Tag: SPR

Best in Energy – 16 May 2023

U.S. electric vehicle deployment projection (EIA)

EU wants end Russian oil imports via India (FT)

U.S. SPR plans to buy 3 million barrels (DOE)

Vietnam approves power plan to 2030 (Reuters)

China promotes intelligent coal mining (Xinhua)

Marathon refinery suffers fatal incident (Reuters)

U.S. DIESEL crack spreads for December 2023 have firmed to $191 per tonne on May 15 up from a recent low of $172 on April 28. Inventories have tightened despite the weakness in the industrial business cycle:

BRENT futures have drifted lower since mid-April as the impact of OPEC⁺’s unexpected production cuts has been more than offset by concerns about a slowing global economy and the strength of consumption. Prices for the remainder of 2023/24 are close to their lowest levels since the start of 2022:

Best in Energy – 12 May 2023

U.S. SPR could start refill after June (Reuters)

U.S. SPR refill becomes contentious (Prospect)

China issues new fuel export quotas (Reuters)

U.S. public support for nuclear power (Salon)

Giffen goods and the impact of inflation (FT)

Russia’s oil and the shadow fleet (Bloomberg)

El Niño to cut Thai rice exports (Bloomberg)

U.S. INITIAL CLAIMS for unemployment insurance benefits climbed to a seasonally adjusted 264,000 in the week ending on May 5, the highest since October 2021. Initial claims have been trending higher since October 2022 and more clearly since the end of January 2023 in a sign the labour market is starting to cool:

U.S. GAS inventories rose +78 billion cubic feet to 2,141 billion cubic feet over the seven days ending on May 5. Stocks are +257  billion cubic feet (+14% or +0.58 standard deviations) above the prior ten-year seasonal average. The surplus has remained broadly unchanged for the last 8-9 weeks since early March:

Best in Energy – 29 March 2023

Saudi Arabia joins Shanghai Cooperation Organisation

Vietnam’s growth slows on trade downturn ($BBG)

Ukraine’s damaged power grid hit by poor weather

Aramco to store oil in China under refinery contract

U.S. energy chief fine tunes message on SPR refilling

U.K. power trading market ($FT)

U.S. coal exports steady in 2022

BRENT’s six-month calendar spread has firmed slightly into a backwardation of around $2 per barrel from just over $1 on March 20, as immediate fears about a contagion of bank failures triggering a global recession have eased, and traders react to the loss of crude supplies from northern Iraq:

Best in Energy – 24 March 2023

Russia oil exports and rising shadow fleet risks

India grows both coal and renewable generation

U.S. energy chief says SPR refill could take years

EU plans to indigenise solar supply chain ($FT)

U.S. central bank’s sharp policy dilemma ($WSJ)

EUROZONE manufacturers have reported a widespread decline in business activity so far in March, the ninth consecutive monthly decline since July 2022. The preliminary purchasing managers’ index fell to 47.1 (17th percentile for all months since 2006) in March from 48.5 (25th percentile) in February:

EARTH’s northern hemisphere from 45°N poleward was hit by severe geomagnetic storm peaking around 0300Z to 0600Z on March 24, according to warnings issued by the Space Weather Prediction Center. The storm registered G4 / K9-minus, the second most severe rating, something expected to happen on only 60 days in every 11-year solar cycle. Solar activity, as measured by sunspots, is intensifying towards the next cyclical peak expected around 2025/26:

Best in Energy – 17 February 2023

Europe’s steel producers and decarbonisation

Steel and potential decarbonisation pathways

U.S. SPR sales and purchasers

Germany’s last nuclear power generators

GAIL wants to buy equity in LNG exporter

EUROPE’s gas futures prices for deliveries in March 2023 have fallen below €50 per megawatt-hour for the first time since December 2021, before Russia’s invasion of Ukraine. Prices have fallen from €177 at the beginning of the winter heating season at the start of October and a record €338 in late August. Energy-intensive industrial closures, conservation measures, the impact of previous high prices, reduced LNG purchasing from China and South Asia, and a mild winter in northwest Europe all combined to avert feared shortages or a price spike during winter 2022/23:

Best in Energy – 14 February 2023

[MUST READ] U.S./China sanctions lessons

Russia’s crude is likely selling above quoted prices

Russia’s oil output unaffected by sanctions ($BBG)

U.S. SPR to sell 26 million barrels in second quarter

U.S. coal-fired generator retirements to accelerate

Russia’s gas exports in search of new markets

Global freight rates fall on excess capacity ($BBG)

High-altitude balloon monitoring systems ($WSJ)

Pakistan plans to shift from costly gas back to coal

Hedge funds cash in on coal investments ($FT)

Singapore slows new investment into China ($FT)

U.S. DURABLE GOODS orders for nondefense capital equipment excluding aircraft (a proxy for business investment) were up by +5 % in December 2022 compared with December 2021. Orders are reported in cash terms; with inflation running faster than 5%, the volume of new business was down in real terms. Even in nominal terms, however, orders have been flat since the middle of 2022, confirming the merchandise side of the economy has run out of momentum:

Best in Energy – 2 February 2023

[MUST READ] Battery manufacturing ($FT)

Japan’s utilities try to diversify coal sourcing

Asia crude imports at record high in January

EU to launch global LNG price assessment

EU will need to cut gas use in winter 2023/24

U.S./Philippines reach deal on military bases

U.S. senators try to ban SPR oil sales to China

Qatar/Airbus reach aircraft settlement ($WSJ)

FRANKFURT, a proxy for northwest Europe, reached roughly 60% of the way through the winter heating season on February 1. So far the accumulated heating demand has been -17% below the long-term average and is the lowest since 2015/16 and before that 2006/07. But after an exceptionally long period of mild temperatures between December 19 and January 15, temperatures have turned significantly colder, causing the heating deficit to narrow slightly:

Best in Energy – 26 January 2023

Europe’s gas-fired generators reduced output

Indonesia coal exports hit record high in 2022

South Africa’s coal exports slumped last year

U.S. oil output growth set to slow in 2023/24

Microsoft warns about revenue outlook

Higher-earners reduce hours worked ($WSJ)

Tesla discounts vehicles to drive sales ($WSJ)

U.S./Iran nuclear talks near breakdown ($FT)

CHINA’s Lower Yangtze mega-region is being hit by a wave of intense of cold which will drive a significant increase in heating demand, though most factories are closed for the Lunar New Year holiday. Temperatures in Nanjing were more than -6°C below the long-term seasonal average on January 25. So far this winter heating demand (731 HDDs) has been lower than average (789 HDDs). But the recent run of cold weather has trimmed the cumulative deficit in heating demand to -7% down from -11% on January 13:  

U.S. PETROLEUM INVENTORIES including the strategic reserve rose +4 million barrels to 1,606 million barrels in the seven days to January 20. But stocks were -170 million barrels below the level a year ago and -304 million barrels below the level before the pandemic in 2019. Commercial crude stocks have increased by +33 million barrels compared with the same point last year. But only because the strategic petroleum reserve has been depleted by -220 million barrels:

Best in Energy – 9 January 2023

Australia/ China coal shipments mostly symbolic value

U.S. SPR rejects first round of offers to refill inventories

Mass transit systems struggling after pandemic ($WSJ)

North Korea becoming full nuclear weapons state ($FT)

Solar storms and the risk to GPS systems and shipping

Local newspapers – disruption, finance and innovation

U.S. GAS INVENTORIES ended the year at 2,891 billion cubic feet on December 30. Stocks were -293 billion cubic feet (-9%) below the pre-pandemic five-year seasonal average down from a deficit of -71 billion cubic feet (-2%) on December 16, the result of a heavy weather-driven depletion in the final two weeks of the year:

U.S. NON-MANUFACTURING businesses reported an unusually sharp deceleration in activity in December. The Institute for Supply Management’s purchasing managers’ survey, which covers services, construction, mining and real estate, slumped to 49.6 (8th percentile for all months since 1997) in December from 56.5 (63rd percentile) in November and 54.4 (35th percentile) in October.

Non-manufacturing activity has been slowing in line with the manufacturing sector over the last 12 months  following the post-pandemic boom. The ISM non-manufacturing index is more volatile than its manufacturing counterpart, so the sudden deceleration should be treated with extreme caution. But if confirmed in the next couple of months it would indicate the business cycle downturn is spreading from merchandise to services:

Best in Energy – 19 December 2022

U.K. parliament warns hydrogen is not a panacea

Employment transition and future energy system

Europe’s challenge to refill gas storage in 2023

ING bank closes offices to conserve energy ($BBG)

U.S. SPR to purchase small amount of crude oil

U.S. shale chief warns against more drilling ($FT)

China set for surge in coronavirus cases ($BBG)

Australia/China try to mend relations ($BBG)

U.S. southeast prepares for cold snap ($BBG)

U.K. utilities warn of cash crunch risk ($FT)

U.S. WELL DRILLING shows signs of having hit a peak and starting to fall as the sector responds to lower prices. The number of active rigs targeting oil or gas has fallen in the most recent two weeks and is no higher than at the end of October. As a result, the rig count has increased by an average of just +1.0 per week in the last 13 weeks: