Best in Energy – 6 June 2022

Texas grid anticipates record electric load this week

OPEC⁺ and the growing gap between rhetoric and reality

U.S./Saudi rapprochement forced by rising oil prices ($FT)

Argentina struggles to boost Vaca Muerta shale play ($FT)

Germany’s policy conflicts over LNG expansion ($FT)

Africa’s shortage of local crude oil refining capacity ($FT)

MISO’s generation reserve could fall very low this summer

MISO prepares for power shortages and demand reductions

Russia/Ukraine war will reshape global energy flows ($WSJ)

TEXAS ELECTRICITY CONSUMPTION has increased at a compound rate of +1.70% per year over the last five years, notwithstanding the pandemic and recession in 2020. Electricity sales to end-users in the state totalled 433 TWh between April 2021 and March 2022 (the latest data available) up from 398 TWh between April 2016 and March 2017:

U.S. PETROLEUM INVENTORIES including the strategic petroleum reserve depleted by another -5 million bbl to 1,681 million bbl in the week to May 27. Stocks have fallen in 74 of the last 100 weeks by a total of -436 million bbl since the start of July 2020:

U.S. EAST COAST DISTILLATE stocks fell by another -0.6 million bbl to just 21.0 million bbl in the week to May 27. Regional distillate inventories are now -23 million bbl (-52%) below the pre-pandemic five-year average and the supply position shows no sign of improving:

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Best in Energy – 6 April 2022

EU/Russia coal ban would strain supply ($BBG)

U.S. central bank signals rapid move to neutral

U.S. Treasury warns of economic shock ($BBG)

Europe’s economy faces energy shock ($BBG)

India’s coal imports to rise in 2022/23

Argentina’s gasoil consumption rises

Crude physical benchmarks weaken

LME sees sharp reduction in positions

California’s emissions price increases

Reuters has created new web pages where you can find all the columns by our commodities experts in one place:

* Industrial metals www.reuters.com/authors/andy-home

* Asian markets www.reuters.com/authors/clyde-russell

* Agriculture www.reuters.com/authors/karen-braun

* Energy markets www.reuters.com/authors/john-kemp

EUROPE’s midsummer-midwinter gas futures calendar spread from July 2022 to January 2023 has narrowed sharply to a backwardation of less than €4/MWh down from a record €72 in early March. To ensure inventories can be accumulated over the next six months for use next winter, without incurring large losses, the spread needs to move into contango to cover storage costs. The July 2022 futures price must fall, the January 2023 price must rise, or both. So far, both prices appear to be adjusting in the expected direction:

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