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Tensions in the Middle East have driven Brent crude above $78 per barrel, yet the underlying market fundamentals continue to be bearish. Weekly analysis of the oil market Last week, crude oil prices in the markets surged sharply, driven by escalating tensions in the Middle East after Iran's missile attack on Israel, which was in retaliation for the assassination of a Hezbollah leader by Israel. Ambiguous remarks from US President Joe Biden about ongoing discussions regarding potential strikes on Iranian oil facilities in response to Tehran's attack caused crude prices to jump by over 5% last Thursday. Nevertheless, the upward pressure somewhat subsided on Friday following additional statements from the US, indicating that Israel might be considering alternatives to striking Iranian oil infrastructure. On average this week, Brent oil futures for November delivery increased by $1.8/b to $75/b, while the December contract rose by $2.0/b to $74.6/b. WTI prices reached $71.2/b, a 2.5% increase. Economists surveyed by Bloomberg on October 3rd predict a decrease in Brent prices for the fourth quarter to $80.0/b (a $1/b drop) and to $78.6/b (a $1.4/b drop) for the first quarter of 2025. This reflects ongoing market concerns over rising global supply and persistent weak demand in China, despite recent attempts at economic recovery. The surge in prices resulted in a rise of the Brent implied volatility index, hitting its peak in almost a year (fig. 11). Trading volumes for Brent call options also soared to unprecedented levels last Wednesday, especially for contracts at $100/b. Despite the ongoing crisis, market fundamentals continue to indicate an excess supply. OPEC+ is set to reinstate some of its production capacity, with increments planned from December. Moreover, following a significant political standoff with Tripoli's government that lasted over a month, the eastern Libyan authorities declared last Thursday that oil production and exports would resume. Iran's Influence on the Global Oil Market. Last week, concerns about escalating tensions and potential attacks on Iran's oil infrastructure brought the nation's oil market into sharp focus. Despite being under embargo, Iran has significantly ramped up its oil production in recent years, going from less than 2 million barrels per day to nearly 3.4 million barrels per day, nearing the pre-2018 sanction levels imposed by former President Donald Trump. This surge in production has seemingly occurred with the US administration's tacit consent, which viewed it as a strategy to temper rising crude prices, coupled with support from China, the primary purchaser, who has consistently disregarded Western sanctions. Furthermore, Iran has capitalized on OPEC's leniency, which has exempted its production from quotas, thus marking one of the most substantial production increases within the organization last year. Numerous analyses have attempted to evaluate the potential consequences of an assault on Iranian oil facilities or a severe intensification of the embargo on the nation. These assessments suggest that oil prices might increase by $20/b (Goldman Sachs) to $28/b (Clearing Energy Partners). Nevertheless, these forecasts fail to consider a potential rise in OPEC production, which possesses enough spare capacity (5 Mb/d, with 3 Mb/d in Saudi Arabia alone) to compensate for a complete cessation of Iranian oil exports. The global manufacturing sector experienced another slowdown in September. The recent months have seen an intensification of the global manufacturing slowdown. The global manufacturing PMI, after peaking at a two-year high of 51.0 in May, has been in contraction (below 50) since July. In September, the index dropped nearly one point to a 14-month low of 48.8, as reported by S&P Global. Despite this, the recent and planned easing measures in the US, China, and the euro area may lend some support to the global industry outlook. Nevertheless, there are risks, including the potential for a surge in oil prices should the Middle East conflict worsen. The global manufacturing slowdown is widespread, yet the downturn is predominantly observed in developed markets, where the average index dropped by 0.8 points to a nine-month nadir of 47.5 (August: 48.3). In emerging markets, the average index fell by one point to 49.8, marking the first contraction since January 2023 (August: 50.8). The euro area's fragility, particularly Germany's, is notable. Germany's manufacturing PMI plummeted to 40.6 in September (August: 42.4), a year-long low, precipitating a further dip in the euro area's average to a nine-month trough of 45.0 (August: 45.8). In the USA, crude oil and gasoline stock levels are on the rise. Last week, commercial crude oil inventories saw a significant increase of 3.9 million barrels (Mb), greatly exceeding the anticipated decrease of 1.4 Mb and the five-year average increase of 0.4 Mb. Currently, stocks are 1% higher than the previous year's levels, yet they remain 5% below the five-year average. This surge is attributed to a reduction in refinery processing of crude oil, primarily due to the closure of BP's Whiting refinery, coupled with a rise in production to 13.3 million barrels per day (Mb/d). Regarding refined products, gasoline inventories expanded more than forecasted, with a rise of 1.1 million barrels (MBmb) compared to the expected increase of 0.2 MBmb, while distillate inventories fell more than anticipated by 1.3 MBmb. Presently, gasoline and distillate stocks are 1% and 7% below the five-year average, respectively. In Europe, diesel prices are on the rise. The Amsterdam Rotterdam-Antwerp (ARA) hub's petroleum product inventories have remained stable, with gasoline inventories increasing by 4% and diesel inventories decreasing by 1%. Following the trend of crude oil, gasoline prices saw a modest increase of 1%, while diesel prices rose by 3%. The ICE diesel forward for the current month closed the week $48/t higher on Friday, driven by concerns over potential regional conflicts in the Middle East, which have escalated diesel prices across Europe. By the end of Friday's session, European diesel shipments reached their highest point since late August, yet the demand for diesel has remained generally stable. Amidst these developments, the average refining margin in Europe (Brent FCC) fell by 7% to $5.0/b. Receive the full report and more, become a member of the KOMPTRADE community.

Brent crude has risen to $74/b following the Federal Reserve's key rate increase. Weekly analysis of the oil market Last week, the oil market gained some support and optimism after the US Federal Reserve decided to reduce its key interest rate. However, the growth potential remains constrained unless the geopolitical climate worsens, especially due to the subdued demand in China and the US, which impedes a sustainable price recovery. On average, ICE Brent futures for October delivery increased by $2.8/b (4.0%) to $73.9/b, and WTI prices went up by $3.3/b (4.9%) to $71.2/b. Economists surveyed by Bloomberg on September 20 have revised the fourth quarter Brent oil price forecast down to $81.0/b (a decrease of $1/b) and to $80.0/b for the first quarter of 2025. In the futures markets, fund managers have adjusted their oil positions upward after hitting record lows. Bullish bets on Brent and WTI have increased by a total of 37,224 net long positions, reaching 89,509, based on weekly data from ICE Futures Europe and the CFTC. Conversely, in the petroleum products markets, net bearish positions in diesel have hit a record high of 45,437 lots, the most since 2006, as per CFTC data. In a similar trend, bearish positions in diesel surged to 72,683 lots, the highest in over a decade, according to ICE Futures Europe, signaling concerns over a potential global oil demand deceleration. The Federal Reserve's interest rate cuts: the start of a new economic cycle? The Federal Reserve's decision to lower its benchmark interest rate by 50 basis points for the first time in four years, reducing rates to 4.75-5%, was largely welcomed by the market. The S&P 500 surged 1.7% to a record high, and gold prices reached a new peak at $2,609 per ounce. This unexpected cut, which was double the anticipated 25 basis points, is seen as "bold and preemptive." However, some view it as an indication of the Federal Reserve's concern over the state of the U.S. economy. This substantial reduction at the cycle's outset, along with explicit signals of further cuts in the future, is expected to stabilize the U.S. economy. Meanwhile, the European Commission is formulating various proposals to enhance the labor market's quality. The Federal Reserve's decision resulted in a predictable effect on the dollar, causing a modest depreciation. The average weekly value of the dollar decreased from 0.7% to 100.7%, marking its lowest point since July 2023. Should this downward trend of the dollar continue, it may stimulate international crude oil demand, as it becomes less costly for foreign countries, potentially leading to an increase in gross revenues. In the USA, crude oil stocks are declining, and there is also a decrease in gasoline demand. In the USA, crude oil inventories have declined, with commercial crude oil stocks falling by 1.6 million barrels, now nearing the levels seen at the end of last year and 4% below the five-year average. In contrast, crude oil stocks at Cushing, a key hub for futures contracts, dropped by 2 million barrels to 22.7 million barrels, the lowest in five years. This reduction in crude inventories was bolstered by a 1.8% rise in net exports and a decrease in crude production to 13.2 million barrels per day. Refinery utilization also decreased to 91.2%, as several facilities scaled back operations due to Hurricane Francine. Additionally, some refineries have brought forward their maintenance schedules due to the low profit margins on gasoline and diesel in the U.S. Meanwhile, inventories of petroleum products saw a slight increase, with gasoline stocks in line with the five-year average, whereas diesel stocks are still 7% below the average. The average demand for gasoline over four weeks continues to decline, staying below 9 million barrels per day for the second consecutive week. The International Energy Agency (IEA) notes that in the US, despite a record number of kilometers driven this summer, improved efficiency standards, the increase of electric vehicles, and teleworking have reshaped the relationship between economic growth, distance traveled, and fuel consumption. Europe: Strong increase in gasoline stocks. In Europe, the Amsterdam-Rotterdam-Antwerp (ARA) hub reported a 2% rise in petroleum product inventories, marked by a notable 8% surge in gasoline stocks, whereas diesel stocks stayed relatively stable with a slight 0.5% increase. The boost in gasoline reserves can be attributed to reduced exports to the United States and West Africa. Nonetheless, gasoline stocks are still 15% under the five-year average, while diesel reserves have hit their peak since February 2023, surpassing the five-year average by 14%. Oil prices have mirrored the rising trend of crude, with gasoline prices increasing by 5% and diesel by 2% over the week. Concurrently, the average refining margin in Europe (Brent FCC) rose by 7% to $4.7/b, which is 9% lower than the five-year average of $5.0/b. Receive the full report and more, become a member of the KOMPTRADE community.

Brent crude at its lowest level for 3 years despite OPEC's intervention. Weekly analysis of the oil market Last week saw a sharp decline in crude oil prices, with Brent crude closing at $71 per barrel on Friday, marking its lowest point since December 2021. The fall was attributed to the release of disappointing macroeconomic data from the United States and China, which reignited concerns about the demand for oil. The decision by OPEC+ to prolong its additional voluntary production cuts for another two months failed to stem the downward trend. This was due to the anticipated resolution of the conflict in Libya and a resurgence in oil exports. Furthermore, the decrease was exacerbated by fund managers in the futures markets who cut their net long positions in Brent and WTI by a total of 99,889 contracts to 139,242, as reported by ICE Futures Europe and the CFTC, reaching an all-time low. On a weekly average, ICE Brent futures for October delivery declined by $6.1/b (a 7.7% decrease, marking the largest weekly drop since October 2023) to $73.5/b. In a similar trend, WTI prices dropped by $6.3/b (an 8.4% decrease) to $69.1/b. Following a Bloomberg survey of economists on September 6, Brent price projections for the third quarter were lowered to $84.0/b (a reduction of $0.5/b) and to $82.6/b (a reduction of $0.4/b) for the fourth quarter. China: weak domestic demand; USA: slowdown in the labour market. The recent release of China's PMI indices once again depicted a rather uninspiring outlook for the Chinese economy. The official composite PMI dipped slightly to 50.1, marking a 20-month low (July: 50.2). Meanwhile, the Caixin composite PMI, which has a greater emphasis on service companies, held steady at 51.2. Consequently, both composite PMIs suggest that the Chinese economy is persisting at a tepid growth rate. The downturn in the property sector continues to suppress domestic demand. In the United States, the latest employment figures indicate a loss of momentum in the labor market, with a rise in the unemployment rate and a decrease in job creation. Some economists believe this report should encourage the US Federal Reserve to initiate rate cuts at its upcoming meeting on September 17 and 18 to avert further economic decline. Globally, the JP Morgan PMI for August highlights a significant disparity between the manufacturing and services sectors. The services sector saw a marked acceleration, with its activity index climbing to 53.8, the highest since the previous May. Conversely, the manufacturing sector's decline persisted, marked by a decrease in production, new orders, and employment, with an index of 49.9. Ultimately, the composite index reached 52.8 in August, a slight increase from 52.5 in July, staying above the neutral 50.0 mark for the tenth month in a row. OPEC+ aims to stabilize crude oil prices by prolonging additional voluntary production cuts. Amid falling crude oil prices, sluggish oil demand growth, and the potential for a swift end to the Libyan conflict, the eight countries that had committed to voluntarily reducing their production last week have decided to delay their plans. Initially, the unilateral production cuts were to be phased out gradually on a monthly basis by 180 to 200 kb/d, from Q4 2024 to Q3 2025. However, given the current market surplus and weak demand, these plans to augment supply have been deferred by two months. Members now intend to gradually reintroduce these cuts from December 2024 until November 2025, subject to further market developments. The recent agreement also includes a firm commitment from Iraq and Kazakhstan to implement specific measures to adhere to the agreed production levels and to honor their compensation schedules for August and September. Ultimately, OPEC+'s decision to moderate the pace of supply increases is expected to stabilize prices rather than cause an immediate surge in Brent crude to $80/b in the near term. Upstream oil and gas investment in 2024: up 1% to $620 billion. Rystad Energy forecasts a 1% increase in global upstream oil investment for 2024, reaching $620 billion. Shale oil investment is predicted to decline by 10% this year, while offshore investment is poised for a 6% growth. Africa is expected to see the most significant increase in upstream oil investments, at 20%, driven by projects in Nigeria, Uganda, and Libya. Europe follows with an 18% rise, primarily in Norway and the UK. In scenarios of steady oil demand, upstream investment is projected to stabilize at $620 to $660 billion annually for the years 2025-2030. This investment level should suffice for resource renewal if crude prices stay within the $70 to $80 per barrel range. Should prices fall below $60 per barrel, Rystad estimates that 25% of resource additions would become unprofitable. USA: Fall in crude oil inventories and lower demand for petroleum products. Last week, commercial crude oil inventories decreased by nearly 7 million barrels, placing stocks 4.5% below the five-year average. This reduction was attributed to decreased imports and a steady domestic crude oil production rate of 13.3 million barrels per day. Regarding petroleum products, the delivery volume of refined products, seen as an implicit demand indicator, declined from the previous week by nearly 5%, primarily due to a 4% fall in gasoline demand. Concurrently, gasoline inventories increased by 0.8 million barrels. Europe: Sharp fall in petrol prices. In Europe, the Amsterdam-Rotterdam-Antwerp (ARA) hub reported a 2.5% decrease in petroleum product inventories, primarily due to reduced stocks of petrol (-3%), fuel oil (-8%), and kerosene (-7%). The prices of petroleum products mirrored and intensified the drop in crude oil prices, with petrol prices falling by 11% and diesel by 4%. Product cracks have continued to weaken due to low demand in Europe. Gasoline cracks have plummeted by over 40%, dropping below $6 per barrel, while diesel cracks have marginally increased by 4.5% to $17.1/bbl. Against this backdrop, the weekly average refining margin for Brent crude remained nearly unchanged (+1%) at $4.3/bbl, which is 16% lower than the five-year average of $5.1/bbl. Year-to-date, the average Brent FCC margin is at $9/bbl, in contrast to the $6.1/bbl five-year average. Receive the full report and more, become a member of the KOMPTRADE community.

The recent decline in share prices on August 4th and 5th presents an opportunity to invest in AI stocks. The majority of data indicates that the economy is not currently in a recession, nor is it decelerating rapidly enough to suggest an impending recession. Additionally, the Federal Reserve is anticipated to lower interest rates multiple times in the coming months, which is likely to stimulate the economy rather than hinder it. Consequently, this could be an opportune moment to invest in the AI industry. IA: Just the beginning of growth Artificial intelligence is only at the initial stage of its development. We are at the onset of an extensive, multi-year investment cycle in AI which, assuming the economy steers clear of a recession, is expected to result in significant earnings growth for AI companies in the coming years. This accelerated growth in earnings is anticipated to boost the value of major stocks within the AI sector. Key findings: Currently, the stock market is experiencing a downturn due to fears of a recession, and the situation is indeed serious. However, despite the decline in prices, we consider these recession concerns to be exaggerated. In fact, we view this market downturn as presenting outstanding investment opportunities, particularly in the artificial intelligence sector. The situation is as follows: the U.S. economy is decelerating and appears relatively weak. However, we do not believe it is on the brink of collapse or that it is currently in a recession. What gives us such confidence? The gross domestic product (GDP) growth is still positive. The labor market is consistently generating jobs, with job vacancies outnumbering the unemployed. Corporate profits are on an upward trend. Business climate surveys are predominantly optimistic. Indeed, the data strongly indicates that the economy is not in a recession, nor is it decelerating rapidly enough to lead us into a recession soon. Additionally, the Federal Reserve is anticipated to reduce interest rates multiple times in the coming months. Such measures are likely to stimulate the economy rather than undermine it. Our recommendation is Grok AI developed by Elon Musk.

The oil market is experiencing high volatility. Weekly analysis of the oil market The oil market is experiencing high volatility due to geopolitical risks and economic slowdowns, with global Brent crude closing at a lower rate of $79 per barrel. The price of Brent crude dropped to $78.5 per barrel at the start of last week due to indicators pointing to weaker-than-expected macroeconomic forecasts, signaling a global economic slowdown. However, prices surged to nearly $82 per barrel on Wednesday amid heightened tensions in the Middle East following strikes attributed to Israel against Hamas and Hezbollah leaders. Futures prices were also buoyed by comments from Federal Reserve Governor Jerome Powell, who hinted at a possible interest rate cut in September. Despite these factors that typically boost prices, they closed significantly lower on Friday as concerns over the global economy took precedence over geopolitical tensions. The announcement of retaliation by Hezbollah, Hamas, and Iran against Israel could increase the geopolitical risk premium of crude oil. However, many analysts believe that Iran's response will likely not exceed certain limits, similar to last April's response. They primarily expect an escalation in attacks by Houthi rebels on merchant ships and oil tankers in the Red Sea, which could once again severely disrupt global shipping. On average, Brent ICE futures for October delivery decreased by $2.6 per barrel (-3.2%) to $79.1 per barrel over the week. In a similar trend, WTI prices dropped by $2.3 per barrel (-2.9%) to $75.7 per barrel. According to a Bloomberg poll of economists on July 31, the consensus is that the price of Brent crude oil will stabilize and is anticipated to reach $85 per barrel in the third and fourth quarters. Rising unemployment in the US is leading to a downturn in global stock and commodity markets. The Federal Reserve's hint at a potential rate cut in September was initially met with market approval last week but was soon deemed inadequate and belated. Numerous prominent companies reported disappointing earnings for the quarter, and the U.S. job figures, along with rising unemployment rates, are causing concern. The recent report indicating the unemployment rate has risen to 4.3% has sparked widespread commentary. The weak employment data has reignited fears of a recession in the United States, as per the Sahm rule—a statistical measure that uses the unemployment rate to predict recessions accurately—thus casting doubt on the Federal Reserve's measures. Amidst these concerns, both the S&P 500 and the Dow Jones indices experienced a 2.1% decline. The movement of liquidation of shares has also spread around the world. The Stoxx 600 index ended the week down 2.9%, the highest biggest drop in more than a year. In Asia, all stock markets were also in the red with a 4.7% decline in the Nikkei index and 0.5% of Hong Kong's Hang Seng Index. In the commodity market, a turnaround is taking place. The Bloomberg Commodity Index, tracking a diverse range of energy, agricultural commodities, and metals futures, has decreased by 4%, reaching its lowest point since 2021. PMI Report: Global Economy Deterioration The latest S&P Global report indicates that the global manufacturing index dropped to 49.7 in July from 50.8 in June, marking the first economic downturn in seven months. Every region worldwide recorded a manufacturing PMI below 50, with the eurozone experiencing the most substantial decline. Decreased manufacturing output in Germany, France, and Italy contributed to the eurozone's output decline, the steepest in seven months, as reported by S&P Global. OPEC+ is maintaining the anticipated supply increase for the fourth quarter at present. The OPEC+ Joint Ministerial Monitoring Committee (JMMC), which convened last week, made no changes to the group's production policy. Consequently, the projected gradual increase in oil production from the fourth quarter will continue for now. The actual implementation of this decision hinges on market conditions. Given the 12% fall in oil prices since early July, driven by demand worries, OPEC+ may need to reconsider its oil supply policy. USA: Crude inventories decline, bolstered by exports. Last week, commercial crude oil inventories decreased by 3.4 million barrels, compared to the consensus of a 1.1 million barrel drop and a 5-year average decrease of 7.2 million barrels. This marks the fifth consecutive week of declines, with inventories now 2% below last year's levels and 4% below the 5-year average. The decline was bolstered by a rise in crude oil exports of 733 thousand barrels per day and a reduction in refinery utilization to 90%. Domestic crude oil production remained constant at 13.3 million barrels per day. Regarding refined products, gasoline inventories fell by 3.7 million barrels due to reduced production, especially in PADD 3 following refinery shutdowns, while distillate and jet fuel inventories rose by 1.5 million barrels and 0.3 million barrels, respectively, attributed to lower net exports. In Europe, stocks and prices of petroleum products have declined. At the Amsterdam-Rotterdam-Antwerp (ARA) hub, inventories fell by 1%, primarily due to a 6% decrease in kerosene stocks. Market prices have followed suit, with gasoline prices falling by 1% and diesel prices by 2.6%, in response to lower crude oil prices. The European refining margin now stands at $8.3 per barrel, surpassing the five-year average of $7.0 per barrel.

Rotterdam oil registered operators Weekly analysis of the oil market On February 1, 2021 Rotterdam introduced a licensing programme for bunker suppliers operating within the port. The official list of licensed suppliers can be found here: https://www.portofrotterdam.com/sites/default/files/bunker-permit-and-facility.pdf The PDF file can be viewed after registering on the port website. The five oil refineries in the port of Rotterdam form the core of the petrochemical cluster in the port area. The oil refineries manufacture products such as gasoline, diesel, kerosene, heating oil and feedstock for the chemical industry. The refineries in the port have a combined distillation capacity of 58 million tonnes. In the Netherlands, Belgium and Germany another five refineries are supplied with (crude) oil via pipelines from the port of Rotterdam. Shell Nederland ExxonMobil Vitol BP Gunvor Petroleum Rotterdam Platts corrects German Renewable Capture Prices for Feb. 28 and Feb. 29 Rotterdam oil registered operators Commodity: Electric Power, Energy Transition Region: EMEA Subscriber note type: Data Correction Platts, part of S&P Global Commodity Insights, has corrected German Renewable Capture Prices data for Feb. 28 and Feb. 29 due to a technical error. Rotterdam Europort : Ideal location for crude oil supply The oil refineries in the port of Rotterdam receive their crude oil by tanker from areas including the North Sea region, Russia and the Middle East. The port of Rotterdam offers the advantage that even the largest oil tankers can enter the port and load and unload at the oil terminals in a single visit. The crude oil is transported by pipeline to the refineries in Rotterdam and the hinterland. Cluster with Vlissingen, Antwerp and Germany The petrochemical cluster in Rotterdam is not isolated. Together with the refineries of Total/Lukoil in Vlissingen, Shell in Godorf, BP/Rosneft in Gelsenkirchen and Total and ExxonMobil in Antwerp, the port of Rotterdam makes up one of the three largest fuel hubs in the world. Excellent distribution possibilities within Europe and overseas and the broad range of tank storage ensure that also large-scale trade in fuels takes place in Rotterdam.

Brent at nearly $83/bbl supported by geopolitical tensions and low signs of improvement in the economy in the euro zone. Weekly analysis of the oil market The price of Brent was up slightly last week, still supported by geopolitical tensions in Middle East, and encouraging macroeconomic indicators showing signs of improvement in Europe zone. On a weekly average, the price of Brent ICE (one-month London futures contract) increased by $0.3/bbl (+0.4%) to $82.8/bbl, while WTI remained stable at $77.8/bbl. The consensus of economists surveyed by Bloomberg on February 23 is stable compared to last week, with a price of Brent for the first quarter at $82.5/bbl and $82.8/bbl for the second quarter. Eurozone PMI indices: contraction in industry, but improvement in services activity. The Eurozone Composite PMI for February came in slightly above consensus forecasts, at 48.9 compared to 47.9 in January. However, it remains in contraction territory. The rise in the composite PMI index is entirely due to the increase in the services PMI (from 48.4 to 50.0), as the manufacturing PMI fell (from 46.6 to 46.1). The decrease in the European manufacturing PMI is explained by a further reduction in orders to exports and by a more marked contraction in employment, but above all by the fall in the German PMI, the index passing from 45.5 in January to 42.3. On the other hand. S&P Global's Eurozone report offers little reassurance on pricing, however, with inflation in selling prices and growth in average input costs for producers of goods and providers of services continuing to increase. In the United States, growth in private sector activity slowed in February, with an estimate of the index Composite PMI at 51.4, after reaching 52 the previous month. Russia's oil revenues: The difficult assessment of economic sanctions As the Russia-Ukrainian conflict will enter into its third year, and that a new set of economic sanctions (the 13th) was adopted last week by the G7, the impact of these sanctions on Russia's oil revenues is still difficult to estimate. According to the KSE Institute, sanctions on Russian oil have already cost the country $113 billion in export revenues since the start of the conflict, with an additional loss estimated at $55 billion in gas export revenues due to Europe's diversification away from Russian gas. For the IEA, which is based on flows from Kpler and price data from Argus, average oil export revenues in 2023 were $175 billion ($14.6 billion/month), compared to $228 billion. $ ($19 billion/month) in 2022, a drop of more than $53 billion (around 2% of Russia's estimated GDP). Nevertheless, Russia's oil export revenues appear to be on the rise again in 2024 with revenue estimated at $15.6 billion in January for an export of 7.7 Mb/d of oil and petroleum products. On average over the last three months, the price of Russian crude was sold at a discount of $13.4/bbl compared to Brent (according to Argus), but has always remained above the $60/bbl mark set by the G7 countries, demonstrating the difficulty of enforcing this ceiling despite the pressure exerted by the United States on some shipping companies. On the other hand, according to data from Argus, the price seiling for petroleum products was generally respected in recent months, with the exception of naphtha, the sale price of which was slightly higher. The lack of transparency and the difficulty of obtaining precise data on oil flows and real prices of sale (Argus prices are obtained by consultation with a few players) make it difficult to estimate the impact of the G7 measurements. To avoid this lack of transparency, the United States, the European Union and the United Kingdom introduced tougher rules this month aimed at supporting the implementation of caps on price and prevent its circumvention by reducing the opportunities for bad actors to use opaque transport to conceal the purchase of oil beyond the ceiling. In particular, operators will have to provide detailed certificates for each transport (previously declarations on an annual basis were accepted). USA: Further increase in crude stocks and low level of use of American refineries. In the United States, commercial crude stocks increased by 3.5 Mb last week (vs. +3.8 Mb consensus/+1.8 Mb average over 5 years), for the fourth consecutive week. They are currently less than 1% of the average five-yearly. This increase was supported by crude oil production which returned to its record level of 13.3 Mb/d. American refinery activity is starting to recover, with a utilization rate of 80.6%, but still well below the levels seen at this time of year over the past five years (86.3%) due to outages for maintenance and repairs. With regard to petroleum products, stocks of gasoline are down very slightly (-0.3 Mb), while stocks of distillates have decreased by more than 4 Mb due to of an increase in demand. Distillate stocks are on average 9% lower than the five-year average. Europe: Tensions on diesel are reducing. Decline in refining margins In Europe, stocks of refined products in the ARA zone increased by 0.5% to 5.7 Mt last week. The Gasoline stocks fell 3.4%, but remain more than 3% below the average of the last five years. The Diesel stocks decrease again (-1.2%) and remain more than 15% below the average of the last five years. On the Rotterdam international market, gasoline prices fell by 0.1% and diesel prices by 3.7%, the pressure on this market starting to ease with crack diesel down 9.3% per week last. In this context, the European refining margin fell by 17% to $10.6/bbl.

Further drop in crude oil prices: oil market rebalances Weekly analysis of the oil market Crude oil prices remain on a downward trend for the third consecutive week. The geopolitical premium that kept prices around $90/b has declined, although an extension of the conflict between Israel and Hamas to other parts of the Middle East remains possible, even inevitable for some countries like Iran. The price of crude oil currently fluctuates between $80 and $85/b, in line with its equilibrium price based on market fundamentals, estimated at $83/b (model linking the supply, demand and evolution of oil stocks. On the futures markets, hedge fund managers continued to disengage with a further 24,245 (-7.7%) decline in combined net positions (Brent and WTI). Oil prices, however, found some support at the end of last week as financial markets rallied. Europe: Lower gasoline and diesel prices in the Rotterdam market Petroleum product prices followed the decline in crude oil prices, with a 1.9% decrease for gasoline and 5.6% for diesel. In this context, the European refining margin (Brent FCC) increased by $0.5/b to $6.9/b, about double the average of the last 5 years. The price correction on the oil market led to a clear reduction in the offset of the forward curves. The price spread between the first two Brent futures contracts narrowed from $1.5/bbl last month to just $20/bbl. Surprisingly, the price gap between the first two futures contracts on the WTI is even gone negative for one day last week. The premium on the price of oil for short-term delivery over longer maturities has also been significantly reduced. Currently, the difference between the contract of the first month and the contract with maturity in twelve months is $3/b, compared to $8 to $10/b the previous month. This significant change in the shape of the forward curves suggests a more comfortable supply outlook for the oil market in the coming months. However, this situation could change if Saudi Arabia decides to extend its voluntary reduction of production beyond the end of year. The likelihood of such a decision has increased significantly in recent days due to the recent drop in prices. Saudi Arabia is expected to announce its decision at the next OPEC+ meeting in about two weeks. On a weekly average, Brent crude oil prices on futures markets fell $4.7/bbl to $81.6/bbl, and WTI fell $4.1/bbl to $77.3/bbl. The consensus of economists surveyed by Bloomberg on November 10 remained stable, with a crude oil price for this quarter at $90/b and $90/b for the first quarter of 2024. USA: the EIA forecasts a rebalancing of the oil market in 2024. In its latest monthly report, the EIA forecasts oil production in 2024 up 1 MMb/d, down substantially from this year (+1.6 MMb/d). The US agency thus expects that OPEC+ production reductions will keep world production growth below that of world consumption (+1.4 MMb/d) contributing to a reduction in inventories and upward pressure on oil prices in early 2024. Although the Agency considers that the conflict between Israel and Hamas has not affected the physical supply of oil at this stage, uncertainties surrounding the conflict and other global oil supply conditions could put upward pressure on crude oil prices in the coming months. EIA projects that the price of Brent will increase from $90/b in the fourth quarter of 2023 to an average of $93/b in 2024. In its analysis, the EIA notes that the gradual improvement in vehicle fuel efficiency and the increasing share of electric vehicles reduce the per capita demand for automotive gasoline in the United States. The agency cites researchers from the Argonne National Laboratory who estimated that the adoption of electric vehicles helped reduce fuel consumption in the United States by about 0.5% in 2021 compared to what it would have been otherwise. The impact of the adoption of electric vehicles on fuel consumption has probably increased since 2021; however, data lags on vehicle scrappage rates and changes in telework habits, among other factors, complicate the analysis of the impact of electric vehicles on recent per capita fuel consumption declines. EIA currently projects that overall gasoline consumption in the United States will decrease in 2024 to 8.83 MMb/d, from 8.88 MMb/d in 2023 EUROPE: Stocks rise in October. Crude oil consumption falls sharply. US oil stock data was not available last week due to technical issues on the EIA website. In Europe, Euroilstock monthly figures show an increase in stocks of refined products in the EU-15 and Norway in October from 0.5 Mb to 585 Mb, mainly due to an increase in average distillate stocks. Stocks of petroleum products continued to rise despite a Crude oil consumption in European refineries fell 4.5% to 8.97 MMb/d, the lowest level since March 2022. This is partly due to maintenance work at several refineries over the past month. Average distillate stocks rose 0.3% to 393 MMBs in October. Although some market participants were concerned about a possible tightening of supply in Europe, in particular due to problems in refineries and the Russian diesel embargo, traders Note that the distillate market remains well supplied, with aggregate demand for average distillates remaining weak in October. Gasoline inventories edged down 0.3% to 108 MMb, while demand remained strong during the month as arbitrage for exports to the US remained open. Oil inventories fell again in October, falling 1.2% to 56 Mb, the lowest level since September 2022. The use of lighter crude oils in European refineries appears to be putting pressure on oil supplies.

Brent stabilizes around $90/b, pending the evolution of the conflict in the Middle East. Weekly analysis of the oil market After the sharp rise in oil prices over the past two weeks following Hamas' attack on Israel, crude oil prices fell last week to stabilize at around $90/bbl over the weekend. Crude oil prices now fully incorporate a geopolitical premium of $6-7/bbl and, in the absence of further developments in the conflict, are expected to continue to hover around $90/bbl. The announcement this weekend by the Israeli army "of the beginning of the second phase" of the war with the intensification of air strikes and ground operations in Gaza suggests however that the risk of igniting the conflict in the region via Iran, main support Hamas' material remains possible even if for the moment this scenario does not seem the one that the oil markets envisage. Indeed, in future markets, hedge fund managers have begun to reduce their net bullish crude oil (Brent and WTI) of 13,185 net positions combined to 390,791, based on weekly futures and options data from ICE Futures Europe and CFTC. Bullish bets on WTI crude oil have even come down to their lowest levels in eight weeks. On average weekly, Brent crude oil prices in futures markets fell by $1.8/bbl to $89.3/bbl, and WTI lost $3.3/bbl to $84.7/bbl. Economists surveyed by Bloomberg as of October 25 have revised up their crude oil price forecast for this quarter to $90/bbl (+$1.0/bbl). IMF: Global recovery still weak and disparities between regions growing. The global economy continues to send mixed signals, with the weakness of the eurozone contrasting with the vigour of the United States. In its latest economic outlook report, the IMF notes that global economic activity remains below its pre-pandemic trajectory. Several factors are holding back the recovery. Some reflect long-term consequences of the pandemic, such as the war in Ukraine. Others are more cyclical in nature, including the effects of the tightening of monetary policies needed to curb inflation, and the reduction of tax incentives faced with the increase in the public debt of States. The IMF now forecasts global growth of 3% for 2023 (from 3.5% in 2022) and 2.9% for 2024. These projections remain below the historical average (2000-19) of 3.8%, and forecasts for 2024 are down 0.1 percentage point from last July’s estimates. For advanced economies, growth is expected to fall to 1.5% in 2023 and 1.4% in 2024 (from 2.6% in 2022), as the US economy bounces off weaker-than-expected growth in the eurozone. For emerging markets and developing economies, growth is expected to decline slightly from 4.1% in 2022 to 4.0% in 2023 and 2024. In China, post-COVID growth momentum, which is expected to bring growth to 5.0% this year, is expected to slow to 4% in 2024 as the economy faces increasing headwinds due mainly to the housing crisis. Global inflation is projected to decline gradually from 8.7% in 2022 to 6.9% in 2023 and 5.8% in 2024. The forecasts for 2023 and 2024 have been revised upwards by 0.1 percentage point and 0.6 percentage point respectively, compared to last July’s forecasts. For the IMF, USA: Another mega merger acquisition in the oil sector According to the weekly EIA report, US commercial crude oil stocks increased by +1.4 mb during the week to October 20 (compared to -0.5 mb for consensus and +1.2 mb on average over 5 years. Despite this increase, stocks remain at their lowest level in 5 years. The increase was supported by crude oil exports, which decreased by 0.5 mb/d, and refineries, which reduced their processing by 0.2 mb/d to return now in the 5-year average. In addition, domestic crude oil production remained stable at a record 13.2 MMb/d, with the number of platforms in operation increasing by 2. In terms of product, gasoline inventories slightly increased (+0.2 Mb vs -1.3 Mb consensus), reflecting lower demand (-1%) and smaller exports. Distillate stocks fell sharply (-1.7 mb vs -1.8 mb consensus) due to an increase in net exports. After the acquisition of Pionner by Exxon for 60 billion dollars, Chevron announced last Monday the acquisition of the Hess oil company for $53 billion. While Exxon’s target was clearly oriented towards shale the acquisition of Hess diversifies Chevron’s portfolio with assets in Bakken and especially Guyana (where production is expected to increase 1.5-fold next year to nearly 0.6 MMb/d, according to the IEA). Most these record acquisitions are driven by the search for new oil and gas reserves to support growth long-term returns for shareholders. However, they also reflect the difficulty for these American oil giants to increase their own production, given the decline of In 10 years, Exxon’s production has fallen by nearly 12%, from 4.2 MMb/d in 2012 at 3.7 Mb/d in 2023, its lowest level since the merger with Mobil. Against this backdrop, both companies closed down sharply this week with the release of their quarterly results. In the third quarter of 2023, the US oil majors' profits fell sharply year-on-year (-54% for Exxon, -42% for Chevron), 2022 was an exceptional year with crude oil prices soaring to nearly $140/bbl. However, this year’s results are up from 3T2021. Note the excellent results of TotalEnergie, with a record quarterly result of $6.7 billion, up +1% year-on-year. Europe: lower prices for petroleum products on the Rotterdam market In Europe, on the Rotterdam market, stocks of petroleum products increased very slightly last week, with higher stocks of gasoline and naphtha offsetting lower stocks of diesel. Commodity prices followed the decline in the price of crude oil with a decline of 0.6% for gasoline and 2.3% for diesel. European refining margin (Brent FCC) drops from $0.2/bbl to $5.5/bbl but remains nearly 11% above average over the last five years ($5/bbl).

In a particularly tense geopolitical context, crude oil prices remained broadly stable last week before surging nearly $5/bbl last Friday when Iran’s foreign minister warned that Tehran-backed Hezbollah could open a new front in Israel’s war against Hamas if the blockade of Gaza continued. On average weekly, Brent crude oil prices in futures markets gained $0.5/bbl to $87.7/bbl, while WTI lost $0.2/bbl to $85.3/bbl. Weekly analysis of the oil market Brent stable despite geopolitical tensions and market volatility. On the spot market, Brent lost $1/bbl to $90.5/bbl. Despite the absence of a significant influence on oil supply to date, the current geopolitical instability prompts market players to take measures to protect themselves from the risk of a possible price increase, that could result from a regional escalation of the conflict between Israel and Hamas. The oil volatility index (OVX) has thus risen sharply to exceed 44, its highest level since last March, a sign of the great uncertainty in the market. However, the median crude oil price forecast for this quarter and the first quarter of 2024 has been revised upwards to $87.2/bbl and $87.5/bbl respectively. At the same time, the high forecasts were revalued by +$7.5/b to $103.6/b for this quarter. IEA vs. OPEC: Two different visions of the global oil market in 2024. In its latest monthly report, the IEA notes that, barring unforeseen disruptions, global oil production is expected to average around 101.3 MMb/d in the fourth quarter, thanks in particular to higher production from Nigeria and Kazakhstan. Crude oil production is projected to increase by +1.5 MMb/d year-on-year to an average of 101.6 MMb/d, thanks to the United States, which will contribute 1.3 Mb/d to global supply growth in 2023, or 65% of total non-OPEC growth+ (2 Mb/d this year). For next year, the IEA forecasts a substantial increase in global supply, mainly driven by the US (but to a lesser extent than this year) and other non-OPEC+ producers such as Brazil, Guyana and Canada. These four countries will contribute 65% to growth of 1.7 MMb/d in 2024, bringing global oil production to a new annual peak of 103.3 MMb/d. In terms of oil demand, the IEA expects a strong growth trajectory to continue in the fourth quarter. For 2023 as a whole, average growth of 2.3 MMb/d is expected, bringing global demand to 101.9 Mb/d. According to the IEA, China remains one of the main drivers of this growth, with a 77% contribution. Globally, demand for oil is mainly driven by demand for kerosene and petrochemicals. In 2024, oil demand growth is expected to slow to 0.9 MMb/d, due to a more challenging economic climate and continued progress in energy efficiency, bringing global demand to 102.7 MMb/d. In this context, the market is expected to return to a surplus next year (+1.3 MMb/d in the first half of the year and +0.6 MMb/d over the year), which could force OPEC+ to maintain or even strengthen its policy of reducing production. The IEA scenario differs from that of OPEC, which on the basis of the current agreements of OPEC+ members leads instead to a supply deficit of 1 MMb/d on average next year. OPEC estimates that oil demand in 2024 will increase by +2.2 MMb/d to 104.3 MMb/d, driven by solid global economic growth, with continued improvements in China. Growth is expected mainly in non-OECD countries (+2 MMb/d), particularly in the Middle East and Asia (China, India mostly). USA: Crude stocks rise. Oil production at its highest. Last week, US commercial crude stocks increased by +10.2 million barrels (against a consensus of -1.4 million barrels/+4.3 million barrels on average over 5 years. This increase was supported by exports of crude oil down -1.9 MMb/d and an increase in domestic crude production of +300 Mb/d to a record 13.2 MMb/d. On the product side, gasoline and distillate inventories are down, confirming a slight recovery in demand and exports. Europe: relatively stable petroleum products market. Tensions on diesel. In Europe, on the Rotterdam market, stocks of petroleum products fell slightly last week, mainly due to lower diesel stocks. The price of petroleum products increased by 0.2% for petrol and by 0.9% for diesel. The gas oil market in Europe remains tight, due to the Russian embargo and a decrease in exports from the United States and Saudi Arabia. In addition, the low water level on the Rhine puts additional pressure on distribution costs in Europe, bringing them closer to the peaks reached in July. The European refining margin remained stable last week at $6.3/bbl.

La transition énergétique de l’Europe Photovoltaïque L’industrie photovoltaïque mondiale est actuellement concentrée en Chine. Mais la croissance sans précédent du marché ouvre des opportunités pour les acteurs européens, qui bénéficient de trois tendances. Après une longue période de progrès progressifs, où la seule différence était le prix, l’accélération technologique se produit maintenant en Europe. Dans des domaines tels que l’automobile, l’agriculture et la construction, diverses niches pourraient ouvrir la voie à de nouveaux segments de marché pour des produits hautement différenciés, loin de la logique des matières premières qui domine actuellement. Enfin, les réglementations européennes évoluent : avec une plus grande prise en compte du cycle de vie (moins de production à forte intensité de carbone, recyclabilité), elles sont susceptibles de changer la donne. En photovoltaïque, est-il possible de faire une différence ailleurs que sur le prix ? Il est vrai qu’en termes de technologie, l’industrie du panneau solaire se caractérise aujourd’hui par une certaine homogénéité. La plupart des acteurs utilisent une technologie basée sur le silicium polycristallin ou quasi-monocristallin, implémentée dans différentes architectures. Cela ne signifie pas qu’il n’y a pas d’innovation, mais plutôt qu’elle a été progressive jusqu’à présent. Néanmoins, au fil du temps, il y a eu des améliorations importantes du rendement et des coûts. En ce qui concerne les performances des appareils, le premier panneau proprement dit, développé en 1954 par Bell Labs (quarante ans après les premiers essais de cellules photovoltaïques en silicium), avait une efficacité de 6%. Il y a quelques années, ce chiffre était passé à 13 ou 14%, et aujourd’hui une grande partie des panneaux solaires sur le marché ont un rendement d’environ 20%. Le coût des panneaux a chuté de 80 % en dix ans. Le coût des panneaux a chuté de 80 % en dix ans, pour de bonnes et de mauvaises raisons. Les bonnes raisons sont les avancées technologiques et l’intensification de la transition énergétique. Les mauvaises raisons sont les subventions massives, en particulier en Allemagne, qui, au lieu d’aider l’industrie européenne à décoller, ont conduit à une surcapacité industrielle et à une guerre des prix dans laquelle seuls quelques fabricants chinois ont pu survivre et qu’ils dominent maintenant. Aujourd’hui, le prix est le critère principal, bien avant la performance, tant pour les installateurs de fermes photovoltaïques que pour les clients privés. Cela signifie-t-il que l’industrie européenne ne sera pas à la hauteur ? Non, pour au moins trois raisons. La première, c’est que le marché est en plein essor et qu’il y a de la place pour de nouveaux joueurs. Nous n’avons pas encore les chiffres définitifs pour 2022, mais en 2021, selon l’Agence internationale de l’énergie1, la production mondiale d’énergie photovoltaïque a augmenté d’un record de 179 TWh (+22%) pour atteindre plus de 1000 TWh. Cette croissance est tirée par le marché chinois, suivi par les États-Unis et l’Union européenne. Si nous suivons le scénario de carboneutralité des Nations Unies, la production solaire photovoltaïque annuelle devra atteindre environ 7400 TWh d’ici 2030. À partir des 1000 TWh actuels, cela implique une croissance moyenne de la production d’environ 25% par an sur la période 2022-2030. Dans ce vaste marché, la production chinoise continuera de dominer, et nous devons examiner de près ce qui se passe aux États-Unis. Mais la croissance du marché européen sera également très significative, ce qui ouvre des perspectives de reprise pour les acteurs européens, car - et c’est la deuxième raison - nous entrons dans une phase où un certain nombre d’innovations technologiques arrivent à maturité, et bien qu’elles ne soient pas des percées au sens strict du terme, elles représentent des accélérations décisives.

Like Star Wars, according to the Chinese scientific journal Systems Engineering and Electronics, a new machine using magnetic plasma rings developed by Chinese scientists would be able to move objects remotely. They could thus deflect space debris, recover defective satellites, change their trajectory and revolutionary military applications. China Can Moving Satellites Remotly What technology would have been used ? A Cannon projecting rings of magnetized plasma creating magnetic fields. The magnetic cannon would have a range of one kilometer and could move objects just after a few minutes of activation. The cannon will project eight rings of plasma towards a target every second, at a speed of 10,000 meters per second, or 30 times the speed of sound. When these plasma rings approach the target, they begin to influence its movement using magnetic force. How it works. The central piece is a magnetized coaxial barrel. This is a device able to generating flows of hot, electron-rich and energetic gases. These plasma rings house charged particles such as ions and electrons. The latter can move autonomously by reacting to electric and magnetic fields. The magnetic field, generated by the discharge current circulating in the plasma ring, in turn induces a current in the plasma. This current generates a magnetic field opposite to the original one. The process repeats until the magnetic field lines are frozen in the plasma. Which means that the magnetic force can be routed to a distant destination through the plasma ring. Applications of such technology. Make available the possibility to quickly stop or divert the rotation of a space object (debris or satellite). The possibility of attracting a small satellite to a spacecraft for inspection or repair. Tow or recover any magnetizable object in space. the team of researchers proposed the idea of ​​using plasma rings to regulate the relative movement of a companion satellite. This is with the aim of directing it towards the main satellite for recovery. These plasma rings generate a well of dynamic magnetic potential, capable of interacting with the magnetic field of the companion satellite. Thus, we create a force exploited to reduce the relative speed of the two satellites and bring them closer. This method constitutes an innovative and adaptable approach for the rapid recovery of companion satellites. It also opens the way to potential applications in precise delivery missions. This technology can replace robotic arms and reduce the risk of accidents and represent a major utility in space exploration and the manipulation of space objects, particularly in their delivery and trajectory correction in the event of a malfunction. The military use of the device, although obvious and revolutionary, is not filled in the study, even if its design is linked to the defense industry.