Tag: PMIs

Best in Energy – 31 May 2023

Gatik tankers adjust maritime services (Reuters)

Singapore detains more oil tankers (Bloomberg)

Russia’s ship-to-ship crude transfers (Vortexa)

U.S./UAE diplomatic and security relations (WSJ)

U.S./China manufacturing supply chains (WSJ)

U.S. logistics firms hit by slower demand (WSJ)

U.S. debt deal and energy permitting (Reuters)

U.S. energy insecurity and lower incomes (EIA)

CHINA’s manufacturers reported a widespread decline in business activity in May as the post-coronavirus rebound ran out of momentum. The official NBS purchasing managers’ index slipped to 48.8 (2nd percentile for all months since 2011) down from 49.2 (5th percentile) in April and 51.9 (92nd percentile) in March:

U.K. ROAD FUEL prices have fallen by between -22% (diesel) and -24% (gasoline) from the record peak in July 2022, relieving some of the financial pressure on households as well as freight transportation firms:

Best in Energy – 23 May 2023

Germany to subsidise industrial power (Reuters)

Boeing sceptical on sustainable aviation fuel (FT)

U.S. western states in Colorado river deal (WSJ)

Ford’s procurement deals for lithium (FT)

Ocean shipping container production falls (FT)

U.S. retailers near end of destocking cycle (WSJ)

EUROZONE manufacturers have reported another widespread decline in business activity so far in May. Preliminary results show the purchasing managers’ index slipping to 44.6 (6th percentile for all months since 2006) in May down from 45.8 (8th percentile) in April and 54.6 (67th percentile) a year ago. The index is firmly in recession territory at the lowest level since the first wave of the pandemic in March-May 2020 and before that July 2012 and October 2008-June 2009 following the financial crisis:

EUROPE’s gas storage is refilling more slowly than average as a result of a relatively cold start to spring and sharply lower prices encouraging more consumption by industry and power generators. Storage sites across the European Union and United Kingdom (EU28) topped up their fill by +10.3 percentage points between March 31 and May 21 compared with a prior ten-year average top up of +11.3 percentage points. But because storage started from a record high, fill remains exceptionally high. EU28 storage was 65.9% full on May 21, the second highest on record, and compared with a prior ten-year seasonal average fill of just 44.7%:

Best in Energy – 2 May 2023

Australia interest rate rise surprise (Reuters)

U.S. ethanol blend waiver reissued (Reuters)

China coal consumption set to rise (Reuters)

U.S. fuel use slips amid freight recession (FT)

India predicts heatwaves in May (Bloomberg)

Iran executed high-placed British spy (NYT)

U.S./Iran seized each other’s oil tankers (FT)

U.S. South’s low winter gas depletion (EIA)

Wind farm construction costs (Energy Monitor)

Nickel market moves into big surplus (Reuters)

New York to limit gas connections (Utility Dive)

CHINA’s manufacturers unexpectedly reported a fall in business activity in April after rapid growth in March and February. The purchasing managers’ index slumped to 49.2 (6th percentile for all months since 2011) down from 51.9 (92nd percentile) in March and 52.6 (96th percentile) in February. The surge in activity after the end of coronavirus controls and the passing of the exit wave appeared to have run out of momentum, at least temporarily:

U.S. GAS inventories rose by +79 billion cubic feet over the seven days to April 21. Inventories have tracked much higher than usual so far in 2023 and were at the highest level for the time of year since 2020 and before that 2017. Stocks were +280 billion cubic feet (+16% or +0.61 standard deviations) above the prior ten-year seasonal average up from a deficit of -261 billion cubic feet (-8% or -0.98 standard deviations) at the start of 2023:

Best in Energy – 6 April 2023

Best in Energy will resume after Easter on Wednesday April 12.

OPEC⁺ output cuts set to test $60 cap on Russia’s oil sales

Exxon halts Brazil deepwater exploration project ($WSJ)

Exxon completes start up of new Texas crude refining unit

New Zealand aluminium smelter’s demand response deal

Global oil tanker voyages redrawn by sanctions on Russia

Sweden tries to dampen speculation about Nord Stream

France/China summit given cautious coverage (trans.)

EU/China summit attempts to de-escalate tensions ¹

Iran/Saudi Arabia foreign ministers meet in China

¹ China’s state-controlled media has relatively limited coverage so far of the summit meeting with French President Emmanual Macron, and almost none on the meeting with European Commission President Ursula von der Leyen, implying expectations for a major “reset” or improvement in the relationship are modest.

U.S. RAILROADS hauled 10% fewer shipping containers in the first 13 weeks of 2023 compared with the same period in 2022, according to the latest weekly traffic report from the Association of American Railroads, confirming that a significant cyclical slowdown is underway:

U.S. NON-MANUFACTURING businesses reported a much less widespread expansion in March. The Institute for Supply Management’s purchasing index covering the services, agriculture and mining sectors fell to 51.2 (13th percentile for all months since 1997) in March down from 55.1 (40th percentile) in February. The non-manufacturing index is more volatile and less reliable than its manufacturing counterpart. Nonetheless, it has been trending lower as the non-manufacturing sector follows manufacturers into a significant cyclical slowdown:

Best in Energy – 3 April 2023

OPEC⁺  announces pre-emptive production cut

OPEC⁺ cuts production as economic outlook deteriorates

OPEC⁺ surprises with cut after saying it would hold ($BBG)

OPEC⁺ cut shows revenue needs and U.S. divergence ($FT)

Europe’s marine insurers complain about sanctions ($FT)

Russia shifts oil sales benchmark from Brent to Dubai

India’s state-owned coal company boosts production

U.S. city planners reduce number of parking spaces ($WSJ)

EUROZONE manufacturers reported a fall in business activity in March for the ninth month running. The final reading for the purchasing managers’ index was 47.3 (17th percentile since 2006), little changed from the preliminary reading of 47.1 published just over a week earlier, and well below the 50-point threshold dividing expanding activity from a contraction. Energy prices have retreated from record highs in the third quarter of 2022 but remain far above the long-term average. Excess inventories continue to weigh on orders and production. Manufacturers now have to deal with increased fears about a recession and increased caution from household and business purchasers:

NORTHWEST EUROPE is now more than 90% of the way through the heating demand season. The accumulated number of heating degree days at Frankfurt in Germany (a proxy for the densely populated macro-region of Northwest Europe) in winter 2022/23 was just 1,621 on March 31 compared with a long-term average of 1,966 (-18%). Temperatures were above the long-term average on 124 out of 182 days between October 1 and March 31 compared with only 58 days at or below normal:

Best in Energy – 31 March 2023

Iraq/Kurdish regional oil revenues dispute

U.K. hydrogen residential trial hits hurdles

U.S. crude oil exports hit record high in 2022

U.S. banking – a slow-motion crisis? ($WSJ)

Vitol reports record $15 bn profit in 2022 ($FT)

U.S. FINANCIAL CONDITIONS have tightened modestly following the failure of Silicon Valley Bank and several other financial institutions. Overall conditions were close to the long-term average on March 24, after being quite relaxed at the end of January 2023. Risk appetite is still relatively high but standards for credit and leverage have tightened, according to a plethora of indicators used by the Federal Reserve Bank of Chicago to compile its National Financial Conditions Index:

CHINA’s manufacturers reported a widespread increase in business activity for the second month running in March. The official purchasing managers’ index was 51.9 (93rd percentile for all months since 2011) in March after 52.6 (96th percentile) in February. Business activity is rebounding rapidly after the exit wave of the pandemic severely disrupted activity in December and January:

Best in Energy – 2 March 2023

Global CO2 emissions hit record high in 2022

India refinery processing hits seasonal record

Latin America accelerates solar deployment

U.S. gas turbines reach record operating rate

Argentina experiences mass blackout

United States explores more China sanctions

Passenger aviation demand stays high ($FT)

U.S. rail freight weakened further in February

China prepares economic team overhaul ($FT)

U.S. MANUFACTURERS reported business activity declined in February for the fourth month running. The ISM composite activity index was 47.7 in February up marginally from 47.4 in January but both readings were in only the 16th percentile for all months since 1980. New orders fell for the sixth month in a row. The new orders sub-index (47.0) was in only the 14th percentile for all months since 1980:

U.S. DISTILLATE inventories were unchanged over the seven days ending on February 24. Stocks were -14 million barrels (-11% or -0.87 standard deviations) below the prior ten-year seasonal average but the deficit has narrowed from -31 million barrels (-22% or -2.5 standard deviations) on October 7:

Best in Energy – 1 March 2023

India’s coal producers see booming fuel demand

China’s massive deployment of wind generation

Northwest Europe forecast cold winter end ($BBG)

India heatwave boosts power use to record ($BBG)

U.S. consumer confidence and expenditure ($BBG)

U.S. shale firms squeezed by escalating costs ($FT)

Colorado refinery shut after cold weather damage

U.S. electricians in increasing demand ($WSJ)

Russia/China nuclear cooperation ($BBG)

Central banks fear impact of rising wages ($FT)

CHINA’s manufacturers reported the most widespread rise in business activity for over a decade as the economy rebounded after the end of coronavirus lockdowns and the passing of the epidemic’s exit wave. The official purchasing managers’ index surged to 52.6 in February, the highest since April 2012, and up from just 50.1 in January 2023 and 47.0 in December 2022. The index was in the 96th percentile for all months since 2011 pointing to a very broad upturn in activity:

NORTHWEST EUROPE is more than three-quarters of the way through the heating season. Frankfurt in Germany has experienced 1,377 heating degree days so far this winter compared with a long-term seasonal average of 1,673, a deficit of almost 18%, reducing heating demand and easing the pressure on gas inventories and prices:

Best in Energy – 21 February 2023

India directs private coal-fired generators to run

EU heat pump sales surge on high energy prices

Russia/U.S./China trilateral relationship ($WSJ)

Russia/Netherlands infrastructure threat ($FT)

U.S/China intellectual property conflicts ($WSJ)

U.S./China technology export controls ($WSJ)

U.S./Taiwan step up military cooperation

China’s coal output and emissions ($BBG)

Ion’s ransomware attack ($FT)

EUROZONE manufacturers reported business activity fell in February for the eighth consecutive month. Preliminary estimates from partial survey data put the purchasing managers’ index at 48.5 (25th percentile for all months since 2006) in February compared with 48.8 (26th percentile) in January:

EU EMISSIONS allowance prices have hit a record €100 per tonne of CO2 equivalent for the compliance period ending in December 2023:

Best in Energy – 31 January 2023

Europe’s ammonia plants idle – for now

IMF upgrades economic forecast slightly

Germany plans to keep gas stocks high

Germany explores strategic gas reserve

EU boosts imports of Russian LNG ($BBG)

Pakistan’s foreign exchange shortage

Journalism – impartiality and framing ¹

Commodity trading  (McKinsey report)

¹ This report on impartiality and bias in journalism focuses on the British Broadcasting Corporation and its coverage of government finance issues (spending, taxation, borrowing and debt) in the United Kingdom. But the same issues are relevant for other media organisations and other topics, including energy. Factual accuracy is a necessary but not sufficient condition for impartiality. Selection of sources, choice of language, exploration of alternative viewpoints and narrative framing are just as important.

U.S. INTEREST RATE traders expect the federal funds target rate to peak at 4.75-5.00% by July 2023 up from 4.25-4.50% at present. Thereafter the rate is expected to start declining before the end of the year as the central bank responds to decelerating inflation and/or recession:  

CHINA’s manufacturers reported an increase in business activity in January 2023. The official purchasing managers’ index climbed to 50.1 (26th percentile for all months since 2011) from 47.0 (1st percentile) in December 2022: