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The logo of the OPEC is pictured at the OPEC headquarters on October 4, 2022. In October last year, the oil cartel announced its decision to cut output by two million barrels per day.

Joe Klamar | Afp | Getty Images

Several OPEC+ members are set to tighten global production by an additional 1.16 million barrels per day until the end of the year, further burdening central bank efforts to curtail global inflation — but critically protecting the alliance’s broader output strategy from political pressures. 

Washington has stepped in to criticize Sunday’s announcement where eight OPEC+ producers — including group leader Saudi Arabia and key allies Kuwait and the UAE — said they would remove more than a combined 1 million barrels per day from global oil markets, as part of an independent initiative unlinked to the broader OPEC+ policy.

This adds to Russia’s existing intentions to trim 500,000 barrels per day of its own production from February output levels, now until the end of the year — bringing the combined voluntary cuts of OPEC+ members in excess of 1.6 million barrels per day.

“We don’t think cuts are advisable at this moment, given market uncertainty — and we’ve made that clear,” a spokesperson for the National Security Council said, according to Reuters.

U.S. President Joe Biden’s administration has repeatedly lambasted the OPEC+ group for its production cuts, citing the inflationary toll on households and flinging accusations of camaraderie with sanctions-struck Russia. Curbs in production lead to smaller supply, causing higher prices at the pump in importing countries which then provides a boost for headline inflation figures.

Relations devolved into a war of words with OPEC+ chair Saudi Arabia at the end of last year, when the oil group agreed a 2 million barrels per day cut until the end of 2023 — a decision upheld at ministerial and technical committees since.

One such technical council, the OPEC+ Joint Ministerial Monitoring Committee concluded on Monday with a statement that acknowledged the voluntary cuts, making no mention of a broader change in formal production policy.

Referring to the voluntary cuts, the OPEC Secretariat said they represent “a precautionary measure aimed at supporting the stability of the oil market.”

The JMMC will next convene on June 4, with a full ministerial meeting to follow.

Formal group action is arguably no longer required, with front-month June Brent futures prices up by $4.44 per barrel from the Friday settlement to $84.33 per barrel at nearly 10 a.m. London time. Some analysts now warn of prices soaring to $100 per barrel, while Goldman Sachs could drive up Brent forecasts by $5 per barrel to $95 per barrel for December 2023.

“The anticipated increase in oil prices for the rest of the year as a result of these voluntary cuts could fuel global inflation, prompting a more hawkish stance on interest rate hikes from central banks across the world. That would, however, lower economic growth and reduce oil demand expansion,” said Victor Ponsford of Rystad Energy in a research note.

Oil jumps as OPEC and its allies announce a surprise output cut

Tamas Varga, of oil broker PVM, flagged the broader political risks of the organized voluntary cuts, telling CNBC that headline inflation should rise faster than anticipated.

“But central banks might not deviate from the course of slowing down the hike in borrowing as their views are chiefly shaped by core inflation figures, which will not be as much affected by stronger oil prices as headline data,” he said.

“The voices of the proponents of the NOPEC bill in the US Congress will also get louder and they will accuse OPEC+ to use oil as a weapon. The step is unreservedly bullish, for now macro worries are overtaken by supply concerns. The move will also lead to further souring of the Saudi-US relationship.”

The NOPEC — No Oil Producing and Exporting Cartels— bill refers to proposed U.S. legislation that would open OPEC+ countries to potential antitrust legal action.

The U.S. can attempt to combat price hikes by releasing further volumes from its Strategic Petroleum Reserves — with one anonymous OPEC+ delegate saying that Washington has encumbered its fight against inflation by blocking global access to Venezuela and Iranian volumes, while EU nations likewise refrain from Russian purchases out of solidarity with the invaded Ukraine.

OPEC+ delegates have previously also found fault with western nations’ windfall taxes on energy companies — which they claim received no consistent support when WTI futures traded in negative territory in April 2020 — and with the accelerated shift toward renewables that has reduced hydrocarbon investments without producing sufficient alternative green fuel to fully meet consumer demands.

Spare capacity has been at the heart of recent OPEC+ pronouncements, with the group stepping in to protect the appeal of stable return for long-term investments in oil projects. Nearly all of the countries participating in the recently-announced independent cuts possess additional capacity.

One anonymous OPEC+ source said discussions to coordinate further independent cuts gained traction toward the end of last week, when volatility in the banking sector following the failures of several U.S. and Swiss lenders eroded investor confidence in more historically volatile assets, such as oil. OPEC+ delegates have previously expressed that the oil impact of the banking turbulence would be short-lived, with longer-term questions lingering over the looming demand of a reopening China, the world’s largest consumer.  

“What happened to the oil prices over the last three weeks was nothing to do with oil factors, it was everything to do with the banking crisis, and the fears that brings with it. We also had a huge, huge increase in [the] short market, and that is something that OPEC are very keen to stomp out,” Amrita Sen, co-founder and director of research at Energy Aspects, told CNBC’s Dan Murphy.

Investors generally assume short positions when they expect market or price declines.

“I do believe, if the market overtightens, or exogenous issues or shocks fade, they will reverse this cut along the line. So this isn’t set in stone for the rest of the year, but very clearly defending a floor.”

OPEC is very clearly defending a floor with surprise output cut: Energy Aspects

Voluntary production moves are easier to agree and unwind without staining domestic or external OPEC+ politics. Such cuts have previously been accepted by the group, provided they aligned with the spirit of existing OPEC+ policies — but they have typically expressed the initiative of a single country, barring temporary Saudi-Kuwaiti-UAE reductions organized during the Covid-19 pandemic.

A coordinated gesture of Sunday’s scale effectively creates a second, unofficial agreement on top of the existing formal OPEC+ strategy — one that does not command formal commitments and can be more readily defended when individual oil ministries face pressures from their own governments or state oil companies to increase output and short-term revenues. Independent cuts also bypass the need for unanimous OPEC+ member approval and tentatively avoid external accusations of organized anti-consumer behavior.

But the gesture will not bridge the growing political rift between OPEC+ kingpin Saudi Arabia and the Biden administration, whose influence has been increasingly supplanted by China in the Middle East. In the past month, Beijing brokered a resumption of relations between arch-rivals Tehran and Riyadh, with Saudi Arabia also taking steps to join the China-led Shanghai Cooperation Organization as a dialogue partner.

“[The organized voluntary cuts] certainly would play into the narrative that the U.S. is losing its influence in the region to either influence the actions of core OPEC producers like Saudi Arabia and the UAE, which have traditionally been client states of the U.S.,” Andy Critchlow, EMEA head of news at S&P Global Platts, told CNBC.

“You can’t really look at this in isolation from the wider geopolitical situation in the Middle East, which is seeing these core oil producers shift closer to China, shift much closer to Russia. You know, they like operating in this multipolar world, instead of being completely tied to U.S. dependency.”

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BP profit falls sharply but CEO says oil major ‘off to a great start’ in strategy reset

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BP profit falls sharply but CEO says oil major 'off to a great start' in strategy reset

British oil and gasoline company BP (British Petroleum) signage is being pictured in Warsaw, Poland, on July 29, 2024.

Nurphoto | Nurphoto | Getty Images

British oil giant BP on Tuesday posted slightly weaker-than-expected first-quarter net profit, following a recent strategic reset and a slump in crude prices.

The beleaguered oil and gas major posted underlying replacement cost profit, used as a proxy for net profit, of $1.38 billion for the first three months of the year. That missed analyst expectations of $1.6 billion, according to an LSEG-compiled consensus.

BP’s net profit had hit $2.7 billion a year earlier and $1.2 billion in the final three months of 2024.

The results come as the energy major faces fresh pressure from activist investors less than two months after announcing a strategic reset.

Seeking to rebuild investor confidence, BP in February pledged to slash renewable spending and boost annual expenditure on its core business of oil and gas.

BP CEO Murray Auchincloss told CNBC’s “Squawk Box Europe” on Tuesday that the firm was “off to a great start” in delivering on its strategic reset.

BP CEO Murray Auchincloss discusses first-quarter results

“We had a great operational quarter. We had our highest upstream operating efficiency in history. Our refineries in the first quarter ran at the best they’ve run in 24 years. We had six exploration discoveries in a row, which is really unusual and we started out three major projects,” Auchincloss said.

For the first quarter, BP announced a dividend per ordinary share of 8 cents and a share buyback of $750 million.

Net debt rose to $26.97 billion in the January-March period, up from $22.99 billion at the end of the fourth quarter. BP had previously warned of lower reported upstream production and higher net debt in the first quarter, when compared to the final three months of last year.

Shares of BP fell 3.3% on Tuesday morning. The firm is down roughly 8% year-to-date.

Activist pressure

BP’s green strategy U-turn does not appear to have gone far enough for the likes of activist investor Elliott Management, which went public last week with a stake of more than 5% in the London-listed firm.

The disclosure makes the U.S. hedge fund BP’s second-largest shareholder after BlackRock, the world’s largest asset manager, according to LSEG data.

Elliott was first reported to have assumed a position in the oil and gas company back in February, driving a share price rally amid expectations that its involvement could pressure BP to shift gears back toward its oil and gas businesses.

BP’s Auchincloss declined to comment on interactions with investors when asked whether the firm was under pressure from the likes of Elliott to go beyond the plans announced in its February pivot.

Notably, BP suffered a shareholder rebellion at its annual general meeting earlier this month. Almost a quarter (24.3%) of investors voted against the re-election of outgoing Chair Helge Lund, a symbolic result that reflected a sense of deep frustration among the firm’s shareholders.

Mark van Baal, founder of Dutch activist investor Follow This, told CNBC last week that he hoped the shareholder revolt means Amanda Blanc, who is leading the process to find Lund’s successor, will look for a new chair who is “climate competent” and “will not respond to short-term activists so quickly.”

Lund is expected to step down from his role next year.

Takeover candidate

BP’s underperformance relative to industry peers such as Exxon Mobil, Chevron and Shell has thrust the energy major into the spotlight as a prime takeover candidate. Energy analysts have questioned, however, whether any of the likeliest suitors will rise to the occasion.

BP’s Auchincloss on Tuesday said that he wouldn’t speculate on whether the company is a takeover target, but confirmed the oil major had not asked for any sort of protection from the British government.

“What I will say is we’re a strong, independent company and we’ve got sector-leading growth. And if we can deliver the sector-leading growth, and the first quarter is a fantastic example of that, then I have no concerns. I think we’re going to do great,” Auchincloss said.

Murray Auchincloss, chief executive officer of BP, during the “CERAWeek by S&P Global” conference in Houston, Texas, on March 11, 2025.

Bloomberg | Bloomberg | Getty Images

Oil prices have fallen in recent months on demand fears. International benchmark Brent crude futures with June delivery traded at $65.19 per barrel on Tuesday morning, down more than 1% for the session. That’s lower from around $84 per barrel a year ago.

Asked whether weaker crude prices could put the some of the firm’s reset plans in jeopardy, Auchincloss said, “Not really. We have a balance of products that we think about that generate revenue for us. So, oil, natural gas and refined products as well.”

— CNBC’s Ruxandra Iordache contributed to this report.

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The first giant 15 MW turbine is up at Germany’s largest offshore wind farm

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The first giant 15 MW turbine is up at Germany’s largest offshore wind farm

Germany’s largest offshore wind farm under construction, EnBW’s He Dreiht, just hit a big milestone: The first enormous turbine is now up in the North Sea.

He Dreiht – which means “it spins” in Low German – is using Vestas’s massive 15 megawatt (MW) turbines, the first project in the world to install them. Just one spin of one of the rotors can generate enough electricity to power four households for an entire day.

When it’s finished, He Dreiht will have 64 mega turbines cranking out 960 megawatts (MW) of clean power – enough to supply around 1.1 million homes. And it’s being built without any government subsidies.

EnBW, one of Germany’s major energy companies, has been working in offshore wind for more than 15 years, but He Dreiht is their biggest project yet. “It will play a key role in helping us to significantly grow our renewable energy output from 6.6 GW to over 10 GW by 2030,” said Michael Class, who heads up EnBW’s generation portfolio development.

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The project is a win for Vestas, too. “With the installation of the first V236-15.0 MW, we have reached an important milestone for both the He Dreiht project and our offshore ramp-up, which helps Germany build a more secure, affordable, and sustainable energy system,” said Nils de Baar, president of Vestas Northern & Central Europe.

He Dreiht is located about 85 kilometers (53 miles) northwest of Borkum and 110 kilometers (68 miles) west of Helgoland. At peak times, more than 500 workers will be out at sea building the farm, using a fleet of more than 60 ships. EnBW’s offshore team in Hamburg is running the show.

The installation process is a major operation. The 64 foundations were already set in the seabed last year. Parts for the turbines are loaded onto the installation vessel Wind Orca in Esbjerg, Denmark, and shipped out in a 12-hour journey to the construction site. From there, the turbines are lifted into place. Meanwhile, crews are also working on internal wind farm cabling.

A partner consortium made up of Allianz Capital Partners, AIP, and Norges Bank Investment Management owns 49.9% of the shares in He Dreiht.

Read more: Trump admin halts $5 billion NY offshore wind project mid-build


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Tesla gives update on Tesla Semi factory, says on track for volume production in 2026

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Tesla gives update on Tesla Semi factory, says on track for volume production in 2026

Tesla has released a quick update about its Tesla Semi factory in Nevada. It says that it is on track for volume production of the electric semi truck in 2026.

The Tesla Semi was first scheduled to go into production in 2019, but it has faced numerous delays.

Now, it appears that there is finally some momentum to bring it to volume production.

For the last two years, Tesla has been working to build a new factory next to Gigafactory Nevada, where it builds the battery packs and drive units for most of its electric vehicles built in North America.

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Today, Tesla released a “progress update on the factory, confirming that it finished building and it’s now working on deploying the production lines:

Tesla had previously mentioned aiming for volume production by 2025, but it is now only talking about starting production toward the end of the year and ramping up next year.

The automaker reiterated its planned production capacity of 50,000 units.

We recently reported that an early Tesla Semi customer, Ryder, stated that the electric truck program is experiencing more delays and a price increase described as “dramatic.”

They now expect to take deliveries of their first trucks later in 2026 and said that the price has increased “dramatically,” leading them to scale back their pilot program from 42 to 18 Tesla Semi trucks.

When originally unveiling the Tesla Semi in 2017, the automaker mentioned prices of $150,000 for a 300-mile range truck and $180,000 for the 500-mile version. Tesla also took orders for a “Founder’s Series Semi” at $200,000.

However, Tesla didn’t update the prices when launching the “production version” of the truck in late 2022. Price increases have been speculated, but the company has never confirmed them.

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