Tom Whipple and Steve Andrews, Editors
Quotes of the Week
“Australia said on Monday it will decide whether to curb exports of liquefied natural gas (LNG) after a watchdog urged restrictions, warning one of the world’s biggest suppliers of the fuel could face a shortfall and soaring prices next year. The Australian Competition and Consumer Commission warned extra gas is needed to offset declining output at offshore fields that have long supplied the populous east coast, home to nearly 90% of Australia’s population…The ruling could affect fuel supplies and prices in 2023 for global consumers already roiled by gas disruptions due to the war in Ukraine.”-Sonali Paul and Renju Jose, Reuters
“There is no path out of economic oblivion for Russia as long as the allied countries remain unified in maintaining and increasing sanctions pressure against Russia, and The Kyiv School of Economics and McFaul-Yermak Working Group have led the way in proposing additional sanctions measures. Defeatist headlines arguing that Russia’s economy has bounced back are simply not factual – the facts are that, by any metric and on any level, the Russian economy is reeling, and now is not the time to step on the brakes.”-Jeffery Sonenfeld et al, SSRN
Stat-and-Graphic of the Week
U.S. distillate consumption has begun to fall in line with the deceleration in manufacturing activity. The volume of distillate supplied was down -0.4% in March-May compared with the same period a year earlier. Distillates are the most cyclically sensitive part of the oil market, so the business cycle slowdown is filtering through into lower fuel use, part of the market rebalancing process:
Graphic of the Week
Headlines for the week of Aug 1 – Aug 7
The Global Energy Situation
Oil Posts Biggest Weekly Loss Since April On Demand Concerns
Today’s Energy Crisis Spells Disaster For The Global Economy
The Diesel Crisis Is Far From Over
Summer Gasoline Demand in US Drops Below Pandemic Levels
Oil Falls Below $90 for First Time Since War as Demand Slows
Russia
Baker Hughes to sell Russian oilfield services unit
Europe
German gas shortage risks ‘unforeseeable consequences’, says Commerzbank
Gas demand declines as prices soar, utility giant Engie says
European gas storage on track to meet target but at a cost
Nuclear power plants could stay open, says Germany
North America
U.S. diesel shortage shows economy hitting capacity limit
U.S. drilling activity slows as prices ease
Natural prices have fallen for 49 straight days, approach $4 a gallon
USA natural gas prices hit 14-year seasonal high
Shale profits finally blossoming after decade of steep losses
US South Central gas storage deficit widens amid elevated demand, prices
U.S. emergency crude stockpile falls to lowest in 37 years
Shrinking U.S. exports likely to build oil stocks at Cushing storage hub
Freeport LNG reaches agreement with US on corrective actions following June fire
Middle East
Global thirst for natural gas triggers Middle East spending spree
Hezbollah threatens Israel with war over disputed gas field
Libya’s NOC says oil output hits 1.2 million b/d after lifting of force majeure
OPEC oil output rises in July despite outages – survey
OPEC+ flags severely limited availability of excess capacity
China
China starts construction of $22b expansion of transmission line network
Latin America
Venezuela’s oil exports drop by more than a third in July
The Global Economy
Agriculture
La Nina adds uncertainty to already troubled agriculture market
France has driest July on record with crops taking a battering
World’s food supply faces a new threat from the lack of rain in India
Ukraine’s grain corridors still need ships to ease the food Crisis
US
Here’s what the six key official indicators of US recession show
U.S. corporate profits, economic outlooks, surprisingly upbeat
Congress is giving billions to the chip industry. Strings are attached.
Airline flight woes drag US jet-fuel consumption below forecasts
Europe
Who is Europe’s top gas supplier?
Euro zone factory activity contracted in July as recession fears grow
German cabinet agrees to gas levy for consumers from October
London is teetering toward water rationing if drought persists
China
China factory activity sees shock contraction on outbreaks
China home sales plunge in July, as mortgage revolt deters buyers
China’s economy deteriorated further in July, Beige Book says
India could surpass China as world’s biggest minerals buyer, says economist
Middle East
Saudi Arabia’s economy grows 12% in Q2 on high oil prices
Global Warming
Mapping the coolest spots inside the world’s sweltering cities
Can the world really “adapt” to climate change?
North America
GOP lawmakers lobby oil industry to denounce tax-and-climate bill
How the new climate bill would reduce emissions
The End of Snow threatens to upend 76 million American lives
Hurricane forecasts trimmed on slow start for Atlantic storm season
