International Courant
An oil pump jack is seen in a subject on June 27, 2024 in Stanton, Texas.
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SINGAPORE — International markets are wildly exaggerating the oil glut, in keeping with Jeff Currie, chief technique officer of vitality pathways at personal fairness big Carlyle.
Considerations about oversupply out there are “fully overblown,” Currie stated on the annual Asia Pacific Petroleum Convention in Singapore, blaming extreme pessimism about Chinese language demand amid stagnant U.S. crude manufacturing.
US crude oil costs final week hit their lowest stage since June 2023 as demand from the worldwide economic system weakened. largest crude oil importer stays lukewarm in a market the place there’s clearly an oversupply.
The important thing level is that the market is dramatically overestimating that flood.
Jeff Currie
Chief Technique Officer of Power Pathways at Carlyle
“(China’s) demand weaknesses are being massively exaggerated by base results and by destocking,” he stated at APPEC. China’s crude oil imports in 2023 had been reached a report excessive.
“There’s the transition part, the place vans are switching to LNG, after which there’s the financial weak point. So that you’re down 500,000 barrels a day,” he stated, including that the worst of that transition is probably going over.
The demand for oil in China has decreased on the again of a decline in industrial inputs, in keeping with the Worldwide Power Company. Preliminary information from the company additionally pointed to continued weak point in July, as China’s crude oil imports fell to their lowest stage since 2022 amid strict lockdowns within the nation. China’s crude oil imports fell 7% in August.
On the provision facet, there’s black oil manufacturing within the US, one of many world’s largest producers of crude oilhas been “flat” this 12 months, Currie stated. Black oils embrace crude oil, heating oil, gasoline oil, asphalt and tar. White oils embrace gasoline and jet gasoline.
“The U.S. is producing report quantities of pure fuel liquids. Liquids are usually not oil … When you have a look at oil, U.S. manufacturing is flat this 12 months,” Currie stated.
“The primary downside is that the market is dramatically overestimating the flood (in oil provide), and that’s mirrored in report numbers of quick positions… and I’ve by no means seen something prefer it,” he added.
In June, Carlyle stated that would purchase a portfolio of gas-weighted belongings with preliminary manufacturing estimated at 47,000 barrels oil per day. The corporate struck a $945 million cope with Energean to amass the latter’s belongings in Egypt, Italy and Croatia, Reuters reported.
Provide exceeds demand
Different analysts within the sector disagree with Currie’s evaluation of the oversupply within the crude oil market.
“We’re in all probability producing rather more oil for the important thing merchandise than we’re consuming, and that stability is predicted to deteriorate within the coming 12 months,” stated Torbjörn Törnqvist, CEO of commodity buying and selling firm Gunvor.
Worsening issues about oversupply, oil big OPEC+ is predicted to extend manufacturing in 2025, the primary improve in three years, stated Jim Burkhard, head of analysis for oil markets, vitality and mobility at S&P International.
Even when OPEC+ would not improve manufacturing, the world remains to be taking a look at greater than 5 million boreholes of unused oil, Burkhard stated.
“Which means extra unused capability will likely be left on the sidelines, and that may put downward stress on costs,” he stated.
Oil glut is dramatically overestimated by markets: Carlyle
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