Tag: Italy

Best in Energy – 20 June 2022

Germany to boost gas storage, restart coal generation (trans.)

Italy reports persistent shortfall in gas supplies

East China reports record power consumption

China restricts Tesla cars for national security

China iron ore prices tumble on weaker demand

China’s refineries idled amid lockdowns ($BBG)

EU/Russia gas flows cut as dispute worsens (FT)

Germany appeals for energy conservation ($FT)

EUROPE’s summer-winter gas futures calendar spread from July 2022 to January 2023 has surged into a backwardation of more than €5/MWh from a contango of €14 earlier this month as the dispute between Russia and the European Union has worsened and Russia has cut pipeline exports. Traders expect Europe will struggle to fill gas storage following the reduction of pipeline flows and will need even higher prices to enforce greater gas conservation. The backwardation is the most severe since early April:

CHINA’s most actively traded iron ore futures contract has slumped to $116/tonne from $146 a little over two months ago, as persistent lockdowns to control the coronavirus epidemic disrupt consumption:

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Best in Energy – 20 May 2022

China accelerates purchases of Russian crude*

China increases crude inventories*

China boosts energy imports from Russia ($BBG) *

U.S./China talks on Russia strategic oil purchases*

U.S./China top diplomats hold telephone talks*

United States open to Russia oil secondary sanctions*

China cuts mortgage rates sharply to boost economy

Italy boosts Russian oil imports ($FT)

Germany prepares for rationing industrial gas supply

China completes Daqing coal rail maintenance (trans.)

U.K. postal service to raise prices again as costs surge

U.K. consumer confidence lowest since at least 1974

Finland prepares for end of Russian gas flows ($BBG)

U.K. grid practises black start with renewables ($BBG)

* An interesting cluster of stories has emerged over the last 24 hours about China increasing crude oil purchases from Russia, but using the extra volumes to replenish strategic reserves, which the White House says would not violate any sanctions. The first six items should all be read in this context.

China does not report commercial or strategic reserves and there is less distinction between them than for IEA countries, so there is no way of ascertaining whether extra crude is really going into strategic inventories or being added to commercial stocks to be refined or depleted later. The concept of “replenishment” of strategic stocks is also curious because China did not join the U.S.-led emergency oil releases in late 2021 and early 2022.

An outside observer might conclude China is boosting its purchases of deeply discounted Russian crude, but the White House has decided to ignore it, at least for the time being, because it does not want to risk triggering a further rise in prices, especially before congressional elections in November, where inflation is emerging as the dominant political issue.

U.S. FINANCIAL CONDITIONS were tightening rapidly even before this week’s tumble in equity prices, as access to credit and risk capital becomes more restricted and expensive:

EUROPE’s GAS FUTURES summer-winter calendar spread from July 2022 to January 2023 has moved into a small contango of €2/MWh, down from a record backwardation of more than €70 in early March, as storage fills at record rates and inventories become more comfortable:

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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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