OPEC Plus to cut output by one million bpd

OPEC Plus oil producers are likely to agree output cuts of at least one million barrels per day (bpd) for early next year led by Saudi Arabia rolling over its voluntary additional cut and smaller curbs by others, two delegates told Reuters ahead of a virtual OPEC+ meeting on Thursday.

Saudi Arabia, Russia and other members of OPEC Plus pump more than 40% of the world's oil, or some 43 million bpd. They currently have cuts of about 5 million bpd in place.

According to Reuters a preliminary agreement has been reached for a cut of more than one million bpd.

This would include Saudi Arabia extending the voluntary cut of one million bpd it has had in place since July plus additional contributions from other members, sources said.

It was unclear how much other members would contribute, sources said. A third source said a new reduction would be agreed on Thursday without providing a figure.

"It depends on other group participants, could be near or more," the third source said when asked about the possible one million bpd cut.

With Saudi Arabia's voluntary output cut of one million bpd and a Russian export cut of 300,000 bpd both set to expire at the end of this year, the focus is on plans for 2024.

Benchmark Brent crude futures were up to US$83.95 a barrel at 1221 GMT on Thursday, on track for a third day of gains on expectations of fresh cuts from OPEC Plus.

Earlier, two delegates involved in the discussions said fresh cuts for 2024 could potentially take one million to two million bpd in production off the market in the first quarter of 2024.

RBC Capital Markets analyst Helima Croft said that Saudi Arabia, which began its additional voluntary one million bpd in July, would not want to shoulder additional cuts alone.

"We could envision a scenario where Russia and Saudi Arabia roll over their cut through the first quarter of 2024 and assemble a coalition of the willing individual producers prepared to make voluntary adjustments," she added.

The focus is on lower output with prices down from near US$98 in late September and concerns brewing over weaker economic growth in 2024 and expectations of a supply surplus.

The International Energy Agency (IEA) this month forecast a slowdown in 2024 demand growth as the last phase of the pandemic economic rebound dissipates and as advancing energy efficiency gains, expanding electric vehicle fleets and structural factors reassert themselves.

OPEC Plus sources this week said discussions had been proving difficult, as evidenced by the group postponing their meeting which was scheduled for November 26.

Plans now call for an OPEC only ministers’ virtual meeting on Thursday at 1100 GMT and a wider OPEC Plus meeting at 1400 GMT.

Sources said the delay was sparked by disagreement over output quotas for African producers; a matter they said had largely been resolved.

The OPEC Plus meeting coincides with the opening of the United Nations' COP28 climate summit being hosted by OPEC member the United Arab Emirates.

 

 

 

Iranian oil output 3.1 million barrels per day

The US Energy Information Administration (EIA) in a report disclosed Iranian crude oil output at 3.1 million barrels per day (bpd). This indicates Iranian oil output has risen 500,000 bpd in the current year.

On October 29, the spokesman of the Iranian Oil, Gas and Petrochemical Products Exporters’ Union said that Iran’s oil production has increased to 3.4 million barrels per day, despite the US sanctions aimed at curbing oil exports and the associated revenue to Iran’s government.

“The latest reports show that Iran’s oil production has increased to 3.4 million barrels per day, while it was about 2.9 million barrels per day until recently,” Hamid Hosseini told IRNA.

Given that previously closed oil wells have been reopened and returned to the production cycle, Iran can increase its oil production to 3.8 million bpd, he said.

“If we seek to increase oil exports from 3.8 million barrels per day to 4.2 million bpd in the 7th National Development Plan, we need to invest an average of US$25,000 for each barrel of oil. Since these oil wells, we have the opportunity to increase the oil production to 3.8 million barrels per day,” he explained.

Hosseini also said that about 40,000 bpd have been added to the country’s oil production from the Sepehr and Jafir oilfields, which can help with the economic growth of the country.

 

India to add coal-fired power plants to avoid outages

According to a Reuters report, India aims to add 17 gigawatts of coal-based power generation capacity over the next 16 months, its fastest pace in recent years, to avert outages due to a record rise in power demand.

The expansion drive comes ahead of this week's UN climate summit COP28, where France and the United States are expected to clamp down on financing for coal plants. India is dependent on coal for 73% of its power generation.

The world's fastest growing major economy has added an annual average of 5 gigawatts of coal-based electricity generation capacity over the last five years, but it is also ramping up renewable energy.

Yet it will fall short of satisfying power demand if it does not expand the number of its coal plants, said two government officials, who did not want to be named as they are not authorized to speak to media.

In the next four months, India plans to add nearly 3 gigawatts of coal-fired generation, while the following fiscal year, starting from April 01, 2025, will see it add 14 gigawatts, or its highest level in eight years, according to internal government documents seen by Reuters.

To ensure completion of projects, New Delhi has begun a review of 38 coal generation plants whose construction has been held up for years, moving to resolve issues over equipment and land acquisition delays, the two officials said.

The government expects 28 of these projects to become operational in the next 18 months, it told power producers in a presentation at a meeting on November 21.

Such projects include state-run power company NTPC's 660-megawatt unit in the eastern state of Bihar which has been delayed for 13 years, and two in the neighbouring state of Jharkhand held up for five years.

At the meeting, Power Minister R. K. Singh told public and private power generators that India would have to add coal-based thermal capacity, to meet requirements growing at an unprecedented rate.

He also urged private companies to set up fresh coal-based power generation capacity to meet night-time demand and assured them of financial assistance.

Industry officials said such a call was being made for the first time in a decade since most private investments in the coal-fired power sector had stopped around the year 2012, partly because of India's green energy push.

While the coal expansion drive aims to meet an expected rise of 10% in demand during peak hours in fiscal year 2024-25, India remains committed to meet a national commitment of half of fuel generation capacity from non-fossil fuels by 2030.

Since adding 22 gigawatts of capacity in the fiscal year 2015/16, India cut back on plans to expanding coal-fired plants as the government opted for alternate energy capacity, officials have said.

Now India wants coal-fired plants sufficient to meet power demand of 384 gigawatts by the fiscal year 2031/32, revised up 5% from an earlier projection of 366 gigawatts, the government documents showed.

The government consequently revised up its estimate of coal-based power requirement by 9%, to 283 gigawatts.

"We have now modeled a stressed scenario factoring in a below-normal monsoon and a corresponding demand spike, such as we experienced in Aug-Oct this year," one of the government officials said.

That stress accounts for delays in the commissioning of 86 gigawatts of non-fossil capacity by fiscal 2031/32.

In the lead-up to Thursday's climate summit in Dubai, the European Union, United States and UAE have rallied support for a deal to triple global renewable energy installed by 2030.

More than 100 countries have backed this deal, officials told Reuters, but countries including China and India are not yet fully on board.

 

Iran-Pakistan gas pipeline, seeking exemptions

The Government of Pakistan (GoP) is reportedly using diplomatic channels to engage with the US authorities to seek exemption from sanctions on multi-billion Pakistan –Iran (IP) Gas Pipeline Project.

Minister for Power and Petroleum, Muhammad Ali recently visited Iran to discuss the project and other energy sector related issues. During the meeting both sides agreed to develop consensus to proceed with the project.

The Gas Sales and Purchase Agreement (GSPA) between Pakistan and Iran was signed in June 2009 and became effective after completing the Conditions Precedents in June 2010.

Under the project, Iran will supply gas from onshore gas processing facility at Assaluyeh to traverse a distance of 1,150 Kms up to Iran-Pakistan border (Iran Section).

Pakistan section of the pipeline is to be laid from Iran-Pakistan border up to Nawabshah in Pakistan covering a distance of over 781 Km. Iran is obligated to supply 750 MMCFD under GSPA.

According to sources, Pakistan and Iran are engaged in the revival of the project. The technical team from Pakistan visited Iran in January 2023 to discuss the way forward. The Iranian technical team visited Pakistan in August 2023 wherein possible implementation options were discussed.

The Prime Minister constituted a high level Ministerial Oversight Committee (MOC) for the project to find robust workable solutions and recommend way forward keeping in view its economic viability, financing as well as political and diplomatic consequences. The Committee is holding regular meetings and considering steps that can be taken for implementation.

Based on recommendations of the Committee, Petroleum Division and Ministry of Foreign Affairs (MoFA) are actively engaged with US authorities to seek exemption from sanctions. Alternative, project implementation options are also being explored to fulfill Pakistan’s obligations under GSPA.

Pakistan is actively pursuing legal and diplomatic avenues to implement the project. International legal counsels are also engaged to help seek waiver from US sanctions and formulate workable implementation options.

 

Hamas invites Elon Musk to visit Gaza

A Hamas senior official invited US billionaire Elon Musk on Tuesday to visit the Palestinian Gaza strip to see the extent of destruction caused by the Israeli bombardment.

"We invite him to visit Gaza to see the extent of the massacres and destruction committed against the people of Gaza, in compliance with the standards of objectivity and credibility," Hamas' senior official Osama Hamdan said in a press conference in Beirut.

On Monday, Elon Musk, the social media mogul assailed for his endorsement of an anti-Jewish post, toured the site of the Hamas assault on Israel and declared his commitment to do whatever was necessary to stop the spread of hatred.

Musk owns the X social media platform.

Hamdan's comments come one day after a temporary truce between Israel and Hamas was extended for an additional 48 hours.

"Within 50 days, Israel dropped more than 40,000 tonnes of explosives on the homes of defenseless Gazans," he said, "I call on US President Biden to review the US relationship with Israel and to stop supplying them with weapons."

Speaking on the destruction of Gaza incurred by Israel since the conflict began on October 07, Hamdan called on the international community to quickly send specialized civil defense teams to help retrieve bodies still trapped under the rubble. According to the Palestinian foreign ministry, thousands are still trapped.

The truce agreed last week was the first halt in fighting in the seven weeks since Hamas attacked Israel, killing 1,200 people and taking about 240 hostages back into Gaza, according to Israeli tallies.

In response to that attack, Israel has bombarded the enclave and mounted a ground offensive in the north. At least 16,000 Palestinians have been killed, Palestinian health officials say, and hundreds of thousands displaced.

Iran finalizes deal to buy Russian fighter jets

Iran has finalized arrangements for the delivery of Russian made Sukhoi su-35 fighter jets and helicopters, Iran's deputy defence minister told Iran's Tasnim news agency on Tuesday, as Tehran and Moscow forge closer military relations.

Iran's air force has only a few dozen strike aircraft, including Russian jets as well as ageing US models acquired before the 1979 Islamic Revolution.

"Plans have been finalized for Sukhoi Su-35 fighter jets, Mil Mi-28 attack helicopters, and Yak-130 jet trainers to join the combat units of Iran's Army," Iran's deputy Defence Minister Mehdi Farahi said.

The Tasnim report did not include any Russian confirmation of the deal.

In 2018, Iran said it had started production of the locally-designed Kowsar fighter for use in its air force. Military experts believe the jet is a carbon copy of the F-5, first produced in the United States in the 1960s.

 

 

Can Nikki Haley be the next US president?

According to The Hill, the political wing of the conservative network led by billionaire Charles Koch has endorsed former South Carolina Governor, Nikki Haley for president, throwing its weight behind a top Republican challenger to former President Trump.

Americans for Prosperity Action (AFP) released a memo Tuesday backing Haley, who served as ambassador to the UN during the Trump administration, arguing she is the strongest candidate to defeat Trump in the GOP primaries as well as President Biden in next year’s general election.

This marks the first time the deep-pocketed group has thrown its support behind a Republican candidate in a presidential primary and opens up vast resources for Haley’s challenge to Trump.

“AFP Action is proud to throw our full support behind Nikki Haley, who offers America the opportunity to turn the page on the current political era, to win the Republican primary and defeat Joe Biden next November,” reads the memo from AFP senior adviser Emily Seidel.

“She has what it takes to lead a policy agenda to take on our nation’s biggest challenges and help ensure our country’s best days are ahead. With the grassroots and data capability we bring to bear in this race, no other organization is better equipped to help her do it,” it continued.

The memo stated the group was getting involved in a presidential primary for the first time because it wants a candidate who will turn the page on the past. It added that Trump and Biden will only further perpetuate the country’s downward spiral in politics.

This comes nearly a year after the conservative network signaled it would not back Trump in the Republican primary, saying it would support a candidate who represents a new chapter. The endorsement demonstrates the group’s attempt to distance the Republican Party from Trump, who the group said would lose to Biden.

“In sharp contrast to recent elections that were dominated by the negative baggage of Donald Trump and in which good candidates lost races that should have been won, Nikki Haley, at the top of the ticket, would boost candidates up and down the ballot, winning the key independent and moderate voters that Trump has no chance to win,” the memo states.

Haley has battled Florida Governor Ron DeSantis as the top challenger to Trump in the GOP race and has seen her standing in polls tick up amid several strong debate performances. Trump, for his part, has maintained large leads in polls both nationally and in early voting states.

DeSantis’s campaign panned the AFP Action endorsement in a statement released Tuesday, saying the establishment is lining up behind a moderate who has no mathematical pathway of defeating the former president.

AFP Action acknowledged DeSantis in its memo, praising him as a strong advocate for many important freedom-oriented policies and fiscal responsibility in the Sunshine State. The group noted that it endorsed his successful gubernatorial reelection bid last year.

“We also understand that some of the Governor’s supporters, including some who support AFP, will be disappointed in our decision,” the memo reads.

“However, as the 2024 primary season heats up, we are entering a time period that demands choices. Donald Trump won the nomination in 2016 largely because of a divided primary field, and we must not allow that to happen again, particularly when the stakes are even higher in 2024.”

Haley welcomed the group’s endorsement in a statement, reiterating that the 2024 election “is a choice between freedom and socialism, individual liberty and big government, fiscal responsibility and spiraling debt.”

Americans for Prosperity

 

AMERICANS FOR PROSPERITY CHARLES KOCH JOE BIDEN NIKKI HALEY NIKKI HALEY RON DESANTIS RON DESANTIS