Tag: freight

Best in Energy – 23 May 2023

Germany to subsidise industrial power (Reuters)

Boeing sceptical on sustainable aviation fuel (FT)

U.S. western states in Colorado river deal (WSJ)

Ford’s procurement deals for lithium (FT)

Ocean shipping container production falls (FT)

U.S. retailers near end of destocking cycle (WSJ)

EUROZONE manufacturers have reported another widespread decline in business activity so far in May. Preliminary results show the purchasing managers’ index slipping to 44.6 (6th percentile for all months since 2006) in May down from 45.8 (8th percentile) in April and 54.6 (67th percentile) a year ago. The index is firmly in recession territory at the lowest level since the first wave of the pandemic in March-May 2020 and before that July 2012 and October 2008-June 2009 following the financial crisis:

EUROPE’s gas storage is refilling more slowly than average as a result of a relatively cold start to spring and sharply lower prices encouraging more consumption by industry and power generators. Storage sites across the European Union and United Kingdom (EU28) topped up their fill by +10.3 percentage points between March 31 and May 21 compared with a prior ten-year average top up of +11.3 percentage points. But because storage started from a record high, fill remains exceptionally high. EU28 storage was 65.9% full on May 21, the second highest on record, and compared with a prior ten-year seasonal average fill of just 44.7%:

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:

Best in Energy – 2 May 2023

Australia interest rate rise surprise (Reuters)

U.S. ethanol blend waiver reissued (Reuters)

China coal consumption set to rise (Reuters)

U.S. fuel use slips amid freight recession (FT)

India predicts heatwaves in May (Bloomberg)

Iran executed high-placed British spy (NYT)

U.S./Iran seized each other’s oil tankers (FT)

U.S. South’s low winter gas depletion (EIA)

Wind farm construction costs (Energy Monitor)

Nickel market moves into big surplus (Reuters)

New York to limit gas connections (Utility Dive)

CHINA’s manufacturers unexpectedly reported a fall in business activity in April after rapid growth in March and February. The purchasing managers’ index slumped to 49.2 (6th percentile for all months since 2011) down from 51.9 (92nd percentile) in March and 52.6 (96th percentile) in February. The surge in activity after the end of coronavirus controls and the passing of the exit wave appeared to have run out of momentum, at least temporarily:

U.S. GAS inventories rose by +79 billion cubic feet over the seven days to April 21. Inventories have tracked much higher than usual so far in 2023 and were at the highest level for the time of year since 2020 and before that 2017. Stocks were +280 billion cubic feet (+16% or +0.61 standard deviations) above the prior ten-year seasonal average up from a deficit of -261 billion cubic feet (-8% or -0.98 standard deviations) at the start of 2023:

Best in Energy – 27 April 2023

Best in Energy will resume on Tuesday May 2.

Oil prices fall on economic fear after OPEC⁺ cut (Bloomberg)

United States defends semiconductor subsidies (Bloomberg)

Pioneer Resources chief to retire (again) at end of 2023 (FT)

U.S. diesel prices drop amid freight recession (WSJ)

Australia thermal coal re-routed to China (Reuters)

U.S. coal shipments to generators rose in 2022 (EIA)

U.S. GASOLINE inventories fell by -2 million barrels to 221 million barrels over the seven days ending on April 21. Inventories are at the lowest for the time of year since 2014 and -12 million barrels (-5% or -0.86 standard deviations) below the prior ten-year seasonal average:

U.S. PETROLEUM inventories including the strategic reserve fell by -1 million barrels over the seven days ending on April 21. Stocks have depleted in 103 out of 147 weeks since the start of July 2020 by a total of -506 million barrels:

Best in Energy – 28 March 2023

China’s coal imports rebound as economy restarts

France hit by fuel shortage due to industrial unrest

Kurdish regional oil output falls after pipeline halt

Sustainable aviation fuel adoption in United States

U.S. renewable generation surpasses coal or nuclear

Freight forecasts downgraded on stock glut ($WSJ)

U.S. retailers negotiate cuts in freight rates ($WSJ)

U.S. shale producers avoid forward oil selling ($FT)

Aramco’s downstream integration into China ($FT)

Aramco downstream integration into China ($BBG)

Central banks constrained by inflation targets ($FT)

U.S. CONTAINER PORTS handled loaded boxes amounting to 2.24 million twenty-foot equivalent units (TEUs) in February 2023, down from 2.77 million TEUs in February 2022, and the lowest for the time of year since 2015. Businesses are still trying to reduce excess inventories as a result of the pivot from spending on merchandise to services following the lifting of epidemic controls, as well as the general slowdown in the business cycle:

Best in Energy – 15 February 2023

Global central banks inject $1 trillion of liquidity

South Asia’s price-sensitive LNG consumption

U.S. services sector inflation remains high ($BBG)

U.S. automakers have more pricing power ($BBG)

Ocean freight rates slump as volumes fall ($WSJ)

China’s major refiners resume Russia oil buying

U.S. pilot shortage drives up airfares ($FT)

Near-space and sovereignty issues ($WSJ)

U.S. SERVICE SECTOR prices excluding rent (a measure economists have taken to calling “supercore” inflation) rose at an annualised rate of +5.2% over the three months ending in January, more than twice as fast as the central bank’s target of a little over 2% per year. Supercore prices rose at an annualised rate of +7% in January alone and were up by a similar amount over the previous 12 months, implying there is still a lot of momentum behind inflation:

U.S. INTEREST RATE traders expect the central bank will have to adopt a more restrictive policy to squeeze persistent inflation out of the economy. The central bank is expected to raise its fed funds target rate to 5.00-5.25% or even 5.25-5.50% by August 2023 up from 4.50-4.75% at present. Forecasts for interest rates at the end of 2024 have risen by almost +75 basis points since the start of the month:

Best in Energy – 14 February 2023

[MUST READ] U.S./China sanctions lessons

Russia’s crude is likely selling above quoted prices

Russia’s oil output unaffected by sanctions ($BBG)

U.S. SPR to sell 26 million barrels in second quarter

U.S. coal-fired generator retirements to accelerate

Russia’s gas exports in search of new markets

Global freight rates fall on excess capacity ($BBG)

High-altitude balloon monitoring systems ($WSJ)

Pakistan plans to shift from costly gas back to coal

Hedge funds cash in on coal investments ($FT)

Singapore slows new investment into China ($FT)

U.S. DURABLE GOODS orders for nondefense capital equipment excluding aircraft (a proxy for business investment) were up by +5 % in December 2022 compared with December 2021. Orders are reported in cash terms; with inflation running faster than 5%, the volume of new business was down in real terms. Even in nominal terms, however, orders have been flat since the middle of 2022, confirming the merchandise side of the economy has run out of momentum:

Best in Energy – 1 February 2023

South Asia’s LNG buyers express interest after prices fall

France’s nuclear generators key for power prices in 2023

India to boost government capital spending in 2023/24

U.S. refiners predict high margins on Russian sanctions

U.S. road haulage firms see recovery in late 2023  ($WSJ)

Greek tankers resume shipments of Russian oil

Pakistan prepares for IMF loan – or debt default

U.S. gas consumption hit record on December 23

Freeport LNG requests authorisation to restart one unit

U.S. CRUDE OIL including condensates production fell by -35,000 b/d to 12.38 million b/d in November compared with October. But production was up by +585,000 b/d (+5.0%) compared with the same month a year earlier. Annual growth levelled off at around +600,000 b/d for most of 2022:

Best in Energy – 19 January 2023

Energy conservation and excess mortality ($BBG)

J.B. Hunt earnings confirm freight decline ($WSJ)

U.S. refiners schedule more maintenance in 2023

U.S. gas prices forecast to fall in 2023/24 by EIA

Russia’s oil revenues predicted to decline ($FT)

Iran hit by winter gas shortages ($BBG)

Nuclear weapons and decision-making ($FT)

U.S. MANUFACTURERS are raising prices more slowly as input costs for raw materials and energy ease and demand for goods falls. Producer selling prices for finished products other than energy and food increased at an annualised rate of +4.2% in the three months to December 2022 down from an annualised +11.5% increase in the three months to April 2022. But selling prices are still rising twice as fast as the central bank’s target of a little over 2% per year for overall inflation, keeping upward pressure on interest rates:

Best in Energy – 12 January 2023

PJM says 46 GW of generators failed to respond ¹

U.S. says price cap is cutting Russia’s oil earnings

Global LNG import volumes hit record high

Freeport LNG outage extended to February

French aluminium smelter begins restart

South Africa hit by worst ever power cuts

Freight forwarder cuts employment ($WSJ)

Australia/China coal trade restarts ($WSJ)

Saudi Arabia plans full nuclear fuel cycle

LME’s nickel-market breakdown inquiry

¹ PJM’s post-event study for winter storm Elliot on December 24 is worth reading in full and confirms the major problem was the failure of many generators to respond to instructions from the grid because of a failure to start up or secure enough fuel (principally gas). Generators were unavailable even though they had been given repeated warnings of an extreme weather event for several days beforehand and told to prepare for a plunge in temperatures. In many cases, generators provided less than 1 hour of notice they would not be available. If generators cannot be depended upon to respond to instructions they cannot be considered firm dispatchable power for reliability purposes.

In response, PJM was forced to initiate a series of relatively extreme emergency measures to protect the transmission system, including voltage reductions and an order for flat-out maximum generation from units that were available.

U.S. PETROLEUM INVENTORIES including the strategic reserve totalled 1,599 million barrels on January 6, the lowest seasonal level since 2004. Stocks have fallen by -185 million barrels over the last 12 months and are down by -518 million barrels from their peak in mid-2020 as production has persistently fallen below consumption: