Tom Whipple and Steve Andrews, Editors

Quote of the Week

“Saudi Energy Minister Prince Abdulaziz bin Salman said ‘cutting production at any time’ was an option for OPEC+…Call it a price floor, the return of the OPEC+ put or, simply, a line in the sand. Whatever its name, Riyadh’s intervention indicates a preference to keep oil near $100.”
Javier Blas, Bloomberg Business

Stats of the Week

Russian crude exports have been on a downward trajectory this summer, falling to 4.6 million b/d in June and 4.2 million b/d in July, according to Rystad Energy estimates. In June, both Europe and Asia reduced purchases of Russian crude, while July exports to Europe increased slightly as the region prepares for an oil embargo set to take effect in December. At the same time, exports to Asia continued to drop, which could be explained by discounts proposed for Russian blends being less generous than before.

EU imports of Russian crude are expected to dwindle to just 600,000 b/d by December 2022 – a nearly 2.5 million b/d drop from the 3 million b/d before Russia-Ukraine conflict. Rystad Energy still expects that Russia will be able to redirect a significant portion of crude volumes – or 75% in the base case – to Asia and other markets.

The Central Bank of Russia expects the national economy to collapse by 7.5-8% year-over-year in third-quarter 2022 and by 10-11% in the fourth-quarter 2022. Russia will have to cope with a national economic crisis as well as source new markets for its oil and oil products when the EU embargo comes into force, Rystad said.
Oil & Gas Journal

Distillate fuel inventories decreased by 700,000 bbl and are about 24% below the 5-year average for this time of year.
US Energy Information Administration

US natural gas prices rose above $10 per million British thermal units for the first time since 2008 as America exports more liquefied natural gas to hungry markets in Europe and Asia.

Some 20 million households across the US — about one in six American homes — have fallen behind on their utility bills. It is, according to the National Energy Assistance Directors Association, the worst crisis the group has ever documented. Underpinning those numbers is a blistering surge in electricity prices, propelled by the soaring cost of natural gas.
Bloomberg Business

Graphics of the Week

Headlines for the week of Aug 22 – Aug 28

The Global Energy Situation
Oil prices rise on signals OPEC might cut output
Diesel pinch looms

Russia

Gazprom to suspend Nord Stream gas supplies
Putin bets winter gas chokehold will yield Ukraine peace – on his terms
Meltdown averted but six months on, Russians face economic pain
Russia’s oil production on track for first drop in four months

Europe

How much is power in Europe? It’s now equal to oil at $1,000 a barrel
Germany touts possible ‘major role’ for Canadian LNG in shift away from Russia
Bidding war between Asia and EU on who gets most USA LNG
Inspectors set to visit besieged Ukrainian nuclear plant

North America

Endless demand spurs U.S. natural-gas prices to shale-era highs
The world’s biggest LNG exporter has a pipeline problem
U.S. Strategic Petroleum Reserve falls to 35-year low
USA Henry Hub gas prices climb to record high
California set to approve rules to ban gasoline-powered cars by 2035
California sets sights on zero-emission vehicle future to chagrin of oil, biofuel groups
Texas grid avoids summer blackouts with $1 billion in extra spending
USA pump prices post longest falling streak since 2015
U.S. diesel prices climb for first time in two months

Middle East/NA

Majors make significant discovery offshore Cyprus
Iran and Russia move to create a global natural gas cartel
U.S., Iran edge toward nuclear deal as Israel warns it cedes too much to Tehran
Libya’s oil production rebounds to top 1.2 million Bpd
Iran starts drilling at oil field shared with Saudi Arabia
Kazakh oil flows interrupted again
Israel eyes gas exports to Europe as production surges by 22%
Shootouts and blasts erupt in Libyan capital

China

Sichuan drought jeopardizes hydropower in China’s decarbonization roadmap
China accounts for nearly half of the world’s renewable energy capacity
Iconic Shanghai sights go dark as drought hits power supply

The Global Economy

Global economies flash warning of sharp slowdown

Agriculture

EU Energy crisis forces major fertilizer producer to halt production

US

U.S. economy contracts mildly in second quarter; no sign of recession in underlying data
US shale could erase debt by 2024, freeing up cash for gas pivot

Russia
In isolated Russia, a tale of two economies
Putin orders troop replenishment in face of Ukraine losses

Europe

Analysis: As Ukraine war drags on, Europe’s economy succumbs to crisis
British Airways to cut over 10,000 flights as industry woes threaten to stretch through winter
French minister calls for restrictions on flights by private jet
UK economy shrank record 11% in 2020, worst since 1709
German power prices smash record as energy panic engulfs Europe
Rhine water level set to fall again at key German chokepoint

China

US and China reach landmark audit inspection deal
China industrial profits drop 1.1% in first seven months of 2022

Asia

Japan set for new nuclear plants in post-Fukushima shift

Global Warming

North America

Democrats designed the climate law to be a game changer. Here’s how.