In this week’s newsletter, we'll take a fast examine a number of the critical figures and data within the energy markets. we are going to then study a number of the key market movers early on before providing you with the newest analysis of the highest news events going down within the global energy complex over the past few days.
- Dropping copper prices are often viewed as a vital indicator in forecasting a future economic recession, hence the nickname Dr. Copper, and it seems that we've entered exactly that period.
- Since April, copper has lost almost a 3rd of its value as inflation is creeping ever-closer to double-digit territory in both the US and Europe, suggesting economic momentum is slowing.
- Nominal interest rates on longer-term US treasuries have already began to weaken - the 10-year treasury rates fell to three recently - in another cautionary indicator of growth decelerating.
- Having hit very cheap rate since November 2020 late last week at 6,955/mt, copper prices have seen some respite in the week on the rear of China promising support for its embattled property sector.
Market Movers
- US oil services major Halliburton (NYSE:HAL) posted a 41% year-on-year increase in Q2 profits, arguing that it's years of solid demand sooner than it.
- one in every of Europe’s largest wind farms, the 475 MW Nysater project in Sweden operated by RWE (ETR:RWE) with Nordex-designs turbines hit the headlines in the week as its turbine collapsed amid an alleged oil spill.
- Canadian oil producer Suncor Energy (TSE:SU) has agreed to usher in three new independent directors and sell its retail business, as a part of its agreement with activist investor Elliott Investment.
As volatility soars, it's increasingly difficult to forecast what oil markets will neutralize the short term. Despite that fact, seeing oil prices climb again on the rear of lower US Fed rate hikes and an overall weakening dollar, one can be tempted to believe we are back during a fundamentals-driven market. There may well bea brief pricing downside in Libya coming online, but within the larger picture supply is undoubtedly lagging behind demand by a large margin.
US Permian Production to Hit Record in August. consistent with the IEA’s DPR report, output within the Permian Basin is because of increase to an all-time high of 5.445 million b/d, up 80,000 b/d compared to the present month’s rate, bringing total shale production to 9.1 million b/d.
Germany Wants its Nuclear Reactors Back. Germany’s economy ministry indicated Berlin may extend the lifespan of its three remaining atomic energy reactors, to blame for 6% of the country’s electricity generation, as they continue to be scheduled to be pack up by year-end 2022.
Gazprom Deflects Blame for Europe’s Gas Squeeze. Russia’s pipeline gas monopoly Gazprom told customers in Europe that its supplies are operative majeure since day as extraordinary circumstances beyond its control forced it to chop gas exports via Nord Stream 1.
Tensions Rise as Libya Lifts catastrophe. The newly-designed head of Libya’s NOC Farhat Bengdara has called on all port blockades to be lifted, only several days after the Tripoli government stormed the headquarters of the national company and initiated talks with tribal leaders.
Biden Climate Bill Derailed Again. President Biden has pledged to require strong executive action after Senator Joe Manchin voted against a green bill that will have provided up to 300 billion in multi-year tax incentives for clean energy, an integral a part of the US’ Paris Agreement roadmap.
EU Signs Azerbaijan Gas Deal. As we indicated last week, the eu Union signed a memorandum of understanding with Azerbaijan, a move designed to double imports of gas to a minimum of 20 bcm by 2027, up from 12 bcm this year.
Venezuela Operations Disrupted by Pipeline Blaze. Refinery operations in Venezuela’s key Jose complex were halted after a fireplace broke out on the Muscar-Soto gas pipeline, with the pinnacle of PDVSA Tareck El Aissami labeling it a “terrorist attack”.
US Wants to finish Dependence on Chinese Rare Earths. in line with US Treasury Secretary Janet Yellen, the u. s. wants to “friend-shore” its China rare earths dependence by supporting new capacity in friendly countries, like South Korea or Japan.
Russia and China to begin Building New Gas Pipeline. the development of the facility of Siberia-2 gas pipeline, delivering Russian gas via Mongolia to China, will likely start in 2024, with its throughput capacity maximized to 50 bcm p.a..
Russia Uses UAE Dirhams as Oil Currency. in line with recently published reports from Reuters, a minimum of two Russian sellers are demanding that Indian buyers do payment following a crude cargo delivery in UAE dirhams rather than the standard US dollars.
Saudi Arabia Cools Expectations of Spare Capacity. Saudi prince Mohammed bin Salman said it'd pause years to spice up Saudi Arabia’s crude production capacity from the present 12 million b/d to 13 million b/d, adding that there won’t be any capacity beyond that threshold.
TotalEnergies Wants to Lock In UAE Exports. French oil major TotalEnergies (NYSE:TTE) has been courting UAE national company ADNOC to clinch a diesel supply deal in 2023 when Russian products would be banned by the EU.
Heatwaves Stretching US Grids. per US grid operators in Texas and Southwest, on will see unprecedented power use across the region amidst triple-digit temperatures, already pushing ERCOT North Hub power prices to $220 per MWh.
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