ECB holds crisis meeting as bond yields surge and diverge
Australia’s electricity market suspended to avert blackouts
Europe has imported record volume of LNG so far in 2022
Europe boosts coal from South Africa to offset Russia
U.S. API calls for deregulation to boost energy production
Pakistan’s economy caught in balance of payments crisis*
Europe races to fill gas storage but will still be vulnerable
Macro-economic tools and micro-economic goals ($FT)
* The IMF’s usual response to a balance of payments crisis is to recommend a “structural adjustment programme” with higher taxes/charges and lower government spending/subsidies to reduce internal demand and shore up the budget combined with a devaluation of the exchange rate to boost exports and reduce imports. Some external lending can be provided to smooth the adjustment. Because IMF loans are “conditional” they are also designed to encourage the adoption of unpopular policies and perseverance with them.
FREEPORT LNG’s statement on incident at its export terminal and likely resumption of operations – key items:
* incident … resulted in the release of LNG, leading to the formation and ignition of a natural gas vapor cloud, and subsequent fire at the facility
* LNG vapor cloud dispersion and ignition thereof were at all times contained within the fence line of the liquefaction facility, lasting approximately 10 seconds
* fire and associated smoke visible thereafter were from the burning of materials in and around the location where the incident occurred, such as piping insulation and cabling
* incident occurred in pipe racks that support the transfer of LNG from the facility’s LNG storage tank area to the terminal’s dock facilities
* none of the liquefaction trains, LNG storage tanks, dock facilities, or LNG process areas were impacted
* preliminary observations suggest that the incident resulted from the overpressure and rupture of a segment of an LNG transfer line, leading to the rapid flashing of LNG and the release and ignition of the vapor cloud
* completion of all necessary repairs and a return to full plant operations is not expected until late 2022. Given the relatively contained area of the … incident, a resumption of partial operations is targeted to be achieved in approximately 90 days
FREEPORT’s updated timeline for the resumption of exports is more delayed than traders initially anticipated. The premium for gas delivered in Northwest Europe compared with Louisiana’s Henry Hub has widened to €77/MWh up from €50 before the incident, with the adjustment coming via upward pressure on European prices and downward pressure on prices in the United States:
TEXAS temperatures and therefore air-conditioning and refrigeration demand remain much higher than normal. Temperatures have been at or above average on 56 of the 74 days since the start of April. Cumulative cooling demand since the start of the year has been almost 36% higher than the long-term average:
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