Best in Energy – 28 July 2022

EU/Russia gas pipeline flows fall sharply

U.S. frackers warn of supply chain limits

China’s plan to centralise iron ore purchasing

U.S. leaders embrace subsidies, tariffs ($WSJ)

Grid-scale batteries used for price response

U.K. households face winter bill crisis ($FT)

West London’s local power constraint ($FT)

U.S. PETROLEUM inventories depleted by -9 million bbl in the week to July 22, with declines in commercial crude (-5 million), gasoline (-3 million), and distillate fuel oil (-1 million) as well as a drawdown in the SPR (-6 million), partially offset by increases in propane (+3 million) and other oils (+3 million). Petroleum inventories have depleted in 80 of the last 108 weeks by a total of -438 million bbl since the start of July 2020. Total stocks are at the lowest seasonal level since 2008 and show no signs of rebuilding:

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Best in Energy – 4 July 2022

Australia’s export earnings rise on energy prices

South Africa’s electricity shortages are worsening

U.K. electricity pricing – space and time (parts 1-3)

Biden/Bezos disagree on causes of inflation ($FT)

U.S. government split on lifting China tariffs ($FT)

NATO’s resolve tested by economic downturn ($FT)

U.S. refineries push crude processing to limit ($BBG)

U.S. CENTRAL BANK is now expected to raise rates earlier and more aggressively to bring inflation under control, with traders anticipating rates will peak around the end of the first quarter or the start of the second quarter of 2023. By implication, the business cycle is expected to slow significantly by the end of this year, creating conditions for inflation to moderate and the central bank to begin easing interest rates a few months later by the second quarter of 2023:

U.S. MANUFACTURERS reported much slower growth last month. The Institute for Supply Management (ISM)’s purchasing managers’ index slid to 53.0 in June (45th percentile since 1980) from 56.1 in May (76th percentile) and 60.9 a year ago (97th percentile):

U.S. MANUFACTURERS reported a decline in new orders for the first time since the first wave of the pandemic in 2020. The ISM new orders index slumped to 49.2 in June (18th percentile) from 55.1 in May (45th percentile):

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