Tag: Rhine water levels

Best in Energy – 10 August 2022

European retailers cut lighting and hours to save energy

U.S. electricity use forecast to rise to record high in 2022

Microsoft cuts travel and other expenses ($WSJ)¹

China’s climate is getting hotter and wetter (trans.)

China’s ultra-deep Tarim basin oil and gas wells (trans.)

¹ Most major corporations are starting to restrict travel and other routine expenses spending as they try to cope with rising inflation while maintaining earnings in line with forecasts and analysts’ expectations. Business spending reductions will flow through into slower growth in passenger aviation, hospitality and other business-related services. Spending controls will therefore amplify the broader business cycle slowdown that is already underway.

EUROPE’s major rivers are running very low as a result of the prolonged drought and temperatures well above normal. Recorded water depth on the Rhine at the Kaub gauging station has fallen to just 48 centimetres, the lowest seasonal level for more than a quarter of a century by a wide margin, severely restricting barge freight:

U.S. RETAIL GASOLINE prices have fallen for eight consecutive weeks by a total of -96 cents per gallon (-19%) since June 13. Retail diesel prices have declined for seven consecutive weeks by a total of -82 cents per gallon (-14%) since June 20.

Fuel-price reductions are mostly explained by the decline in international crude prices. Refining margins remain higher than before Russia invaded Ukraine. Diesel prices remain elevated compared with gasoline as a result of the global diesel shortage.

In the last two months, lower crude and fuel prices have been driven by the slowdown in the economy (actual and expected) and the pass-through from former price increases which have enforced changes in household and business behaviour and dampened consumption. In the next few months, if lower prices are sustained, they will relieve some pressure on household budgets and business operating costs, ease recessionary forces, and buy back some of the demand that was lost:

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Best in Energy – 8 August 2022

Russia oil discounts narrow on China/India demand

Germany’s river freight restricted by low water level

Bangladesh explores rotating factory closure ($BBG)

Asia’s emissions market prices are still low ($BBG)

China’s navy and air force practices Taiwan blockade

China forecasts flooding in major coal areas (trans.)

U.S. shale producers focus on higher oil prices ($FT)

U.S./China navy competition and Northern Sea Route

EUROPEAN GAS OIL calendar spreads between December 2022 and December 2023 have fallen into a backwardation of less than $11 per barrel from almost $33 in mid-June, as traders anticipate the onset of a recession depressing consumption:

JAPAN LNG STOCKS at the end of May had risen to 2.36 million tonnes, the highest for the time of year for at least seven years, as the country’s utilities accumulate inventories to protect against possible supply disruptions in winter 2022/23:

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Best in Energy – 3 August 2022

G7 statement reaffirms exploration of Russia oil-price cap

France plans to fill gas storage completely by end of October

France cuts nuclear output as heatwave warms rivers ($BBG)

Rhine water levels close to forcing transport closure ($BBG)

U.S. retailers seek warehouses for excess inventories ($WSJ)

Global refinery capacity expansions

RIVER RHINE water levels at Kaub had dropped to just 61 centimetres on August 2, the lowest since December 2018, and the lowest for the time of year for more than 25 years, as prolonged drought causes river levels to fall across Northwest Europe, threatening power generation and transport of bulk commodities:

CHINA’s hydroelectric power stations generated a record 583 billion kWh in the first six months of the year, an increase of +100 billion kWh or more than +20% compared with the same period in 2021. China’s hydro generation was more than three times the entire electrical output of the United Kingdom:

CHINA’s thermal power generation, nearly all of it from coal, dipped to 2,728 billion kWh in January-June, a decrease of 98 billion kWh (-4%) compared with the same period in 2021, helping improve the coal inventory situation:

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Best in Energy – 22 July 2022

Germany to cut energy use to resist blackmail

EU divided on compulsory gas demand cuts

Europe’s electricity generation under stress

Europe turns to Africa for more oil and gas

China’s semiconductor manufacturing ($BBG)

Texas power grid and bitcoin miners ($BBG)

RHINE RIVER water levels measured at Kaub are the lowest for the time of year for more than a quarter of a century and indicative of drought conditions across northwest Europe. Low rainfall is restricting river borne freight and is an indicator of the stress for thermal and nuclear power plants that rely on river water for their cooling systems. For coal and gas combustion plants, efficiency and maximum output is reduced. For nuclear plants, insufficient cooling capacity can force output limits or a precautionary safety shutdown:

EUROZONE manufacturers reported a decline in activity this month for the first time since the first wave of the pandemic in 2020. Preliminary data show the manufacturing sector purchasing managers index fell to 49.6 in July (28th percentile) down from 52.1 in June (47th percentile) and 54.6 in May (65th percentile). Russia’s invasion of Ukraine and the sanctions the EU has imposed in response have pushed the region’s economy into recession:

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