Best in Energy – 10 May 2023

Australia boosts hydrogen projects (Reuters)

Pakistan buys crude from Russia (Bloomberg)

Schlumberger operations in Russia (Reuters)

China warns of power shortages (Bloomberg)

Oil prices questioned by Goldman Sachs (FT)

U.S. airconditioning and emissions (Reuters)

OPEC and OPEC⁺ (EIA)

BRENT’s six-month calendar spread from July 2023 to January 2024 has narrowed to a backwardation of around $1.75 per barrel from more than $4.00 on April 12 as the impact of OPEC⁺ production cuts has been offset by concerns about the outlook for the global economy and petroleum consumption:

Best in Energy – 13 April 2023

China/Europe economic rebound set to boost emissions

China plans to accelerate coal production and generation

Russia redirects gasoline exports from Europe to Africa

U.S. gas consumption fell during mild start to 2023

U.K. households confused by hydrogen and heat pumps ($FT)

U.S. INTEREST RATE traders have cut expectations for the path of rates following the regional banking crisis and amid signs both business activity and price rises are slowing. Projected interest rates have reverted to their level at the start of February, before anxiety about inflation increased:

U.S. SERVICE SECTOR inflation has decelerated significantly though it is still running faster than the central bank target. Services prices rose at an annualised rate of +5.8% over the three months ending in March, while prices excluding rent of shelter rose at an annualised rate of +2.7%:

Best in Energy – 21 March 2023

Maritime emissions and pathway to net zero

Africa/Southeast Asia set for emissions growth

Oil majors and trading operations ($BBG)

EU plan to extend gas conservation target

U.S. fuel exports reach record high in 2022

U.K. explores small modular reactors ($FT)

EUROPE’s gas storage sites reported small net inflows on March 18 and March 19, a tentative sign the winter inventory depletion season is coming to an end early. The data is provisional and contains a mix of confirmed reports and estimates. But storage across the European Union and the United Kingdom was 55.8% full on March 19, the second-highest for the time of year after winter 2019/20 (56.2%) and well above the prior ten-year average (34.8%):

Best in Energy – 17 March 2023

U.S. energy-related emissions projection

Bank rout as easy money era ends ($BBG)

OPEC⁺ calm despite oil price drop ($BBG)

OPEC⁺ sees oil price fall financially driven

Russia/India oil price above $60 on freight

China is diversifying away from U.S. trade

U.S. retailers press for price cuts ($WSJ)

Russia oil exports and rising storage ($BBG)

Shippers balk at costly green freight ($WSJ)

U.S. INTEREST RATE markets steadied on March 16 as the Federal Reserve organised major national banks to help boost confidence in their smaller regional counterparts by placing large-scale deposits with First Republic bank. Rate forecasts firmed slightly. But the rate trajectory implied by futures prices still shows rates declining from August onwards as the central bank responds to tightening credit conditions and a slowing economy:

NORTHWEST EUROPE is roughly 85% of the way through the heating season. Temperatures at Frankfurt in Germany have been close to the long-term seasonal average since the start of March. But very warm temperatures in October and from mid-December to mid-January have left a significant deficit in heating demand that has not been erased. The total number of degree days so far this winter (1540) is -16% below the long-term average (1842):

Best in Energy – 2 March 2023

Global CO2 emissions hit record high in 2022

India refinery processing hits seasonal record

Latin America accelerates solar deployment

U.S. gas turbines reach record operating rate

Argentina experiences mass blackout

United States explores more China sanctions

Passenger aviation demand stays high ($FT)

U.S. rail freight weakened further in February

China prepares economic team overhaul ($FT)

U.S. MANUFACTURERS reported business activity declined in February for the fourth month running. The ISM composite activity index was 47.7 in February up marginally from 47.4 in January but both readings were in only the 16th percentile for all months since 1980. New orders fell for the sixth month in a row. The new orders sub-index (47.0) was in only the 14th percentile for all months since 1980:

U.S. DISTILLATE inventories were unchanged over the seven days ending on February 24. Stocks were -14 million barrels (-11% or -0.87 standard deviations) below the prior ten-year seasonal average but the deficit has narrowed from -31 million barrels (-22% or -2.5 standard deviations) on October 7:

Best in Energy – 8 February 2023

Power sector emissions near tipping point

(see full IEA report on electricity markets)

Russia oil sanctions enrich intermediaries

Cobalt prices fall on emerging oversupply

Container trade left with massive surplus

U.S. gasoline consumption falls ($FT)

U.S. coal-fired generator retirements

U.S. INTEREST RATE traders expect the central bank to increase its target fed funds rate by two more quarter-points before July 2023 reaching 5.00-5.25% up from 4.50-4.75% at present. The forecast has increased by a quarter-point following stronger than expected employment data for January. The interest rate path has been repeatedly revised upward over the last year as inflationary pressures have proved more persistent than expected:

Best in Energy – 10 January 2023

India forecasts coal shortage and orders extra importing

India expects coal-fired generation to rise 8% in 2023/24

China’s re-opening mixed effect for oil consumption

China’s re-opening to boost power sector emissions

U.S. CO2 emissions above target

Cryptocurrencies and emissions

U.K. gas storage strategy ($FT)

OPEC⁺ and pricing power ($FT)

U.S. GAS front-month futures prices have slumped to less than $3.80 per million British thermal units (34th percentile for all months since 1990) from more than $9.10 (86th percentile) at the end of August. Figures have been adjusted for inflation using the core consumer price index for all items excluding food and energy:

Best in Energy – 10 November 2022

City leaders plan for 24/7 carbon-free energy

Aramco to ship full crude volumes to Asia in Dec

Coal prices tumble as winter supply fears ease

Corporate-level emissions receive more focus

U.S. PETROLEUM INVENTORIES including the strategic reserve fell by -4 million barrels in the week to November 4. There were only minor changes in stocks of distillate fuel oil (-1 million barrels), jet fuel (+1 million barrels) and gasoline (-1 million barrels). Total inventories have depleted by -498 million barrels since the start of July 2020 and are at the lowest seasonal level since 2004:

Best in Energy – 9 November 2022

G7 sanctions will raise tanker ton-miles ($BBG)

U.S. coal mining firms plan for gradual phase out

U.S. coal mining regional productivity variations

New Zealand to increase strategic oil inventories

EU agrees distribution of emissions targets

LONDON’s temperatures have been higher than the long-term seasonal average consistently since the middle of October, reducing heating demand and gas consumption. The number of heating degree days so far this winter has reached just 117 compared with a long-term average of 153. But the city-region is only 10% of the way through the expected heating season. The half-way point doesn’t normally arrive until January 23 as a result of seasonal lag:

Best in Energy – 8 November 2022

Europe squeezes LNG supply for emerging markets ($BBG)

Russia sends tanker to China via northern sea route ($BBG)

China to boost diesel exports as new refineries start up

China’s oil imports rise as new refineries build stocks

Nvidia downgrades semiconductors for China ($WSJ)

U.S. coal-fired generators scheduled to retire by 2029

Renewable diesel output grows rapidly from low base

Fusion firms target commercial models by 2030s ($FT)

China explores gradual retreat from lockdowns ($WSJ)

ATMOSPHERIC concentrations of carbon dioxide (CO2) at the Mauna Loa observatory on Hawaii rose to 415 parts per million (ppm) in October 2022 up from 404 ppm in October 2017 and 391 ppm in October 2012. CO2 concentrations have increased at a compound annual rate of +0.57% per year between 2017 and 2022. On the current trajectory, concentrations are likely to reach 430 ppm, the maximum scientists say is consistent with +1.5°C of average global warming, in 2027: