As Saudi Arabia pushes ahead with its ambitious Vision 2030 plan to build huge futuristic cities and resorts, the world’s top crude oil exporter will need to borrow more money on the debt markets as oil prices continue to linger at levels of about $20 per barrel lower than the Saudi fiscal breakeven oil price.
Saudi Arabia, for its part, looks to lock in future term sales for its crude in the top Asian markets, which are set to continue driving global demand growth in the coming years. India has even surpassed China as the single biggest driver of demand growth. Aramco already has several deals with Chinese refiners and petrochemical producers as the Saudi oil giant has been pursuing deals in recent years to expand its international downstream presence, especially in demand centers such as Asia.
If we stay on this trend, Trump would be taking a whole new approach towards the South American nation. In his first administration, he tried to isolate the country economically and politically to oust Nicolás Maduro’s regime. Joe Biden tried to leverage existing sanctions to push for a democratic election. But now, Trump 2.0 would be looking out for the interests of American businesses and consumers first, at the expense of other considerations.
It is impossible to say for how long China’s LNG imports will remain subdued, so this is really an opportune time for European buyers to strike years-long deals for liquefied gas. Over the short term, Europe will likely avoid stratospheric gas prices as it starts replenishing its gas inventories—these are currently so low that the continent will need to buy an additional 20 million tons of LNG this year, according to Reuters calculations cited by Bousso in his column. That translates into some 250 cargos, which, thanks to China’s weaker demand, will be more readily available for European buyers.
According to the latest Baker Hughes data, U.S. rig counts have continued their sideways move, falling by one w/w to 486. Rig count has remained in the 472-488 range for 41 consecutive weeks. The Permian Basin rig count fell by one w/w to 300, having previously been below 300 for just one week in the past three years. The main change was in the Texas portion of the Delaware Basin where drilling fell by three w/w to a three-year low of 62 rigs. In contrast, the U.S. gas rig count rose by two w/w to 102, with the Haynesville and Marcellus rig count unchanged at 30 and 26, respectively. Likewise, positioning across the energy complex remains mainly negative, with traders concerned about Trump’s tariffs as well as a potential return of Russian oil flows.
Traders have booked more non-sanctioned tankers to deliver crude to India, while the price of Russia’s flagship Urals grade has dropped to below the $60 per barrel price cap by the G7, allowing shipments involving Western companies, Reuters reported earlier this month, citing ship-tracking data and trading sources. Daily rates for non-sanctioned tankers on the western Russia to India route have spiked to the highest in a year, incentivizing more shippers to offer such cargoes.
It is quite unsurprising to get such a warning from a central bank that, like other state financial institutions, quite unsurprisingly follows commodity market forecasts. Such behavior is even less surprising from the central bank of one of the world’s largest oil producers. Moreover, Russian budget drafters tend to be conservative in their oil price estimates traditionally, so the central bank is likely to also err on the side of caution. In fact, the bank forecast the average price of Brent crude this year at $60 per barrel in a recent update. That’s down from $68 per barrel for 2024 and $60 for both 2026 and 2027.
West Texas Intermediate advanced 0.4% to settle just below $70 a barrel, continuing a three-week rally. A US government report on Wednesday showed the country’s stockpiles shrank by 3.34 million barrels last week to the lowest in a month, helping allay concerns of an oversupplied market.
Cnooc’s focus on extraction leaves its earnings heavily dependent on global oil prices, which averaged about 3% less in 2024 on-year. But it also means the company is relatively unaffected by headwinds to demand faced by downstream peers. Earlier this week, China’s biggest top, Sinopec, reported a tumble in profits as the electric-vehicle boom weighs on fuel consumption.
“The Company increased production by 24 percent, which was in line with our forecast, while only spending $31.3 million on capital expenditures, which was less than we had forecasted and a 41 percent decrease from the prior year. The cost efficiencies that our field operations team has achieved have allowed us to continue to grow production and revenue and drill 50 percent longer laterals while spending 12 percent less per well than we had forecast to spend in our 2023 drilling program”, Regener said.