BKR Rig Count | The total active drilling rigs in the United States decreased by 1 last week, to 582. Oil rigs dropped by 2 to 477, and gas rigs increased by 1 to 100. Rig count in the Permian Basin remained flat at 303 | Nov 27 | BKR NAM Rig Count
US Crude Inventories, excluding those in the Strategic Petroleum Reserve (SPR), decreased by 1.8 MMbbl to 428.4 MMbbl (about 5% below the 5y average for this time of year). On the products side, gasoline increased by 3.3 MMbbl (3% below the 5y average). Distillate fuels increased by 0.4 MMbbl (5% below the 5y average). Total commercial petroleum inventories decreased by 1.8 MMbbl | Nov 22 | EIA Weekly Report
OPEC+ Delays Online Meeting on Oil Output Curbs to December 5 | Talks have been pushed back from original date of December 1. The group is set to discuss whether to proceed with reviving supplies, beginning with an increase of 180,000 barrels a day in January. Delegates said earlier this week that talks have begun on delaying the move, potentially for several months. Coalition leaders Saudi Arabia and Russia have made trips this week to fellow members Iraq and Kazakhstan | Nov 28 | Bloomberg
Türkiye is Currently Negotiating with the US for a Sanctions Waiver | It would permit the continuation of natural gas imports from Russia through Gazprombank. Turkish Energy Minister Alparslan Bayraktar expressed concerns that without such an exemption, Türkiye would be unable to make payments and consequently unable to procure gas. Russia is a critical energy supplier for Türkiye, accounting for approximately 42% of its gas imports in the previous year | Nov 27 | GlobalData
China’s independent refiners have snapped up barrels from across the Middle East and Africa as offers of Iranian oil remain scarcer and more expensive than usual, in part due to broadening US sanctions. Traders and shippers put the scarcity of Iranian supply down to the broadening of US sanctions in October to include more dark fleet tankers plying the Iran-China trade. That move has crimped the number of vessels available for ship-to-ship transfers, tightening supply and driving prices higher. Flows of Iranian oil to China have dipped more than 10% this month compared with October. Meanwhile, the volume of West African crude is at the highest on a monthly basis in at least two years | Nov 27 | Bloomberg
Trump’s Tariff Plan Threatens Higher US Gasoline Prices | President-elect Donald Trump said he’s set to impose a 25% tariff on “ALL products” from Canada and Mexico. The extra costs would send gasoline prices in the Midwest up by as much as 50 cents a gallon during summer’s peak driving season. US is still dependent on imports of crude oil used to make gasoline and diesel. Domestic output mainly consists of a grade of crude known as light sweet oil, but the nation’s refiners need a variety known as heavy crude to produce fuel. Last year, fuelmakers imported 6.5 million barrels a day of oil — equivalent to the production of Iraq and Kuwait combined. The amount accounted for 40% of crude refined in the country. Tariffs would renew fears of inflation and could potentially hit hard US fuelmakers at a time when margins are waning | Nov 27 | Bloomberg
“Drill, Baby, Drill” Is Unlikely Under Trump, Exxon Says | “I think a radical change is unlikely because the vast majority, if not everybody, is primarily focused on the economics of what they’re doing,” said Exxon Mobil’s Upstream President Liam Mallon. On his side, TotalEnergies Chief Executive Officer Patrick Pouyanne cited US producers’ commitment to return cash to shareholders and said “it’s not only decisions by politicians” that drive American output | Nov 26 | Bloomberg
Looking ahead
S&P Global Crude Oil Markets Short Term Outlook | S&P core oil market view remains unchanged: crude oil supply surplus in 2025 — driven by higher output outside of OPEC+, and inventories will rise from the current low levels. But the newest, biggest source of uncertainty depends on what Donald Trump says and does as he once again becomes US president on Jan. 20, 2025 and how he will manage US gasoline prices. If gasoline prices rise too much in his view, he will be forceful in calling for more oil production from OPEC+, which may involve making compromises. Yet prices that are too low — below $65/b for WT) — will hinder his goal of US “energy dominance.” OPEC+ has twice postponed the start of its plan to increase output by as much as 2.2 million b/d (2.5 million b/d including the United Arab Emirates quota increase). The original June 2 plan was to start a year-long increase in October, but now the increase is planned for January. S&P interprets delays as a decision to not increase production at prices around $70/b. S&P outlook calls for prices, on average, to be in the $60-$75/b range — not high enough for OPEC+ to initiate its increase. OPEC+ crude oil production will increase by 300,000 b/d in 2025 over 2024. S&P assumes the UAE would implement its 300,000-b/d quota increase incrementally over the course of 2025, which is view important to maintain OPEC+ unity. S&P do not longer project a formal increase in production quotas apart from the UAE and has also cut its Iranian production outlook for 2025–26 by 150,000 b/d because of the possibility that actions by the incoming Trump administration could impact Iranian exports. 2025 Dated Brent price outlook was raised by $1, to $72/b | Nov 22 | S&P
WoodMac Global Economic Outlook Q4 2024: Brace for Protectionism | In 2024, GDP will expand by 2.7% on strong growth in the services sector and consumption. An upgrade to historic US GDP boosted global growth in 2023 to 2.8%, providing a favorable base effect for the forecast. Global economic growth will accelerate to 3.0% in 2025. Interest rates will continue to fall towards 3% in major economies over 2025, with inflation settling around the 2% target. A pivot to investment and industrial production (IP) will gain momentum. IP growth will outpace GDP growth in 2025 and 2026. Consumption and services growth will moderate from the robust levels of 2023 and 2024. China’s economic stimulus measures will drive growth back to 5% in 2025. Measures to support consumption are required to bolster existing stimuli. India’s outlook is downgraded for the fiscal year 2025 (April 2024 to March 2025) to 6.8% due to slowing industrial activity and weaker consumer demand. However, prospects remain strong for the fiscal year 2026, with infrastructure investment and the manufacturing sector driving growth. Europe’s economy is not synchronized. Germany is a drag – with a forecast GDP contraction of 0.1% in 2024. Spain has been a bright spot, with growth upgraded to 3.1% in 2024. However, the general picture across Europe is of sluggish economic growth. Global GDP will reach US$171.7 trillion in 2050, growing at 2.2% per year between 2030 and 2050. The risk of escalating trade protectionism is looming. Trump’s proposed tariffs and the potential for global retaliation pose a downside risk to the outlook | Nov 27 | WoodMackenzie
Global Crude: Reinvestment rate to remain modest as companies prioritize returns to shareholders | For the global integrated oil companies (GIOCs), which include BP, Chevron, Eni, Equinor, Exxon Mobil, Shell and TotalEnergies, capital discipline remains a key objective as investors continue to emphasize shareholder distributions and balance sheet strength. As a result, reinvestment rates have fallen with the growth in cash flows far outpacing increases in organic investment. After reinvesting 90% of cash flow during 2014–20, this number has dropped to an average of 40% over 2021–23. With declining cash flows and moderate increases to spending, S&P projects the reinvestment rate to rise to an average of 58% during 2024–26, yet remain below pre-pandemic levels. While global exploration spending for the peer group increased 17% in 2023 to $10.1 billion, following a 14% increase in 2022, this was more than 60% below peak levels seen a decade earlier in 2014. S&P projects a significant slowdown in the growth pace seen during 2022–23, with exploration expenditures expected to remain below pre-pandemic levels. Despite reserve replacement challenges, S&P projects an annual production growth rate of 3.7% for the peer group from 2023 to 2030. The hydrocarbon mix of the peer group has remained stable over the past decade, with liquids accounting for 56%-58% of total output, a trend expected to continue through 2030. While the overall hydrocarbon split will hold steady, the mix among companies is showing increasing divergence, reflecting the execution of differing upstream portfolio strategies | Nov 27 | S&P
