Saudi Arabia Is Losing Its Iron Grip on Global Oil Markets -- Commodities Roundup

MARKET MOVEMENTS:

--Brent crude oil is down 0.5% at $73.22 a barrel

--European benchmark gas is down 2.9% at 47.16 euros a megawatt-hour

--Gold futures are up 0.3% at $2,676.00 a troy ounce

--LME three-month copper futures are down 0.2% at $9,102.50 a metric ton

TOP STORY:

Saudi Arabia Is Losing Its Iron Grip on Global Oil Markets

Saudi Arabia's sway over the Organization of the Petroleum Exporting Countries long meant unquestioned dominance of the global oil market. Those days are over, at least for now.

The kingdom is struggling to execute its plan to keep prices elevated. Higher prices would help pay for Saudi's infrastructure-spending spree, including $1 trillion of projects designed to rapidly pivot the economy away from oil. It would also pinch drivers at the pump and contribute to risks that inflation could stage a global comeback.

But the cartel's increasingly fractious members are pushing to pump more and maximize short-term profits, in part due to the expectation of growing competition from U.S. shale drillers emboldened by former President Donald Trump's re-election.

OTHER STORIES:

TotalEnergies Boosts Presence in Germany With $1.65 Billion VSB Deal

TotalEnergies struck a deal to buy renewable-energy company VSB Group from Partners Group for 1.57 billion euros ($1.65 billion), expanding its presence in Germany.

The French energy giant said Wednesday that the acquisition adds more than 2 gigawatt of developed onshore wind-power capacity across Europe.

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Centrica Boosts Electricity-Generation Forecasts on Delayed Nuclear Plants Closure

Centrica extended the operational lives of four nuclear power stations in the northern U.K., adding around 9 terawatt-hour of electricity generation to its output between 2026 and 2030.

The U.K. energy company, which owns British Gas, said Wednesday that two of the power stations, Heysham 1 and Hartlepool located in the east and west coast of northern of England, respectively, are now expected to generate electricity until March 2027, one year later than previously expected.

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The Israeli Investigator Who Delivered Dirt on Exxon's Enemies

Eitan Arusy made his name more than a decade ago as a dogged sleuth helping the Manhattan district attorney uncover a well-disguised-and deadly-terror-financing operation.

He parlayed that achievement into a successful career as a private investigator, where he excelled at digging up emails and other nonpublic information that could be used as weapons in high-stakes litigation and geopolitical disputes.

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Korean Battery Makers Have Bright Future Despite Trump

South Korean battery makers have benefited from President Biden's signature climate bill, the Inflation Reduction Act. Donald Trump's reelection brought some uncertainties to them, but it may not be all bad.

These makers of batteries for electric vehicles and other advanced applications have seen their shares plunge since Trump was elected. Samsung SDI's share price has dropped 23% in the past month while LG Energy Solution's has lost 9%. On the campaign trail, Trump railed against subsidizing the purchase of electric vehicles and has even said he may repeal the IRA.

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Volvo Car Sales Rose in November on Strong EV Demand

Volvo Car said global sales rose 5.2% on year in November, mainly driven by strong demand for electrified models in Europe and the U.S.

The Swedish automaker, which is majority owned by China's Zhejiang Geely Holding Group, sold 66,977 cars in November, up from 63,682 in the same month last year, it said Wednesday.

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U.S. Ethanol Production Drops Sharply

Average daily production of ethanol in the U.S. dropped sharply for the week ended Nov. 29, falling more than expected by analysts surveyed by Dow Jones.

In its latest weekly report, the Energy Information Administration said average daily production for the week was 1.073 million barrels a day. That's down 46,000 b/d from last week's record-high average of 1.119 million b/d. It is also below the low-end of analyst estimates for the week, with expectations landing between 1.099 million and 1.125 million b/d.

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U.S. Crude Oil Stockpiles Fall More Than Expected

U.S. crude oil inventories fell more than expected last week and product stocks saw a buildup as refineries ramped up their capacity use, according to data released Wednesday by the U.S. Energy Information Administration.

Commercial crude oil stocks excluding the Strategic Petroleum Reserve fell by 5.1 million barrels to 423.4 million barrels in the week ended Nov. 29 and were about 5% below the five-year average for the time of year, the EIA said.

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Tamarack Valley Energy Sees Better-Than-Expected Production in 2025

Tamarack Valley Energy sees production in 2025 topping analyst expectations as it sets its budget and capital returns targets for the year.

The Canadian energy company said Wednesday that it sees output for the year to be between 65,000 and 67,000 barrels of oil equivalent a day.

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Activist Palliser Refreshes Call for Rio Tinto to Unify Dual Listing

Activist investor Palliser Capital is calling for an independent review of Rio Tinto's dual listing in London and Sydney, insisting it makes more sense for the mining giant to unify its corporate structure in Australia.

In a letter to Rio Tinto's board on Wednesday, the U.K.-based hedge fund said Rio Tinto's dual-listed structure "has proved to be an unmitigated failure for shareholders and requires urgent unification into a single Australian-domiciled holding company."

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Rio Tinto Expects Pilbara Iron-Ore Shipments to Be Roughly Flat in 2025

Rio Tinto, the world's second-biggest miner by value, expects annual iron ore shipments from its Australian operations to be little changed in 2025, while forecasting its copper and bauxite production from its mines to rise year over year.

The Anglo-Australian company, which makes the bulk of its profits by digging up iron ore in Australia's Pilbara, said it expects to ship between 323 million metric tons and 338 million tons of the steel ingredient from those operations next year. That is in line with its 2024 estimate provided to investors last year.

MARKET TALKS:

Oil Edges Lower After U.S. Gasoline Inventories Rise -- Market Talk

1628 GMT - Oil prices edge lower in late afternoon trade in Europe after data showed U.S. gasoline inventories rose last week., but remain in a tight range as traders await OPEC+'s next policy move on Thursday. Crude benchmarks Brent and WTI are both down 0.5% to $73.23 and $69.56 a barrel, respectively, after opening the session higher. The latest EIA data showed U.S. crude stockpiles fell by 5.1 million barrels last week, against expectations of a 1.2-million-barrel fall. Gasoline stocks, instead, increased by 2.4 million barrels despite the Thanksgiving holiday, compared with expectations of a 200,000-barrel rise. ([e-mail])

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Milder Weather Outlook Keeps U.S. Natural Gas Under Pressure -- Market Talk

0905 ET - U.S. natural gas futures struggle to hold above $3 as milder temperature forecasts for December reduce demand expectations. "The quick flip late last week from extremely cold forecasts to a broad-based warmup appears to have prompted a sharp reversal in speculative entry," Ritterbusch says in a note. With storage likely to be higher than previously foreseen, "commercials will also be looking to establish short hedges that would appear to position this market for further price declines, at least until the temperature forecasts again reverse," the firm adds. The Nymex front month is off 1% at $3.011/mmBtu.([e-mail])

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Gold Edges Higher After U.S. Job Creation Slowed -- Market Talk

1617 GMT - Gold prices rise in late afternoon trade in Europe after the latest U.S. job data showed private payrolls growth was less than expected in November, reflecting a slowing labor market. The yellow metal's futures trade 0.4% higher at $2,679.50 a troy ounce, while the U.S. dollar slightly retreated against a basket of other major currencies. The U.S. private sector added 146,000 jobs last month--down from a revised 184,000 a month prior and against expectations of 163,000--possibly strengthening the case for a December rate cut. The report comes ahead of Fed Chair Jerome Powell's remarks later on Wednesday and U.S. nonfarm payrolls data on Friday. ([e-mail])

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Gold's Near-Term View Slightly Bearish as Focus Turns to U.S. Data -- Market Talk

1405 GMT - Gold's near-term forecast remains modestly bearish amid a rising dollar and weakening yuan, while long-term trends remain bullish, according to StoneX's Fawad Razaqzada. "Investors are awaiting a fresh buy signal, but probably feel a more significant correction is needed before the metal becomes attractive again," the market analyst says in a note. Focus is now on coming U.S. data for more insights into the health of the economy and the Fed's next move. The November nonfarm payrolls report due on Friday is seen as key. "A weaker-than-expected jobs report could renew hopes for a dovish Fed, possibly lifting gold in the short term," Razaqzada says. "However, in the event the data is not weak then gold may extend its losses." Gold futures currently trade 0.1% higher at $2,670.80 a troy ounce. ([e-mail])

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Palm Oil Falls Amid Signs of Declines in Malaysian Exports -- Market Talk

1009 GMT - Palm oil prices fell in Asian trade, reversing earlier gains amid signs of a decline in Malaysian exports. Data from cargo surveyors AmSpec Agri Malaysia and Intertek Testing Services indicated reductions in the country's November palm-oil exports of 10.35% and 9.26%, respectively, Phillip Nova's Lim Tai An says in commentary. The decline in exports could dampen bullish sentiment, though market participants are focused on supply disruptions from ongoing weather conditions, the analyst adds. The Bursa Malaysia Derivatives contract for February delivery fell 38 ringgit to 5,037 ringgit a ton. ([e-mail])

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12-04-24 1159ET