Tom Whipple and Steve Andrews, Editors

Quotes of the Week

“On Wednesday, the U.S. national average at the pump rose to $4.567, up from $4.523 yesterday, and up from $3.043 a year ago, according to AAA. That’s a more than 50% rise in gas prices in a year.  ‘There is a real risk the price could reach $6+ a gallon by August,’ said Natasha Kaneva, head of global oil and commodities research at JPMorgan.”-Charles Kennedy, Oilprice.com  

“As there is always too much or too little oil, the industry, not being self-adjusting, has an inherent tendency to extreme crises; this fact has called forth the ingenuity of planners within the trade. As no individual unit can evolve a rational production policy on its own, some sort of communal organization is almost inevitable. Paradox though it may appear, oil, competitive par excellence, is usually controlled by some ‘leading interests.’ The major companies have in the past played a vital part, with the independents as an indispensable corrective …”- Paul Frankel, Essentials of petroleum: a key to oil economics, (1946 and 1969), cited by John Kemp, Reuters on 5/22/22

“The global economy is powered primarily by energy and debt, with energy providing production and debt providing finance. Today, central banks are aggressively increasing interest rates in order to counter inflation, but the move could leave commodity prices too low for producers. If the debt bubble bursts then we will be faced with a shrinking economy that cannot accommodate a growing population.”-Gail Tverberg, Oilprice.com

Graphics of the Week

Headlines for the week of  May 16-23

The Global Energy Situation

Oil market fears recession more than tight fuel inventories

Russia

Omens of decline for Russia’s once world-leading energy industry
Russia’s Gazprom suspends gas supplies to Finland’s Gasum
Russia’s Gazprom says gas transit via Ukraine down at 43 mcm

Europe

LNG demand is soaring as Europe races to replace Russian Gas
Germany to end Russian oil imports whatever EU decides
EU clarifies how companies can legally pay for Russian gas
Four EU countries to increase offshore wind power capacity tenfold
How Germany is racing to sever dependence on Russian energy
EU lays out Russian gas reduction plan, focuses on new supply and renewables

North America

Gasoline prices top $6 in California, $9 in parts of Europe
U.S. natural gas prices fall as colder weather approaches
Surging natural gas prices squeeze U.S. industrial sector
Permian oil output forecast to hit record high in June -EIA
Gasoline metrics are flashing red for a tight, costly US summer
Henry Hub price expected to average $8.69 in 3

China

China’s April oil refinery output plunges to 2-year low as COVID curbs bite
Yen, supply chain chaos sends Japanese manufacturers home

Middle East

Saudi Arabia set for oil output capacity above 13 mln bpd by 2027, says minister
Saudi oil revenue to surge 66% to $249 billion on high prices
Iraq balks at greater Chinese control of its oilfields
Libyan oil deadlocked as clashes force PM-designate out of Tripol

South America

Biden administration mum on plans to ease Venezuelan oil restrictions; lawmakers speak out

The Global Economy

Stagflation danger stalks global economy beset by war fallout
Age of scarcity begins with $1.6 trillion hit to world economy
Is the global debt bubble about to burst?

Agriculture

Worsening drought leaves 3.5 million needing food aid in Kenya

Russia

U.S. considering move to block Russian debt payments -Treasury
Russia’s economic outlook grows ‘especially gloomy’ as prices soar
Russia’s economy slowed down more than expected in first quarter
After 3 months of war, life in Russia has profoundly changed

U.S.

U.S. crude stockpiles slide as refining ramps up ahead of summer- EIA
Stock market bottom remains elusive despite deepening decline
Gas shortages and record-high prices plague Washington drivers

Europe

Euro area would barely grow if Russian gas cut off, EU says

China

Record food costs throw a spotlight on how China will feed itself

Asia

N.Korea mobilizes army, steps up tracing amid COVID wave
North Korea receives aid from China as covid outbreak spreads
Japan nuclear regulator grants initial nod to Fukushima water release plan
Sri Lanka can’t find cash to pay even one ship for petrol

Asia 

N.Korea mobilizes army, steps up tracing amid COVID wave
North Korea receives aid from China as covid outbreak spreads
Japan nuclear regulator grants initial nod to Fukushima water release plan
Sri Lanka can’t find cash to pay even one ship for petrol

Latin America

Geopolitics Takes a Back Seat As Biden Drops Sanctions On Venezuela

Global Warming

Dire climate report prompts UN official to ask rich countries to share energy tech
A Hot, Deadly Summer Is Coming With Frequent Blackouts

North America

Dominion makes its case to SCC for $9.65 billion from customers to build wind farm
Crop land ‘deteriorating’ in Canada as excess rain hinders planting

Asia

Climate change swells odds of record India, Pakistan heatwaves
Pollution kills 9 million people a year as fixes are neglected