Biden blasts oil companies over high gasoline prices

Spanish Market: Crude oil, Oil products
17/11/21

US president Joe Biden today blasted oil and gas companies over "significant profits off higher energy prices" as he again asked the Federal Trade Commission (FTC) to investigate if there is any price manipulation in gasoline markets.

"The two largest oil and gas companies in the US, as measured by market capitalization, are on track to nearly double their net income over 2019, the last full year before the pandemic" and are spending the profits on stock buybacks and dividends, Biden wrote in a letter to FTC chairman Lina Khan. "I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct."

The White House asked FTC, the US government's primary anti-trust regulator, in July to investigate if there was any manipulation in oil and gasoline markets, citing a divergent trend in crude and gasoline prices. To date, the commission's response has been to direct staff to increase oversight of mergers in the energy industry. But Biden said the FTC should act immediately to review "mounting evidence of anti-consumer behavior by oil and gas companies."

By Haik Gugarats

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28/11/24

Opec+ meeting delayed to 5 December

Dubai, 28 November (Argus) — A meeting of Opec+ ministers scheduled for 1 December has been postponed to 5 December. Opec said the delay is because of a conflicting travel schedule for energy ministers of Mideast Gulf countries, as the Gulf Co-operation Council (GCC) leaders summit in Kuwait overlaps with the Opec+ meeting. The Opec+ meeting, which was to be held online, will coincide with a decision to be taken by eight member countries on whether to press ahead with a plan to begin the phased return of 2.2mn b/d of "voluntary" production cuts to the market from January. This was to begin in October, but concerns about the strength of oil demand and price weakness prompted the group to postpone to December and then to January. The UAE will start increasing its output from January regardless, as a 300,000 b/d increase to its official production quota kicks in over the course of 2025. Any increase to Opec+ supply would be tempered by additional cuts that some of the eight will be making in the coming months to compensate for past overproduction. Iraq, Kazakhstan and Russia are the group's leading overproducers. Saudi energy minister Prince Abdulaziz bin Salman on 27 November talked with Kazakhstan's energy minister Almasadam Satkaliyev and Russia's deputy prime minister Alexander Novak, Moscow's point man on Opec+ matters. A day earlier, Prince Abdulaziz met in Baghdad with Iraq's prime minister Mohammed Shia al-Sudani and Novak. The statements from both meetings emphasised "full adherence to the [current policy] agreement, including the voluntary production cuts agreed upon by the eight participating countries, as well as compensating for any excess production." The 5 December meeting will be a third consecutive Opec+ ordinary ministerial meeting to be held virtually rather than in Vienna. The last time Opec+ held its ministerial meeting in-person was in June 2023. By Bachar Halabi and Nader Itayim Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

US refiners cannot readily replace Canadian oil: AFPM

27/11/24

US refiners cannot readily replace Canadian oil: AFPM

Calgary, 27 November (Argus) — US refiners that process Canadian crude would not easily find alternative supplies if president-elect Donald Trump follows through on his tariff plans, potentially threatening the viability of some fuel producers, a US refining industry group warned today. Trump on Monday said he would impose a 25pc tariff on imports of all goods from Canada and Mexico, claiming those two countries need to tighten borders they share with the US. Such tariffs would be problematic for US refiners that have come to rely on a steady diet of Canadian crude, much of which comes from the western, oil-rich province of Alberta. "There is no easy, fit-for-purpose replacement for this crude oil," the American Fuel and Petrochemical Manufacturers (AFPM), which advocates for many US refiners, said on Wednesday. Canadian oil is the number one refinery feedstock in the US midcontinent, accounting for 65pc of all crude runs in the region, according to AFPM. Refiners in the region have limited connectivity to US crude and refined products pipelines, so tariffs could sharply increase operating costs and even threaten their viability, the association said. Many refineries were built prior to the US shale boom and are suited for heavier, high-sulfur crudes that typically come from foreign sources. Canada exported about $428bn in goods and services to the US in 2022, while the US exported $481bn to Canada, according to US data. Petroleum makes up a substantial part of Canada's exports, with roughly 4mn b/d of Canada's 5mn b/d of production shipped to the US. Of this, about 3mn b/d is destined for the US midcontinent region. "The crude oil pipeline logistics have changed over the decades such that the loss of Canadian oil into these regions can only be replaced with domestic production," Lipow Oil Associates president and industry analyst Andrew Lipow told Argus Wednesday. "Unfortunately, there is very little pipeline capacity to deliver crude oil produced in Texas and New Mexico to refineries in Montana, Minnesota, and Chicagoland." Lipow suggested three scenarios, or some combination thereof, may unfold: Canadian crude would need to be further discounted to overcome the tariff; US refiners would pay more for crude, including for domestic WTI that would rise to import parity; or Canadian crude would be exempted from tariffs and there would be no change. "The extent of the price impact depends on one's locations, but certainly seems to me that the consumer will be paying more for energy," Lipow said. Tariffs on crude and refined products "will not help our industry compete, nor will they support US energy dominance and affordability for consumers", AFPM said. The American Petroleum Institute (API), another industry group, agreed. "Maintaining the free flow of energy products across our borders is critical for North American energy security and US consumers," an API spokesperson said. By Brett Holmes Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Traders expect Opec+ to delay output increase

26/11/24

Traders expect Opec+ to delay output increase

London, 26 November (Argus) — Vitol, Trafigura and Gunvor representatives today suggested that Opec+ members would probably continue to delay their plan to start increasing crude production. The comments from three of the world's biggest trading firms come just days before the Opec+ alliance is set to hold a ministerial meeting on 1 December to decide its output policy for next year. At the top of the agenda is whether eight members will begin returning 2.2mn b/d of "voluntary" production cuts over a 12-month period starting in January — three months later than originally planned. "I think there's no room for them to increase," Gunvor chief executive Torbjorn Tornqvist said at the Energy Intelligence Forum in London today. "So far they've been very disciplined and they've made the right call not to add any oil," he said. Most forecasters predict weak oil demand next year, with the market flipping into a surplus. "I suspect that the barrels coming back will again be deferred," Trafigura's global head of oil Ben Luckock said. "Exactly how long? Probably not that far, but they have the choice to be able to continue to [delay] and they probably don't enjoy the price right now." The front-month Ice Brent crude futures is currently trading around $73/bl, around $20/bl below where prices were before Opec+ announced its initial output cut in October 2022. The alliance has reduced output by about 4mn b/d since then, Argus estimates. "The likelihood is that Opec will try to manage the market through the next two to three months to wait to see how some of these geopolitical aspects solve themselves," Vitol chief executive Russell Hardy said. All three executives pointed to geopolitical uncertainties such as the incoming US administration's Iran sanctions policy, the trajectory of the Ukraine-Russia war and the conflict in the Middle East as potential market movers in 2025. Luckock also stressed the importance of compliance for the Opec+ alliance. "I think compliance is a huge deal, because a cheating Opec doesn't yield higher prices." Members including Iraq, Kazakhstan and Russia have tended to exceed their production targets this year, tarnishing the credibility of the alliance. But a long-running Saudi-led effort to get these countries to comply and compensate appears to be bearing fruit. The three executives also gave their traditional forecasts for what the oil price would be in 12 months. Tornqvist said he expected prices to be similar to today's levels at $70/bl, which he described as "fair" given the world's large spare production capacity and declining production costs. Luckock said it was a "mug's game" forecasting 12-months out, particularly given the range of geopolitical uncertainties on the horizon. When pressed for a number he settled on $75/bl, but said this was not particularly useful to anyone. Hardy stuck with his previous forecast of $70-80/bl. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Trump tariffs will divert TMX crude from USWC

26/11/24

Trump tariffs will divert TMX crude from USWC

Houston, 26 November (Argus) — President-elect Donald Trump's plans to impose tariffs on imports from Canada could divert most of the crude exported via the 590,000 b/d Trans Mountain Expansion (TMX) pipeline away from US west coast refiners to Asia-Pacific. Flows from Canada's newest pipeline might shift after Trump, via social media late on Monday, announced plans to slap a 25pc tariff on all imports from Mexico and Canada. TMX, which expanded capacity on the Trans Mountain system to 890,000 b/d and gave Asia-Pacific buyers access to heavy sour crude produced in Alberta's oil sands, would have to direct all its flows to Asia if US west coast demand weakens. Tariffs on crude imports from Canada would force US west coast refiners to turn elsewhere. Refiners in the region have increased purchases of Canadian grades since the May commencement of the pipeline. Cheaper prices and closer proximity to Vancouver, where TMX crude loads, allowed the heavy sour crudes to find favor along the US west coast. But the proposed tariffs would strengthen TMX prices, no longer making it the cheapest heavy sour option. About 313,000 b/d of mostly heavy sour Canadian crude has loaded at Vancouver's Westridge terminal in the six months since the pipeline made its debut, according to analytics firm Vortexa. US west coast refiners received around 145,000 b/d since the pipeline came on line in May, up from less than 40,000 b/d a year earlier. Most TMX crude destined for the US west coast has gone to California refiners, with Marathon, Chevron and Phillips 66 emerging as consistent buyers. Around 34mn bl of TMX crude has loaded for Asia-Pacific, or about 161,000 b/d. China, the largest buyer in Asia-Pacific, has purchased about 83pc of those barrels, Vortexa data shows. Also, Latin American barrels could see a resurgence after being displaced by TMX in the region. Latin American medium and heavy sours, like Napo and Oriente, could see a resurgence in demand as well, after TMX displaced those grades. In the first six months after TMX, imports of Napo and Oriente fell by 14pc. Brazilian and Guyanese crudes could also see higher demand in the region, according to market participants. But Mexican crude flows could also be limited by Trump's tariffs. Imports from Mexico have been declining since TMX's May commencement, dropping 65pc in the pipeline's first six months of service. But refiners still import the grades, taking roughly 3.5mn bl, or 16,7000 b/d since the pipeline began operating. By Rachel McGuire Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Norden agrees marine biodiesel deal with Meta

26/11/24

Norden agrees marine biodiesel deal with Meta

London, 26 November (Argus) — Danish shipping company Norden has agreed with tech giant Meta to utilise marine biodiesel blends on operated vessels. The deal is based on Norden's book-and-claim, a system that can be used to deliver proof of sustainability (PoS) documentation to customers to offset the latter's scope 3 emissions and fulfil their voluntary demand. The PoS can be obtained on a mass-balance system, allowing shipowners flexibility with regards to the port at which a blend can be bunkered. Norden did not specify which marine biodiesel blends it will use as part of this agreement, but said the biofuel will be ISCC-certified and will have an 80-90pc greenhouse gas (GHG) emissions reduction potential. The agreement follows recent drops in Argus assessments for marine biodiesel blends comprising Advanced Fatty acid methyl ester (Fame) 0 in the ARA trading and refining hub. By Hussein Al-Khalisy Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

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