Oil markets have experienced a turbulent week, responding to rumors about a possible Israeli attack on Iranian oil facilities and the threat of a major hurricane disrupting U.S. oil production. However, the anticipated Israeli attack did not occur, and the effects of Hurricane Milton on U.S. oil output were minimal. As the week progressed and the expected Israeli response did not materialize, Brent crude futures dropped slightly, closing just below $79 per barrel.
Despite Hurricane Milton’s severe impact on Florida, its effects on the oil industry were limited. As a result, broader economic factors played a more significant role in market trends. Notably, U.S. inflation fell to an annual rate of 2.4%, influencing market dynamics.
Oil Companies Expect Weak Q3 Profits
Major oil companies are preparing for disappointing third-quarter profits. A UK oil giant has reported a $500 million decline in refining margins and weak oil trading performance. Similarly, Shell has indicated a 30% drop in refining profit margins, falling to $5.5 per barrel from $7.7 per barrel in the previous quarter.
Copper Prices React to Chinese Policy
Copper prices saw a slight increase to $9,770 per metric ton, fueled by anticipation of clearer policy guidelines from China regarding infrastructure investments. This came after a lackluster briefing from the National Development and Reform Commission (NDRC) earlier in the week. Investors are hoping for more information from Chinese Finance Minister Lan Foan in a scheduled briefing.
ExxonMobil Expands Offshore Operations
ExxonMobil has made a significant move by acquiring state leases for over 271,000 acres in Texas state waters. This acquisition aims to support an offshore carbon capture project and follows its previous bid for 69 blocks in the shallow waters of the Gulf of Mexico.
Houthi Rebels Target Russian Tankers
Yemen’s Houthi rebels have claimed responsibility for a missile attack on the Olympic Spirit, a Russian chemical tanker carrying vegetable oils. The attack involved at least four projectiles and coincided with a strike on a container ship named St. John in the Indian Ocean.
Rio Tinto Secures Major Lithium Deal
Australian mining giant Rio Tinto has confirmed a $6.7 billion all-cash agreement to acquire Arcadium Lithium. This deal positions Rio Tinto as a leading player in the global lithium market, as it acquires the world’s seventh-largest lithium producer.
East Timor Seeks Chinese Investment
The East Timor government is reportedly in talks with Chinese firms, including Sinopec, to develop the stalled Greater Sunrise gas field. This field contains approximately 5.1 trillion cubic feet of natural gas and aims to address ongoing challenges in negotiations with Australia.
JPMorgan Cautions on Mining Stocks
JPMorgan has issued a warning about a potential 20% decline in mining stocks if the U.S. imposes tariffs after the upcoming presidential election. This scenario could mirror the 10% drop in mining stocks seen during the early months of the Trump administration.
Libya Restores Oil Production
Libya’s oil production has rebounded to 1.22 million barrels per day, returning to levels seen before the recent central bank crisis and oil embargo. Exports are also on the rise, with the first Mellitah shipment in two months recently reported.
Mexico Enhances Control Over Pemex
A new bill passed in Mexico’s lower house of Congress aims to give the government greater control over the state oil company Pemex. This change will reclassify Pemex as a public company and require it to prioritize social objectives over profit-making.
Shell Faces Regulatory Setback
The U.S. Federal Energy Regulatory Commission has denied Shell’s request for access to non-public commissioning documents for Venture Global’s Calcasieu Pass LNG facility. As a result, Shell continues to face challenges in securing contract cargoes from the project.
Nigeria Eliminates Fuel Subsidies
Nigeria’s state oil company, NNPC, has increased gasoline prices by over 15%, marking the second price hike in less than a month. This move signifies the end of the country’s costly fuel subsidy, as Nigeria begins selling gasoline at market prices of $0.63 per liter.
China Invests in Coal-to-Liquids Technology
China’s state-controlled CHN Energy has commenced construction on a $24 billion coal-to-liquid project in Hami, Xinjiang. The first phase of the project is expected to be operational by the end of 2027, increasing coal-to-liquid production capacity by 50% to 12.2 million tons per year.
Malaysia Proposes New UCO Futures Contract
Malaysia’s stock exchange is seeking feedback on its proposal to launch a new futures contract for used cooking oil (UCO). This move aims to enhance Kuala Lumpur’s position as the world’s second-largest exporter of UCO, a key ingredient in biodiesel production.
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