OPEC+ Outlook:
OPEC+ is expected to approve a modest oil output hike of 137,000 barrels per day for December 2025, signaling a cautious approach amid supply glut concerns. Despite adding 2.7 million bpd since April, new Western sanctions on Russia are complicating production plans. Oil prices have rebounded from $60 to $65 per barrel, supported by sanctions and improved trade sentiment. Most voluntary cuts will remain in place through 2026.
Ukraine–Russia Conflict:
Ukraine launched drone strikes on Russia’s Tuapse oil terminal, damaging infrastructure and vessels, temporarily halting operations at the 240,000 bpd Rosneft refinery. Russia reported intercepting 283 Ukrainian drones over the weekend, while retaliatory strikes left parts of southern Ukraine without power. These attacks are heightening supply risk in the Black Sea region.
ADIPEC Energy Conference Highlights:
At Abu Dhabi’s ADIPEC conference, OPEC+ leaders expressed confidence in crude demand through 2026, citing strong energy needs from AI and data centers. UAE and OPEC officials emphasized balancing supply while remaining flexible amid sanctions and volatility. ADNOC’s CEO projected oil demand will stay above 100 million bpd beyond 2040 and called for $4 trillion in annual energy investment to meet global infrastructure needs.
U.S. Oil Inventories:
Analysts expected a small 500,000-barrel crude build for late October, following a major 6.86 million-barrel draw the week prior. However, API data later showed a 6.5 million-barrel build, signaling an unexpected crude oversupply even as gasoline and distillate inventories tightened. The mixed data suggest refined product markets remain strong but crude momentum may soften.
Regional Stock Markets:
Most Gulf markets traded lower as oil prices eased and expectations for a U.S. rate cut in December fell to 65%.
- Saudi Arabia: Index down 0.7%, led by bank and power sector weakness; Aramco and Saudi Telecom gained.
- Abu Dhabi: Up 0.4% on property sector rebound.
- Dubai: Down 0.1% on weaker banking shares.
- Egypt: Up 1.1%, hitting a record high on a new $788M tourism project.
Energy Outlook (TotalEnergies):
TotalEnergies forecasts global oil demand will rise until around 2040, then gradually decline. Revised projections show 2050 demand between 55–98 million bpd, depending on climate action scenarios. The firm cited slower EV adoption, reduced green incentives, and energy security priorities as reasons for higher demand expectations.
Oil Tanker Storage & Sanctions:
Western sanctions on Russia and Iran have led to record volumes of oil stored on tankers, effectively keeping a supply glut off the market. Gunvor warns that lifting sanctions could trigger an oversupply, while Mercuria expects global output may exceed demand by up to 2 million bpd next year if current trends persist.
Maritime Security Risks:
Pirates attacked the Malta-flagged tanker Hellas Aphrodite off Somalia, marking a resurgence in Somali piracy—the worst since 2024. The crew is safe, and EU naval forces are responding. These incidents add to Red Sea shipping disruptions caused by Yemen’s Houthi militants, heightening global maritime security concerns.
Market Takeaway
Oil markets are balancing between geopolitical risks and oversupply fears.
- Short-term: Volatility remains due to sanctions, inventory swings, and conflict-driven disruptions.
- Medium-term: Demand outlook stays firm into 2026, supported by AI, infrastructure, and industrial growth.
- Long-term: Energy transition progress is slowing, suggesting sustained fossil fuel demand beyond 2040.
If you have any questions or would like current pricing, please contact your Energy Account Manager.
Propane
Market Summary – U.S. Propane (EIA Weekly Report)
Inventories: Propane stocks rose by 400,000 bbl last week to 106.1 million bbl, versus expectations for a 250,000 bbl build. Inventories are now 5.6 million bbl higher (+5.6%) year-over-year, marking an all-time high.
Regional Changes:
- Gulf Coast (PADD 3): +500,000 bbl
- Midwest (PADD 2): –300,000 bbl
- East Coast (PADD 1): +400,000 bbl
- PADD 4 & 5 (Rockies/West Coast): –100,000 bbl
Exports: Increased 315,000 bpd to 1.964 million bpd, rebounding from the prior week but still insufficient to offset strong production.
Production: U.S. propane output remains at record highs, sustaining pressure on storage levels despite stronger exports.
Market Pricing: Conway propane trades at 39.7% of crude oil value, reflecting abundant supply and muted drawdown expectations.
Overall: U.S. propane inventories continue to climb despite export recovery, signaling a well-supplied market with limited near-term bullish pressure.
If you have any questions or would like current pricing, please contact your Energy Account Manager.
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