Tag: Germany

Best in Energy – 13 September 2022

EU frames energy windfall tax as “solidarity contribution”

EU explores electricity demand reduction at peak hours

Diesel additives are in short supply in Germany ($BBG)

Europe needs more diesel fuel exports from China

Renewable energy jobs set to increase rapidly

U.S. railroads prepare for imminent strike ($WSJ)

China reports cyberattack by United States (trans.)

U.S. Northeast distillate inventories very low

NORTHWEST EUROPE’s benchmark gas futures contract for deliveries in January 2023, the heart of next winter, has fallen to less than €200 per megawatt-hour from a peak of €345 in late August. Higher inventories in seasonal storage have reduced the probability about stocks running out. Plans for significant voluntary and mandatory reductions in gas and electricity consumption and the increasing probability of a region-wide recession will also lessen the pressure on stocks in the event gas supplies from Russia are disrupted:

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Best in Energy – 12 September 2022

German households stock up on electric heaters¹

Germany’s north benefits from wind resources

France appeals for grid-to-grid support ($FT)

Droughts and hydropower reliability ($WSJ)

Boreal forests and a warming climate ($FT)

HEDGE FUNDS and other money managers increased short positions in NYMEX WTI futures and options by +2 million bbl to 44 million bbl in the week to September 6, among the largest number of short positions since Russia’s invasion of Ukraine in late February. Bearish sentiment has been gradually building since the start of June as the economy slows under the combined impact of supply chain problems, inflation and rising interest rates:

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Best in Energy – 8 September 2022

Global energy employment report from IEA

Germany to subsidise basic electricity quota

China boosts coal imports amid hot dry spell

China buys cheap LNG from Russia ($BBG)

U.S. power use forecast to hit record in 2022

White House plan to cut industrial emissions

Semiconductor makers face downturn ($BBG)

Europe set for big gas shortfall in 2023 ($BBG)

Europe energy suppliers face Lehman moment

Goldman’s case for a U.S. soft landing ($WSJ)

Pakistan’s floods risk triggering unrest ($FT)

U.S. COOLING DEMAND since the start of the year has been around +11% higher than the long-term seasonal average (1981-2010) and +2% higher than the prior seven-year average (2015-2021). Higher-than-usual temperatures have contributed to pressure on electricity networks and put gas consumption by power generators on course for a record high this year:

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Best in Energy – 9 August 2022

U.K. household gas and electricity bills set to surge

German economy set to lose $265 billion from war

Goldman reiterates forecast for even higher oil prices

Long-term energy storage using thermal systems

U.S. reconciliation bill tax and spending implications¹

¹ The non-partisan Congressional Budget Office (CBO) prepares a “scorecard” for all proposed legislation examining the implications for government revenues and spending. The linked document is the scorecard for the “Inflation Reduction Act of 2022” approved by the Senate on a party-line 51-50 vote on August 7. Full details of the contents of the bill and its passage through the legislature are available from the bill tracking system maintained by the non-partisan Congressional Research Service.

SOUTH CHINA’s precipitation has tapered off after an unusually heavy start to the rainy season, which brought flooding earlier than usual. Total precipitation at Yibin/Xiangjiaba on the Sichuan/Yunnan border has been 800 millimetres since the start of the year, around 7% above the 2014-2021 average, but the surplus has been shrinking in recent weeks. Reduced rainfall is likely to limit hydropower production later in the year and increase reliance on coal-fired generators:

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Best in Energy – 8 August 2022

Russia oil discounts narrow on China/India demand

Germany’s river freight restricted by low water level

Bangladesh explores rotating factory closure ($BBG)

Asia’s emissions market prices are still low ($BBG)

China’s navy and air force practices Taiwan blockade

China forecasts flooding in major coal areas (trans.)

U.S. shale producers focus on higher oil prices ($FT)

U.S./China navy competition and Northern Sea Route

EUROPEAN GAS OIL calendar spreads between December 2022 and December 2023 have fallen into a backwardation of less than $11 per barrel from almost $33 in mid-June, as traders anticipate the onset of a recession depressing consumption:

JAPAN LNG STOCKS at the end of May had risen to 2.36 million tonnes, the highest for the time of year for at least seven years, as the country’s utilities accumulate inventories to protect against possible supply disruptions in winter 2022/23:

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Best in Energy – 29 July 2022

EU’s bilateral emergency energy sharing deals

U.S. refiners say fuel consumption still strong

Japan’s energy saving template for Europe

U.S./China leaders call – White House view

U.S./China leaders call – China view (trans.)

Global coal use rebounds to previous peak

German city turns off lights and hot water

U.S. REAL FINAL SALES to private domestic purchasers were unchanged in the second quarter after advancing at an annualised rate of +3.0% in the first, confirming the economic slowdown that has been evident for some time. Real final sales to private domestic purchasers (RFSPDP) strips out the impact of inventory changes, government spending and trade to focus on the underlying behaviour of households and businesses and is therefore the best indicator of underlying economic momentum. RFSPDP was growing at the slowest rate since the first wave of the pandemic in 2020 and before that the recession of 2008/09:

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Best in Energy – 27 July 2022

[MUST READ] Germany cuts ammonia production to save gas

[MUST READ] Critical minerals recovery from waste streams

Japan strikes benchmark coal deal at $375/tonne ($BBG)

Germany to subsidise energy efficiency renovations

IMF downgrades global economy forecasts

Pakistan raises electricity prices

U.S./Russia oil price cap ($FT)

U.S. uranium import reliance

CYCLICAL INDICATORS: three of the top five stories featured on the front page of the Wall Street Journal on Wednesday are about slower sales, slower corporate earnings and slower hiring:

CATERPILLAR’s share price in the three months from May to July was down by -13% compared with the same period a year ago. The heavy equipment manufacturer’s share price has been closely correlated with the OECD’s leading economic indicator. The slump is consistent with the onset of a business cycle slowdown:

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Best in Energy – 26 July 2022

Germany struggles with Russia gas reductions

Germany’s coal-fired generators face challenges

EU motorists hit by relatively high diesel prices

EU poised to approve softened gas cuts plan

United States becomes largest LNG exporter

EU28 GAS STOCKS are still accumulating rapidly and have risen above the pre-pandemic seasonal average, despite recent concerns about a potential disruption of pipeline supplies from Russia. EU28 gas inventories are currently at 751 TWh compared with a pre-pandemic five-year average of 719 TWh. Stocks have been accumulating at +5 TWh per day, in line with the seasonal norm. Inventories are on course to reach 985 TWh by end of September, slightly above the pre-pandemic average of 983 TWh:

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Best in Energy – 22 July 2022

Germany to cut energy use to resist blackmail

EU divided on compulsory gas demand cuts

Europe’s electricity generation under stress

Europe turns to Africa for more oil and gas

China’s semiconductor manufacturing ($BBG)

Texas power grid and bitcoin miners ($BBG)

RHINE RIVER water levels measured at Kaub are the lowest for the time of year for more than a quarter of a century and indicative of drought conditions across northwest Europe. Low rainfall is restricting river borne freight and is an indicator of the stress for thermal and nuclear power plants that rely on river water for their cooling systems. For coal and gas combustion plants, efficiency and maximum output is reduced. For nuclear plants, insufficient cooling capacity can force output limits or a precautionary safety shutdown:

EUROZONE manufacturers reported a decline in activity this month for the first time since the first wave of the pandemic in 2020. Preliminary data show the manufacturing sector purchasing managers index fell to 49.6 in July (28th percentile) down from 52.1 in June (47th percentile) and 54.6 in May (65th percentile). Russia’s invasion of Ukraine and the sanctions the EU has imposed in response have pushed the region’s economy into recession:

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