Tag: oil tankers

Best in Energy – 10 March 2023

U.S. Treasury reassures traders on sanctions ($FT)

Russia’s missiles target Ukraine’s energy networks

India to boost LNG imports for generators ($BBG)

U.S. central bank discovers r* is unreliable indicator

U.S. yield curve inversion and equity values ($WSJ)

U.S. economy and supply-driven inflation ($WSJ)

U.S. inflation fuelled by margin expansion ($BBG)

U.S./EU downplay race on energy subsidies ($FT)

EU eases state aid rules to match U.S. subsidies

(see also European Commission press release)

U.S. railroad safety and trackside sensors ($WSJ)

Yemen’s decaying oil storage tanker to be unloaded

U.S. TREAURY YIELD curve between two-year and ten-year maturities has inverted to around 100 basis points, the most extreme since August 1981, when the economy was entering the second part of the double-dip recession of the early 1980s. The inversion is signalling a sharp fall in interest rates, resulting from a rapid deceleration of inflation, a downturn  in the business cycle, or a combination of both:

U.S. GAS INVENTORIES are moving into an increasing surplus, keeping downward pressure on prices. Stocks were +240 billion cubic feet (+13% or +0.58 standard deviations) above the prior ten-year seasonal average on March 3, up from a deficit of -263 billion cubic feet (-8% or -0.98 standard deviations) on January 1, 2023, and a deficit of -427 billion cubic feet (-13% or -1.52 standard deviations) on September 9, 2022:

Best in Energy – 7 February 2023

Bangladesh will buy more LNG if prices fall further

Russia’s oil and gas export earnings have slumped

U.K. mild winter cuts cost of energy bills support

U.K. considers locational pricing for electricity

U.S. aircraft in near collision at Austin ($WSJ)

Shadow tanker fleet is growing rapidly ($FT)

Remote work and commute time saved ($BBG)

U.K. homes hesitate to install heat pumps ($FT)

Best in Energy – 6 February 2023

[MUST READ] Russia targets Ukraine power grid

Shadow tankers fleet rises to 600 vessels ($BBG)

London heat island and excess mortality ($BBG)

South Africa’s coal exports hit by gangs ($BBG)

U.S. labour market’s surprising strength ($BBG)

China’s balloon flight and U.S. countermeasures

China’s previous balloon overflights ($WSJ) ¹

China’s high-altitude balloon programme ($FT)

¹ China’s high-altitude balloon overflight across North America and the U.S. decision to shoot it down is being almost totally ignored by the country’s main state-controlled media, suggesting the government is still deciding its response and/or is keen not to allow the episode to worsen relations further.

U.S. OIL DRILLING is slowing in response to the slide in prices since the middle of 2022 (when WTI was trading around $120 per barrel) especially since the start of November (when it was still $90-95). Typically there is a 15-20 week lag between a change in futures prices and a change in number of active rigs. The number of rigs drilling for oil has fallen in 7 of the last 9 weeks by a total of -28 rigs (-4%). The drilling reduction is the largest since July and August 2020 when the industry was still in shock after the first wave of the pandemic and the volume war between Russia and Saudi Arabia:

Best in Energy – 1 February 2023

South Asia’s LNG buyers express interest after prices fall

France’s nuclear generators key for power prices in 2023

India to boost government capital spending in 2023/24

U.S. refiners predict high margins on Russian sanctions

U.S. road haulage firms see recovery in late 2023  ($WSJ)

Greek tankers resume shipments of Russian oil

Pakistan prepares for IMF loan – or debt default

U.S. gas consumption hit record on December 23

Freeport LNG requests authorisation to restart one unit

U.S. CRUDE OIL including condensates production fell by -35,000 b/d to 12.38 million b/d in November compared with October. But production was up by +585,000 b/d (+5.0%) compared with the same month a year earlier. Annual growth levelled off at around +600,000 b/d for most of 2022:

Best in Energy – 5 January 2023

China LNG imports to rebound later in 2023

Russia ships Arctic crude oils to India and China

North America electric reliability in next 10 years

Pakistan’s retail gas storage in plastic balloons ¹

China boosts coal output and inventories (trans.)

U.S. gas prices tumble on mild weather ($WSJ)

Amazon plans 18,000 layoffs ($WSJ)

Steel and decarbonisation pathways

¹ Gas has been transported and stored in bags or balloons by poorer, often rural, customers without connection to grid supplies across Asia for some time. Specialised gas containers are relatively expensive. Photo agency Alamy has a photograph of a cyclist trailing a gas-filled “balloon” in China’s Shandong province in 2014. Don’t try this at home!

EUROZONE MANUFACTURERS reported business activity declined for the sixth month running in December but the deterioration was less widespread than in November and October. The eurozone manufacturing purchasing managers’ index was at 47.8 (21st percentile for all months since 2006). The index remained well below the 50-point threshold dividing expanding activity from a contraction. But declines were less widespread than November when the index was at 47.1 (17th percentile) and October at 46.4 (13th percentile):

U.S. CRUDE PRODUCTION including field condensates rose by +69,000 b/d to 12.381 million b/d in October 2022. The increase came entirely from onshore production in the Lower 48 states, most of which is from shale. Production has been up year-on-year by an average of around +630,000 b/d (+5.7%) in the last 12 months:

Best in Energy – 8 December 2022

Semiconductors as fulcrum of U.S./China conflict ($FT)

U.S./EU explore deal on technology and subsidies ($WSJ)

Saudi/China summit showcases U.S. triangulation ($FT)

China’s relationship with the Arabian peninsula (trans.)

Western allies try to unblock oil queue at Turkish Straits

Renewables growth sharpens focus on need for dispatch

United Kingdom approves first new coal mine for decades

U.K. temperatures fall well below seasonal average

U.S. coal-fired generation in slow retreat

Abadan oil crisis – U.K. official history

BRITAIN’s electricity transmission system is heading towards what is likely to be the first triad event of winter 2022/23 on the early evening of December 8. Freezing temperatures with little wind and an early end to solar generation will maximise demand on the island-wide transmission system from 1630-1800 GMT. Net demand has been climbing steadily towards likely-triad levels in recent days. Major customers with discretionary loads have a strong incentive to reduce demand in these critical periods to benefit from lower transmission charges through throughout the entire year ahead. Deliberate “triad avoidance” behaviour helps curb peak loads and reduce stress on the system:

Best in Energy – 7 December 2022

G7/Russia oil price cap evolution

China relaxes epidemic controls

India to purchase more gas for power generation

North Carolina’s 3rd day of blackouts after sabotage

Russia/China gas pipeline enters service (trans.)

Russian oil tanker spoofs position signal ($FT)

Russian oil tanker spoofs AIS maritime signals

London’s last great killer smog this week in 1952

BRENT calendar spreads slipped into contango yesterday through May 2023. The combined six-month spread moved into contango for the first time (outside the month-end expiry process when prices and spreads are unrepresentative) for the first time since November 2020, before the first successful coronavirus vaccines were announced:

LONDON is experiencing a period of unusually low temperatures this week, exactly 70 years after similar conditions between December 5 and December 9, 1952, caused the “Great Smog” resulting in 4,000 excess deaths. As temperatures dropped to freezing, domestic and commercial coal combustion surged, sending thousands of tonnes of particulates into the air over the city. A temperature inversion trapped smoke in low-lying areas along the Thames, between the hills surrounding the metropolitan area. For four days and nights, the metropolitan area was blanketed with a suffocating mixture of fog and smoke. The map below shows areas with the worst pollution, which were also the areas with the highest excess mortality:

Best in Energy – 6 December 2022

Renewables deployment accelerated by energy crisis

North Carolina substations in sophisticated sabotage

Oil tankers in queue to transit Turkish straits ($FT)

France prepares for tight power supplies next week

New England grid outlines winter reliability plan

EU retail sales fall with economy in recession ($WSJ)

EU plan for gas price cap distracts from real problem

U.S. jet fuel consumption below pre-pandemic level

BRENT’s six-month calendar spread has collapsed to a backwardation of just 67 cents per barrel (54th percentile for all trading days since 1990) from $8 (98th percentile) at the start of November. Month-to-month spreads are flat through April 2023. Traders anticipate crude supplies will remain comfortable through the first few months of next year because: (a) the EU/G7 price cap on Russia’s exports was set at a relatively high level; (b) policymakers have signalled a relaxed approach to enforcement (c) refiners have boosted purchases and inventories ahead of the price cap’s introduction; and (d) the slowing global economy is expected to dampen oil consumption:

Best in Energy – 5 December 2022

EU sets price cap for Russia crude at $60

(see legal text of EU price cap regulation)

Russia’s “shadow fleet” of oil tankers ($FT)

EU sets oil price cap above market ($BBG)

EU cuts gas consumption by 25% ($FT)

U.S. shale production runs into constraints

Saudi/China summit and policy priorities

India’s capital hit by severe winter smog

North Carolina substations attacked ($WSJ)

Japan plans strategic LNG purchasing ($WSJ)

U.S./EU compete to offer green subsidies ($FT)

BP plans big expansion of hydrogen production

U.S. GAS inventories fell faster than the seasonal average in the second half of November. Working gas stocks in underground storage were -178 billion cubic feet (-4.9%) below the pre-pandemic five-year seasonal average on November 25 compared with a deficit of -97 bcf (-2.5%) on November 11:

Best in Energy – 9 November 2022

G7 sanctions will raise tanker ton-miles ($BBG)

U.S. coal mining firms plan for gradual phase out

U.S. coal mining regional productivity variations

New Zealand to increase strategic oil inventories

EU agrees distribution of emissions targets

LONDON’s temperatures have been higher than the long-term seasonal average consistently since the middle of October, reducing heating demand and gas consumption. The number of heating degree days so far this winter has reached just 117 compared with a long-term average of 153. But the city-region is only 10% of the way through the expected heating season. The half-way point doesn’t normally arrive until January 23 as a result of seasonal lag: