Tag: South Asia

Best in Energy – 15 February 2023

Global central banks inject $1 trillion of liquidity

South Asia’s price-sensitive LNG consumption

U.S. services sector inflation remains high ($BBG)

U.S. automakers have more pricing power ($BBG)

Ocean freight rates slump as volumes fall ($WSJ)

China’s major refiners resume Russia oil buying

U.S. pilot shortage drives up airfares ($FT)

Near-space and sovereignty issues ($WSJ)

U.S. SERVICE SECTOR prices excluding rent (a measure economists have taken to calling “supercore” inflation) rose at an annualised rate of +5.2% over the three months ending in January, more than twice as fast as the central bank’s target of a little over 2% per year. Supercore prices rose at an annualised rate of +7% in January alone and were up by a similar amount over the previous 12 months, implying there is still a lot of momentum behind inflation:

U.S. INTEREST RATE traders expect the central bank will have to adopt a more restrictive policy to squeeze persistent inflation out of the economy. The central bank is expected to raise its fed funds target rate to 5.00-5.25% or even 5.25-5.50% by August 2023 up from 4.50-4.75% at present. Forecasts for interest rates at the end of 2024 have risen by almost +75 basis points since the start of the month:

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 – 8 July 2022

[MUST READ] EU still vulnerable to Russian gas cuts this winter

German landlord cuts heating to limit bills and gas consumption

U.S. manufacturers start to idle on higher energy costs ($BBG)

U.K. transmission operator’s investment pathway to 2030

Africa’s governments face fuel price protests ($BBG)*

South Asia hit by Europe’s rush for LNG ($WSJ)

Big nickel short position broke the LME ($BBG)

U.S. gasoline consumption fell in second quarter

* Sharp increases in the cost of food and fuel have often acted as the trigger for unrest. In eighteenth century England, increases in grain prices as a result of bad harvests or war frequently led to local disturbances, usually targeting bakers, grain merchants and government storehouses, with magistrates often calling in soldiers to restore order. Fuel riots were less common but a sharp rise in the price of coal would normally trigger a parliamentary inquiry to investigate monopolistic practices and hoarding. Food and fuel price rises were always seen as politically sensitive and a potential threat to public order (“The Coal Industry of the Eighteenth Century”, Ashton and Sykes, 1929).

U.S. PETROLEUM INVENTORIES including the strategic petroleum reserve fell -1 million bbl to 1,678 million bbl last week. Stocks have fallen in 78 out of the last 105 weeks by a total of -440 million bbl since the start of July 2020. The most recent week saw an increase in crude inventories (+2 million bbl) but depletion of gasoline (-2 million), distillate fuel oil (-1 million) and jet fuel (-1 million).

The drawdown in fuel stocks in the week ending July 1 is likely associated with the impending public holiday on July 4, which will have seen inventories pulled forward from the primary distribution system of refineries, pipelines and bulk terminals (where they are recorded) into the secondary system of retailers and local fuel suppliers as well as end-users’ own storage tanks (where they are not recorded). It largely reversed a big build in gasoline, distillate and jet fuel the week before as stocks were pre-positioned ahead of the holiday demand:

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Best in Energy – 29 April 2022

EU regulators defend electricity market design

India explores purchase of Russian oil assets

EU LNG imports running at full capacity ($BBG)

China admits epidemic supply disruption (trans.)

EU struggles with payment for Russian gas

Austria’s payment for Russian gas ($BBG)

EU options for sanctioning Russian oil ($WSJ)

South Asia’s fuel-oil power generation ($BBG)

U.S. REAL FINAL SALES to private domestic purchasers (FSPDP) increased at an annualised rate of 3.7% in the first quarter, accelerating from 2.6% in the fourth quarter, according to advance estimates published on April 28.

Real FSPDP excludes the effect of foreign trade as well as the temporary impact of changes in government spending and inventory accumulation and depletion, so is the most useful measure of underlying spending by households and businesses. The economy exhibited strong momentum in the first three months of the year.

But headline real gross domestic product shrank at an annualised rate of 1.4% in the first quarter as a result of negative effects from foreign trade (-3.2 percentage points), inventory accumulation (-0.8 percentage points) and slower government spending (-0.5 percentage points):

U.S. S&P 500 equity index has risen just 2.5% over the last twelve months; the slow increase is consistent with an end-of-cycle recession or mid-cycle slowdown:

U.S. CONSUMERS were the most negative about the government’s economic policy in March for seven years – with levels of disapproval consistent with recessions and mid-cycle slowdowns in the past:

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