EEMEA Oil and Gas Chartbook_No rush

Summary of EEMEA Oil and Gas Chartbook Equities Industry Overview - Industry: Oil and Gas - Region: EEMEA (Eastern Europe, Middle East, and Africa) Key Points 1. OPEC+ Output Decisions: OPEC+ has agreed to postpone output hikes due to weak oil demand, extending the unwinding of 2.2 million barrels per day (mbpd) of voluntary cuts over 18 months instead of 12 months previously [15][15][15] 2. Saudi Arabia's Jack-Up Rigs: The active jack-up rig count in Saudi Arabia is expected to drop to 61 by mid-December 2024 from 88 rigs in February 2024, approaching pre-2020 levels [12][12][12] 3. China's Oil Imports: Crude oil imports to China increased by 9% month-on-month (mom) and 4% year-on-year (yoy), primarily driven by stockpiling rather than actual demand [14][14][14] 4. Global Oil Demand: Overall global oil demand growth remains weak, with notable declines in diesel and gasoline demand in the US and China [14][14][14] 5. European Refining Margins: European refining margins have weakened, averaging USD 6.3 per barrel but dropping to USD 3-4 per barrel in early December 2024, influenced by increased output from Nigeria's Dangote refinery [17][17][17] 6. Freight Rates: Clean tanker day rates have seen a modest increase, but remain significantly lower than in the first half of 2024 due to oversupply [18][18][18] Additional Insights - Market Dynamics: The third wave of rig suspensions in Saudi Arabia may affect between five and ten rigs, which is an increase from the previously expected five [12][12][12] - Regional Production Compliance: Iraqi oil production has declined to comply with OPEC+ quotas, while Kazakhstan's output rebounded significantly in November 2024 [15][15][15] - Economic Impact: Weaker refining margins have led to economic cuts in operations, with some refineries, like Gunvor's Rotterdam facility, facing closures [17][17][17] Conclusion The EEMEA oil and gas sector is currently facing challenges due to weak demand, regulatory decisions from OPEC+, and fluctuating refining margins. The situation is compounded by geopolitical factors and market dynamics that continue to evolve.