Tom Whipple and Steve Andrews, Editors

Quotes of the Week

“We will struggle to avoid a gas emergency this winter without at least 20% savings in private households, businesses and industry. The situation may become very serious if we do not significantly reduce our gas consumption.”-Klaus Mueller of Germany’s Bundesnetzagentur

“Russia hasn’t yet weaponized oil in the way it has natural gas, but it almost certainly will if its military campaign in Ukraine continues to falter. That also could put more than 1 million barrels a day of Kazakhstan’s CPC crude, shipped from an export terminal in Russia, at risk.

“And then there’s the wider economy. A strong US dollar and the increasing prospect of recession could quickly tip global oil demand growth into reverse. If it does, the OPEC+ output cut may soon look more like an effort to contain the slump rather than the attempt to juice prices that it seems now.”-Julian Lee, Bloomberg oil strategist

(About OPEC+’s announced cut in oil production) “Offending the West in this way could backfire. The White House said Wednesday that OPEC+’s announcement is a reminder of why it is so important to wean off foreign fossil fuels, and reiterated its commitment to a clean-energy transition. That is the balancing act OPEC+ must perform going forward: Maximize oil revenue today, and the West will find ways to pivot more quickly away from oil. The 1973 oil embargo was a strong catalyst behind improving fuel-efficiency standards in the U.S., after all. It is a winning game for OPEC+ in the short term, but playing too aggressively is a surefire way to lose in the long run.-Jinjoo Lee, Wall Street Journal

Stats of the Week

(In the Permian Basin) “The number of new horizontal wells increased to 4,524 in 2021, compared with 350 in 2010. In June 2022, the Permian Basin accounted for about 43% of U.S. crude oil production and 17% of U.S. natural gas production (measured as gross withdrawals). The length of a well’s horizontal section, or lateral, is a key factor in well productivity. In the Permian Basin, average well horizontal length has increased to more than 10,000 feet in the first nine months of 2022, compared with less than 4,000 feet in 2010.”-From US EIA

“Industry oil stockpiles in countries that make up the Organization for Economic Cooperation and Development are 9.2% lower than the five-year average… While the oil cartel has often cut production in the face of weakening demand, it never implemented a cut in such a tight market, according to a Goldman Sachs research note from Monday.”-Jinjoo Lee, Wall Street Journal

Graphics of the Week

Headlines for the week of Sept 26 – Oct 2

The Global Energy Situation

IEA: Global Gas Markets To Remain Tight Through 2023
Oil jumps 4% to 5-week high lifted by OPEC+ output cut

Russia

Russia says truck bomb damages key bridge to Crimea
Russia’s bridge to Crimea severely damaged by explosion
Europe Turns Its Back on Russian Crude as Sanctions Draw Closer
Russia expects temporary output drop from potential oil price cap
Russian crude exports slide to 12-month low as EU ban, price caps loom
Russia Claims Natural Gas Could Still Flow Through Nord Stream 2
Putin orders Russia to seize Exxon-led Sakhalin 1 oil and gas project

Europe

UK Energy Regulator Warns of ‘Significant Risk’ of Gas Shortage
European Gas Demand Set For Record-Breaking Decline In 2022
European Gas Drops as Mild Weather and Stockpiles Ease Nerves
Only One EU Member Is Still Receiving Russian Natural Gas
Sweden sends diving vessel to probe leaking Nord Stream pipelines
Europe’s Diesel Crisis Is Far From Over
Nord Stream investigation finds evidence of detonations, Swedish police say

North America

More U.S. LNG heads to Europe despite output constraints
US Coal Prices Climb Past $200 as Global Energy Crunch Boosts Demand
U.S. Gasoline Prices Are Climbing Again and May Get Worse
U.S. Shale Workforce In Short Supply

Middle East/NA

Israel, Lebanon Near Maritime Border Deal, Opening Up New Gas Source for Europe

China

China Is Expanding Its Energy Footprint In The Middle East
China Is Rerouting U.S. Liquefied Natural Gas to Europe at a Big Profit
China Services Activity Drops as Covid Lockdowns Curb Spending

Africa

China Tightens Lending Taps, Leaving African Markets Vulnerable
Power Cuts Drive South African Factory Activity to 14-Month Low
Nigerian oil export terminal had theft line into sea for 9 years

Latin America

U.S. Looks to Ease Venezuela Sanctions, Enabling Chevron to Pump Oil

The Global Economy

China property woes trigger decline in global cement output

Agriculture

As the Fertilizer Crisis Bites, Farmers Take Drastic Steps
US DATA: Weekly corn export sales for MY 2022-23 down 125% on week and below market expectations

North America

US National Debt Tops $31 Trillion for First Time
U.S. job openings drop sharply, labor market starting to loosen
Florida has a flood problem and insurance problem
In Hurricane Ian’s Wake, Insurers and Homeowners Gear Up for Coverage Fights
Is This The Next Major Threat For Oil Demand?

Europe

Fitch cuts outlook for UK rating to ‘negative’ from ‘stable’
COVID wave looms in Europe as booster campaign makes slow start
Winter Warnings Spur UK Households to Dial Down Thermostats

Russia

Kremlin backers openly target Russia’s generals for battlefield setbacks
A Distracted Russia Is Losing Its Grip on Its Old Soviet Sphere
Russia’s Soaring Defense Spending Is Unsustainable

Middle East

Iranian Rial Plunges To Record Low
Lebanon says maritime deal ‘make or break’ after Israel snubs request for changes

China

China to Host Almost a Third of the World’s New Coal Mines
Biden Administration Clamps Down on China’s Access to Chip Technology

Global Warming

Flaring practices allow more methane into the atmosphere than thought; simple fixes can have big impact
Coal Revival Threatens to Push Power Sector Emissions to Record

North America

Will the Supreme Court Restrict the Scope of the Clean Water Act?
Mississippi River Drought Imperils Trade on Key US Waterway

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