CRUDE RESTART
OPEC is expected to push ahead on oil production plan.
OPEC and its allies are expected to press on with their planned revival of oil production when they meet this week, as prices bounce back from their August stumble.
The coalition led by Saudi Arabia and Russia is gradually restoring the vast amount of crude production halted during the pandemic, and will probably ratify the next monthly installment when it gathers on Wednesday, according to a Bloomberg survey of traders and analysts. Several OPEC+ delegates privately predict the same outcome.
Crude markets faltered earlier this month as the resurgent pandemic threatened demand in China and the U.S. But prices have since recovered after fuel use proved resilient to the latest coronavirus wave, giving the Organization of Petroleum Exporting Countries and its partners more breathing space.
“Uncertainties over the world economy and the growth recovery in China have largely peeled away,” said Ed Morse, head of commodities research at Citigroup. “There’s good evidence that the bottom in oil prices was temporary and overdone, and if the recovery continues, OPEC+ would likely stick to the plan.”
The cartel has already restarted roughly 45 percent of the unprecedented production volume shuttered last spring. Under a plan spearheaded by Saudi Energy Minister Prince Abdulaziz bin Salman, OPEC+ will return the rest in monthly increments of 400,000 barrels a day through to late 2022.
Seventeen of 22 traders, analysts and refiners surveyed by Bloomberg expected no change to this schedule at the meeting, meaning October’s hike will go ahead as planned.
The OPEC+ coalition’s careful stewardship of the oil market has kept prices high enough to support the revival of the global petroleum industry, and largely avoided the kind of spike that could threaten the world’s economic recovery.
Exxon unit joins move to renewable diesel
Exxon Mobil Corp.’s Imperial Oil Ltd. will produce renewable diesel at a new facility in Canada, the latest in a string of refiners announcing plans to make lower-emissions biofuels.
The project is expected to produce about 20,000 barrels per day of renewable diesel when it starts in 2024, which could reduce emissions in the Canadian transportation sector by about 3 million metric tons per year, Exxon said in a statement Wednesday.
Imperial joins major crude-oil refiners such as Phillips 66 and Valero Energy Corp. in boosting output of biofuels as increasing alarm over the impact of global warming spurs companies and governments to step up efforts to curb greenhouse gases. A United Nations report this month warned of more catastrophic weather shifts without immediate action to rein in carbon emissions.
“Canada’s proposed low-carbon fuel policies incentivize the development of lower-emission fuels that can make meaningful contributions to the hard-to-decarbonize sectors of the economy, including transportation,” Ian Carr, president of ExxonMobil Fuels & Lubricants Co., said in the statement.
The new complex at the Strathcona refinery near Edmonton, Alberta, will use locally grown plantbased feedstock and hydrogen with carbon capture and storage as part of the manufacturing process. Prices for soybean oil, often used to make renewable fuels, are up more than 40 percent this year as more fossil-fuel refiners announce plans to enter the market.
The OPEC+ coalition led by Saudi Arabia and Russia is gradually restoring the vast amount of crude production halted during the pandemic. Above, oil jacks pump in a Russian field.