OPEC+ prepares for weekend meeting after Saudi warns speculators to ‘watch out’

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2 years ago

June 2, 2023

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Led by Saudi Arabia and Russia, OPEC+ agreed in early October to reduce production by 2 million barrels per day from November.

Vladimir Simicek | Afp | Getty Images

The OPEC+ alliance of oil producers will decide further production policy steps over the weekend, as crude prices reflect an ongoing struggle between supply-demand fundamentals and broader macro-economic concerns.

After convening remotely throughout the Covid-19 pandemic, OPEC+ has returned to in-person meetings and will gather in Vienna on June 4. The OPEC ministers gather for a separate meeting unlikely to address output on June 3.

Ministers face an oil market rattled by supply volatility, demand uncertainty, and a prospective recession, which could throttle transport fuel consumption. Since October, OPEC+ — a 23-member alliance including heavyweights Russia and Saudi Arabia — has lowered output by 2 million barrels per day in an effort to combat lower demand. Some members have also announced additional voluntary cuts totaling 1.6 million barrels per day in April.

Group members are expected to coagulate their individual positions and proposals in the 24-48 hours before the meeting, some OPEC+ delegates told CNBC, speaking on condition of anonymity — while public comments so far have been conflicting.

On May 23, Saudi energy minister Prince Abdulaziz bin Salman warned oil market speculators they could face further pain ahead, in comments some have read as hinting further supply cuts could be in the cards.

“I keep advising [speculators] that they will be ouching. They did ouch in April. I don’t have to show my cards, I’m not [a] poker player … but I would just tell them, watch out,” he said at the time.

Russia’s Deputy Prime Minister Alexander Novak later indicated that he expected no further steps from the OPEC+ meeting, but then said his comments were misinterpreted as downplaying an output cut, according to Russian state news agency Tass.

Russia and Saudi Arabia have been united in their public OPEC+ stance since a March 2020 dispute that led to the one-month dissolution of their oil partnership and an ensuing price war.

Moscow and Riyadh later mended ties through a new OPEC+ agreement to respond to a demand plunge driven by the Covid-19 pandemic — and have remained like-minded on OPEC+ matters since. Voiding the perception of a public rift, Saudi Foreign Minister Prince Faisal bin Farhan al-Saud and his Russian counterpart Sergey Lavrov on Thursday met on the sidelines of a BRICS summit in Cape Town.

The two reviewed the cooperation between their countries and “ways to strengthen & develop them in all fields, in addition to discussing the consolidation of bilateral & multilateral action,” according to the Saudi foreign ministry.

Two OPEC+ delegates, who did not want to be named due to the market sensitivity of the meeting, told CNBC that further output cuts were unlikely this weekend. One noted that this will remain the case unless demand stays low in China — where recovery has fallen short of expectations, in the wake of shedding strict Covid-19 restrictions.

A third source said that OPEC+, which prioritizes the state of global inventories over outright prices, would be comfortable with futures above $75 per barrel, while a fourth estimated near $70-80 per barrel.

Brent futures with August expiry were trading at $75.70 per barrel at 10:24 a.m. in London, up $1.42 per barrel from the Thursday settlement.

The OPEC+ group isn’t “after spikes” and seeks a “balanced market,” the fourth delegate told CNBC, stressing that the alliance must continue to strike a “precautionary” production strategy. Deep cuts also risk re-attracting U.S. ire, as Washington has historically criticized supply reductions that pile strain on consuming households.

‘Wait and see’?

Goldman Sachs’ analysts expect OPEC+ to keep production unchanged this weekend. However, they said in a note Wednesday that they see a “sizeable 35% subjective probability” of further OPEC cuts, as oil prices are “clearly below our $80-85/bbl estimate of the OPEC put. Very low positioning, the Saudi determination not to give speculators free rein, and the decision to meet in person also suggest that deeper cuts will likely be discussed.”

OPEC+ has waded stormy waters for the better part of the year. Oil markets have historically been steered by physical supply and demand fundamentals — which have been increasingly overshadowed by broader macro-economic concerns over the fuel consumption impact of high inflation, bolstering interest rates and the spring collapse of several U.S. and European banks.

OPEC+ delegates also said the group had been following U.S. debt ceiling negotiations, as the proposal of President Joe Biden and House Speaker Kevin McCarthy transited several debate and vote stages in a bid for the world’s largest economy to avoid defaulting on its bills.

“The impact of higher oil prices on the global economy will weigh heavily on the ministers’ minds,” Jorge Leon, senior vice president of oil market research at Rystad Energy, said in a Thursday note, adding that OPEC+ could maintain production as a precaution. “The ministers might therefore take a ‘wait and see’ approach and hold off taking any action. Demand forecasts remain lukewarm at best, so maintaining current output could be the most prudent course. “

Supply is also under question, given involuntary declines.

Roughly 450,000 barrels per day of northern Iraqi exports were frozen by a legal dispute between Baghdad, Ankara, and the Kurdistan Regional Government. Nigeria, typically West Africa’s largest oil producer, self-reported its April crude production at just 999,000 barrels per day following disruptions, according to OPEC’s Monthly Oil Market Report for May.

Meanwhile, the true extent of Russian output losses remains unclear, as vessels carrying Moscow’s crude turn off their satellite tracking and Russia looks to further shift its clientele east.

Environment

GE Vernova lands repower orders for 1 GW of US wind turbines

Published

2 hours ago

January 24, 2025

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GE Vernova lands repower orders for 1 GW of US wind turbines

GE Vernova repower wind — Photo: GE Vernova

GE Vernova’s onshore wind business announced that it received orders in 2024 to repower over 1 gigawatt (GW) of wind turbines in the US.

Wind energy repowering is all about breathing new life into older turbines. By swapping out aging parts like turbines, blades, and nacelles for the latest tech, wind farms see significant boosts in efficiency, power capacity, and overall lifespan. Other infrastructure and control systems can also get a second life.

Adding new components to existing infrastructure and grid connections means it’s less expensive to extend the life of the wind farm with fewer resources. New components make the turbines less prone to breakdowns which means less maintenance, so there are fewer operational costs.

The repowering projects for which GE Vernova received orders will use nacelles and drive trains that it manufactures in its Pensacola, Florida, factory.

“As the United States works to meet the doubling of projected demand for more energy, repower projects like these help US workers in US factories take advantage of what we already have, where we already have it,” said Matt Lynch, general manager of Repower at GE Vernova.

The orders were booked between the first and fourth quarters of 2024. GE Vernova’s wind repower projects are expected to come online between 2024 and 2027.

GE Vernova’s onshore wind business has a total installed base of approximately 56,000 turbines and nearly 120 GW of installed capacity worldwide.

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Kia’s NACS adapters available now; Supercharger access still pending

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2 hours ago

January 24, 2025

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Kia's NACS adapters available now; Supercharger access still pending

Kia’s official first-party NACS adapters are now ready to ship out, but owners will have to wait to use them on Tesla Superchargers until later this quarter.

The rollout of Supercharger access to non-Tesla brands is hitting a fever pitch this year, with several brands added to the “coming soon” list, and even beyond that, VW and Honda have both made their own announcements that access is coming soon.

But for most vehicles, charging on Superchargers will require an adapter for the time being, as most brands aren’t adding native NACS ports to their vehicles until a future date (the current exceptions are the 2025 Kia EV6 and Hyundai Ioniq 5 which have native ports).

Each manufacturer is dealing with adapter rollouts separately, and Kia’s ready to announce that their adapters are ready to go.

Kia told us today that shipments of first-party adapters are currently en route to dealerships, and certain owners will be getting a notification soon to claim their adapter.

In Kia’s previous announcement about adapter availability, it said that any 2024 or 2025 EV6 or EV9 owners who took delivery after September 4 would get a free NACS adapter. Those owners should receive a push notification soon in their Kia Connect app through which they can claim their adapter.

For other owners, adapters will be available from Kia dealers for $249, which is roughly in line with the average cost we’ve been seeing for these adapters. Dealers should be getting the adapters any day now.

However, these adapters will be of limited usefulness for the next several weeks. You’ll be able to use them to charge at Tesla destination chargers, or any home charger with a Tesla/NACS plug on it, but Supercharger access still requires a handshake between the car and the charging network, and that handshake is currently disabled.

Originally, Kias were going to gain access on January 15th, but that was pushed back until the “back end of this quarter.” Some owners found out a loophole to allow for charging on the network, but that loophole was closed just yesterday.

As a result, Kia is also including “definitive instructions” on how to use the adapters along with each shipment. It wants to ensure that everyone is using them properly, especially given the recent back-and-forth about, uh, unsanctioned methods to access the network before official availability.

Kia’s EV6 with the native NACS port has also taken longer to arrive than Hyundai’s 2025 Ioniq 5. Ioniq 5s are already shipping (and can even charge faster than Teslas at a Supercharger, a feat the EV6 should also achieve), but EV6s haven’t yet hit dealerships. They should be on around the same timeline as Supercharger access, and ought to be available in the back half of this quarter.

So… Kia fans will still have to wait a little bit, but at least you’ll have the adapters ready to go for when the floodgates open later this quarter.

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Kempower and Ziegler partner on EV fast charging for fleets

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2 hours ago

January 24, 2025

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Kempower and Ziegler partner on EV fast charging for fleets

EV charger manufacturer Kempower and Ziegler Energy Solutions have paired up to deliver EV fast charging infrastructure for commercial fleets.

To put it simply, Finland and US-based Kempower brings DC fast chargers to the table, and Ziegler Energy Solutions’ (ZES’s) specialty is infrastructure, energy efficiency, and operational flexibility, along with sales and service.

“As businesses and municipalities increasingly transition to electric fleets, reliable and adaptable EV charging infrastructure with the highest uptime is paramount,” said Troy Monson, general manager of Ziegler Energy Solutions. “Partnering with Kempower enables us to deliver scalable, user-friendly solutions that support our customers’ electrification goals and operational needs.”

ZES, which is now a Kempower Certified Partner, helps fleet operators address challenges like high mileage, uptime demands, and energy cost management using its EV fleet planning tools that simulate real-world scenarios like duty cycles, charging schedules, and energy needs. It also has a leasing program, and integrates solar and battery storage into fast charging infrastructure.

This means Kempower can now offer its DC fast chargers to fleet operators with ZES’s support, ensuring uptime and reliability.

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