S&P Global — 10 September 2024
Daily Update: September 10, 2024
Libyan Oil Crisis Continues Under OPEC’s Watchful Gaze
By Nathan Hunt
Start every business day with our analyses of the most pressing developments affecting markets today, alongside a curated selection of our latest and most important insights on the global economy
Libya joined OPEC in 1962, shortly after the oil-producing group was formed in 1960. However, since 2020, the country has been exempted from OPEC production quotas. Venezuela and Iran are also exempted from quotas due to challenges under US-led sanctions, but Libya’s exemption has more to do with political instability undermining the country’s oil output. In a sense, Libya’s challenges are self-imposed as competing centers of power in the country constantly threaten production. The latest "Oil Markets" podcast from S&P Global Commodity Insights examines the evolving situation in Libya and its effect on OPEC production quotas.
On Sept. 2, Libya’s National Oil Corp. declared force majeure on the 70,000 b/d El-Feel oil field. The ongoing disruptions to Libyan oil production intensified in late August as the eastern political faction operating out of Benghazi started shutting down oil fields in response to actions taken by the western government in Tripoli to replace central bank Governor Al-Siddiq al-Kabir. UN-sponsored negotiations between Benghazi and Tripoli are attempting to resolve the crisis and restore relative stability to Libyan oil production.
“The fall of Gaddafi in 2011 started a period of enormous volatility in Libya,” Charlie Mitchell, senior oil news reporter for S&P Global Commodity Insights, said on the “Oil Markets” podcast. “The key issue is that the oil sector accounts for about 93% of government revenues in the country. And so, it’s a kind of key political football, and the health of the oil sector in Libya is heavily dependent on relationships between key actors, which can fluctuate.”
Libyan light, sweet crude is highly desirable, especially to refineries in Europe. Prices for similar grades have been pushed up since the crisis began. But Libya also supplies its own fuel, and queues at pumping stations in the country have extended for miles as fuel shortages have worsened in recent months. These shortages are shocking in a country that has the world’s 10th-largest proven oil reserves.
OPEC has maintained an interest in Libyan production, despite not subjecting the country to production quotas. OPEC appears optimistic that the latest negotiations between rival Libyan factions will stabilize output. On Sept. 5, OPEC announced that it would delay rolling back 2.2 million b/d of voluntary cuts by two months. Oil prices have already fallen in the region based on an anticipated deal on Libyan production. If voluntary cuts ease while Libyan production returns, this might force further declines in oil prices. That puts OPEC in the unusual position of delaying actions on production quotas due to the internal politics of a member state that isn’t subject to quotas.
“Negotiations were held,” Mitchell said. “The eastern and western factions have agreed to appoint a new central bank governor within 30 days, which would be early October. The markets took that as a sign that the oil shutdowns could gradually start to ease, and the price dropped as a result on Sept. 3.”
Today is Tuesday, September 10, 2024, and here is today’s essential intelligence.
Listen: All Things Aviation: CORSIA And The Future Of Carbon Markets In Aviation (Part 2)
This is episode 2 of All Things Aviation, a special six-part series focusing on the dynamics, trends and outlooks in the aviation sector. In this episode, Marie-Louise du Bois, head of the global carbon pricing team, is joined by S&P Global Commodity Insights experts Dana Agrotti, low carbon market lead analyst; Agamoni Ghosh, managing editor for global compliance carbon pricing; and Eklavya Gupte, editorial lead for carbon news.
—Listen and subscribe to the podcast from S&P Global Commodity Insights
Global PMI Selling Price Inflation Close To Four-Year Low In August
Prices charged for goods and services rose globally at the slowest rate for nearly four years in August, according to the worldwide PMI surveys produced by J.P.Morgan and S&P Global in association with ISM and IFPSM. Inflationary pressures moderated, notably in the service sector, and manufacturing cost pressures remained constrained by falling demand for inputs and few supply scarcities.
—Read the article from S&P Global Market Intelligence
Three-Year Live Performance Review of the S&P QVM Top 90% Indices
Three years ago, S&P DJI launched the S&P Quality, Value, and Momentum Top 90% Multi-factor Indices (the S&P QVM Top 90% Indices) across the large-, mid- and small-cap US equities segments. These indices have enriched our factor lineup, offering a differentiated approach that selects a high percentage of the universe, while excluding only the lowest-ranked decile.
—Read the article from S&P Dow Jones Indices
Economic Research: Europe Must Avoid The Middle Technology Trap To Continue Reaping Free Trade's Rewards
The European economy is renowned for the intensity of its trade compared to others major economies. Over the past three decades, it has consistently increased its reliance on imports and exports, setting it apart from countries like China, which shifted away from an export-led growth model in the mid-2000s, and the USA, which is primarily focused on its domestic market.
—Read the article from S&P Global Ratings
Not In My Backyard… Or Yours: What The New EU Methane Rule Means For Kazakh Crude Oil Exports
Countries are increasingly targeting greenhouse gas emissions embedded in imported goods as a way to prevent "carbon leakage." The European Union's newest regulation aimed at carbon leakage (the "EU Methane Rule"), passed in April 2024, seeks to reduce methane emissions in fossil fuels imported into the EU. With the EU importing 97% of its crude oil, the rule will have significant global environmental and economic consequences. This report uses asset-level oil and gas methane intensity data to examine the effect of the regulation on Kazakh oil producers.
—Read the article from S&P Global Commodity Insights
Exploring The Early Stages Of Metaverse E-Commerce In Q&A With Sawhorse
The consumer-facing metaverse may be years away from standing up a substantive e-commerce revenue stream, but recent moves by retailers into virtual experiences, such as Walmart Inc. into Roblox Corp., are paving the way to that future one product at a time. Sawhorse Productions LLC was the primary force behind the development of Walmart Discovered, giving the digital agency a clear view of the metaverse landscape for brands and retailers. S&P Global Market Intelligence Kagan recently conducted an email interview with Nic Hill, head of interactive at Sawhorse, to break down the key challenges and opportunities in bringing retail to the metaverse.
—Read the interview from S&P Global Market Intelligence
Webinar: Strategic Planning Of Electric Vehicle Technologies In The Pursuit Of Increased Range And Faster Charging Times (Sept. 19, 2024)
This webinar will address the EV trilemma of range, charging time and cost, which will be a key focus for the automotive industry in the coming years. Achieving a competitive position in any segment requires striking the right balance between trade-offs and savings from economies of scale to achieve overall cost reduction in new electric vehicle-specific technologies.
—Register for the webinar from S&P Global Mobility
Content Type
Location