The monthly average U.S.-dollar price of West Texas Intermediate (WTI) crude oil fell by $5.79 (-7.5%) to $71.90/barrel in December. That retreat occurred within the context of a weaker U.S. dollar (broad trade-weighted index basis -- goods and services), the lagged impacts of October’s increase of 588,000 barrels per day (b/d) in the amount of petroleum products demanded/supplied (to 20.7 million b/d), and accumulated oil stocks that tipped seasonally lower -- staying near the midpoint of the five-year average range (December 2023 average: 439 million barrels).
Selected highlights from the 2 January 2024 issue of OilPrice.com‘s Intelligence Report include:
“The
first U.S.-Yemen naval clash in the Red Sea, followed by the arrival of an
Iranian warship into the Bab-el-Mandeb strait, has prompted an increase in
geopolitical risks again, lifting Brent back to the $79 per barrel mark,”
editor Tom Kool wrote. “China issuing its crude import quotas for 2024, coupled
with product export allowances, will reinvigorate Chinese buying in the
markets, so for the first time in several weeks, the immediate outlook seems
more bullish than bearish.”
US Oil Output Starts to Decline. According
to EIA figures, U.S. crude oil production fell to 13.248 million b/d in
October, the first monthly decline since April even as the month-on-month
change was a mere 4,000 b/d, with all tight oil plays posting increases except
North Dakota.
Maersk Halts Red Sea Transit, Again. The world's second-largest container line
Moller-Maersk halted transit through the Red Sea less than a week after it had
decided to resume navigation, with its Maersk Hangzhou tanker coming under attack
by Houthi militias.
China Coal Demand to Peak in 2025. China's state-owned energy company Sinopec expects
the country's coal consumption to peak around 2025 at 4.37 billion metric
tonnes, with oil hitting a plateau in 2026-2030 at 16 million b/d and natural
gas reaching a climax only by 2040.
Russian Pipeline Gas Exports to Europe Collapse. Exports of Russian pipeline gas to Europe plunged by a further 56% year-on-year in 2023, coming in at a mere 28.3 billion cubic meters as Gazprom's options were narrowed down to TurkStream and one remaining pipeline via Ukraine.
The foregoing comments represent the general economic views and analysis of Delphi Advisors, and are provided solely for the purpose of information, instruction and discourse. They do not constitute a solicitation or recommendation regarding any investment.
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