IMF upgrades global economic outlook for 2023
The IMF has slightly upgraded its 2023 growth projection for the global economy but warns of sluggish expansion later in the decade.
"The global economy continues to gradually recover from the pandemic and Russia's invasion of Ukraine," IMF director of research Pierre-Olivier Gourinchas said today. "In the near term, the signs of progress are undeniable."
The IMF World Economic Outlook report, released today, forecasts global growth of 3pc both this year and in 2024. The 2023 forecast is 0.2 percentage points higher than in the IMF's April report. The world economy grew by 3.5pc in 2022. IMF forecasts are used by many economists, including at the IEA, to model oil demand projections.
The slightly better outlook for 2023 reflects measures the US and Swiss financial regulators have taken to address the fragility of the financial sector. The IMF has dialed down its previous dire warnings of potential contagion from the failures of major Swiss and US banks. The IMF has upgraded its 2023 GDP growth forecast by 0.2 percentage points for the US and for the broader, advanced economies group, to 1.8pc and 1.5pc, respectively.
The 2023 GDP growth forecast for China remained unchanged at 5.2pc, even though the IMF noted the Chinese economy's weaker than expected recovery from the effects of the Covid-19 pandemic. "The recovery following the re-opening of its economy shows signs of losing steam amid continued concerns about the property sector, with implications for the global economy," Gourinchas said.
The IMF cut Saudi Arabia's projected GDP growth for 2023 to 1.9pc, from the previous 3.1pc, after the leading Opec producer announced oil production cuts.
Russia's GDP growth forecast was adjusted higher to 1.5pc for 2023, with IMF researchers citing "hard data" on retail trade, construction, and industrial production that suggested strong economic performance in January-June.
Economic growth in 2024-28 will remain low by historical standards, with the slowdown more pronounced in the advanced economies, the IMF said.
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Japan's Tokyo Gas invests in nature-based carbon fund
Japan's Tokyo Gas invests in nature-based carbon fund
Tokyo, 3 September (Argus) — Japanese gas retailer Tokyo Gas is investing up to $25mn in Climate Asset Management's nature-based carbon fund. The carbon credits provided by the fund are natural carbon credits created from efforts such as afforestation and nature regeneration. Its carbon credits require large, continuous areas of land to be created, so supplies are limited and are expected to become difficult to purchase in the medium to long term, Tokyo Gas said. It has secured carbon credits over a 12-year period until 2037 with its investment in the carbon fund of Climate Asset Management, a partnership between HSBC Asset Management and climate change advisory and investment group Pollination. Tokyo Gas sees carbon credits as an important tool in the transition period from city gas. It aims to replace half of its domestic supplies of city gas with synthetic methane, or so-called e-methane, by 2040 after it starts commercial use in 2030. Japan's trade and industry ministry aims to replace 1pc of the country's city gas volumes to e-methane by 2030 and 90pc by 2050. The gas retailer is already participating in five e-methane projects globally, including the ReaCH4 project in Cameron in the US state of Louisiana, partnering fellow Japanese gas utilities Osaka Gas and Toho Gas and trading house Mitsubishi. The four companies aim to export 130,000 t/yr of synthetic methane to Japan by 2030 using the 15mn t/yr Cameron LNG facility. This project aims to move to an initial engineering stage this year. By Reina Maeda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Libya's crude output down 70pc in a week
Libya's crude output down 70pc in a week
London, 2 September (Argus) — Libya's crude output has fallen by nearly 70pc, Argus estimates, in the week since the country's eastern-based government ordered an oil blockade in response to an attempt to replace the central bank governor. Argus estimates Libya's current production at around 300,000 b/d, based on official documents and shipping sources. This is down from 960,000 b/d on 26 August when the oil blockade was announced. Output was 1.2mn-1.25mn b/d in early August, before the Repsol-led El Sharara field was forcibly shut down by the Libyan National Army (LNA). State-owned NOC today declared force majeure production from the 70,000 b/d El Feel field. Crude from the field, which is near El Sharara, is exported through the Mellitah terminal, 100km west of Tripoli. Italy's Eni, which operates the field alongside state-owned NOC, confirmed El Feel's closure to Argus last week. The biggest effect from the latest shutdowns is being felt in the oil heartland Sirte basin, from where crude is exported through the eastern export terminals at Es Sider, Ras Lanuf, Zueitina, Marsa el Hariga and Marsa el Brega. The region's oil facilities are effectively controlled by the LNA, which props up the eastern-based government in Benghazi. These five terminals exported 728,000 b/d of crude in the three months to August, out of a country total of 1.04mn b/d, according to Kpler. But there have been no exports from any of the five since 30 August, when a 500,000 bl cargo left Ras Lanuf. Libya's output may fall further as storage tanks are filled, although production is unlikely to hit zero. Some output will probably remain online to supply domestic refineries, as will some gas-linked oil production that supplies power plants. Most production in the country's west, which is nominally controlled by the internationally-recognised administration in Tripoli, is likely to continue. This includes the Eni-led 25,000 b/d Bouri and the TotalEnergies-led 20,000 b/d Al Jurf offshore fields, and Eni's Wafa wet gas field on the Algeria border that produces crude and condensate. The latest shutdowns were sparked by a Tripoli-based presidential council attempt on 18 August to replace long-standing central bank governor Sadiq al-Kabir. The presidential council has since installed an interim governor and board which on 2 September said the bank's operations had returned to normal. But al-Kabir and the eastern-based administration have refused to recognise the legitimacy of the new board. Analysts say the crisis could degrade Libya's ability to carry out international financial transactions and worsen a domestic shortfall of banknotes. Libya's oil export revenues usually flow into the central bank, making it one of the country's most powerful institutions. By Aydin Calik Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US issues first non-FTA LNG export permit since pause
US issues first non-FTA LNG export permit since pause
London, 2 September (Argus) — The US Department of Energy (DOE) has authorised Mexico's 1.4mn t/yr Altamira LNG export terminal to export cargoes produced from US gas to countries without a free trade agreement with the US (non-FTA authorisation). This is the first new non-FTA permit issued to a LNG export terminal since President Joe Biden's administration announced a pause on issuing new non-FTA authorisations in January, as it planned to review the impact of a further build-out of LNG export capacity using US gas. Altamira uses US feedgas, requiring permits from the DOE to export to countries that do and do not have a free trade agreement with the US. Altamira exported its first — partial — cargo last month , and already had a licence to export to countries with which the US has free trade agreements. The terminal was under construction when Biden announced the pause on new licences. The DOE did not immediately respond to an Argus request for comment on new non-FTA authorisations. Terminal operator New Fortress Energy said in February that it was unfazed by a lack of non-FTA authorisation, as it has enough supply commitments to countries that have FTAs with the US. Altamira non-FTA authorisation to end in 2029 The DOE has granted Altamira LNG a five-year non-FTA authorisation — not the multi-decade authorisation New Fortress sought. New Fortress wanted authorisation until 2051, but the DOE authorisation expires on 30 August 2029. The DOE said it will re-evaluate the export term when it has a "more complete record on which to evaluate" New Fortress' request. The re-evaluation would take place no sooner than 31 August 2026. The DOE acknowledged that re-exporting gas from the US as LNG in Canada and Mexico raises concerns that do not hold for straight US exports of LNG — namely that the US' economy "does not receive a significant portion of the benefits DOE has recognised for LNG exported directly from the US, particularly with respect to the jobs and infrastructure investment associated with construction and operation of liquefaction facilities". The DOE also said "long-term consequences may arise from the fact that foreign infrastructure is not directly subject to US environmental laws", so it would "carefully consider the development of this market segment". The DOE has now approved 46.45bn ft³/d of non-FTA exports from operational and planned projects in the US' lower 48 states, with a further 6.71bn ft³/d approved for non-FTA exports using US gas from terminals in Mexico and Canada. By Martin Senior Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Investment funds hold record long position on Ice TTF
Investment funds hold record long position on Ice TTF
London, 2 September (Argus) — The net long position of investment funds at the Dutch TTF gas hub has reached a record high of nearly 267TWh, according to the latest data released by the Intercontinental Exchange (ICE). The net long position had already reached a 2.5-year high of nearly 130TWh by mid-June . This position was roughly unchanged until late July. But there then came a sharp 61TWh jump between 26 July and 2 August, and a further 42TWh increase by 9 August. For the week ending 16 August, investment funds held a combined net long position of just under 266.6TWh, although it had edged down to 263.2TWh by the week ending 23 August, the most recent data show. Both of these figures surpass the previous record on 16 April 2021 of 262.6TWh ( see net position graph ). This first week of August was when prices in Europe shot up to a nine-month high following news of damage to the metering station at Sudzha, where the only still-functioning interconnection point between Russia and Ukraine is located. Such a large increase in investment funds' position over that period hints at their influence on overall price formation. The overall change in net position has been driven by both the opening of more long positions as well as the closing of short positions. Between 26 July and 23 August, investment funds' long positions increased by 79TWh to 465TWh. In the same period, their short positions dropped by just over 53TWh. Their short positions increased by 10TWh in the week of 16-23 August, just as TTF prices fell as market concerns around fighting near Sudzha subsided. Expectations of continued price volatility may have driven investment funds to build up their long positions. The future of Russian transit through Ukraine beyond this year is unlikely to be decided until late in the year, while significant Norwegian maintenance will drive down European supply this month and may continue to be adjusted at short notice. Investment funds typically make their money from price volatility, whereas utilities make most of their money from the margins on their sales to customers and associated services. The nearly 132TWh increase in investment funds' net long position between 26 July and 23 August is in sharp contrast to movements from other types of market participants. Commercial undertakings, defined as companies with retail portfolios, switched from a small net long position of 49TWh to a net short position of 40TWh. And investment and credit firms, which had already held sizable net short positions, increased them by a further 44TWh in this time to a total net short of 223TWh. Combining the total net short positions of commercial undertakings and investment and credit firms gives a total of around 263TWh, almost exactly matching investment funds' net long positions. Commercial undertakings' movements were largely driven by "risk reduction contracts", which more than tripled from a net short of 60TWh on 26 July to nearly 191TWh on 16 August, before falling to 177TWh on 23 August ( see commercial undertakings graph ). On aggregate this is the largest net short position on risk reduction contracts since the end of 2021. Firms have to hedge large physical long positions in the storage market, with EU storage sites already over 92pc full. At the same time, commercial undertakings' net long positions on contracts classified as "other" rose by around 30TWh to 138TWh, leaving a total net short position of 40TWh. By Brendan A'Hearn Ice TTF net positions 2018-present TWh Commercial undertakings' net positions 2018-present TWh Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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