Oil rallies as US crude stocks decline in tight market: Energy market wrap

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Updated 20 October 2021
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Oil rallies as US crude stocks decline in tight market: Energy market wrap

RIYADH: Oil prices rose on Wednesday after US crude inventories at the nation’s largest storage site hit their lowest level in three years and nationwide fuel stocks fell sharply, a signal of rising demand.

Brent crude futures settled at $85.82 a barrel, a gain of 0.9 percent or 74 cents and the highest since October 2018.

November US West Texas Intermediate crude, which expires on Wednesday, settled at $83.87, up 91 cents, or 1.1 percent. The more active WTI contract for December settled up 98 cents to $83.42 a barrel.

Crude prices have risen as supply has tightened, with the Organization of the Petroleum Exporting Countries maintaining a slow increase in supply rather than intervening to add more barrels to the market, and as US demand has ramped up.

Globally, refiners have been boosting output thanks to high margins, one that can only be restrained by maintenance. US refining capacity use dropped in the most recent week, but analysts noted that supply may continue to tighten if US refiners also pick up processing again.

Emissions cut

Anglo-Australian miner Rio Tinto announced a $7.5 billion plan to reduce carbon emissions by 50 percent by 2030 and forward its target of 2025 for a 15 percent reduction in emissions from 2018 levels.

LNG deals

China has agreed to three huge liquefied natural gas deals with US exporter Venture Global LNG.

According to documents posted on the US department of energy website, the agreements with China’s state oil giant Sinopec include two 20-year deals for a combined 4 million tons of LNG per year.

Germany’s oil imports

German crude oil import volumes fell 7.1 percent from January to August and related lockdowns hit the industry, official data showed on Wednesday.

Oil volumes in Jan-Aug fell to 51.9 million tons from 55.8 million in the same months of 2020, statistics from the BAFA foreign trade office showed.

Forecast 

Crude oil prices could reach $100 per barrel in the first or second quarter of next year as global inventories are at their lowest level, the Iraqi oil minister said.


Saudi Arabia’s industrial output rises 10.4% in November: GASTAT 

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Saudi Arabia’s industrial output rises 10.4% in November: GASTAT 

RIYADH: Saudi Arabia’s industrial output rose at its fastest rate in months, climbing 10.4 percent year on year in November, supported by stronger manufacturing activity and higher oil production, official data showed. 

The Industrial Production Index increased to 114.4, up from 103.6 a year earlier, according to the General Authority for Statistics, though the index slipped 0.7 percent from October.

The latest figures highlight continued momentum in the Kingdom’s industrial sector as Saudi Arabia pursues economic diversification under its Vision 2030 agenda.

In its latest report, GASTAT stated: “Preliminary results indicate an increase of 10.4 percent in the IPI in November 2025 compared to the same month of the previous year, supported by the rise in mining and quarrying activity, manufacturing activity and water supply, sewerage and waste management and remediation activities.”  

The sub-index of mining and quarrying activity increased by 12.6 percent year on year in November, supported by Saudi Arabia’s decision to raise oil production to 10.1 million barrels per day, compared to 8.9 million bpd a year earlier. 

Manufacturing activity rose by 8.1 percent compared to November 2024, driven by a 14.5 percent increase in the production of coke and refined petroleum products. The manufacture of chemical products also recorded a 10.9 percent annual rise.

In contrast, the sub-index of electricity, gas, steam, and air conditioning supply declined by 4.3 percent year on year, while water supply, sewerage and waste management and remediation activities rose by 10.2 percent. 

On a month-on-month basis, the overall IPI fell by 0.7 percent in November. 

Mining and quarrying activity rose by 0.5 percent from October, while manufacturing activity edged up by 0.3 percent.

However, electricity, gas, steam, and air conditioning supply recorded a sharp monthly decline of 28.6 percent. Water supply, sewerage and waste management and remediation activities fell by 3.1 percent over the same period. 

Overall, the index of oil activities advanced by 12.9 percent year on year in November, while non-oil activities increased by 4.4 percent. 

Compared to October, oil activities rose by 0.4 percent, while non-oil activities declined by 3.4 percent. 

The IPI measures changes in industrial output based on the International Standard Industrial Classification framework and covers mining, manufacturing, utilities, and waste management sectors.