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Record Global Gasoline Consumption Defies IEA Forecast

Global gasoline consumption hit a record 26.9 million barrels per day (bpd) this year, exceeding the 2019 peak and defying estimates that the last pre-pandemic year was the time when gasoline demand worldwide would peak.  The data, reported by Bloomberg Opinion columnist Javier Blas, shows the latest figures from the International Energy Agency (IEA). The same agency, which has been strongly advocating for a faster energy transition for years, had predicted just this year that 2019 was the peak demand for gasoline globally.   Back in June, in its Oil 2023 annual report, the IEA said that “Growth is set to reverse after 2023 for gasoline and after 2026 for transport fuels overall.” “Gasoline demand will be disproportionately impacted as EVs progressively replace vehicles with internal combustion engines (ICE),” the IEA said, adding that “This means that the fuel is likely to exhibit the earliest and most pronounced peak in demand.” And it also said that “Usage will never return to 2019 levels and the post pandemic peak could come as early as 2023. Following a brief plateau, the decline is forecast to accelerate from 2026 onwards.”

However, the IEA’s latest figures not only show that 2019 wasn’t the peak demand year for global gasoline consumption, but that demand in both 2023 and 2024 would surpass the pre-pandemic levels.

Per the latest data reported by Bloomberg’s Blas, gasoline demand globally is set to further rise next year, to top 27 million bpd.  In the June report, the IEA predicted that “Following a brief plateau, the decline is forecast to accelerate from 2026 onwards, with 2028 demand 900 kb/d below that of 2019.”  The IEA also famously said earlier this year that global demand for all three fossil fuels – oil, natural gas, and coal – is set to peak before 2030, which undermines the case for increasing investment in fossil fuels.

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Oil Markets Face Israel-Hamas War Risk

  • Iran, has been looking to catalyse an expansion of the direct conflict between Israel and Hamas into a wider war between Islam and the Jewish state of Israel.
  • EU source: the Iranian-backed Houthis are not acting against vessels in and around the Red Sea without Beijing’s tacit approval.
  • If China did take its foot off the brake with Iran, then the chances of an embargo on oil exports first to Israel and then to its allies would dramatically increase.

The rise in the benchmark Brent oil price from just over US$72 per barrel (pb) to above US$80pb in a week highlights that the risk premium attached to the Israel-Hamas war is still very much in play in the global oil markets. Although other factors played a part in the oil price rise, a significant part of the increase was due to the rising danger posed to tankers moving oil from the Middle East to Europe via the Red Sea. This has long been the shortest and generally cheapest method to move oil via ships from east to west. However, several vessels – supposedly linked in some way to Israel, but some are not at all connected – have been seized by Yemen’s Houthi militants. The group remains overtly backed by Iran and covertly backed by Iran’s own sponsors, most notably in this instance Russia, but also China. Given the crucial importance of this transit route and the area surrounding to the global oil markets, things may become a lot worse very fast. In many ways, the problem for ships of countries seen as aligned to the U.S. travelling through the Red Sea begins before the Red Sea is reached – in fact, somewhere east of the Oman coast of the Arabian Sea, which then flows into the Gulf of Aden, on the south coast of Yemen. It is at this juncture that ships must pass through the crucial chokepoint of the Bab-el-Mandeb Strait. This 16-mile-width waterway flows between the west coast of Yemen on the one side, and the east coasts initially of Djibouti and then of Eritrea on the other, before it joins the Red Sea. As it stands, never has the literal translation of the chokepoint’s name from Arabic – ‘The Gate of Grief’ – been more apposite than it is now. From the beginning of the Israel-Hamas War that effectively began on 7 October, the Middle East’s leading Shia Islamic power, Iran, has been looking to catalyse an expansion of the direct conflict between those two protagonists into a wider war between Islam and the Jewish state of Israel, which it thinks could draw the U.S. and its allies into another no-win war in the region. Tehran’s attempts to mobilise Lebanon’s Hezbollah militants – a much bigger force than Hamas, which Iran also supports with money, weapons, and training – into a simultaneous full-scale war against Israel have so far been unsuccessful, due in large part to the extraordinarily accomplished diplomacy of U.S. Secretary of State Antony Blinken and his team. Similarly unsuccessful – and for the same reason – has been Iran’s call for an embargo on the exports of oil by Islamic states to Israel.

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Novak: Oil prices may range between $80-$85 in 2024

Russian Deputy Prime Minister Alexander Novak said on Wednesday that the Brent oil prices in 2024 could be in the range of $80 and $85 per barrel. In an interview with Russia-24 TV channel, Novak noted that Russian oil and gas revenue will reach approximately 9 trillion rubles by the end of 2023. He added that about 57% of Russia’s total export revenues came from the fuel and energy sector, stressing that many countries want to buy Russian oil and petroleum products. Furthermore, the official said that he expects the first liquefied natural gas shipments from the Arctic LNG 2 plant to start in the first quarter of 2024, stressing that Russia proved that it is capable of working successfully under Western sanctions. NN: We have in essence a Put…. a floor under our oil  trade at $80 a barrel.  And with 2 of the 3 major oil producing regions in the world at war, I predict OVER $100 Brent. I’ll take a deal like this every day of the week.

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US: 12 drones, 3 missiles downed in Red Sea

https://youtu.be/N9tozCflir8

United States Central Command (CENTCOM) revealed on Tuesday that its assets shot down 12 one-way attack drones, three anti-ship ballistic missiles, and two land attack cruise missiles during today’s operations in the Red Sea. The command said that the USS Laboon warship navigating those waters as part of the international mission to secure trade and multirole fighters Boeing F/A-18F Super Hornet intercepted the arms route, after being allegedly fired by the Houthis. The attacks started at 6:30 am (Yemen’s time) and lasted over ten hours. “There was no damage to ships in the area or reported injuries,” they said in a post on X, formerly known as Twitter. During the day, a Houthi spokesperson claimed the attack on the Swiss MSC United VII commercial vessel.

Iraqi Resistance claims attack on US base in Syria

The Islamic Resistance in Iraq claimed it targeted an American base in Al-Shaddadi, situated in northeastern Syria, with a barrage of missiles on Tuesday. The purported attack comes after the United States carried out a retaliatory strike in Iraq, claiming that Iranian-backed militia Kataib Hezbollah and affiliated groups launched a drone attack on a base in Erbil, Iraq, which injured three US service members. “The President [Joe Biden] places no higher priority than the protection of American personnel serving in harm’s way. The United States will act at a time and in a manner of our choosing should these attacks continue,” National Security Council spokesperson Adrienne Watson stated. NN: Its obvious the U 1S is one  lucky pot shot away  from war

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WTI down by 1.5% as Angola exits OPEC

The prices of oil futures declined on Thursday after Angola announced its decision to leave the Organization of the Petroleum Exporting Countries (OPEC). The move seemingly stirred investors’ hopes there would be more supply as the African country previously voiced opposition to the group’s recent decisions, including the one on production cuts. West Texas Intermediate (WTI) for deliveries in February decreased by 1.52% at 7:50 am ET to sell for $72.11 per barrel. At the same time, Brent for the same month’s settlements dropped by 1.37% to go for $78.55 per barrel. Angola and another African OPEC member, Nigeria, had a spat with the other cartel members before the latest meeting regarding their oil production quotas. At a meeting in June, Angola and Nigeria were given lower crude oil production quotas as part of the OPEC+ agreement, after the two producers had underperformed and failed to pump to their quotas for years, due to a lack of investment in new fields and maturing older oilfields. The most recent spat within OPEC about the African countries’ quotas was one of the reasons for the cartel to postpone its latest meeting within a few days. African OPEC members Angola, Congo, and Nigeria were forced to commit to lower output in 2024, and the originally scheduled November 26 meeting could potentially have pressured them to make further production cuts, as the Saudis expressed discontent over compliance with the deal as it shoulders the bulk of the burden.

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Houthis claim airstrikes on ships in Red Sea….. US allegedly issues warning to Houthi rebels

Yemen-based Houthi rebels claimed responsibility on Friday for the attacks on two vessels in the southern Red Sea when the crews disregarded warnings by the armed faction. The group has previously stated its intention to stop all ships en route to Israel until its conflict with Hamas is resolved. “The naval forces of the Yemeni Armed Forces, with the help of Allah Almighty, carried out a military operation against two container ships, MSC Alanya and MSC PALATIUM III, which were headed towards the ‘israeli’ entity. They were targeted with two appropriate maritime missiles,” the Yemeni Armed Forces posted on Telegram. Earlier, a report from Axios stated that the United States issued a warning to the militia, urging them to cease their attacks on the vessels and to refrain from launching any attacks against Israel.

US allegedly issues warning to Houthi rebels

The United States supposedly sent messages to Yemen-based Houthi rebels, warning them to stop their attacks on ships in the Red Sea, Axios reported. The Biden administration allegedly also warned the Houthis against attacking Israel, the news outlet said, citing US officials. The warning comes following the ever-increasing escalation of attacks made by Houthi rebels, targeting ships and using drones in the Red Sea. NN: Their is more than one way to get a rally going in oil.

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Bullish Bets on Oil Fell to Lowest on Record This Week

  • Hedge funds have cut their bullish bets on crude oil to record lows.
  • Money managers have slashed their net long positions in both WTI and Brent crude oil by 59,094 lots to just 149,272 in the week ending December 12.
  • Crude oil prices have been on the decline over the last month, although spot prices for both benchmarks were trading up on Friday.

Hedge funds have cut their bullish bets on crude oil to record lows as the market reacts to increasing U.S. inventories and fear that OPEC+ will not fully deliver on its promises to voluntarily cut production come January 1. Money managers have slashed their net long positions in both WTI and Brent crude oil by 59,094 lots to just 149,272 in the week ending December 12. This is “the lowest in exchange and regulatory data going back to 2011,” Bloomberg suggested on Friday. The record lows were a result of short-only bets reaching to the highest in nearly four years, while long-only bets fell, ICE Futures Europe and the Commodity Futures Trading Commission data show. Crude oil prices have been on the decline over the last month, although spot prices for both benchmarks were trading up on Friday. WTI was trading up $0.21, at $71.79 per barrel on Friday afternoon, a 0.29% increase on the day. While an increase on the day, it is down from $76.79 a month ago. Brent crude oil prices were also trading up on the day, at $76.90 per barrel, trading up $0.29 per barrel (0.38%). Brent was trading at $81.18 per barrel just a month ago. The news comes just a couple days after the Energy Information Administration (EIA) lowered its crude oil forecast for 2024. In December’s Short Term Energy Outlook (STEO), the EIA forecast that Brent crude oil would trade at an average of $93 per barrel, it is a decrease from the forecast the agency published in November. As for OPEC+, the EIA estimated that OPEC+ crude production would fall by another 600,000 bpd next year. Crude oil prices fell on Tuesday by more than 4% to a six-month low as the consumer price index in the United States increased. NN: I predict that Tuesdays oil price in the$72 area will be a great money making opportunity. Buy the shit out of this drop. Christmas did indeed come early

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Oil Prices Stage a Comeback After Hitting Six-Month Low

This week, the oil market witnessed a significant rebound, driven by a confluence of factors including a weaker dollar and revised demand forecasts from major energy organizations. After a period of decline that saw prices reaching a six-month low, the market’s recovery highlights its dynamic nature and sensitivity to global economic indicators. The International Energy Agency (IEA) has updated its oil demand forecast for 2024, projecting an increase in global consumption by 1.1 million barrels per day (bpd). This adjustment, which cites an improved outlook for the U.S. economy and the influence of lower oil prices, marks a significant shift from the IEA’s previous stance. Contrastingly, the Organization of the Petroleum Exporting Countries (OPEC) maintains a more bullish forecast, anticipating a much larger increase in demand. Meanwhile, the U.S. Energy Information Administration (EIA) has moderated its price forecast for Brent crude in 2024 to $83 per barrel, reflecting a nuanced perspective on global supply and demand dynamics. This divergence in forecasts by major agencies underscores the ongoing debates and uncertainties in predicting future oil market trends. The recent developments in the oil market are also closely tied to the monetary policy signals from the U.S. Federal Reserve. The Fed’s indication of a potential reduction in borrowing costs. Oil prices are on course for their first weekly increase in eight weeks, a shift in sentiment that was driven in large part by the Federal Reserve pledging to cut interest rates next year. As the price of Brent rose toward $77 per barrel, the oil markets are on course for the first week-on-week increase in eight weeks. Despite continuous attacks on tankers in the Red Sea, it was the United States that provided most of the bullish sentiment. First, the Federal Reserve’s pledge to start cutting interest rates next year buoyed the markets in general before a larger-than-expected US inventory draw pushed oil even higher.

OPEC Blames Oil Price Decline on Exaggerated Concerns. Publishing the December monthly oil report this week, OPEC reiterated its optimism for 2024 oil demand growth of 2.46 million b/d and blamed the recent drop in oil prices on exaggerated demand concerns impacting market sentiment.

Houthis Attack Product Tanker, Again. A product tanker carrying jet fuel from India was attacked whilst transiting the Red Sea, however managed to avoid being boarded thanks to military assistance, only two days after Houthi rebels claimed responsibility for an attack on a Norwegian tanker.

Shell Talks with Venezuela Derailed over Price. The future of the 4.2 TCf Dragon offshore gas field, to be fed into Atlantic LNG, might have run into an impasse after talks between Venezuela’s oil authorities and presumed project operator Shell (LON:SHEL) failed to agree on future LNG prices.

French Banks the First to Stop Fossil Funding. France’s second-largest bank Credit Agricole (XXX:CAGR) announced that it would stop financing new fossil fuel projects and publish its oil industry exposure as part of its new climate goals, joining French banking peer Banque Postale in doing so.  NN: BlaskMask Pod Cast:

i am getting that hot warm gushy feeling
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IEA: Global Oil Inventories Fell in October Oil rises on IEA demand upgrade.. Crude prices jump over 3% on US inventory draw

Global observed oil inventories fell in October, with the first drop in oil product stocks for the first time in four months, the International Energy Agency (IEA) said on Thursday.Global observed oil inventories dropped by 19.6 million barrels in October, with crude inventories largely unchanged, but with the first decline in refined petroleum stocks in four months. The falling product stocks in October reversed the trend from the third quarter when oil product stocks rose by 1.3 million barrels per day (bpd), while crude drew 1.6 million bpd on average, the IEA said. The latest OPEC+ cuts announced for the first quarter of 2024 are aimed at preventing a potential inventory build, the agency said. But it also noted that soaring supply from non-OPEC+ producers – led by the United States – and slowing global demand growth this quarter could make OPEC+’s task to support prices more difficult.

Oil rises on IEA demand upgrad

World oil consumption will rise by 1.1 million barrels per day (bpd) in 2024, the IEA said in a monthly report, up 130,000 bpd from its previous forecast, citing an improvement in the outlook for the United States and lower oil prices. Prices were also boosted by a larger-than-expected draw from the U.S. crude inventory, Teng added. The U.S. Energy Information Administration (EIA) said energy firms withdrew a bigger-than-expected 4.3 million barrels of crude from stockpiles in the week ended Dec. 8 as imports fell. [EIA/S]

Crude prices jump over 3% on US inventory draw

Crude oil prices for front-month settlements continued to climb further on Thursday following a large drawdown from US crude stockpiles, excluding those held in the Strategic Petroleum Reserve (SPR). A larger-than-expected weekly draw from crude inventories in the United States seemingly raised concerns about the stability of the crude supply amid winter months in the Northern Hemisphere. The upward movement of prices was likely supported by the optimism that the Federal Reserve could begin cutting interest rates next year. West Texas Intermediate (WTI) for January contracts surged 3.11% to sell at $71.71 a barrel at 9:21 am ET. Brent for February deliveries soared 3.06% to go at $76.53 per barrel.

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Russia’s economy reportedly under severe stress due to war

Russia’s economy is under significant stress due to the war in Ukraine, a new Financial Times report said Thursday. Based on a draft text conducted by the US Treasury Department, the report mentions that the Russian economy would have grown by 5% if it had not invaded its neighbor. Besides, the invasion of Ukraine has caused an increase in domestic consumer prices, and one-third of the national budget was allocated to defense. Consequently, according to the Treasury Department’s Chief Sanctions Economist, Rachel Lyngaas, the combination of the war, sanctions by US allies, and Moscow’s policy responses are putting considerable economic pressure on the country. The conflict has led to higher spending, a depreciating ruble, rising inflation, and a tight labor market due to worker emigration, significantly affecting Russia’s economic performance compared to other energy-exporting countries. NN: Russia’s source of hard currency is oil. And oil in the seventies is slow death. Your damn right they will participate in cutting production.