Best in Energy – 19 May 2022

India’s grid is struggling to supply record demand

(see also background article on power shortages)

U.S. grid faces reliability challenges this summer

Indonesia boosts energy subsidies by $24 billion

EU elects to turn from Russia gas back to coal ($FT)

Bloomberg’s plan to shake up UK journalism ($BBG)

U.S. PETROLEUM inventories including the strategic petroleum reserve depleted by another 8 million bbl to 1,691 million bbl last week. Inventories have depleted in 72 of the last 98 weeks by a total of 426 million bbl since the start of July 2020. The persistent shortage of oil is putting intense upward pressure on prices:

U.S. GASOLINE stocks fell by 5 million bbl to 220 million bbl in the week to May 13. Inventories have fallen for 14 of the last 15 weeks by a total of 30 million bbl and are now at the lowest for the time of year since 2014:

U.S S&P 500 equity index has fallen by 7% compared with the same period a year ago, and is down by 15% in real terms, as investors anticipate an imminent business cycle slowdown:

U.K. INFLATION has accelerated to 9%, the fastest rate since 1982 and one of the most significant price shocks since the Second World War:

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Best in Energy – 27 April 2022

Russia halts gas deliveries to Poland and Bulgaria

Germany says gas transit unaffected by dispute

Germany plans to seize Russian-owned refinery

Italy explores Russian-owned refinery seizure

EU remains reliant on Russian diesel imports

Britain plans to extend coal-fired generation

India plans to boost coal imports through 2025

China to boost infrastructure spending ($BBG)

China plans major infrastructure boost (trans.)*

Narratives about inflation and recession as epidemic

World Bank warns over energy and food prices shock

Indonesia needs Russian oil to keep prices down ($FT)

* The announcement was anodyne but significant the policy meeting was chaired by the president himself and the write up is the top item across all state-controlled media and government websites (Xinhua, NDRC and State Council) emphasising importance of the investment message and signal.  

BRITAIN plans to extend coal-fired power generation at Drax to cope with gas and electricity shortages, according to the operator:

EUROPE’s gas traders were sanguine about the ability to replenish storage over the next few months ahead of next winter’s heating season, at least before Gazprom announced it would cut deliveries to Poland and Bulgaria. Benchmark futures for summer 2022 and winter 2022/23 gas have been high but stable for more than a month and the backwardation has remained narrow and also stable, indicating that most traders expected a regular storage fill:

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Best in Energy – 25 April 2022

China’s oil consumption tumbles ($BBG)

Russia’s crude oil production falls ($BBG)

Coal consumption hits new record ($BBG)

China oil and gas output rises rapidly ($BBG)

China’s growing domestic gas production

China only buyer for Russia divestments ($FT)

U.K. supermarkets limit cooking oil sales

Indonesia prohibits palm oil exports

Indonesia justifies palm oil export ban

Fuel tax cuts boost Russia’s oil revenues

Commodity currencies hit by global slowdown

Emerging markets fear reprise of 1994 tequila crisis

EU explores options for Russia oil embargo

India blackouts during hot weather ($BBG)

U.S. PETROLEUM inventories including the strategic petroleum reserve depleted by -13 million bbl to 1,699 million bbl in the week to April 15. There were large draws in crude (-13 million bbl) and distillate fuel oil (-3 million bbl) underscoring the continued shortage of oil in global markets and strong demand, for now, for middle distillates from manufacturers and freight firms:

INDIA’s electricity grid is struggling to meet demand as air conditioning and refrigeration loads climb with temperatures that have been well above the long-term seasonal average. Frequency remains well below the target of 50 Hz, with a control range of 49.90-50.05, for much of the day as there is insufficient generation. The situation seems to have stabilised since early April but is fragile with little or no spare capacity to absorb additional shocks or meet further demand:

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