In this week’s newsletter, we are going to take a glance at a number of the critical figures and data within the energy markets. We will then have a look at a number of the key market movers early in the week before providing you with the newest analysis of the highest news events happening in the global energy complex over the past few days. We hope you enjoy.
- Investor confidence within the German economy has plummeted to rock bottom level in a minimum of decade, with market gloom surpassing the impact of COVID-19 as German households face another challenge, a $300 annual gas levy destined to assist gas retailers stay afloat.
- The large-scale impact of economic headwinds continues to be yet to be felt - Germany’s economy stagnated in Q2 and also the IMF has cut its projections of economic process to 1.2% in 2022 and 0.8% in 2023.
- Tomorrow’s earning call of leading gas firm Uniper (ETR:UN01) – already bailed out by the govt. for $15 billion - are going to be a harbinger of future developments, with expectations starting from bad to worse.
Market Movers
- Russia’s state public utility Gazprom (MCX:GAZP) warned that gas prices could spike by an additional 60% to $4,000/Mcm amidst reduced production and exports, potentially indicating that there'll not be any drastic upticks in Nord Stream 1 flows.
- The activist energy investor Kimmeridge Energy Management amassed a forty five stake in California Resources (NYSE:CRC) recently and has been pushing for policy changes, including sales of acreage to realty purposes.
- in line with Bloomberg, UK energy major BP (NYSE:BP) are going to be soon quitting its Mexican oil assets because it continues to pivot towards renewables.
Last week’s oil trading closed on an upbeat note – U.S. inflation data surprised to the upside and demand looked as if it would be studying nicely. What a change can several days make as weak Chinese macroeconomic readings added plenty more bearish pressure, causing headaches for global policymakers. Not only were Chinese crude demand and refinery runs at their lowest within the post-pandemic period, but its July industrial activity also rose but anticipated at 3.8%. increase this the continued uncertainty surrounding a possible Iran nuclear deal and you'll inevitably see why the bears have condemned in the week, with Brent futures dropping as low as $92.60 per barrel.
Chinese Refining Still Underwhelming. Chinese refinery runs dropped to the bottom daily rate since March 2020 at 12.53 million b/d, down almost 1 million b/d, surprising many within the oil markets who expected a robust post-lockdown recovery, though prolonged maintenance may need played a job.
Permian Hits Another Record High. Cementing the Permian Basin’s reputation because the leading force of incremental US crude production, oil output within the largest U.S. shale play is ready to rise to a record 5.408 million b/d in September consistent with the EIA, comparable to 60% of the country’s shale production.
Saudi Aramco Flaunts Maximum Capacity Coming Soon. Announcing net Q2 profits of $48.4 billion, the top of Saudi Aramco (TADAWUL:2222) Amin Nasser claimed the corporate is prepared to bring production to its maximum capacity of 12 million b/d if asked by the govt..
PEMEX Needs Another $6.5 Billion for Refinery. Mexico’s state company PEMEX requested another 6.5 billion in additional funding from its government for the 320,000 b/d Dos Bocas refinery, taking the commissioned yet still-unfinished refinery’s tag to almost 15 billion.
Cracks Appear Again in Iranian Deal. Whilst the oil markets warmed up to the likelihood of an Iranian deal lately, the U.S. State Department cooled off a number of that optimism by saying Iran must abandon its extraneous demands that transcend the scope of the JCPOA.
PDVSA Stops Oil-for-Debt Payments. Venezuela’s national company PDVSA has suspended crude deliveries to European companies under an oil-for-debt deal, asking Eni and Repsol for products instead because theLatin American country is struggling to urge its refineries up and running again.
Chinese Regions See First Industry Power Cuts. The regional government of Sichuan has started rationing industrial power consumption amid its worst heatwave in 60 years, heavily impacting lithium producers Tianqi Lithium (SHE:002466) and Sichuan Yahua (SHE:002497) likewise as several major aluminium smelters.
German Power Prices Soar to All-Time Highs. Hamstrung by extremely low Rhine levels impeding usual coal flows and ongoing quarrels around Nord Stream 1, Germany’s 2023 derivative soared to yet one more all-time high of €508 per MWh.
Nigerian Military Steps Up Fight Against Theft. Nigerian authorities have stated that the country’s military is stepping up efforts to combat thieves ravaging oil pipelines within the Niger Delta region, with NNPC reportedly losing up to 400,000 b/d to theft and sabotage.
Big Oil able to Embrace IRA Climate Bill. Oil majors and medium-tier independents alike have expressed readiness to tap into the provisions of the Inflation Reduction Act, providing a replacement $17/mt baseline credit for carbon capture and storage facilities that's set to be in high demand.
Spiking US Exports Lift Freight Costs. The widening Brent-WTI spread is adding an additional appeal to US crude exports globally, however, the increased demand for Aframax tankers has also pushed freight costs to Europe to almost $6 per barrel, possibly making Asia-bound VLCC deliveries more profitable.
Norway Keeps Hydro Energy to Itself. Confronted with multi-year water level lows and high demand, Norway has moved to prioritize the domestic market to the detriment of exports, dealing another blow to the united kingdom which relied on plentiful Norwegian hydro power to fulfill demand in periods of low wind.
Nickel Trading Still Fails to endure March Blowout. in keeping with Reuters, the quantity of nickel traded on the London Metal Exchange fell by 40% year-on-year in July, at 34,962 lots in total, marred by the one-week suspension of trading in early March that led to the cancellation of billions of dollars in trades.
