Tag: IEA

Best in Energy – 9 May 2022

China prioritises energy and food security (trans.)

California forecasts power shortages to 2025

U.S. grids warn of electricity shortfalls ($WSJ)

IEA sidelined by White House on oil release

India’s prolonged electricity blackouts

India’s fuel distributors trim volumes

Japan to phase out Russian oil imports

U.S. fuel prices rise faster than crude

Global refining margins widen ($BBG)

U.S. refiners run out of capacity ($FT)

CO2 removal becomes focus for policy

Pandemic results in 15 million deaths

U.S./Ukraine intelligence sharing ($WSJ)

INDIA’s temperatures have fallen over the last week and are closer to the seasonal average, reducing electricity consumption slightly and easing stress on the power grid. The grid’s frequency has moved closer to the 50 Hz target and periods of under-frequency have become shorter and less severe, showing a closer balance between generation and demand:

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Best in Energy – 13 April 2022

WTI’s negative price – inside story ($BBG)

India faces coal and electricity shortage

OPEC/IEA tensions break into the open

OPEC reduces oil consumption forecast

German economists downgrade outlook

CNOOC to exit U.S./U.K./Canada assets

India’s refiners buy Russian oil ($BBG)

Jet fuel supplies are tightening ($BBG)

Energy crisis ousts climate policy ($FT)

U.S. petroleum product exports in 2021

U.S CONSUMER PRICES are increasing between two and four times faster than the central bank’s target of a little over 2%. Core prices for items other than food and energy have increased at a compound annual rate of 4.0% over the last two years and were advancing at an annualised rate of 5.8% in the three months from December to March. Services prices, which are normally more stable but also more labour-intensive, increased at a compound rate of 3.4% over the last two years and were rising at an annualised rate 7.1% between December and March. The rapidly rising cost of energy, raw materials, manufactured products, freight and labour is becoming more deeply entrenched in the rest of the economy:

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Best in Energy – 7 April 2022

EU proposes ban on Russian coal from August

China/Australia coal ban as awkward precedent

IEA countries to release further 60 million bbl

Russia/China switch payments to yuan ($BBG)

Shell writes off $5 billion for exit from Russia

Shanghai quarantine facilities expand (trans.)

U.S. ethane consumption is growing

U.S. jet fuel supplies tighten ($BBG)

U.S. PETROLEUM inventories including the SPR rose by +1 million bbl last week – the first increase for 13 weeks and the first increase this year:

U.S. DISTILLATE inventories have risen by a total of +2 million bbl over the two most recent weeks after declining in 9 of the 10 previous weeks by -17 million bbl, as exceptionally high fuel prices incentivise more production and discourage consumption:

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Best in Energy – 1 April 2022

White House statement on oil release

IEA holds emergency meeting on oil

EU/Russia stand off over gas payments

U.S. homes transition to LED lighting

BRENT spot prices and calendar spreads have softened significantly since the White House announced the release of up to 180 million barrels from the U.S. strategic petroleum reserve. The six-month spread has narrowed to a backwardation of $9 per barrel, the lowest since before Russia’s invasion of Ukraine, down from $18 a week ago and a record $21 earlier in March:

U.S. SPR crude inventories will fall to less than 400 million barrels, the lowest since 1984, if 180 million are released over the next six months as briefed by the White House:

EUROZONE manufacturers reported a less widespread expansion in business activity this month. The purchasing managers’ index fell to 56.5 in March from 58.2 in February. The composite index is still well above the 50-point threshold dividing expanding activity from a contraction. But the index is at the lowest level for 14 months and in the 79th percentile since 2006 down from the 92nd percentile in December:

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Best in Energy – 31 March 2022

White House briefs on 180 million bbl oil release

U.S./IEA oil releases have had limited impact

Sri Lanka runs out of currency to buy fuel

U.K. horticulture hit by surging gas prices

Germany’s industrial base hit by energy crisis

India’s power generation shortages worsen

Euronav tanker firm suspends Russian business

U.S. hydro output hit by western drought

White House struggles to balance goals ($WSJ)

U.S. PETROLEUM stocks outside the strategic petroleum reserve rose by +2 million bbl to 1,139 million bbl last week. But inventories are -107 million bbl (-9%) below the pre-pandemic five-year seasonal average. Stocks have declined in 65 of the last 91 weeks by a total of -323 million bbl since the start of July 2020:

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Best in Energy – 18 March 2022

[MUST READ] Russia’s military failure ($WSJ)

IEA plan to restrain oil use by 2.7 million b/d

EU plan to replace Russian gas lacks realism

Oil market liquidity falls as volatility rises

Traders hit by rising margin calls ($BBG)

Russia’s oil exporters switch to private sales

IEA/EIA/OPEC divide on war impact ($BBG)

China holds epidemic policy meeting (trans.)*

U.S. shale smaller firms boost output ($WSJ)

Andurand’s path for oil to reach $200 ($BBG)

* The fact China’s top policymaking group held a meeting dedicated to coronavirus control and its impact on daily life and the economy, and chose to publicise it as the top item on all state-controlled websites, suggests the country’s leaders are deeply concerned about the extent and impact of the latest outbreaks.

BRENT’s six-month calendar spread has become highly volatile as traders try to assess whether or not sanctions will disrupt Russia’s exports and how much impact that will have on global oil supplies. In recent weeks, the spread in dollars per barrel has seen 5-10 standard deviation movements on multiple days, which is generating large P&L swings and margin calls:

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