Best in Energy – 15 May 2024

U.S. electric vehicle sales lose market share (EIA)

U.S./China tariffs and risk of circumvention (Reuters)

China’s muted response to U.S. tariffs so far (Xinhua)

Huawei ups phone sales at Apple’s expense (Reuters)

Iran prepares for eventual leadership succession (FT)

IAEA chief tries to rebuild relationship with Iran (FT)

INVESTMENT FUNDS purchased the equivalent of +7 terawatt-hours (TWh) in futures linked to the Dutch TTF gas benchmark over the seven days ending on May 10. Funds have been net purchasers in seven of the most recent eight weeks, buying a total of +105 TWh since March 15. As a result, investors have amassed a net long position of 103 TWh, up from a net short position of 1 TWh two months ago, and the largest bullish position since September 2021:

Best in Energy – 14 May 2024

United States raises tariff rates on China (White House)

U.S. Trade Representative statement on tariffs (USTR)

Japan predicts increase in electricity demand (Reuters)

Asia’s refiners turn away from Mideast crude (Reuters)

India/Iran sign port management agreement (Reuters)

Germany’s solar generation hits record high (Reuters)

Europe’s economic under-performance (FT)

Russia’s diesel exports re-routed (EIA)

NORTH ATLANTIC sea surface temperatures in the tropical region (05-20°N 30-60°W) remained far above normal for the time of year through April. Tropical storm formation requires a minimum surface temperature of 26°C, among a number of other necessary and complex conditions. Surface temperatures averaged 27.42°C in the region in April which was +1.54°C above the long-term average for the time of year. The exceptional ocean warmth is expected to produce a higher than average number of tropical storms this summer, with a more than usual number of hurricanes, including severe hurricanes:

Best in Energy – 13 May 2024

GPS jamming and spoofing becoming common (FT)

Saudi Arabia’s reliance on foreign consultants (FT)

U.S. coal-fired generators lose baseload to gas (EIA)

Georgia’s economic growth and power demand (WSJ)

Global oil use is rising on long-run trend (Bloomberg)

China’s price-sensitive commodity purchases (Reuters)

Carrington’s sunspot observation in 1859 (Royal Astronomical Society)

U.S. GASOLINE stocks are very close to the long-term seasonal average as the market remains well supplied. Inventories were just -4 million barrels (-2% or -0.36 standard deviations) below the prior ten-year average on May 3 and the deficit has narrowed from -6 million barrels (-3% or -0.87 standard deviations) in the middle of March:

Best in Energy – 10 May 2024

Yunnan’s aluminium ambitions hit by drought (Reuters)

India prepares for tight electricity supply in June (Reuters)

Diesel margins slump in negative sign for crude (Reuters)

Interest rate sensitivity of energy investments (Woodmac)

U.S. propane market – consumption and inventories (EIA)

United Kingdom postpones residential hydrogen trial (FT)

News coverage –relentless negativity distorts reality (FT)

EUROPE’s gas storage facilities are refilling much more slowly than normal for the time of year. Inventories accumulated by +58 terawatt-hours (+1.56 TWh per day) between March 31 and May 7 compared with a prior ten-year seasonal average of +80 TWh (+2.15 TWh per day). The region emerged from the winter of 2023/24 with a record volume of gas in store so a smaller than average refill was needed to ensure space does not run out before the depletion season begins in winter 2024/25. But the slow start to refilling has pushed back the likely date on which storage becomes full. It is partly the consequence and partly the cause of an increase in futures prices. TTF benchmark prices for gas delivered in October 2024 have risen to €33 per megawatt-hour from €29 at the end of March:

Best in Energy – 9 May 2024

[MUST READ] Europe’s trade and economic security (Bruegel)

Electric trucks struggle to become competitive on costs (WSJ)

Mexico hit by power shortages and rolling blackouts (Reuters)

Asia’s steelmakers need incentives to cut emissions (Reuters)

China stimulates durable goods via trade-in subsidies (WSJ)

China’s manufacturing-driven growth strategy (Bloomberg)

China plans to upgrade battery manufacturing (Bloomberg)

U.S. oil industry’s opposition to Biden administration (FT)

China indigenises more smartphone technology (Reuters)

U.S. solar generation grid connection delays (EIA)

South China prepares for more heavy rains (MWR)

U.S. DISTILLATE fuel oil supplied was down by -99,000 b/d (-2%) in February 2024 compared with the same month in 2023. But much of the decline was likely due to increased sales of biodiesel and renewable diesel fuel which increased by +114,000 b/d. Total sales of petroleum-derived distillate fuel oil, biodiesel and renewable diesel were basically flat compared with the prior year:

U.S. SOLAR generating capacity at utility-scale facilities had climbed to 95 million kilowatts (kW) by the end of January 2024 up from 74 million kW a year earlier and 7 million kW in 2014:

Best in Energy – 8 May 2024

Renewables provided 30% of global generation in 2023 (Ember)

Thames Barrier and future of London flood defences (FT)

Solar storms and high-impact low frequency risks (WaPo)

China’s small-scale  shale oil drilling programme (SASAC)

Russia attacks Ukraine’s electricity system (Reuters)

SOLAR ACTIVITY is nearing the peak of the 11-year cycle which is likely to occur during 2025 (making the next 18 months the best time to see the aurora). The increase in solar activity boosts the risk of a geomagnetic storm capable of damaging the electricity grid and satellite systems. But so far the cycle is proving a weak one – stronger than the last cycle but otherwise the weakest for a century:

EL NIÑO conditions are ending as sea surface temperatures across the central and eastern Pacific Ocean revert to the long-term average. Surface temperatures in Niño region 3.4 (the critical area for broader climate impacts) were just +0.5°C above the seasonal average in the week centred on May 1 down from +2.1°C in the week centred on November 22:

Best in Energy – 7 May 2024

Iran/Malaysia oil transhipments targeted by sanctions (Reuters)

OPEC⁺ likely to extend output cuts according to officials (Reuters)

U.K. electricity distribution network hit by constraints (Guardian)

Global trade poised for cyclical recovery in 2024/25 (FT)

China expands strategic nuclear forces (Foreign Affairs)

China’s nuclear power reactors (EIA)

BRENT’s calendar spreads have narrowed sharply over the last month as traders conclude crude supplies will remain much more comfortable over the second half of 2024:

EUROPE’s gasoil cracks have fallen to their lowest level for twelve months as traders conclude that diesel supplies will also remain much more comfortable:

Best in Energy – 3 May 2024

[MUST READ] FTC complaint about anticompetitive behaviour (FTC)

Pioneer’s former chief banned from Exxon board by regulators (FTC)

China predicts more heavy rains over hydro generation areas (Xinhua)

China issues widespread flood warnings across southern areas (MWR)

U.S. electricity transmission upgrades run into bottlenecks (Woodmac)

EU/Russia threaten each other with asset seizures (Reuters)

U.S. deepwater oil production set for new boom (Bloomberg)

Japan’s electricity generation strategy (EIA)

INDIA’s transmission grid served a peak load of 222 million kilowatts in March 2024 (+6% higher than a year earlier) while total load served during the month was 139 billion kilowatt-hours (+9% higher than the previous year):

CHINA’s heavy rains over the last month will boost run off across the southeast river systems and the middle and lower stretches of the Yangtze. But rainfall remains below normal further west, limiting generation from the series of massive new dams on the upper reaches of the Yangtze (known as the Jinsha River). Heavy precipitation needs to move further west for the new dams to reach their maximum potential. The arrival of the East Asian monsoon rains from June and especially in July and August will determine whether a new national and global hydro record is set in 2024:

Best in Energy – 2 May 2024

Pioneer former chief barred from Exxon board (WSJ)

China’s oil import growth below forecasts (Reuters)

Container shipping set for big expansion (GCaptain)

U.S. interest rates and inflation control strategy (FT)

Longi and the Shaanxi solar industrial base (Xinhua)

Schlumberger complies with U.S. sanctions (Reuters)

Vogtle nuclear reactor in commercial service (EIA)

U.S. CRUDE OIL inventories outside the strategic petroleum reserve accumulated by +7 million barrels over the seven days ending on April 26, reversing depletion of -6 million barrels the week before. The increase was concentrated along the Gulf of Mexico (PADD 3), where stocks accumulated by +7 million barrels after depleting by -6 million barrels the previous week. PADD 3 is the region most closely integrated with the global seaborne oil market. Nationwide inventories (461 million  barrels) are almost identical to this time last year (460 million) and just -5 million barrels (-1% or -0.11 standard deviations) below the prior ten-year seasonal average. Based on inventories, it is hard to argue the global market is tight at present or running a significant production deficit:

Best in Energy – 1 May 2024

China dominates wind turbine manufacturing (Woodmac)

China’s over-investment and under-consumption (FT)

Europe’s manufacturers struggle to sell costly cars (FT)

IAEA chief to visit Iran to rebuild relationships (Reuters)

U.S. wind generation fell slightly in 2023 (EIA)

Dodecahedrons from the Roman Empire (WaPo)

EUROZONE manufacturers reported business activity declined for the 22nd month running in April as the region struggled to emerge from the prolonged recession caused by the energy price shock linked to Russia’s invasion of Ukraine and the sanctions imposed in response. Preliminary results show the purchasing managers index slipped to 45.6 (12th percentile for all months since 2006) in April down from 46.1 (15th percentile) in March:

SOUTH CHINA has received some of the heaviest spring rains in the last decade which will start recharging river levels and hydroelectric generation. The city of Yibin at the confluence of the Yangtze and Min rivers and on the border between the two major hydro-generating provinces of Sichuan and Yunnan received 127 millimetres of precipitation in April 2024, the second highest in the last decade and +43 millimetres (+51% or +1.26 standard deviations) above the 2014-2023 seasonal average: