Tag: Iran

Best in Energy – 15 May 2024

U.S. electric vehicle sales lose market share (EIA)

U.S./China tariffs and risk of circumvention (Reuters)

China’s muted response to U.S. tariffs so far (Xinhua)

Huawei ups phone sales at Apple’s expense (Reuters)

Iran prepares for eventual leadership succession (FT)

IAEA chief tries to rebuild relationship with Iran (FT)

INVESTMENT FUNDS purchased the equivalent of +7 terawatt-hours (TWh) in futures linked to the Dutch TTF gas benchmark over the seven days ending on May 10. Funds have been net purchasers in seven of the most recent eight weeks, buying a total of +105 TWh since March 15. As a result, investors have amassed a net long position of 103 TWh, up from a net short position of 1 TWh two months ago, and the largest bullish position since September 2021:

Best in Energy – 14 May 2024

United States raises tariff rates on China (White House)

U.S. Trade Representative statement on tariffs (USTR)

Japan predicts increase in electricity demand (Reuters)

Asia’s refiners turn away from Mideast crude (Reuters)

India/Iran sign port management agreement (Reuters)

Germany’s solar generation hits record high (Reuters)

Europe’s economic under-performance (FT)

Russia’s diesel exports re-routed (EIA)

NORTH ATLANTIC sea surface temperatures in the tropical region (05-20°N 30-60°W) remained far above normal for the time of year through April. Tropical storm formation requires a minimum surface temperature of 26°C, among a number of other necessary and complex conditions. Surface temperatures averaged 27.42°C in the region in April which was +1.54°C above the long-term average for the time of year. The exceptional ocean warmth is expected to produce a higher than average number of tropical storms this summer, with a more than usual number of hurricanes, including severe hurricanes:

Best in Energy – 7 May 2024

Iran/Malaysia oil transhipments targeted by sanctions (Reuters)

OPEC⁺ likely to extend output cuts according to officials (Reuters)

U.K. electricity distribution network hit by constraints (Guardian)

Global trade poised for cyclical recovery in 2024/25 (FT)

China expands strategic nuclear forces (Foreign Affairs)

China’s nuclear power reactors (EIA)

BRENT’s calendar spreads have narrowed sharply over the last month as traders conclude crude supplies will remain much more comfortable over the second half of 2024:

EUROPE’s gasoil cracks have fallen to their lowest level for twelve months as traders conclude that diesel supplies will also remain much more comfortable:

Best in Energy – 1 May 2024

China dominates wind turbine manufacturing (Woodmac)

China’s over-investment and under-consumption (FT)

Europe’s manufacturers struggle to sell costly cars (FT)

IAEA chief to visit Iran to rebuild relationships (Reuters)

U.S. wind generation fell slightly in 2023 (EIA)

Dodecahedrons from the Roman Empire (WaPo)

EUROZONE manufacturers reported business activity declined for the 22nd month running in April as the region struggled to emerge from the prolonged recession caused by the energy price shock linked to Russia’s invasion of Ukraine and the sanctions imposed in response. Preliminary results show the purchasing managers index slipped to 45.6 (12th percentile for all months since 2006) in April down from 46.1 (15th percentile) in March:

SOUTH CHINA has received some of the heaviest spring rains in the last decade which will start recharging river levels and hydroelectric generation. The city of Yibin at the confluence of the Yangtze and Min rivers and on the border between the two major hydro-generating provinces of Sichuan and Yunnan received 127 millimetres of precipitation in April 2024, the second highest in the last decade and +43 millimetres (+51% or +1.26 standard deviations) above the 2014-2023 seasonal average:

Best in Energy – 19 April 2024

Energy transition in an era of higher interest rates (Woodmac)

Iran and Israel signal end to missile therapy sessions (Reuters)

China warns about floods amid heavy spring rains (Xinhua)

China forecasts more rains across southern areas (Xinhua)

China’s urban areas hit by widespread subsidence (Reuters)

Europe solar generation depresses daytime prices (Reuters)

India sources more crude from Russia in 2023/24 (Reuters)

U.S. hydro generation predicted to recover in 2024 (EIA)

Europe’s electric vehicle sales are dwindling (Bloomberg)

Iran recalls intelligence ship from Gulf of Aden (Bloomberg)

SOUTH CHINA is experiencing heavy rainfall with the strongest spring rains since 2022 and before that 2016. The city of Yibin at the confluence of the Min and Yangtze rivers on the border of Sichuan and Yunnan has already received 104 millimetres of rainfall so far in April compared with a full-month seasonal average of 84 millimetres between 2014 and 2023. The spring rains should start to recharge the hydroelectric system after a prolonged drought in 2022/23.

For China’s hydro generation, the location of rainfall is critical, given almost all the major generating stations are located in the south and southwest of the country. What matters is precipitation across the Tibetan plateau; the south and southwest (Yunnan, Sichuan, Guizhou, Hunan, Guangxi and Guangdong); and the lower reaches of the Yangtze, often called Jiangnan (including parts of Anhui and Jiangxi). These are precisely the areas currently being inundated by heavy rainfall:

Best in Energy – 18 April 2024

United States reimposes symbolic sanctions on Venezuela (FT)

United States to apply Venezuela rules case-by-case (Reuters)

Iran’s crude oil exports and U.S. sanctions enforcement (FT)

Amazon’s Big River competitive intelligence operation (WSJ)

U.S. solar manufacturers petition for new tariffs (Reuters)

U.S./Iraq gas capture and generation agreements (Reuters)

BRENT’s calendar spreads have continued to soften as traders downgrade the probability the conflict between Iran and Israel will escalate to the point where it disrupts oil production and exports. The spread from June to December 2024 has fallen to its lowest for more than five weeks. Most of the softening has come in the nearest-to-deliver June-July and July-August spreads where most of the speculative money is concentrated and where the supply-demand balance would be impacted most immediately by any escalation that threatened oil production and exports from the Persian Gulf. Traders have concluded Iran will not risk any disruption of its exports; the United States will not risk higher oil prices in an election year; and the United States will restrain the next round of responses by Israel:

Best in Energy – 16 April 2024

Global gas market review and outlook (Oxford Energy)

Russia repairs war-damaged oil refineries (Reuters)

Hawaii electric grid warns about blackouts (Reuters)

India expands coal generation capacity (Bloomberg)

U.S./Iran oil sanctions enforcement (Reuters)

INDIA’s temperatures are climbing in the pre-monsoon season, increasing air-conditioning and refrigeration electricity demand. So far, however, there has been no repeat of the heatwaves of March and April 2022, which has helped keep the power grid stable:

Best in Energy – 15 April 2024

Iran/Israel missile therapy downplayed by oil traders (Reuters)

ERCOT issues no-touch notice ahead of warm weather (Reuters)

EU energy transition, sanctions and resilience (Oxford Energy)

India orders fossil fuel generators to standby (Reuters)

U.S. residential electricity storage (Woodmac)

Gas-fired generators during the eclipse (EIA)

China’s coal production reserve (Xinhua)

U.S./Russia LNG project sanctions (WSJ)

U.S. warehouse rents level off (WSJ)

NORTHERN HEMISPHERE temperatures were the highest on record during the winter of 2023/24. Land surface temperatures were +2.64°C above the 20th century seasonal average between October and March up from +1.94°C during winter 2022/23 and the previous record of +2.38°C in winter 2015/16. Record warmth contributed to the enormous surplus of gas inventories in North America and Europe and the sharp drop in gas prices:

Best in Energy – 11 April 2024

U.S. electricity consumption by data centres (Reuters)

China’s industrial capacity and global trade (Reuters)

Oil majors and responsibility for emission cuts (Shell)

U.S. oil output and associated gas prices (Energy Flux)

Global coal generation capacity rose in 2023 (GEM)

U.S./Iran nuclear diplomacy and enrichment (WaPo)

EU GAS CONSUMPTION fell slightly between December and February compared with a year earlier. Gas use in the seven largest consuming countries (Germany, Italy, France, Netherlands, Spain, Belgium and Poland) in winter 2023/24 was -15% below the ten-year pre-invasion and pre-pandemic average compared with -13% in winter 2022/23:

U.S. SERVICE SECTOR price rises are accelerating as the economy pulls out of the mid-cycle slowdown in 2022/23. Services prices were rising at an annualised rate of +7.0% over the three months ending in March and +8.7% if rent of shelter is excluded. The service sector is much larger and more labour intensive than manufacturing. Prices are rising much faster than the central bank’s whole-economy target of a little over 2% per year and the overshoot is growing. The positive interpretation is the economy is proving more resilient than expected; the negative one is any interest rate reductions have been postponed until later in the year and may be off the table completely:

Best in Energy – 15 March 2024

Europe’s gas market outlook for 2024/25 (Woodmac)

Quant trading strategy in the oil market (Oxford Energy)

Israel/Iran/Hezbollah manoeuvres in Lebanon (Reuters)

Western Hemisphere dominates oil output growth (EIA)

CIA covert information campaign against China (Reuters)

Artificial intelligence, swarm attacks and defence (WSJ)

GLOBAL OCEAN SURFACE temperatures were +1.03°C above the 20th century seasonal average in February 2024, smashing the previous record seasonal anomaly of +0.81°C in February 2016. There has been an unprecedented surge in ocean surface temperatures around the world since February 2023. Elevated ocean temperatures will ensure weather conditions remain warmer-than-normal across much of the world through the first half of 2024:

U.K. ELECTRICITY SALES to residential customers fell by -1.64 billion kilowatt-hours (-15% or -3.57 standard deviations) in December 2023 compared the five-year seasonal average for 2016-2020. Warmer-than-normal temperatures coupled with eye-wateringly high utility prices drove an exceptionally large reduction in household power use, mostly for heating. Household savings were much larger than those for industry (-0.65 billion kWh, -9% or -1.88 standard deviations) and commercial users and public authorities (-0.42 billion kWh, -5% or -1.18 standard deviations):