Best in Energy – 19 April 2023

Russia oil price cap comes under strain (Reuters)

Tesla cuts prices again to boost sales (Bloomberg)

Brazil’s rising distributed solar generation (EIA)

Europe gas inventories at comfortable level (FT)

Dealmakers focus on Permian oil firms (Reuters)

U.K. forecasts enough gas this summer (Reuters)

Clear-air turbulence (WSJ)

NORTHERN INDIA’s temperatures have risen faster than normal since the start of April. Average daily temperatures in the New Delhi suburb of Palam reached 33.4°C on April 18 up from 20.7°C on March 31. Temperatures have been above the long-term seasonal average every day since April 14 after being continuously below average for almost a month between March 17 and April 13. So far, the transmission network has coped with the rapid increase in demand for refrigeration and air-conditioning. Network frequency has dipped as temperatures climb but remains reasonably close to the target of 50.0o Hz. Periods of severe under-frequency below 49.90 Hz are generally around 12% or less each day, which is fairly typical in India:

Best in Energy – 17 April 2023

Saudi Aramco shares used as collateral ($FT)

U.S. LNG projects struggle with finance ($FT)

White House staff in Saudi Arabia discussions

Global diesel prices signal slowdown ($BBG)

Bangladesh/Russia to settle payment in yuan

U.K. critical minerals – prospectivity analysis

China’s long-distance hydrogen pipelines

U.S. interest rate rises and soft landings

(see also underlying research paper)

China/Myanmar ocean outpost? ($WSJ)

U.S. OIL RIG count fell by -2 over the seven days ending on April 14 and is down by a total of -39 (-6%) from its peak in early December as exploration and production firms have trimmed activity in response to lower prices. The number of active rigs has fallen to the lowest level for ten months since June 2022:

Best in Energy – 13 April 2023

China/Europe economic rebound set to boost emissions

China plans to accelerate coal production and generation

Russia redirects gasoline exports from Europe to Africa

U.S. gas consumption fell during mild start to 2023

U.K. households confused by hydrogen and heat pumps ($FT)

U.S. INTEREST RATE traders have cut expectations for the path of rates following the regional banking crisis and amid signs both business activity and price rises are slowing. Projected interest rates have reverted to their level at the start of February, before anxiety about inflation increased:

U.S. SERVICE SECTOR inflation has decelerated significantly though it is still running faster than the central bank target. Services prices rose at an annualised rate of +5.8% over the three months ending in March, while prices excluding rent of shelter rose at an annualised rate of +2.7%:

Best in Energy – 31 March 2023

Iraq/Kurdish regional oil revenues dispute

U.K. hydrogen residential trial hits hurdles

U.S. crude oil exports hit record high in 2022

U.S. banking – a slow-motion crisis? ($WSJ)

Vitol reports record $15 bn profit in 2022 ($FT)

U.S. FINANCIAL CONDITIONS have tightened modestly following the failure of Silicon Valley Bank and several other financial institutions. Overall conditions were close to the long-term average on March 24, after being quite relaxed at the end of January 2023. Risk appetite is still relatively high but standards for credit and leverage have tightened, according to a plethora of indicators used by the Federal Reserve Bank of Chicago to compile its National Financial Conditions Index:

CHINA’s manufacturers reported a widespread increase in business activity for the second month running in March. The official purchasing managers’ index was 51.9 (93rd percentile for all months since 2011) in March after 52.6 (96th percentile) in February. Business activity is rebounding rapidly after the exit wave of the pandemic severely disrupted activity in December and January:

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 – 23 March 2023

U.K. power trading under scrutiny ($BBG)

China’s resurgent oil use and price impact

Asia’s distillate fuel oil stocks are swelling

U.S. central bank and tighter credit ($FT)

U.S. households and gas use in 2020

SINGAPORE distillate inventories have started to rise from multi-decade lows set in the final months of 2022:

U.S. PETROLEUM INVENTORIES depleted by -10 million barrels over the week ending on March 17, the largest drawdown since the end of 2022. Draws in gasoline (-6 million barrels), distillate fuel oil (-3 million) and propane/propylene (-2 million) more than offset a small build in crude (+1 million):

Best in Energy – 21 March 2023

Maritime emissions and pathway to net zero

Africa/Southeast Asia set for emissions growth

Oil majors and trading operations ($BBG)

EU plan to extend gas conservation target

U.S. fuel exports reach record high in 2022

U.K. explores small modular reactors ($FT)

EUROPE’s gas storage sites reported small net inflows on March 18 and March 19, a tentative sign the winter inventory depletion season is coming to an end early. The data is provisional and contains a mix of confirmed reports and estimates. But storage across the European Union and the United Kingdom was 55.8% full on March 19, the second-highest for the time of year after winter 2019/20 (56.2%) and well above the prior ten-year average (34.8%):

Best in Energy – 9 March 2023

Tesla plans to eliminate dependence on rare earths

U.S. energy secretary address to Houston CERAWeek

U.S. oil well initial productivity is declining ($WSJ)

Keystone ordered to trim pipeline pressure ($BBG)

U.S./EU embark on race for energy subsidies ($BBG)

U.S. LNG exports projected to grow in 2023 and 2024

Nord Stream sabotaged by pro-Ukraine team ($WSJ)

Russia/NATO energy war enters attrition phase ($FT)

U.K. workforce remains smaller than before pandemic

India tries to improve electric reliability in April/May

(see also formal press release by the power ministry)

China’s refined petroleum exports set to slow

U.S. solar installers forecast to rebound in 2023

U.S. oil firms embrace hydrogen production idea

U.S./Australia submarine sales agreement ($WSJ)

U.S. PETROLEUM INVENTORIES including the strategic reserve increased by +2 million barrels over the seven days ending on March 3. Stocks have increased in 10 of the last 14 weeks by a total of +31 million barrels from their recent low on November 25, 2022, arresting the previous downward trend. Inventories are still -231 million barrels (-12% or -2.15 standard deviations) below the prior ten-year seasonal average. But the deficit has narrowed from -278 million barrels (-15% or -3.05 standard deviations) in November:

Best in Energy – 3 March 2023

China’s abandonment of coronavirus suppression

China predicts rise in gas consumption

Debt relief in return for climate policies

U.S. interstate gas pipeline construction

U.K. auto sector’s future in doubt ($FT)

Bangladesh tenders for more LNG

Interest rate traders probe Fed reactions

NORTH INDIA has experienced above-normal seasonal temperatures since early February, driving an increase in air-conditioning and refrigeration demand and boosting electricity consumption to a record level. Temperatures in New Delhi’s Palam suburb have been above the long-term seasonal average for 18 out of 22 days since February 9:

U.S. GAS INVENTORIES are depleting much more slowly than normal for the time of year. As a result, inventories were +209 billion cubic feet (+11% or +0.55 standard deviations) above the prior ten-year seasonal average on February 24 up from a deficit of -427 billion cubic feet (-13% or -1.52 standard deviations) on September 9, 2022:

Best in Energy – 23 February 2023

Chesapeake to reduce gas drilling and completions

Auto firms split on electrification timeline ($WSJ)

Commodity markets adapt to Russia/Ukraine war

Europe’s gas storage and refill for winter 2023/24

U.K. government to cut costs for big energy users

U.K. steelmaker plans to close coking ovens

U.S./Russia/China armaments supply ($WSJ)

IEA chief warns EU about complacency ($FT)

BRENT’s six-month calendar spread is trading in a backwardation of $1.80 (71st percentile for all days since 1990). The spread has tightened from a contango of $0.65 (34th percentile) since December 9 as expectations for a soft-landing in the global economy have increased. But it is well below levels before Russia’s invasion of Ukraine, implying the market is comfortably supplied despite sanctions on Russia and output restraint by OPEC⁺ and U.S. shale firms: