The Energy Bulletin Weekly 22 August, 2022

August 22, 2022

Tom Whipple and Steve Andrews, Editors

Quotes of the Week

“China is scrambling to alleviate power shortages and bring more water to the drought-hit basin of the Yangtze river as it battles a record-breaking heatwave…On Wednesday, China’s southwestern province of Sichuan said it would ration power supplies to homes, offices, and shopping malls, after having already ordered energy-intensive metals and fertilizer producers to curb operations.”
David Stanway, Reuters

“As the historic drought in the U.S. Southwest pushes the nation’s largest reservoirs to record lows, the Biden administration Tuesday announced that water shortages along the Colorado River had passed a threshold for the first time that will require unprecedented water cuts in Arizona and Nevada.”
Joshua Partlow and Karin Brulliard, The Washington Post

“[French utility] EDF has had to significantly reduce the capacity utilization rate of its nuclear power plants because droughts in France have reduced water availability for cooling the reactors….Because of the drought, Norway, which generates more than two-thirds of its electricity from hydropower, announced it would curb electricity exports, threatening supply for other European countries at the worst possible time…Germany’s economy is quite dependent on [the Rhine River] crucial shipping corridor, but when the water level is critically low, shippers simply cannot load the usual volume of cargo…”
Irina Slav,

Stats of the Week

Natural gas markets in Europe jumped 6% on Wednesday to €236 a megawatt hour, taking the week’s gains so far to 14%. The latest price was equivalent in energy terms to almost $400 a barrel of oil, as traders raced to secure supplies ahead of the winter. Prices have more than doubled from already extremely elevated levels since June.
From The Financial Times

So far this year, the Brent crude oil price peak was $127.98 on March 8, soon after the Russian invasion of Ukraine.  Prices have steadily dropped after closing at over $120 per barrel on several occasions in June. On Friday, the price of Brent crude oil for October delivery stood at $96.72 per barrel.
From Rigzone

Saudi Arabia claims a current production capacity of around 12 million b/d but Platts Analytics estimates this at closer to 11.5 million b/d. The kingdom, alongside fellow OPEC producer UAE, holds virtually all of the world’s remaining spare capacity. Saudi Aramco’s CEO plans to raise its sustainable production capacity as follows: “ 2025 we should go to 12.3 million b/d and in 2026, we should go to 12.7 million b/d before reaching 13 million b/d by 2027.”
             Saudi Aramco CEO Amin Nasser, cited in S&P Global Commodity Insights

Graphic of the Week

Headlines for the week of Aug 15 – Aug 21

The Global Energy Situation

Russia sees 38% rise in energy export earnings this year – govt document
Gazprom to shut pipeline for three days in new shock to Europe
Russia’s idle primary oil refining capacity revised down 11% for SeptemberEuropeNuclear and hydropower falter as droughts grip Europe
Russia’s goal in attack on nuclear plant: take the electricity, Ukraine says
German refinery reliant on Russia now using oil from the US
German families face 480 euro rise per year in gas bills under new levy
Germany to keep last three nuclear-power plants running in policy U-turn
How the EU plans to cut natural gas consumption by 15%
France prefers LNG terminals to new gas pipelineNorth America

US gas storage levels increase by lower-than-expected 18 Bcf on week: EIA
Oil jumps on massive crude inventory draw
Permian Basin on track for record September production
U.S. crude inventories fell to lowest level since 2004 in June
U.S. big company oil reserves up 13% since 2017, deals drive recent growth -study
U.S. shale faces more than $10 billion in hedging losses<

Middle East

Middle East states set for $1.3tn oil windfall, says IMF
Dust storms highlight Iraqi leadership failures as climate crisis worsens
Saudi Aramco to raise output capacity to 12.3 million b/d by 2025
Gazprom-Iran $40Bn deal faces issues over corrosion and sanctions
Iran set to boost oil exports in August
July crude output rises by 100,000 bpd


China’s crude processing dips to lowest since March 2020

Latin America

Mexico sees its energy future in fossil fuels, not renewables


EU boosts military funding to Mozambique to secure gas projects
Nigerian police say two Brass oil pipelines blown, arrest four
Nigeria hit by electricity blackout after workers strike
Nigeria: Shell – Why we halted onshore divestment

The Global Economy

Cheap air travel may be a thing of the past


Black Sea dry bulk trade resumes as spot grains, fertilizer cargoes enter market


U.S. shipping backups shift to East Coast and Gulf Coast ports
Oil companies work around Jones Act to supply U.S. fuel markets


Germany’s Rhine seen surging to more navigable level next week
German power climbs to fresh record as industry starts to buckle
Seven out of 10 Germans using less energy due to soaring prices -survey
Britain faces ‘humanitarian crisis’ as energy costs soar, says health lobby


China’s growth slowed across all fronts in July, prompting unexpected rate cut
Yangtze shrinks as China’s drought disrupts industry
China’s measures to boost economy don’t match past efforts
China’s heat wave strains its economy
Xi highlights drought risk in China as power supplies threatened
Toyota, CATL shut plants in Sichuan as power crisis worsens
China to discourage abortions to boost low birth rate


Emirates suspends Nigeria flights over failure to repatriate funds
Mozambique to export first LNG as global natural-gas prices soar

Global Warming

World’s largest ice sheet risks melting, threatens spike in sea levels
Why solar power is failing amid record-breaking heat

North America

‘Extreme heat belt’ to place 100mn Americans at risk in 3 decades, research shows
Why Republicans turned against the environment –
Bureau of Reclamation demands water cuts as Colorado River hits dire lows


China races to alleviate drought, power cuts amid record heatwave

Tom Whipple

Tom Whipple is one of the most highly respected analysts of peak oil issues in the United States. A retired 30-year CIA analyst who has been following the peak oil story since 1999, Tom is the editor of the long-running Energy Bulletin (formerly "Peak Oil News" and "Peak Oil Review"). Tom has degrees from Rice University and the London School of Economics.  

Tags: geopolitics, oil prices