Latest news with #non-Opec
Yahoo
5 days ago
- Automotive
- Yahoo
China's electric car revolution hammers demand for oil
Demand for oil faces a dramatic slowdown as China's electric car revolution pushes combustion-engine vehicles off the road, the International Energy Agency (IEA) has said. World oil demand will climb by just 700,000 barrels a day in 2025, for a total of just under 103m barrels a day. But even as demand slows, the big producers are hell-bent on ramping up supply. The Organisation of the Petroleum Exporting Countries (Opec), a cartel of oil-producing nations, is on course to pump out an extra 2.1m barrels a day this year, the IEA said, taking their total daily output to 105m. Kieran Tompkins, at Capital Economics, said: 'We are at a really interesting turning point in the market just now. 'Peak oil demand is on the horizon.' Opec has been voluntarily curtailing the oil supply for several years to try to prop up the price. But Saudi Arabia is now leading a push to loosen the spigot, hoping to regain market share lost to the US and other non-Opec producers. The Saudis bumped up their output by 700,000 barrels a day in June, the IEA said, reaching 9.8m barrels a day. The ostensible reason was to get ahead of any potential disruption from Israel's attack on Iran. Suhail al-Mazrouei, the United Arab Emirates' energy minister, said this week that the market was still 'thirsty' for Opec's oil – as shown by the fact that unsold stock had not built up last month as producers began selling more. Opec's own forecast is that demand will increase by 1.3m barrels a day this year. But analysts at Macquarie Group backed the IEA, saying growth will be barely half that. They said the slowing demand and increasing output would create 'cartoonishly large' surpluses this year. The Brent crude oil price climbed back above $69 a barrel on Friday, having shed 2pc the day before, as traders focused on near-term supply tightness over the likely oversupply later in the year. Opec's hopes of finding buyers for its higher output are running up against a steady decline in demand from China, the world's second-largest economy, where electric vehicles (EVs) are quickly pushing combustion-engine cars off the road. EVs accounted for half of Chinese car sales last year, and the IEA has forecast that this will rise to about 60pc this year. One in 10 cars on Chinese roads are now electric, and the 11m sold in China last year exceeded the entire global sales volume just two years earlier. The Chinese truck fleet is also expected to shift quickly from diesel to liquefied natural gas. Macquarie forecasted China's oil demand to increase by just 54,000 barrels a day this year – the slowest growth in almost a decade, except for a couple of outliers during the pandemic and in 2022. 'The oil market's structural headwinds from China have come to the fore a lot more quickly than many people have appreciated,' Mr Tompkins said. In the short term, however, the supply-demand mismatch could be alleviated by Beijing's move to build a stockpile of crude oil to improve its energy security. Chinese entities have snapped up 82m barrels in the past three months to build this inventory, equivalent to the demand of 900,000 barrels a day. 'Chinese companies are expected to continue driving the expansion of inventories, with the pace of stock building over coming months key to the market balance,' the IEA said. Broaden your horizons with award-winning British journalism. Try The Telegraph free for 1 month with unlimited access to our award-winning website, exclusive app, money-saving offers and more. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Star
08-07-2025
- Business
- The Star
Malaysia's crude oil supply likely to remain under pressure in 2H25
PETALING JAYA: Malaysia's oil production is expected to remain under pressure in the second half of 2025 (1H25), continuing the soft decline seen in the first quarter where crude oil and condensate production dropped 5.2% year-on-year to 45.5 million barrels. RHB Research said this decline is moderating compared to previous quarters, indicating some stabilisation due to improved field performance and operational efficiencies, especially in mature fields. Natural gas production may also contract slightly in the 2H25, primarily due to planned maintenance shutdowns of key facilities in Sarawak and West Malaysia, as well as moderating demand from major liquefied natural gas importers like Japan, China, and South Korea. RHB Research estimates that the global oil market will narrow its theoretical deficit from 1.5 million barrels per day in 2024 to 0.8 million barrels per day in 2025, mainly due to a moderation in demand growth and higher supply from both the Organisation of the Petroleum Exporting Countries (Opec) and non-Opec producers. It maintains its 2025 to 2026 Brent crude oil price estimates at US$70 to US$68 per barrel. Price of Brent crude oil spiked up to as high as US$78 following the escalation of the Israel-Iran conflict, but the gains were quickly reversed on the expected ceasefire. Its top stock pick for the sector includes Bumi Armada Bhd , MISC Bhd , and Yinson Holdings Bhd . It retains its 'buy' call for the stocks with target prices of 65 sen, RM9.70 and RM3.69 a share, respectively. While there could be some clarity on the overall landscape in Sarawak, it still expects a structural shift in spending pattern by Petroliam Nasional Bhd, which may not be well replaced by Petroleum Sarawak Bhd, at least in the short and medium term. Upstream activities are expected to pick up seasonally in the 2Q25 to 3Q25, post monsoon season. Floating production storage and offloading (FPSO) players are likely to have relatively lower earnings risks under fixed and firm long-term charter contracts. RHB Research believes clients would not cancel these FPSO contracts due to the fluctuation in oil prices, since these contracts are backed by compensation clauses.
The Star
19-06-2025
- Business
- The Star
Oil prices capped despite geopolitical conflict
TA Research has retained its 'neutral' view on the O&G sector. PETALING JAYA: Any further upside to the price premium of crude oil prices fuelled by the Iran-Israel conflict is constrained by ample spare capacity among Organisation of the Petroleum Exporting Countries and its members (Opec) members as well as non-Opec suppliers, TA Research states in its oil and gas (O&G) sector report. It said global demand for energy also remains weaker due to slower economic activity and the increased use of electric vehicles. The research house added the geopolitical premium put on crude oil prices since the conflict erupted is more likely to be transient rather than transformative. 'The global oil supply backdrop remains relatively resilient despite the geopolitical turmoil. Opec, led by Saudi Arabia, holds sufficient spare production capacity to offset most short term disruptions from Iran,' it stated. TA Research added US shale producers continue to deliver robust output levels, averaging a steady 13.4 million barrels per day while other non-Opec producers like Brazil, Canada, and Guyana are also ramping up supply, contributing to a broader narrative of a well-supplied global market. While supply-side fears can generate temporary price rallies, the demand picture remains insufficiently supportive for a sustained oil bull cycle without further macroeconomic improvement, TA Research opined. 'While the war may add volatility, the probability of a sustained supply shock remains relatively low unless additional producers or infrastructure become targets,' it summarised. Hence, TA Research has maintained its average Brent crude oil price forecast of US$73 a barrel for 2025. 'We retain our 'neutral' view on the O&G sector, as we believe the risk-reward balance remains evenly poised. 'We reiterate our preference for oil and gas players with strong export linkages and robust cash generation, such as Pantech Group Holdings Bhd and MISC Bhd ,' the research house noted. It explained that MISC ('buy', target price: RM8.40) stands to benefit from increased demand for tanker freight and floating solutions, particularly as shipping markets remain volatile. Additionally, Pantech ('buy', target price: 96 sen), meanwhile, is well placed to ride on higher project flows for pipeline and industrial fittings, driven by infrastructure upgrades and intensified maintenance cycles in response to supply chain vulnerabilities. That said, TA Research said should diplomacy prevail and the war drums go quiet, it forecasts crude oil prices to correct to US$60 to US$65 a barrel level for the Brent contract. Furthermore, should there be complications in the Straits of Hormuz which disrupt supply lines out of the region, prices could spike to US$100 to US$120 a barrel levels.
Business Times
28-05-2025
- Business
- Business Times
Oil gains on supply concerns, investors await July Opec+ output decision
[NEW YORK] Oil prices gained more than 1 per cent on Wednesday on supply concerns as Opec+ agreed to leave their output policy unchanged and as the US barred Chevron from exporting Venezuelan crude. Investors previously anticipated members of Opec+ would agree to a production increase later this week. Brent crude futures settled up 81 cents, or 1.26 per cent, to US$64.90 a barrel. US West Texas Intermediate crude gained 95 cents, or 1.56 per cent, to stand at US$61.84 a barrel. Opec+, the Organization of the Petroleum Exporting Countries and allies, did not change output policy. It agreed to establish a mechanism for setting baselines for its 2027 oil production. Most oil-producing countries at the meeting do not have flexibility to adjust their output, said Bob Yawger, director of energy futures at Mizuho. 'They were hoping to slow the pace of production increases and stop the slide in price. But that's not the way it panned out,' he added. A separate meeting on Saturday of eight Opec+ countries is expected to decide on an increase in oil output for July. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Goldman Sachs analysts saw the group of eight keeping production steady after the July hike. 'However, we see the risks to our Opec8+ supply path as skewed to the upside, especially if compliance doesn't improve or if hard demand data surprise further to the upside,' they added. Coming demand for the summer driving season is significant, and with non-Opec+ crude output flat in the first half of the year, coupled with risks of Canadian wildfires hurting supply, the call on crude is stronger from Opec+, said Janiv Shah, vice-president of oil commodity markets analysis at Rystad Energy. On Wednesday, Chevron terminated the oil production, service and procurement contracts it had to operate in Venezuela, but it plans to retain its direct staff in the country, sources said. Both benchmarks ticked up in the previous session on concerns of tighter supply after the US barred Chevron from exporting crude from Venezuela under a new authorisation on its assets there. Analysts also said prices could respond positively if there was progress on global trade talks or resolving US-Iranian friction. Iran's nuclear chief Mohammad Eslami said on Wednesday it might allow the UN nuclear watchdog to send US inspectors to visit nuclear sites if Tehran's talks with Washington succeed. US crude stocks fell by 4.24 million barrels last week, market sources said, citing American Petroleum Institute figures on Wednesday. Market participants now await government data on crude inventories due on Thursday. REUTERS
Zawya
06-05-2025
- Business
- Zawya
South Africa Fuel price relief: petrol and diesel costs to decrease in May
Motorists will breathe a sigh of relief from Wednesday as the cost of all grades of petrol is set to come down. This is as the Minister of Mineral and Petroleum Resources, Gwede Mantashe, announced the adjustment of fuel prices based on current local and international factors with effect from Wednesday, 7 May 2025. The price of petrol 93 (ULP and LRP) will decrease by 22c a litre while the price of 95 (ULP and LRP) will also come down by 22c a litre. Currently, a litre of petrol 95 costs R21.62 in Gauteng. As of Wednesday, this will come down to R21.40 a litre. At the coast, a litre of 95 petrol, which costs R20.79 a litre, will cost R20. 57 as of Wednesday. Meanwhile, the price of Diesel (0.05% sulphur) will decrease by 42c a litre and that of Diesel (0.005% sulphur) will come down by 41c a litre. The price of Illuminating Paraffin (wholesale) will decrease by 31c per litre. The Single Maximum National Retail Price (SMNRP) for illuminating paraffin will see a 41c decrease and the maximum LPGas Retail Price will increase by 46c per kilogram. 'The average Brent Crude oil price decreased from $71.04 to $66.40 during the period under review,' said the Department of Mineral and Petroleum Resources. It added that the tariff and trade war initiated by the United States which has raised global economic recession concerns, and a possible lower demand for crude oil, and oversupply of oil from non-Opec countries and the anticipated increase in oil production by Opec+ members were the main contributing factors for the fuel price adjustments. 'The average international petroleum product prices of petrol and diesel followed the decreasing trend of crude oil prices while the price of LPG increased due to higher freight (shipping costs) during the period under review,' said the department. All rights reserved. © 2022. Provided by SyndiGate Media Inc. (
