2025-03-20 12:30

Taiwan's CPC signs letter of intent to buy LNG, invest Deal with Alaska Gasline Development Corp, no further details Taiwan says deal will help ensure energy security TAIPEI, March 20 (Reuters) - Taiwanese state energy firm CPC Corp signed on Thursday an agreement with Alaska Gasline Development Corp to buy liquefied natural gas and invest in the project, a move Taiwan's President Lai Ching-te said would ensure the island's energy security. Officials from state-run AGDC and development partner Glenfarne Group are visiting Asian countries this week to court investors for a natural gas project that President Donald Trump says could pump trillions of dollars into the U.S., although analysts say the project's high costs have been a focal point for years. Sign up here. CPC is striving to participate in the project's upstream gas investment to secure stable energy resources for Taiwan, the island's Ministry of Economic Affairs said in a statement, adding the move would "effectively shorten shipping time and risks, boosting reliability of Taiwan's gas supply." The ministry said CPC had signed a letter of intent to purchase LNG and invest in the project, without giving details. Speaking at a dinner reception in Taipei, which was attended by Alaska Governor Mike Dunleavy, Lai said natural gas from Alaska "can meet our need and ensure our energy security." In response, Dunleavy said by securing long-term natural gas supplies from Alaska, Taiwan could further diversify its LNG sources, "ensuring stable energy prices and consistent supply from a friendly neighbour for many decades to come." The officials want to transport gas south from Alaska's remote north via a $44 billion, 1,300-km (800-mile) pipeline, to be shipped as LNG to Japan, South Korea and Taiwan, bypassing the Panama Canal. The United States is Taiwan's most important international backer and arms supplier at a time when China has ramped up military pressure against the democratically-governed island that it claims as its own. Taiwan strongly rejects China's sovereignty claim. Taiwan will deepen military cooperation with the United States including intelligence sharing and holding joint tabletop exercises, the island's defence ministry said in a report this week amid a heightened military threat from China. https://www.reuters.com/business/energy/taiwans-cpc-seeks-invest-project-buy-alaska-lng-2025-03-20/

2025-03-20 12:28

Diesel inventories tight in US and Europe, demand robust Refining margins below seasonal levels despite tight supply Market uncertainty over global economic outlook affects diesel prices LONDON, March 20 - Diesel prices in the Atlantic basin have become increasingly disconnected from tightening supply and demand conditions, reflecting deepening concerns over the outlook for global economic activity. But when facts on the ground don't match prices, something has to give. The price of diesel, a refined fuel used in manufacturing, construction and heavy transport, is often seen as a gauge for industrial activity. And, currently, that gauge is pointing toward a bullish outlook. Sign up here. First, inventories remain tight in both the United States and Europe. U.S. diesel inventories dropped sharply last week to 115 million barrels and are 6% below their five-year average and 13% below the 10-year average, according to data from the Energy Information Administration. Similarly, diesel stocks independently held in Europe's Amsterdam-Rotterdam-Antwerp (ARA) refining hub have declined by 12% since the start of February. While they remain 6% above their five-year average, they are 8.5% below their 10-year average. At the same time, diesel imports into Europe have sharply slowed so far this year compared with 2024, according to data from shipping analytics firm Kpler. And supplies have tightened further due to a sharp drop in Russian diesel exports driven by refinery maintenance as well as recent attacks by Ukraine on Russian refineries and energy infrastructure. While supply has contracted, demand appears robust. In the United States, average four-week product supplied of distillates, a gauge for consumption of diesel and heating oil, reached 4 million barrels per day last week, up 8% from last year and near its five-year average, the EIA data showed. And in Europe, industrial production across the euro area recovered by 0.8% in January from the previous month, according to initial data , opens new tab from Eurostat, the statistical office of the European Union. This will boost demand for diesel even before factoring in the potential spike in defence and infrastructure investment that could be coming down the pipe. DIESEL DISCONNECT Everything about this supply-demand picture points toward rising diesel prices, yet the profit margin refiners make from converting crude oil into diesel has fallen well below the seasonal levels seen in recent years. Benchmark U.S. diesel refining margins are currently around $25 a barrel, compared with their five-year average of $32 a barrel. A similar picture has emerged in Europe, where northwest European diesel refining margins are some 22% below their five-year average at $16.4 a barrel. It is usually impossible to identify any one driver of near-term price dynamics in a complex global energy market. But in this case, the key factor is very likely the uncertainty gripping global markets over the economic outlook amid rising trade tensions. U.S. President Donald Trump's erratic stop-start rollout of tariffs on goods from major trading partners including China, Canada, Mexico and the European Union in recent weeks has roiled many global markets. On top of this, the potential for a ceasefire in Ukraine has muddied forecasts in energy markets, as investors attempt to assess the likely impact of any deal on sanctions, European energy policy and geopolitical alliances. Reflecting this market angst, the Baker Bloom and Davis Index , opens new tab of Trade Policy Uncertainty jumped this year to its highest point since its launch 40 years ago. The diesel price disconnect suggests that this negative sentiment – the deep uncertainty concerning the direction of global trade and manufacturing – is trumping the reality of tight supply-demand dynamics in the physical market. While the weakening diesel price may ultimately end up being an accurate signal – if the feared contraction in global economic activity materializes – investors may be getting ahead of themselves. The fundamental supply and demand picture in the diesel market continues to point toward higher refining margins, so if the facts on the ground do not change soon, prices likely will have to. The opinions expressed here are those of the author, a columnist for Reuters https://www.reuters.com/markets/europe/diesel-disconnect-highlights-market-angst-not-market-reality-bousso-2025-03-20/

2025-03-20 12:17

ISTANBUL, March 20 (Reuters) - Turkey has received an extension from the United States to a waiver for gas payments to Russia, a Turkish source said on Thursday, adding that the extension would be valid until May. In November, Washington imposed new sanctions over the Ukraine conflict on Russia's Gazprombank, one of the country's largest banks which receives payments for natural gas from Gazprom's customers in Europe. Turkey, along with Hungary and Slovakia received a U.S. waiver in December. Sign up here. The extension was first reported by Bloomberg earlier on Thursday. Turkey's energy ministry declined to comment, while Turkey's Treasury was not immediately available for comment. Russia provides more than 40% of Turkey's gas imports. Turkey's gas imports were up 1% last year at 51.7 bcm, with imports of Russian gas were down 2% at 21.6 bcm. https://www.reuters.com/business/energy/turkey-gets-waiver-extension-us-gas-payments-russia-turkish-source-says-2025-03-20/

2025-03-20 12:12

DUBAI, March 20 (Reuters) - Saudi oil giant Aramco has launched a pilot direct air capture unit able to remove 12 tons of carbon dioxide per year from the atmosphere, it said on Thursday. The facility, developed with Siemens Energy, is Saudi Arabia's first carbon dioxide direct air capture (DAC) unit and will be used to test CO2 capture materials, Aramco said. Sign up here. Critics of capturing CO2 emissions have said the technology is expensive and unproven at scale. "The test facility launched by Aramco is a key step in our efforts to scale up viable DAC systems, for deployment in the Kingdom of Saudi Arabia and beyond," Ali A. Al-Meshari, Aramco senior vice president of technology oversight and coordination, said in Aramco's statement. "In addition to helping address emissions, the CO2 extracted through this process can in turn be used to produce more sustainable chemicals and fuels." Aramco, the world's top oil exporter, aims to reduce its so-called Scope 1 and 2 emissions to net zero by 2050. Aramco announced the pilot DAC unit with Siemens Energy in October 2023 and said at the time it would be completed in 2024 and was intended to pave the way for a larger pilot plant that would have the capacity to capture 1,250 tons of CO2 per year. The state oil giant in December signed an agreement with oil services firms SLB and Linde to build a carbon capture and storage project in Jubail, Saudi Arabia. The first phase is expected to be completed by the end of 2027, capturing and storing up to 9 million tons of CO2 a year. Aramco has signed several other agreements to explore carbon capture development and last year took part in an $80 million funding round of Los Angeles-based CarbonCapture. https://www.reuters.com/sustainability/saudi-aramco-launches-first-direct-air-capture-test-unit-2025-03-20/

2025-03-20 12:00

LAUNCESTON, Australia, March 20 (Reuters) - What's more important for crude oil markets? Forecasts of Chinese oil demand growth by leading agencies or the reality of ongoing weakness in imports? Both the International Energy Agency (IEA) and the Organization of the Petroleum Exporting Countries (OPEC) talk about demand when they make forecasts as to the state of the oil sector in China, the world's biggest crude importer. Sign up here. This is a long-standing practice and one that is largely unchallenged by the wider market. The problem is that there is a disconnect between the forecasts of demand growth amounting to several hundred thousand barrels per day (bpd) and the reality that China's oil imports are actually falling. In its latest monthly market report OPEC said that China's oil demand was 16.68 million bpd in 2024, a rise of 320,000 bpd from the 16.36 million bpd the exporter group said it was in 2023. However, China's oil imports were 11.04 million bpd in 2024, according to customs data, which was down 2.1%, or 210,000 bpd from 2023. Obviously demand includes more than just crude imports, as it also counts imports of products, domestic output and any changes in inventories. But the gap between the bullish demand number from OPEC and the weakness in imports can't be bridged by any of the other components of demand. China's imports of refined products were 1.05 million bpd in 2024, a figure calculated by using the customs figure of 48.23 million metric tons and converting at the BP Plc rate of eight barrels of product per ton. Product imports were also down by 1.0% in 2024 from the previous year, according to the customs figures. China's domestic crude production was 4.24 million bpd, up 1.4%, or 60,000 bpd from the 4.18 million bpd in 2023. China doesn't disclose changes in commercial or strategic oil inventories, but an estimate of surplus crude can be made by subtracting what refiners processed from the total volume of crude available from imports and domestic output. On this basis China added about 1.15 million bpd to stockpiles in 2024, up from 760,000 bpd in 2023. Putting the available data together shows that China's imports were weak in 2024, domestic production rose modestly and it's likely that the country was adding to crude inventories. But the more important conclusion is that looking at forecasts for China's oil demand is likely to give a misleading picture of the actual situation. PRICE LINK If OPEC's gain of 320,000 bpd in China's oil demand in 2024 is the right metric to use, it would follow that Chinese demand would be bullish for crude prices. But crude prices struggled last year, with global benchmark Brent futures dropping from a year high of $91.05 a barrel on April 15 to as low as $68.68 by Sept. 10, before ending 2024 at $74.64. While China is far from the sole driver of the crude price, it does play an outsized role given it accounts for about one-quarter of global seaborne imports, and it's the seaborne price that drives the entire crude market. The IEA was more modest than OPEC in its China numbers, with its March monthly report pegging total oil product demand growth at 151,000 bpd in 2024, while forecasting a gain of 228,000 bpd in 2025. OPEC's latest report forecasts that China's oil demand will rise by 310,000 bpd in 2025, more optimistic than the IEA's estimate. But once again, the reality of weak crude imports is continuing, with customs data showing arrivals of 10.42 million bpd in the first two months of 2025, down 370,000 bpd, or 3.4%, from the 10.79 million bpd recorded for the same period in 2024. It's possible that lower crude prices and a recovery in economic momentum could see China's crude imports recover over the rest of 2025. But for now, the forecasts for oil demand growth in China being made by OPEC and the IEA are already at odds with the declining imports. The views expressed here are those of the author, a columnist for Reuters. https://www.reuters.com/markets/commodities/opec-iea-focus-china-oil-demand-crude-imports-are-what-matter-russell-2025-03-20/

2025-03-20 11:37

ROME, March 20 (Reuters) - Italy will begin exclusive talks with an Azeri consortium about the sale of Italian steel company Acciaierie d'Italia (ADI), formerly known as Ilva, Industry Minister Adolfo Urso said on Thursday. The consortium investors interested in taking over ADI are Baku Steel and Azerbaijan Business Development Fund, a person with knowledge of the matter said. Sign up here. ADI, which is under state administration after struggling to maintain production amid rising energy costs and weak demand, is a major headache for Italian Prime Minister Giorgia Meloni because its closure would have major knock-on effects for the country's manufacturing sector. "The commissioners (running the company) have pre-announced to me that they will send a formal request today to be authorized to negotiate with the Azeri consortium that made the best proposal," Urso told reporters on the sidelines of an event in Bologna, northern Italy. In February, both Baku Steel and the Indian company Jindal Steel International raised their preliminary bids for ADI. The government took charge of the ADI's factories in Italy last year under a special administration procedure, ending weeks of clashes with its then top shareholder ArcelorMittal (MT.LU) , opens new tab, the world's second-largest steelmaker. https://www.reuters.com/markets/commodities/italy-begin-exclusive-talks-with-azeri-consortium-over-sale-ilva-steelworks-2025-03-20/