Tag: container shipping

Best in Energy – 17 May 2024

I am taking some annual leave. Best in Energy will resume on Thursday May 30

U.S. energy transition and supply chain security (Oxford Energy)

U.S./EU/China and the return of managed trade (Bruegel)

Laos power reliability hit by drought and crypto (Reuters)

Argentina rations gas amid severe cold weather (Reuters)

U.S. solar manufacturers to get more state help (Reuters)

Texas gas-fired generation hit hourly winter record (EIA)

China’s southwest prepares for more heavy rainfall (MWR)

Japan’s economy hit by inflation and weak currency (WSJ)

Ever Given grounding – why ships crash (BBC TV)

China’s options for responding to U.S. tariffs (FT)

Red Sea conflict strains container shipping lines (GCaptain)

ERCOT warns of low power reserves next week (Bloomberg)

Geomagnetic storm triggered grid disturbances (Bloomberg)

BRAZIL’s hydroelectric reservoirs remained full in April limiting the need to import gas for electricity generation. Hydro reservoirs were storing enough water to generate 109 billion kilowatt-hours of electricity in April down from 129 billion kWh in the same month in 2023 but otherwise the highest for the time of year since 2012. The country imported 1.9 billion cubic metres of gas in the first three months of 2024 up from 1.7 billion cubic metres last year but otherwise the lowest since 2009:

U.S. GAS INVENTORIES were +647 billion cubic feet (+33% or +1.46 standard deviations) above the prior ten-year average on May 10. The surplus has been broadly stable or narrowed slightly over the last two months. But futures prices have started rising consistently as traders anticipate the resumption of exports from Freeport LNG and the arrival of hot weather in Texas and other states causing a surge in air conditioning, met mostly by gas-fired generators, and leading to a large draw down in surplus stocks:

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 – 22 January 2024

EU electricity pricing – review of distributional issues (Bruegel)

Automakers oppose price cuts to boost electric vehicle sales (FT)

Germany’s auto suppliers caught by electric vehicle shift (FT)

Europe’s electricity trading attracts hedge funds (Bloomberg)

Corporate pricing power and the persistence of inflation (FT)

Iran/Pakistan restore relations after missile therapy (BBC)

SABIC approves investment in China petchems (Reuters)

U.K. gas distribution networks face uncertain future (FT)

Red Sea diversions boost container freight charges (WSJ)

Iran’s role and strategy in Middle East conflict (FT)

NORTHWEST EUROPE’s weather has turned from cold-dry-still to mild-wet-windy in recent days as the North Atlantic Oscillation (the pressure difference between the Bermuda-Azores high and Greenland-Iceland low) has shifted from below-normal to above-normal. The result is a big reduction in regional gas consumption from higher wind generation and lower heating demand:

NORTHWEST EUROPE’s gas prices have reverted to pre-crisis levels with front-month futures trading around €27 per megawatt-hour down from €54 in mid-October and a crisis peak in August 2022 of €339:

Best in Energy – 11 January 2024

THANK YOU to everyone who has already completed the oil price outlook survey. If you haven’t yet, please consider doing so. The survey is still open and can be accessed here: https://www.surveymonkey.com/r/2KHWQXC.

Responses are anonymous (even to me) and the average time taken to complete the six questions is just 60 seconds. The more responses, the more representative the results. I will publish the full distribution of results and an analysis next week. I really appreciate it.

China dominates renewables forecasts (Reuters)

China trims crude orders from Aramco (Reuters)

U.K. aviation calls for sustainable fuel help (FT)

Container rate increases trigger suspicion (WSJ)

U.S. GASOLINE inventories accumulated by +8 million barrels over the seven days ending on January 5, after increasing by +11 million barrels the previous week. Stocks are rising slightly faster than normal for the time of year. Inventories had climbed to 245 million barrels on January 5, which was +6 million barrels (+2% or +0.74 standard deviations) above the prior ten-year seasonal average, reversing a small deficit a month earlier:

CHINA’s urban population with access to natural gas increased to 457 million in 2022 up from 339 million in 2017 and 212 million in 2012. The proportion of urban residents with access to natural gas had increased to 50% in 2022 from 42% in 2017 and 30% in 2012:

Best in Energy – 13 November 2023

Venture Global LNG dispute draws call for US/EU intervention (FT)

Italy’s competition regulator investigates wine bottle makers (FT)

PetroChina to replace Exxon as oilfield operator in Iraq (Reuters)

Container shipping cycle  turns from boom to slump (Bloomberg)

China dominates solar generation supply chain (Woodmac)

SEA SURFACE TEMPERATURES across the central and eastern Pacific have been +1.8°C above the long-term seasonal average so far in November, consistent with moderate-to-strong El Niño conditions around the Pacific Basin:

EUROPE’s gas consumption is down sharply compared to the decade before Russia’s invasion of Ukraine as conservation measures and exceptionally high prices force a big reduction in use by electricity generators and energy-intensive industries. Total consumption in the European Union’s seven largest consuming countries (Germany, Italy, France, Netherlands, Spain, Belgium, Poland) was down -13% in the first nine months of 2023 compared with the average for the decade from 2012 to 2021:

Best in Energy – 3 November 2023

Maersk plans to cut 10,000 jobs on trade downturn (Reuters)

Europe/Africa and the issue of carbon tariffs (Energy Monitor)

India explores local carbon tax to avoid carbon tariff (Reuters)

PetroChina/Venezuela explore restarting oil trade (Reuters)

Europe’s overnight trains struggle to make money (Reuters)

Gulf monarchies court private equity firms (Reuters)

U.S. INTEREST RATE traders expect the central bank to cut overnight rates just three times by a total of -75 basis points in 2024, after increasing them by a total of +525 basis points between March 2022 and July 2023. Persistent strength in consumer spending and inflation are expected to ensure rates remain higher for longer:

U.S. GAS INVENTORIES are rising than normal for the time of year. Inventories were +98 billion cubic feet (+3% or +0.41 standard deviations) above the prior ten-year seasonal average on October 27 up from a surplus of +60 billion cubic feet (+2% or +0.23 standard deviations) on October 6. The progressive erosion of surplus inventories since the middle of 2023 has halted and started to go into reverse, at least temporarily:

Best in Energy – 11 October 2023

Australia/China relationship and prisoner release (Reuters)

Container lines to lose EU antitrust exemption (Bloomberg)

Baltic undersea pipeline and cable damaged (Reuters)

ENI pledges gradual shift from oil to gas (Reuters)

Weather derivatives make a comeback (Reuters)

U.S./EU/China trade policy and emissions (PIIE)

U.S./China relations – Pottinger interview (FT)

EUROPE’s crude oil and feedstock inventories depleted by -7 million tonnes in September. Inventories were -31 million tonnes (-7% or -1.42 standard deviations) below the prior ten-year seasonal average. But the deficit has narrowed significantly from -58 million tonnes (-12% or -3.97 standard deviations) at the end of January 2022. European crude inventories have not depleted to anything like the extent seen around the NYMEX delivery point at Cushing in the United States:

Best in Energy – 3 July 2023

China buys more LNG on long term contracts (Bloomberg)

Oil tankers in “dark fleet” are getting younger (Bloomberg)

Oil majors increase offshore exploration spending (Reuters)

Container shipping lines offer low emission option (Reuters)

Oil prices send ambiguous signal about market balance (WSJ)

U.S. nonfarm payrolls survey might be overstating jobs (WSJ)

INDIA’s petroleum consumption increased to 96.2 million tonnes in the first five months of 2023 up from 91.6 million tonnes in the same period in 2022, growth of +5.1%:

U.S. OIL AND GAS drilling rigs fell by -8 over the seven days ending on June 30. The number of active rigs has fallen by a total of -110 (-14%) from its peak at the start of December 2022 in a delayed response to the fall in prices since the middle of 2022:

Best in Energy – 26 June 2023

China’s energy security strategy (Oxford Institute)

Saudi Arabia to cut U.S. oil shipments (Bloomberg)

Maersk orders dual-fuel container ships (Reuters)

China petrochemicals overproduction (Reuters)

LME decision-making under scrutiny (Reuters)

U.S. cargo airline nears bankruptcy (Bloomberg)

U.S. shale producers scale back drilling (FT)

U.S. OIL AND GAS rigs fell by -5 in the week to June 26 and are down by a total of -102 (-13%) since peaking in early December 2022. The fall in prices since the middle of 2022 should start to reduce output by the fourth quarter of 2023 and into 2024:

CHINA’s capital region has experienced a heatwave in recent weeks, with temperatures above the seasonal average in 22 of the first 25 days in June by an average of almost +3.5°C. Beijing, Tianjin, Hebei and surrounding provinces generate more than 80% of their electricity from coal so the heatwave will draw heavily on inventories:

Best in Energy – 19 May 2023

China’s outreach to Central Asia (Reuters)

Europe’s gas prices are normalising (FT)

Russia oil price cap is working (U.S. Treasury)

New Mexico’s oil production boom (Reuters)

U.S. residential energy consumption (Reuters)

BRENT calendar spreads have softened as crude supplies have remained plentiful despite Russia’s invasion of Ukraine and the U.S./EU sanctions imposed in response, while the cyclical slowdown in industrial and freight activity has weighed on petroleum consumption:

SINGAPORE’s port container throughput reached a seasonal record 3.26 million twenty-foot equivalent units (TEUs) in April 2023 up from 3.04 million in the same month a year earlier. Container freight through the port has shown signs of starting to recover since the end of the first quarter: