Monday 9/13 - "High Natural Gas Prices Today Will Send U.S. Production Soaring Next Year" by Irina Slav

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https://oilprice.com/Energy/Natural-Gas/Why-Isnt-Russia-Sending-More-Gas-To-Europe.html

Why Isn’t Russia Sending More Gas To Europe

By Irina Slav - Oct 19, 2021, 3:00 PM CDT

• Gazprom has not booked any extra space on pipelines going through Ukraine after an auction held on Monday
• Gazprom data shows that exports for the first half of October were lower than those for the first half of September
• Europe's gas woes don't seem to be top of the priority list for Moscow, and the reason may not be just geopolitical

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After last week President Vladimir Putin said Russia could send more gas to Europe to alleviate a perceived shortage that has pushed prices to record highs, Gazprom has yet to book additional pipeline space, and prices are climbing again.

Bloomberg reports that Gazprom has not booked any extra space on pipelines going through Ukraine after an auction held on Monday. The total space offered was 15 million cu m daily on two pipelines.

According to the report, the state gas giant has also not booked any pipeline capacity for November. Also, based on preliminary operating figures from Gazprom, Bloomberg said it had calculated that its average daily exports this month, at 427 million cu m, were 12 percent lower than the average for September.

The only relevant update on Gazprom's production and exports available on the company's website showed figures for the period January to mid-October, for which production totaled 399.4 billion cu m. The state giant also reported a 13.1-percent increase in gas exports to countries outside the former Soviet Union for the period, including a 28.2-percent increase in exports to Germany and a 10-percent increase in exports to Poland.

Meanwhile, Reuters reported that Gazprom had booked about a third of the free pipeline capacity along the Yamal-Europe pipeline, which passes through Poland, for next month. This is equal to 32 million cu m of gas daily. The Reuters report also cited Gazprom data showing exports for the first half of October were lower than those for the first half of September.

Europe's gas woes don't seem to be top of the priority list for Moscow, and the reason may not be just geopolitical. Domestic consumption is also high, and it is domestic supply that Gazprom is prioritizing, deputy Prime Minister and former Energy Minister Alexander Novak said last week.

"I want to underline that we in Russia have record high gas consumption figures this year, which is also due to active economic recovery," Novak said in an interview for Rossiya 1, as quoted by Reuters.

In another interview, for news outlet Business FM, Novak said that filling up domestic reserves and securing domestic supply was the priority over more exports for Europe. He also said, however, that there was no actual gas shortage in Europe, while acknowledging the lower than normal levels of gas in storage.

"The problem is related to the fact that gas in storage is at the lowest level for the last five years, at 74 percent, versus the usual 85-90 percent," Novak told Business FM. "This, of course, causes worry among market participants and as a result, as usual, prices go higher."

As for why Russia wasn't supplying more gas via the spot market, Novak listed higher domestic consumption as one reason, noting the lower output of electricity from hydropower stations, the earlier start of heating season, and the filling of domestic storage.

According to many, the reason Gazprom is taking its time with additional supplies is because of Nord Stream 2. The new pipeline is awaiting the final approval of the German authorities to start commercial operation.

"Gazprom is undoubtedly assuming that Nord Stream 2 will be approved in the relatively near future, and positioning itself accordingly," Ron Smith, executive director of Moscow-based BCS Global Markets, told the Financial Times this week, after gas princes in Europe rose 18 percent following the latest gas auctions.

Nord Stream 2 aside, Russia is also prioritizing its long-term contracts, too, the FT reported, citing analysts. Until it made sure commitments on these contracts were fulfilled, it was unlikely to make additional gas available.

By Irina Slav for Oilpric.com

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https://oilprice.com/Energy/Energy-General/Oil-Prices-Remain-Elevated-As-The-Energy-Crunch-Worsens.html

Oil Prices Remain Elevated As The Energy Crunch Worsens

By Tom Kool - Oct 19, 2021, 2:00 PM CDT

• With WTI trading above 80 per barrel, shale drillers in the US are increasingly likely to reduce capital discipline and use their recent cash windfall on new drilling rigs in 2022.
• The US Energy Information Administration (EIA) expects US shale output to increase in November, albeit by a mere 76,000 b/d m-o-m to a total of 8.3mbpd, although a more marked ramp-up is expected next year.
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• At the same time, the number of drilled but uncompleted wells (DUCs) decreased again last month, down 241 to 5,385, the lowest in almost five years, marking the 15th consecutive month nationwide that DUCs declined.

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As countries around prepare for winter weather, it appears that the energy crunch is only going to worsen and energy prices are going to rise.

Chart of the Week

Market Movers

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Tuesday, October 19, 2021

Oil prices remained elevated this week as several continents continue to suffer from a major energy crunch, with China still in the limelight as falling temperatures fortified concerns that the world’s largest energy consumer will not be able to meet domestic demand for heating. These energy crunches could also bring demand lower as high power prices and supply disruptions compel industrial players to curb production. Meanwhile, the ever-increasing trajectory of LNG prices across the globe is adding another layer of support for crude demand, with many Asian nations seeking ways to supplant gas usage. At the same time, the White House continues to push OPEC+ to address the oil supply issue, but the oil group appears to be unmoved by high gasoline prices in the US. Brent prices were trending around $85 per barrel as of Tuesday morning, with WTI narrowing the spread to the global benchmark and trading around $83 per barrel.

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By Tom Kool for Oilprice.com

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Oil-Prices/The-Battle-For-Oil-Market-Share-Heats-Up-Within-OPEC.html

The Battle For Oil Market Share Heats Up Within OPEC

By Gerald Jansen - Oct 19, 2021, 1:00 PM CDT

• Saudi Aramco has cut prices for Asia-bound cargoes in November 2021 by 10-50 cents per barrel, with the heaviest Arab Heavy stream seeing the most marked month-on-month change
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[Tom Nolan + 2,441]

https://oilprice.com/Energy/Natural-Gas/Long-Term-LNG-Becomes-Sellers-Market-As-Prices-Soar.html

Long-Term LNG Becomes Sellers Market As Prices Soar

By Tsvetana Paraskova - Oct 19, 2021, 12:00 PM CDT

• Energy security and emissions reduction targets, especially in China, are prompting more buyers to seek long-term contracts
• The sellers, for their part, now ask for higher prices in the discussions

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Surging spot prices of liquefied natural gas in Asia are giving LNG producers and sellers an advantage in contract negotiations for long-term supply with buyers, industry participants with knowledge of ongoing talks have told Reuters.

Buyers in Asia, which relied very much on spot supply last year when LNG spot prices plummeted to $2 per million British thermal units (mmBtu), are now looking to lock in more long-term gas supply as spot prices hit a record of over $50/mmBtu for some cargoes traded earlier this month.

Energy security and emissions reduction targets, especially in China, are prompting more buyers to seek long-term contracts.

The sellers, for their part, now ask for higher prices in the discussions, according to Reuters’s sources.

The need of buyers to hedge against future extreme volatility in LNG spot prices – as it has happened over the past year – gives advantage to sellers.

As per Wood Mackenzie estimates cited by Reuters, the volume of contracted long-term LNG supply this year has increased from a decade-low in 2020 and is similar to the levels seen in 2018 and 2019.        

Just last week, U.S. Cheniere Energy signed a sale and purchase agreement (SPA) with a Singapore unit of Chinese firm ENN Natural Gas – the first deal since the trade war between the U.S. and China erupted.

The purchase price for LNG under the deal is indexed to the Henry Hub price, plus a fixed liquefaction fee.

Several Chinese energy giants have intensified discussions with U.S. LNG exporters to secure long-term supply deals in light of record spot prices in Asia, rising demand, and the specter of power shortages, Reuters reported last week, quoting industry sources.

The current energy crisis and soaring LNG spot prices will change the way buyers purchase gas, Massimo Di Odoardo, Head of Global Gas Analysis at WoodMac, said last week.

“The instinct will be to look for security of supply – as Chinese buyers have just done in signing longer term contracts at higher prices. Buyers may also look for more non-gas hub LNG pricing, including US Henry Hub-based contracts,” Di Odoardo noted.

By Tsvetana Paraskova for Oilprice.com

[Tom Nolan + 2,441]

Tsvetana Paraskova

Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. 

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[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/Global-Oil-And-Gas-Ambitions-At-Odds-With-Climate-Targets.html

WATCH VIDEO

Global Oil And Gas Ambitions At Odds With Climate Targets

By Irina Slav - Oct 20, 2021, 11:00 AM CDT

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The oil, gas, and coal production plans of some of the world's biggest oil, gas, and coal producers far exceed the emissions targets set in the Paris Agreement on Climate Change, a UN report has warned.

The report by the United Nations Environmental Program found that 15 big fossil fuel producers intended to produce 110 percent more oil, coal, and gas in 2030 than is consistent with the Paris Agreement's scenario for limiting rising temperatures to 1.5 degrees from the pre-industrial era, and 45 percent more than is consistent with the 2-degree scenario.

What's more, the world's big fossil fuel producers plan to continue raising oil and gas production over the next twenty years. On top of that, coal production is seen declining only marginally, according to the authors of the report. This is even more out of sync with Paris Agreement targets, the report warned.

"The devastating impacts of climate change are here for all to see. There is still time to limit long-term warming to 1.5°C, but this window of opportunity is rapidly closing," Inger Andersen, Executive Director of UNEP, said in the news release for the report.

"At COP26 and beyond, the world's governments must step up, taking rapid and immediate steps to close the fossil fuel production gap and ensure a just and equitable transition. This is what climate ambition looks like."

The study detailed in the report examined the fossil fuel extraction plans of the following countries: Australia, Brazil, Canada, China, Germany, India, Indonesia, Mexico, Norway, Russia, Saudi Arabia, South Africa, the United Arab Emirates, the United Kingdom, and the United States. 

It found that the governments of most of these countries are still supportive of their fossil fuel plans despite the green energy transition drive.

"The research is clear: global coal, oil, and gas production must start declining immediately and steeply to be consistent with limiting long-term warming to 1.5°C," says Ploy Achakulwisut, a lead author on the report. "However, governments continue to plan for and support levels of fossil fuel production that are vastly in excess of what we can safely burn."

By Irina Slav for Oilprice.com

[Tom Nolan + 2,441]

https://community.oilprice.com/topic/24658-forget-100-options-traders-now-betting-on-oil-prices-hitting-200-by-tsvetana-paraskova/

 

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IHS Market Warns Of "Armageddon" For US Propane Market 

by Tyler Durden

Tuesday, Oct 19, 2021 - 07:05 PM

The expanding energy crisis is causing propane to rocket higher (read: here) as supplies dwindle to below seasonal levels as research firm IHS Markit Ltd. warns of "armageddon" during the Northern Hemisphere winter. 

https://www.zerohedge.com/commodities/ihs-market-warns-armageddon-us-propane-market

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https://www.fxempire.com/forecasts/article/natural-gas-price-forecast-natural-gas-markets-forming-support-789988

Natural Gas Price Forecast – Natural Gas Markets Forming Support

By:Christopher Lewis

Natural gas markets have broken down a bit during the course of the trading session on Tuesday to show further negativity, but we have seen the market turned around to form a bit of a hammer right at the 50 day EMA, and an area that has been supportive previously. If we can break above the top of the shooting star, then it is likely that I would be a buyer to go looking to fill the gap above on the daily chart that started with the Monday open. If we can break above there, then the market is likely to go looking towards the $6.00 level.

NATGAS Video 20.10.21  - https://youtu.be/F6-84VbQO0c

On the other hand, if we were to break down below the bottom of the candlestick for the trading session on Tuesday, it could open up a move down to the $4.50 level, maybe even the $4.00 level. The $4.00 level for me is the absolute floor in the market, so it will be interesting to see whether or not this actually plays out. The 200 day EMA is sitting right there, so I think that is another reason to think that area will be very important to pay close attention to.

 

 

With this being the case, the market is likely to see a lot of volatility, but quite frankly with natural gas being so localized, it will come down to the weather forecasts in the United States. Keep in mind that the Henry Hub natural gas contract, the one that most people trade, is an American contract, and not a European one. In other words, although the European situation with supply causes a certain amount of influence, it is a completely different set of fundamentals.

For a look at all of today’s economic events, check out our economic calendar.

 

[Tom Nolan + 2,441]

LNG Export Decline

U.S. LNG exports declined in the latest week. According to a report from the EIA, sixteen LNG vessels with a combined LNG-carrying capacity of 58 Bcf departed the United States between October 7 and October 13, 2021.

https://www.fxempire.com/forecasts/article/natural-gas-price-prediction-prices-rebound-at-support-790018

[Tom Nolan + 2,441]

https://www.fxempire.com/forecasts/article/natural-gas-price-fundamental-daily-forecast-short-covering-rally-could-fuel-surge-into-5-591-5-713-790237

Natural Gas Price Fundamental Daily Forecast – Short-Covering Rally Could Fuel Surge into $5.591 – $5.713

By:James Hyerczyk

Updated: Oct 20, 2021,

Analysts at TPH are saying that beyond the continued warm forecasts, it has seen limited fundamental catalysts for the recent sell-off.

Natural gas futures are trading flat early Wednesday after posting a potentially bullish technical reversal to the upside the previous session. The move was fueled by a successful test of a key value area on the daily chart as well as a sharp drop in production.

At 09:04 GMT, December natural gas futures are trading $5.339, down $0.011 or -0.21%.

A confirmation of the chart could trigger a strong short-covering rally, while a failure to confirm will likely lead to a retest of the major support area at $5.269 to $4.956.

Lower Production Fuels Rebound

According to Natural Gas Intelligence (NGI), “Bulls got some ammunition in the latest production figures. Bloomberg data showed output tumbling more than 2 Bcf/d day/day to slightly below 90 Bcf. Wood Mackenzie also estimated production lower day/day, but it put the official tally at around 91 Bcf.”

“In both sets of data, Texas and the New Mexico portion of the Permian Basin posted notable declines, with maintenance events contributing to some of the reductions.”

Short-Term Weather Outlook

NatGasWeather predicts for October 20-26, “One weather system will exit New England, a second will leave the Rockies & track into the Midwest, while a third moves into the West Coast. All three systems will bring highs of 40s to 60s, lows of 20s to 40s. The rest of the U.S. will be nice with highs of 60s to 80s for very light national demand.

The system currently tracking into the Midwest will reach the Great Lakes and Northeast late this week and this weekend for a bump in national demand.

For next week, wet weather systems will impact the West, while nice over the eastern 2/3 of the U.S. Overall, national demand will be low through Friday, then moderate this coming weekend.”

Early Look at Thursday’s Government Storage Report

An early look at Thursday’s Energy Information Administration (EIA) weekly storage report has Energy Aspects issuing a preliminary estimate for an 80 Bcf injection for the week ended October 15.

“A plunge in domestic production and returning feed gas for LNG exports will keep storage activity flat week/week, despite a 2.6 Bcf/d reduction in power” demand, according to the firm.

The five-year average injection is 69 Bcf, while a 49 Bcf build was recorded for the year-earlier period, according to the EIA.

 

 

Daily December Natural Gas

Short-Term Outlook

Analysts at Tudor, Pickering, Holt & Co (TPH) are saying that beyond the continued warm forecasts, it has seen limited fundamental catalysts for the recent sell-off.

This tends to support our assessment that buyers will find value inside a retracement zone at $5.269 to $4.956. If they fail to defend this area then prices could collapse under $4.879.

In the meantime, Tuesday’s price action suggests that counter-trend buyers came in at $5.070, triggering a reversal to the upside. If this move creates enough upside momentum then we could see a short-term rally into $5.591 to $5.713, followed by $5.832 to $6.011.

For a look at all of today’s economic events, check out our economic calendar.

[Tom Nolan + 2,441]

https://finance.yahoo.com/news/big-fossil-fuel-producers-plans-041107370.html

Big fossil fuel producers' plans far exceed climate targets, U.N. says

LONDON (Reuters) - Major economies will produce more than double the amount of coal, oil and gas in 2030 than is consistent with meeting climate goals set in the 2015 Paris accord to curb global warming, the United Nations and researchers said on Wednesday.

The U.N. Environment Programme's (UNEP) annual production gap report measures the difference between governments' planned production of fossil fuels and production levels which are consistent with meeting the temperature limits set in Paris.

Under the pact, nations have committed to a long-term goal of limiting average temperature rises to less than 2 degrees Celsius above pre-industrial levels and to attempt to limit them even further to 1.5C.

The report, which analysed 15 major fossil fuel producers, found they plan to produce, in total, around 110% more fossil fuels in 2030 than would be consistent with limiting the degree of warming to 1.5C, and 45% more than is consistent with 2C.

The size of that gap has not declined much since UNEP's 2020 report, it added.

The countries analysed in the report were Australia, Brazil, Canada, China, Germany, India, Indonesia, Mexico, Norway, Russia, Saudi Arabia, South Africa, the United Arab Emirates, the United Kingdom, and the United States.

Representatives from nearly 200 countries will meet in Glasgow, Scotland, from Oct. 31 to Nov. 12 for climate talks to strengthen action to tackle global warming under the 2015 Paris Agreement.

FOSSIL FUELS

Despite efforts to strengthen climate targets, most major oil and gas producers plan to increase production until 2030 or beyond, while several major coal producers plan to continue or even increase output, the report said.

The plans of the 15 countries analysed envisage fossil fuel production increasing until at least 2040.

This would lead to about 240% more coal, 57% more oil, and 71% more gas in 2030 than what is required in order to curb the rate of global warming to 1.5C.

Of the three fuels, gas production is projected to increase the most between 2020 and 2040, based on the governments’ plans.

The International Energy Agency said in May that investors should not fund new oil, gas and coal supply projects if the world is to hit net zero emissions by mid-century.

"The research is clear: global coal, oil, and gas production must start declining immediately and steeply to be consistent with limiting long-term warming to 1.5C," said Ploy Achakulwisut, a lead author of the new report.

The report was produced by UNEP, as well as experts from the Stockholm Environment Institute, the International Institute for Sustainable Development and think-tanks E3G and ODI.

[Tom Nolan + 2,441]

At a Glance

• Much of the Lower 48 will experience a milder-than-average November.
• Temperatures are expected to be near average or colder across portions of the northern tier this winter.
• The southern tier will likely experience temperatures the most above average this winter.

Much of the Lower 48 will experience milder-than-average temperatures in November, but a shift to a warmer than average southern tier and colder conditions across parts of the northern United States is anticipated this winter, according to the latest outlook from The Weather Company, an IBM Business.

Above-average temperatures are expected from the Southwest into the Midwest and portions of the Northeast in November.

Meanwhile, temperatures will trend near average to slightly colder in November for much of the South and far northwestern Washington.

This winter, there will be a change to near average or slightly colder temperatures from parts of the Northwest into the Central Plains, Great Lakes and far interior Northeast. Northeastern Montana and northern North Dakota will experience temperatures the farthest below average.

Areas from Florida and the Southeast into parts of the Great Basin and Southwest can expect temperatures to be warmer than average from December through February. Temperatures will be the most above average from southern New Mexico into southwestern Texas.

Elsewhere, most of the Northeast and mid-Atlantic into parts of the Plains and West will find temperatures near average to slightly warmer this winter.

What's Behind The Outlook?

Much of the late-fall and winter forecast is driven by a developing La Niña. As seen in the map below, La Niña is the periodic cooling of the equatorial Pacific Ocean waters, which can influence weather patterns across the globe, including in the U.S.

The November outlook resembles what is often observed in November during a La Niña year, with the exception of the Southeast, where models suggest colder temperatures are likely early in the month.

The winter outlook is also based on La Niña's typical influence, which usually means colder in the northern and western U.S. and warmer in the South and East.

 

Blue areas in the box near the equator suggest La Niña conditions are emerging.

However, La Niña is not the only factor to consider. When the polar vortex is strong or weak, the expected pattern during a La Niña (or El Niño) can change.

Last winter, the polar vortex was weak and even though La Niña was in place, temperatures across the U.S. were closer to what is expected during an El Niño winter.

This year, there are signs that a weak polar vortex could be in play again this winter, although probably not as weak as last winter. If this occurs, more blocking weather patterns could develop, meaning cold air could surge farther south into parts of the Lower 48.

"We still have a base 'La Niña look,' but have skewed it a bit colder in the eastern U.S. due to blocking expectations; there is room for colder updates moving forward if we become more confident in blocking, or warmer updates if blocking appears less likely," said Dr. Todd Crawford, director of meteorology at Atmospheric G2.

 

Colder air and blocking weather pattern often develop when the polar vortex is weak.

Now, let's break down what to expect during the winter month-by-month.

December

The shift to slightly colder-than-average conditions will likely emerge from the Northeast into the Midwest and into northern Washington in December.

Warmer-than-average temperatures are anticipated from California into Texas and Louisiana, with the most anomalous warmth from southern Texas into southern New Mexico.

January

In January, temperatures will be above average from Florida and much of the South into the Great Basin and Southern California, with the most above-average temperatures stretching from central Nevada into parts of southwestern Texas.

Areas from northeastern Montana into North Dakota and northern Minnesota are expected to experience temperatures the farthest below average during what is usually the coldest month of the year.

February

The East may experience a shift to warmer-than-average temperatures in February, and temperatures will be the farthest above average from eastern Louisiana into much of Florida and northward into southern North Carolina.

Near-average or cooler temperatures are anticipated from the Northwest into the northern Great Lakes. Temperatures will once again be the farthest below average from parts of Montana into northern North Dakota.

The Weather Company’s primary journalistic mission is to report on breaking weather news, the environment and the importance of science to our lives. This story does not necessarily represent the position of our parent company, IBM.

https://weather.com/forecast/national/news/2021-10-13-late-fall-winter-temperature-outlook-forecast

[Starschy + 211]

There is no reason for Gazprom to book Gas over costly Ukraine Pipelines. They have an agreed volume till 2024. That Gas will be more worth more after 8th January 2022. If the Europeans make longterm Contracts there is Gas available but for sure not those Short term buyer.

The slowdown in October based on two events

a) filling up the Russian Storage

b) Storage and distribution for the Turkstream Pipeline (this will take a few months till the balance is working for all parties)

c) Northstream 2 but the date for opening max. is 8th January 2022.

Gazprom is not willig to pay Ukraine outside the contractual volumes. +15%

 

 

 

 

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/Middle-East-Oil-Exporters-To-See-Fast-Economic-Growth-In-2022.html

Middle East Oil Exporters To See Fast Economic Growth In 2022

By Tsvetana Paraskova - Oct 21, 2021, 12:00 PM CDT

• Economists polled by Reuters this month generally said that prospects for the GCC countries look brighter than in July due to the higher oil prices
• Saudi Arabia, the world’s largest oil exporter and top OPEC producer, is forecast to see its GDP rise by 5.1 percent in 2022, up from expected growth of 2.3 percent in 2021

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/The-Days-Of-Cheap-Solar-Are-Fading-Fast.html

https://www.zerohedge.com/markets/cost-going-green-about-get-more-expensive

The Cost Of Going Green Is About To Get More Expensive

by Tyler Durden

Thursday, Oct 21, 2021 - 02:45 A

The Days Of Cheap Solar Are Fading Fast

By ZeroHedge - Oct 21, 2021, 11:00 AM CDT

• Spot prices for polysilicon bottomed at $6.30/kg in mid-2020 and have jumped 600% to $36.09/kg as of last week
• Bank of America: Perhaps the cost of polysilicon and ultimately solar panels will continue to move higher over the years

The cost of going green is about to become more expensive as polysilicon prices are erupting and will likely remain elevated due to factory shutdowns in China. 

Polysilicon is a superrefined form of silicon used in solar panels for its semiconductor-like material properties. Spot prices for polysilicon bottomed at $6.30/kg in mid-2020 and have jumped 600% to $36.09/kg as of last week, according to BloombergNEF. 

China is a top producer of polysilicon. The latest factory shutdowns of energy-intensive factories, such as ones that refine silicon, have resulted in declining output that will affect global supply. Countries, in a rush, to greenify their economies are increasing demand for solar panels that are pressuring polysilicon prices higher. 

"It's been a very crazy year," Sakura Yamasaki, the Singapore Solar Exchange director, said during a recent Roth Capital Partners webinar. She said polysilicon prices could stabilize in the second quarter of 2022 but thinks prices will continue to increase. 

"The ride up is not over," Yamasaki said.

She said the market will remain "chaotic" in 2022 as other costs such as freight and commodities will make the cost of producing solar panels much higher than in previous years. 

"There will be no relief in 2022," she said, with the outlook "as crazy as this year."

Perhaps the cost of polysilicon and ultimately solar panels will continue to move higher over the years as Bank of America recently noted: no less than a stunning $150 trillion in new capital investment would be required to reach a "net zero" world over 30 years - equating to some $5 trillion in annual investments - and amounting to twice current global GDP.

The move to a net zero global economy is shockingly expensive. For the US alone, President Biden wants 40% of the US power grid sourcing solar generation by 2035, either a bunch of new polysilicon factories will need to be built, or the cost of going green will be astronomically expensive.

By Zerohedge.com

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/UK-Energy-Suppliers-Face-Massacre-Amid-Soaring-Gas-Prices.html

UK Energy Suppliers Face ‘Massacre’ Amid Soaring Gas Prices

By Tsvetana Paraskova - Oct 21, 2021, 9:00 AM CDT

• More than a dozen power suppliers in the UK have exited the retail energy market in recent weeks
• The UK has a so-called Energy Price Cap in place, which protects households from too high bills by capping the price that providers can pass on to them, but which additionally burdens energy providers

Join Our Community

Another 20 energy providers in the UK could go bust in what looks like a “massacre” in the coming months unless the government reviews the energy price cap, the chief executive of one of the largest providers said on Thursday.

More than a dozen power suppliers in the UK have exited the retail energy market in recent weeks, and more are likely to do so, as wholesale gas prices rally.

Europe’s tight gas market, low wind speeds, abnormally low gas inventories, and record carbon prices have combined in recent weeks to send benchmark gas prices and power prices in the largest economies to record highs.

The UK has a so-called Energy Price Cap in place, which protects households from too high bills by capping the price that providers can pass on to them, but which additionally burdens energy providers.

Unless the UK government intervenes and reviews for raising the price cap soon, “we are in danger of just sleepwalking into an absolute massacre”, Keith Anderson, chief executive at ScottishPower, told the Financial Times.

“We think probably in the next month at least another 20 suppliers will end up going bankrupt,” Anderson told SkyNews.

The price cap currently costs providers around $6.9 billion (£5 billion), the top executive of ScottishPower, one of the largest utilities in the UK, told SkyNews.

Last month, the head of the UK’s energy regulator said more energy suppliers were set to go bust as soaring gas prices are putting an unprecedented cost burden on smaller electricity and gas providers.

“I think what is different this time is that dramatic change in the costs that those suppliers are facing,” Jonathan Brearley, chief executive officer of Ofgem, the independent energy regulator for Great Britain, said in September.

Back then, Brearley and the UK’s Business and Energy Secretary Kwasi Kwarteng said in a joint statement that the energy price cap would remain in place.

By Tsvetana Paraskova for Oilprice.com

[Tom Nolan + 2,441]

https://oilprice.com/Energy/Energy-General/The-2021-Oil-Price-Rally-Is-Far-From-Over.html

The 2021 Oil Price Rally Is Far From Over

By Tsvetana Paraskova - Oct 20, 2021, 7:00 PM CDT

• The oil price rally is far from over, with inventory drawdowns across the world suggesting the market is far from being balanced
• OPEC+ appears in no rush to add supply to markets and appears to be producing below its self-imposed production ceiling 
• The steepest 12-month Brent backwardation since 2013 is yet another bullish indicator for oil prices

[Tom Nolan + 2,441]

https://oilprice.com/Latest-Energy-News/World-News/LNG-Tanker-Rates-Surge-As-Global-Natural-Gas-Prices-Soar.html

LNG Tanker Rates Surge As Global Natural Gas Prices Soar

By Charles Kennedy - Oct 21, 2021, 11:30 AM CDT

Soaring prices and demand for liquefied natural gas (LNG) in Asia have pushed spot LNG freight rates to over $200,000 per day as traders scramble to book vessels to ship the fuel to energy-starved markets in Asia.

A vessel to carry LNG from Gladstone, Australia, to Tokyo is now assessed at a time charter rate of $262,215 per day by the Baltic Exchange, Lloyd’s List’s Michelle Wiese Bockmann writes in an analysis.

The Pacific spot LNG freight rates have jumped this week to the highest premium on record over Atlantic rates, driven by a lack of Pacific vessels, strong cargo demand globally, and lack of new tonnage heading to Asia given strong European cargo prices, LNG freight assessor Spark Commodities said.

“There are very limited spot vessels so if there is a prompt vessel requirement for those lifting (free-on-board) then the potential cargo margin could mean the rates could go much higher,” Spark Commodities’ chief executive officer Tim Mendelssohn told Reuters.  

LNG tanker rates have more than doubled this month alone amid high demand for vessels in the energy crisis, industry sources told Reuters.

The spot LNG freight rates have doubled both in the Pacific and the Atlantic basin amid a global energy crunch ahead of the winter as utilities in the northern hemisphere stock up LNG for heating in the coming months.

The wide price difference between the U.S. natural gas benchmark Henry Hub and the soaring prices of LNG in Europe and Asia is a boon to traders who are earning profits from cargo arbitrages of over $100 million.

For example, LNG shipping firm Flex LNG, listed in Oslo, said this week in a presentation at a Danske Bank Natural Gas Seminar that “cargo is king” and that LNG cargoes are providing massive arbitrage. One LNG cargo from the U.S. Gulf Coast to Japan earned an arbitrage of $124 million, while another LNG cargo from the U.S. Gulf Coast to Europe yielded a $100 million arbitrage, according to Flex LNG.

By Charles Kennedy for Oilprice.com

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

https://www.zerohedge.com/commodities/i-dont-remember-time-when-so-many-extreme-events-were-happening-shipping

"I Don't Remember A Time When So Many Extreme Events Were Happening In Shipping"

by Tyler Durden

Wednesday, Oct 20, 2021 - 01:57 PM

By Greg Miller of FreightWaves,

"I don’t remember a time when so many extreme events were happening in shipping," said Stifel analyst Ben Nolan, who has been covering the sector for the past 16 years.

Container shipping led the charge, with rates soaring to stratospheric highs. Dry bulk shipping rates jumped next, to levels not seen in over a decade. Now liquefied natural gas shipping has joined the party. LNG spot shipping rates “surged 40% in one day — Friday — on already high levels,” Nolan wrote in his weekly report.

Clarksons Platou Securities reported that benchmark spot rates for tri-fuel, diesel-engine LNG carriers were $157,500 per day on Monday, up 86% week on week. Rates for MEGI-propulsion carriers were $180,000 per day, up 65% week on week. Even rates for older steam-power LNG carriers are in six digits: at $110,000 per day, up 60% week on week.

Multiple segments, rhyming patterns

Shipping rates for containers, LNG and dry bulk are simultaneously high due due to parallel disruptions in supply and/or demand. No matter what the product or commodity, there’s domestic production, inventories and consumption on one hand and imports on the other. Abrupt COVID-era stops and starts of demand (and in the case of container shipping, cargo supply), compounded by other factors, have left inventories short in many categories, stoking demand for imports and thus ocean shipping.

In the container sector, warehouses are full and U.S. inventories overall are higher than pre-COVID, yet U.S. consumer demand has risen even faster, leaving inventory-to-sales ratios historically low.

In the coal and LNG sectors, high power consumption in Asia lowered stockpiles, with environmental issues and weather playing key roles in European and Asian shortfalls. In both container shipping and coal shipping, port congestion is constricting vessel capacity, a plus for rates.

There are connections between what’s happening in LNG, coal and container shipping. Some previously containerized goods are moving on bulkers. High manufacturing levels in China fueled by U.S. consumer demand have played a role in lower Chinese energy commodity inventories, supporting rates for LNG carriers and bulkers. Because LNG and coal imports can’t fill the gap fast enough, power shortfalls in China are slowing factory output, leading to longer delays and more inventory challenges for importers of containerized goods.

Yet another connection: Heavy ordering of container ship newbuilds has blocked yard slots and raised prices for newbuilds of LNG carriers, bulkers and tankers, which should limit vessel capacity and help support rates for non-container ships in the years to come.

LNG rates have room to run

LNG rates are widely expected to go even higher, as the winter peak is still months away. Spot rates topped $200,000 per day last January and one voyage was booked for a record $350,000 per day.

LNG shipping executives speaking during last week’s Capital Link New York Maritime Forum predicted that spot rates during the coming winter peak should be in the range of $200,000-$300,000 per day.

Charts: Clarksons Platou Securities. Chart data: Clarkson Research Services

LNG shipping is different from dry bulk and tanker shipping due to its much higher level of long-term charter coverage — a difference that became even more pronounced this year.

Richard Gilmore, executive vice president of Maran Gas, said during the Capital Link forum, “This summer and into the fall, a number of charterers [signed] multiyear charters, trying to shift away from spot exposure and trying to get away from having to pay very high rates during the wintertime.”

According to Oystein Kalleklev, CEO of Flex LNG (NYSE: FLEX), “Interest in doing term [long-term charters] rather than spot has been unique. We’ve never seen such a strong term market before.”

Karl Fredrik Staubo, CEO of Golar LNG (NYSE: GLNG), said that there are very few owner-controlled ships left in the spot market. “Most are relets,” he explained, referring to LNG carriers on long-term contract deployed in the spot market by charterers, not shipowners.

The same shift to long-term charters has played out in container shipping, where there are virtually no vessels left to lease short term. Rather than paying $200,000 per day to rent a container ship for one or two round-trip voyages, liners and operators are paying $40,000 per day to lock up ships for three to five years.

Are crude and product tankers next?

Crude and product tanker shipping have not followed the COVID-era pattern seen in containers, dry bulk and LNG shipping. One reason is inventories.

In contrast to what happened in other sectors, crude oil and product inventories surged to excessively high levels during the onset of COVID: on the crude side due to the collapsing oil price incentivizing floating and land-based storage, on the product side because refineries couldn’t ramp down fast enough to match collapsing consumption amid lockdowns.

Tanker rates suffered over the past year due to drawdowns of bloated inventories combined with OPEC+ production cuts and pandemic-induced losses to jet-fuel demand.

But oil inventories have now been drawn down, the price of crude is the highest it’s been since 2018, and shortages of coal and LNG should increase oil demand in the coming months. Will crude and product tankers belatedly join the rate boom seen in other shipping segments?

“Not all energy markets are equal, as the tanker markets are still struggling with oil demand that has not recovered to pre-COVID levels,” said Nolan. “However, there is increasing optimism that a seasonal tanker rally could materialize spurred by heating oil and fuel oil given the spillover from high natural gas and coal prices.

“Furthermore, the higher oil and gas prices are expected to drive more production from both OPEC and the rest of the world, making a 2022 recovery in the tanker market a seemingly foregone conclusion.”

[Tom Nolan + 2,441]

Where Stuff Comes From

https://doomberg.substack.com/p/where-stuff-comes-from

...Take polyethylene, which is the highest volume production plastic in the world. To say polyethylene is ubiquitous is an understatement. Milk jugs, garbage bags, food packaging, wire and cable applications, pipes – polyethylene is everywhere. Industrially, polyethylene is made by sliding down the ladder: ethane is converted to ethylene, which is then polymerized. Ethane is close to natural gas on our ladder, while polyethylene has virtually the same inherent energy as oil.  ...

[Tom Nolan + 2,441]

Klaus Schwab, Forum founder and Davos Man No. 1 interviewed Henry Kissinger at the time, the man who helped open China to the world. Kissinger said, “What President Xi has done is put forward a concept of international order in the economic field that will have to be the subject of conversation and the substance of the creation of an evolving system.”

Make no mistake about it, his was not a criticism. It was a carefully worded praise.

Why 'Davos Man' Is The Scourge Of The Earth

https://www.zerohedge.com/geopolitical/why-davos-man-scourge-earth

[Tom Nolan + 2,441]

Washington Post - Oct 21

Inaction on climate change imperils millions of lives, doctors say

https://archive.md/C2RaG

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Bullshit!  This is more chatter towards Global Control of populations! - Tom Nolan

 

[Tom Nolan + 2,441]

https://oilprice.com/Latest-Energy-News/World-News/Doc-Leak-Reveals-Countries-Lobby-For-Milder-Climate-Commitments.html

Doc Leak Reveals Countries Lobby For Milder Climate Commitments

By Charles Kennedy - Oct 21, 2021, 10:30 AM CDT

A massive document leak has revealed efforts by Saudi Arabia, Japan, and Australia, among others, were lobbying the United Nations to downplay the urgency of the energy transition as presented in the latest report by the International Panel on Climate Change.

The BBC reports that the leak also reveals an unwillingness of wealthy nations to shoulder part of the burden that the energy transition would put on poorer nations.

According to the report, the leak consists of more than 32,000 submissions by governments, companies, and other parties to the IPCC. In these, there were comments against the wording of the report's conclusions and outright rejections of some of these conclusions.

 

For instance, the BBC writes, one adviser to the Saudi oil ministry commented that "phrases like 'the need for urgent and accelerated mitigation actions at all scales…' should be eliminated from the report".

Saudi Arabia also wanted the authors to delete the conclusion that "the focus of decarbonisation efforts in the energy systems sector needs to be on rapidly shifting to zero-carbon sources and actively phasing out fossil fuels".

A senior Australian official rejected the call for closing all coal-fired power plants—one of the main goals of the COP26 meeting, which begins this Sunday and will last for two weeks, during which world leaders will try to agree on how to conduct the energy transition.

India is also against the closing of coal power plants. In the leaked documents that the BBC saw, one scientist from the Indian Central Institute of Mining and Fuel Research said the country would likely remain dependent on coal for much of its energy in the future because of "tremendous challenges" in the path of providing affordable electricity to people.

The "pro-oil" commentators on the IPCC report also strongly supported technologies such as carbon capture and storage despite their current high costs, the BBC reported.

By Charles Kennedy for Oilprice.com

[Tom Nolan + 2,441]

https://oilprice.com/Metals/Commodities/Metals-Shortage-Likely-To-Continue-Into-The-New-Year.html

Metals Shortage Likely To Continue Into The New Year

By Ag Metal Miner - Oct 20, 2021, 1:00 PM CDT

• Pandemic-related restrictions have resulted in long queues for ships into ports, weighing on metals supply chains.
• The global energy crisis has also played a role in the supply difficulties.
• Demand for many key base metals is recovering, though supply is still rebounding.