Tom Whipple and Steve Andrews, Editors

Quotes of the Week

“OPEC+ is now producing below its targets by a record 3.58 million barrels per day – about 3.5% of global demand – highlighting underlying tight supply in the oil market, even as recession fears drag oil prices lower.”-Ahmad Ghaddar, Reuters

“Europe is attempting to buy as much oil and gas as it can ahead of winter, which has resulted in tankers having to travel further distances and make few voyages. The LNG carrier shortage is particularly acute as much of the fleet has already been booked for winter when demand is expected to climb, especially when Freeport LNG restarts. At the same time, traders are putting an increasing amount of crude and fuel in floating storage, which is making the tanker market even tighter.”-Irina Slav, Oilprice.com

“As natural gas demand around the world breaks new records, U.S. shale producers are struggling to keep up with demand. While natural gas prices in the United States fell after a railway strike was averted last week, it looks likely that prices both at home and abroad will spike this winter. A hotter-than-expected summer and a lack of alternative energy sources have left U.S. inventories below the seasonal average.”-Irina Slav, Oilprice.com

Mike Oestmann, CEO of private-equity-backed Tall City Exploration, said he isn’t concerned about running out of inventory, but estimated the costs to drill a well and bring it online are up about 40% over the past year because of soaring costs for material and labor, and that the number of rigs working in the Permian appears to have reached a plateau.-Collin Eaton and Benoit Morenne, WSJ

Stat of the Week

“As of 18 September, EU gas inventories stand at 98 bcm, 2 bcm higher than the five-year average and on course to reach a peak above 103 bcm before draws commence…We estimate total EU gas supply has risen 1.2 percent year on year over the past six months despite the fall in imports from Russia, while demand has fallen 13.3 percent year on year over the same period. ”-Standard Chartered analysts, quoted in Rigzone

Graphic of the Week

Headlines for the week of Sept 19 – Sept 25

The Global Energy Situation

IEA: Global oil production rose by 790,000 bpd in August
Latest oil market reports show broad balance agreement
Carbon capture not good enough to achieve decarbonization
Coal power generation falls despite energy crisis
Onshore crude oil inventories seem to be at inflection point
Oil demand set to stop growing in Q4 as slowdown bites, IEA says
The energy market’s next crisis: oil tanker shortages

Russia

IEA: Russian crude ban will take 2.4 million bpd off the market
Putin threatens to escalate war as India distances itself from Russia
Russia could find new markets for half the oil shunned by the EU

Europe

EU gears up to tax fossil fuel companies amid energy crisis
EU targets €140bn from windfall taxes on energy companies
Last reactor at Ukraine’s Zaporizhzhia nuclear plant stopped
EU countries can use 225 bln euros of EU loans for energy crisis
Germany takes control of 3 Russian-owned oil refineries

North America

Oil output in Permian to rise in Sept to highest on record – EIA
Analysts may have overhyped America’s largest oil basin
Gasoline prices could spike this winter
Record U.S. LNG exports to Europe may not last
Oil rig count ticks higher as gas rig count slips

Middle East/NA

Is the Middle East becoming unhabitable?
Oil exports from Iraq’s Basra port stop—repair could take weeks

China

China’s Covid lockdowns are the single biggest threat to oil markets
IEA sees biggest China oil demand drop in over three decades

Africa

Nigeria’s oil industry headwinds worsen, production drops to record low, 972,394

India

Narendra Modi chides Vladimir Putin over Ukraine war

The Global Economy

China and Russia move to disrupt the dollar’s dominance in oil markets

Agriculture

Energy crisis could lead to food shortages in Europe
Smallest French corn crop since 1990 shows drought’s huge toll
Fodder dries up for Pakistan’s cattle as floodwaters stay high

China

China braces for a slowdown that could be even worse than 2020
Exclusive: Biden to hit China with broader curbs on U.S. chip and tool exports

Africa

South Africa suffers 100th day of power blackouts this year

India

India may need up to 28 GW in new coal-fired plants, advisory body says

Asia

Scientists report major progress on Tokamak fusion effort

Global Warming

North America

Real estate listings with flood scores shift home-shopper habits

Middle East

Rising temperatures turn Middle East region into climate hot spot

Commentary

The Oil Production Story: List of the world’s top 50 oil producers with comments about long-term production trends, prepared by Steve Andrews