December 2024 Global Commodity Snapshot

Commodities: Global

 

OPEC Oil Output Fell in December from a drop in the UAE due to field maintenance.  The Organization of the Petroleum Exporting Countries pumped 26.5 million barrels per day (mbpd) last month per Bloomberg estimates as modest gains in Libya and Nigeria were also offset by similarly-modest declines in Iran and Kuwait.  Nigeria’s oil production including condensates climbed 0.15 to 1.7 mbpd in November, the highest in more than three years, as the result of Nigerian authorities ramping up security measures at oilfields to crack down on pipeline theft and sabotages.

US Net Crude Oil Imports were forecast to fall by -20% in 2025 to 1.9 million barrels per day, their lowest since 1971, the Energy Information Administration (EIA) said, pointing to higher U.S. production and lower refinery demand.  The EIA projected the United States to produce 13.5 mbpd of oil in 2025, up from 13.2 mbpd in 2024.  US oil production rose 260,000 bpd month-over-month to a record 13.5 mbpd in October as demand surged to the highest levels since the pandemic.  US operating oil rigs also moved higher to 482 on January 3rd from 477 as of November 27th.  Per AAA, US average regular unleaded gasoline prices per gallon declined to $3.03 (-4¢) at the end of December (with California’s average declining a similar amount to $4.38).  The Permian basin production overall is now up to 6.0 mbpd and has been increasing by 15% per year since 2021.  That puts it ahead of Iraq, the number 2 OPEC producer.  Chevron believes the Permian Basin production will top out in the late 2020s as they cut investment there by 10% for 2025.  In energy-related political news, New York Governor Hochul signed a law that allowed the state to charge fossil fuel companies billions for climate change damage.  She looked to generate $75 billion in revenue over the next few years from this action.  President Biden banned most new oil and natural-gas drilling acreage permitting in coastal waters, which would require an act of Congress to overturn.

Chinese Oil Imports jumped in November from a year earlier for the first annual growth in seven months, data showed, driven by lower prices of Middle East supplies and additions to the national stockpile. The world’s top crude oil buyer took in 11.8 mbpd, up +14.3% from a year earlier.  China’s coal imports rose +26% year-on-year in November, taking total arrivals for the year to a record high, as imported supply was cheaper than domestic coal.  Coal imports totaled 54.98 million metric tons last month.  Sinopec said that Chinese petroleum consumption will peak by 2027 at 16.0 mbpd of crude oil.  In 2024, consumption was seen at about 15.0 mbpd.  However, India’s crude oil imports rose by +2.6% year-on-year in November to 4.7 mbpd, driven by strong economic and travel activity.  While still far short of China, one would expect that number to continue to grow as economic development continues.

Argentina’s Rosario Grains Exchange Hiked its Forecast for the nation’s 2024/25 wheat harvest thanksFilling the Safe to recent rainfalls and fresh weather over the austral spring month of November.  The exchange now expects a 19.3 million metric ton wheat harvest compared to a prior forecast of 18.8 million tons.  French farmers planted 6.3m hectares of winter grains for the 2025 harvest, up +6.6% from 2024.  As seen right, China’s gold reserves have been growing strongly, with net gold imports via Hong Kong in November more than doubled from October, marking the highest level in seven months, 33.1 metric tons versus 15.4 tons.  Total reserves gained 0.33 million ounces in December to reach 73.3 million ounces, according to the latest Bank of China release.  In US dollar terms, the share of gold in China’s total official reserve assets amounted to 5.5% last month, compared to 4.0% a year ago.

 

And in other news:

 

Mexico is sitting on more than half a billion liters of tequila in inventory, almost as much as its annual production, as the fast-growing industry reckons with slowing demand.  By the end of 2023, the industry had 525mn liters of tequila in inventory, either ageing in barrels or waiting to be bottled, according to data shared with the Financial Times by the Tequila Regulatory Council.  Of the 599mn liters of tequila produced last year, about one-sixth remained in inventory, according to the FT… the spirit faces waning popularity as young adults more often turn away from alcohol consumption.  Oh how the worm turns!

NASA’s Parker Space Probe will come closer to the sun’s surface than any other flight in human history.  It will still be 3.8 million miles away but that is close enough to study the solar winds and other phenomena in detail. 

https://science.nasa.gov/mission/parker-solar-probe/

 

 

All the best in your investing!

David Burkart, CFA

Coloma Capital Futures®, LLC
www.colomacapllc.com
Special contributor to aiSource