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

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Inventories Rise More than Expected

According to the EIA, natural gas in storage was 3,288 Bcf as of Friday, October 1, 2021. This represents a net increase of 118 Bcf from the previous week. Expectations were for a 108 Bcf build according to survey provider Estimize. Stocks were 532 Bcf less than last year at this time and 176 Bcf below the five-year average of 3,464 Bcf. At 3,288 Bcf, total working gas is within the five-year historical range.

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Natural Gas Price Fundamental Daily Forecast – EIA Could Report a Triple-Digit Storage Injection

The short-term direction of the December natural gas futures contract will be determined by trader reaction to $5.736 to $5.534.

Oct 07, 2021 05:29 AM GMT

Natural gas futures are trading nearly flat early Thursday after posting a dramatic technical closing price reversal top the previous session. The move did not change the trend to down, but it sure looked like longs were liquidating and new shorts were entering the market.

Traders blamed the volatile sell-off on a price drop in Europe and a rapidly improving domestic supply situation. Natural Gas Intelligence (NGI) also reported a drop in spot gas prices amid a moderate temperature forecast for much of the Lower 48.

At 04:23 GMT, December natural gas futures are trading $5.838, up $0.035 or +0.60%.

According to Leticia Gonzales at Natural Gas Intelligence (NGI), “Despite the rumbling overseas about potential energy shortages this winter, U.S. supplies are on much stronger ground than they were only a month ago. Inventories as of September 24 stood 575 Bcf below year-ago levels and 213 Bcf below the five-year average, but forecasts for mild weather through at least the end of October are seen leading to plump inventory builds that could quickly tighten up those deficits.”

Translation:  Unless there is an early start to winter, U.S. producers may be able to rebuild the current deficit enough to cushion the impact of heating demand later in the season.

US Energy Information Administration Weekly Storage Report

Ahead of Thursday’s EIA weekly storage report, due to be released at 14:30 GMT, traders are looking at the possibility of a triple-digit injection.

NGI is reporting that a Bloomberg survey produced results ranging from a build of 101 Bcf to as high as 114 Bcf. The median of those results was a 105 Bcf injection.

A Wall Street Journal poll included injections as low as 84 Bcf, but the average still landed at a stout 102 Bcf. Reuters’ poll was wider, with high-side estimates hitting 115 Bcf and the median injection coming in at 104 Bcf. NGI modeled a 114 Bcf injection.

NGI said a storage build even at the low end of major surveys would surpass the five-year average build of 81 Bcf as well as last year’s 75 Bcf injection, according to the EIA.

Daily Forecast

The short-term direction of the December natural gas futures contract will be determined by trader reaction to the 50% to 61.8% retracement zone at $5.736 to $5.534.

Look for an upside bias on a sustained move over $5.736. Prices could accelerate to the upside if buyers can overtake $6.031 with conviction.

A sustained move under $5.534 will be a sign of weakness. Taking out $5.469 will change the main trend to down. This could trigger an acceleration into the main retracement zone at $5.269 to $4.956.

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20 hours ago (Oct 07, 2021 04:10 PM GMT)

Natural Gas Price Forecast – Natural Gas Markets Plunge to Find Buyers

Natural gas markets have fallen a bit during the trading session on Thursday to reach down towards the $5.40 level where buyers jumped back in.

Natural gas markets have fallen a bit during the course of the trading session on Thursday to reach down towards the $5.40 level, which is an area that has been supportive in the past and now that we have turned around the way we have, I suspect that it is only a matter of time before we go higher. After all, part of the pullback was due to Vladimir Putin suggesting that Russia was going to continue pumping natural gas at a high rate to the European Union. However, natural gas markets are extraordinarily localized, so this will have minimal to no effect on the United States.

NATGAS Video 08.10.21

As for LNG exports, the United States does not do much of that because quite frankly it is not set up to be an exporter. Without going into the process, it makes much more sense for an energy company to sell natural gas in the United States or Canada, possibly even Mexico, then it does to go through the process of sending natural gas across the ocean. It is not that it cannot, it is just that the margins are not quite as attractive, despite the fact that the European equivalent is roughly $36 right now.

Given enough time, American natural gas may find its way to the European Union, but right now that energy crisis continues so therefore it does put a little bit of a bid in the market due to the fact that the United States had so much in the way of disruptions due to hurricane Ida and a tropical storm. Beyond that, we also had severe droughts earlier this year that dwindled supplies in an attempt to cool homes. At this point, I still think we probably grind higher.

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

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A Cold Winter Could Send Oil Prices Soaring Past $100

By Irina Slav - Oct 07, 2021, 7:00 PM CDT

  • Meteorologists are predicting a cold winter, and it could send energy prices even higher.
  • Record-high natural gas prices forced some utilities to switch to oil derivatives instead, boosting demand for crude.
  • Though oil prices might break $100, they are unlikely to stay there for long.

The spike in oil prices to the highest in years after OPEC+ said it will not add more barrels than the initially agreed 400,000 bpd monthly was expected. The forecasts by bank analysts that oil could go higher before the year is over were also expected. Now, some are expecting a further climb towards $100. The good news is that even if it happens, it won’t last. Goldman Sachs recently updated its oil price forecast for the final quarter, saying it now expected Brent crude to reach $90 per barrel by the end of December. Before that, the bank said oil demand could jump by 900,000 bpd if the winter was colder.

“While we have long held a bullish oil view, the current global supply-demand deficit is larger than we expected, with the recovery in global demand from the Delta impact even faster than our above-consensus forecast and with global supply remaining short of our below consensus forecasts,” the bank’s commodity analysts said in late September.

Then Bank of America said oil could hit $100 per barrel because of the energy crunch that has now gone global, with U.S. Energy Secretary Jennifer Granholm saying this week the department could release oil from the country’s emergency reserve to lower gasoline prices. The bank went on to warn that this could make the global economic recovery stumble badly.

The bank pointed to the record-high natural gas prices that forced some utilities to switch to oil derivatives instead, boosting demand for crude and, like Goldman, noted the prospect of a cold winter as another bullish factor for oil.

“If all these factors come together, oil prices could spike and lead to a second round of inflationary pressures around the world,” BofA analysts wrote in a note. “Put differently, we may just be one storm away from the next macro hurricane.”

Related: The EU Is Panicking Over Skyrocketing Energy Prices

Yet even if Brent hits $100 per barrel, it is unlikely to stay there for long, according to John Driscoll, chief strategist at JTD Energy Services. And it would take a lot of things to happen for the benchmark to reach this price level.

“I see that as kind of a lower probability scenario. That is, if everything goes wrong, if we have Arctic weather, if we’ve got glitches, breakdowns in the deliverability, the supply chains. That is a possible scenario but I don’t see that likely to be sustainable,” Driscoll told CNBC this week.

It will all depend on the weather, it seems. All forecasters mention a cold winter as a key factor for all energy prices, and all seem to expect it.

“You could see an off-the-charts spike — that is one scenario out there,” Driscoll went on to tell CNBC. “I don’t really hear anybody talking about the prospects of a mild subdued winter. I think, given all the uncertainty over weather and climate change, we could be in for a wild ride here.”

Yet the weather is impossible to predict with any accuracy over longer periods of time, and indeed, current forecasts for the winter season differ dramatically among meteorologists, as Bloomberg reported earlier this month. 

The rational thing to do, of course, is to plan for the worst possible scenario, which would be a very cold winter. Indeed, this was what Europe and China tried to do and what became one big reason for the gas price spike. Yet some of that spike, at least, was the result of speculation rather than fundamentals. The fact that gas prices dropped by $50 after Russian President Vladimir Putin effectively said the country will supply additional gas to Europe is quite telling.

By Irina Slav for

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One Of Wall Street’s Biggest Oil Bears Sees Higher Crude Prices On The Horizon

By Alex Kimani - Oct 07, 2021, 6:00 PM CDT

  • Standard Chartered Global Research has maintained its somewhat bearish oil price outlook during the last couple of months, but last week, the investment bank suddenly turned bullish
  • Standard Chartered raised its 2021 average Brent price forecast by USD 6/bbl to USD 71/bbl, and its 2022 forecast by USD 8/bbl to USD 67/bbl

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Latest articles from Tsvetana Paraskova


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Even The World’s Top LNG Exporter Thinks Natural Gas Prices Are Too High

By Tsvetana Paraskova - Oct 07, 2021, 6:30 PM CDT

Natural gas prices have reached unhealthy levels for both producers and consumers, Saad al-Kaabi, Qatar’s Energy Minister and CEO of Qatar Petroleum, the world’s top LNG exporter, said on Thursday, a day after spot liquefied natural gas prices in Asia hit a new record high.

“While natural gas prices are an outcome of basic market fundamentals including supply and demand, the current price levels observed in global markets are unhealthy for both producers and consumers,” al-Kaabi said, as carried by Bloomberg, after a virtual dialogue with European Energy Commissioner Kadri Simson today.  

Last month, al-Kaabi said on the sidelines of the Gastech industry conference in Dubai that the surging gas prices were partly the result of underinvestment in the industry, also driven by the attempts at fast energy transition.

“There’s a euphoria around the energy transition that’s forcing companies not to invest,” al-Kaabi said. 

“There is a huge demand from all our customers, and unfortunately we cannot cater for everybody. Unfortunately, in my view, this is due to the market not investing enough in the industry,” al-Kaabi said at the event in September, as carried by Reuters

Back then, when spot LNG prices in Asia were “only” $20 per million British thermal units (mmBtu)—a record for September ahead of the winter heating season—the Qatari energy minister said he hoped the high prices wouldn’t last because they would not be good for consumers.

“We don’t want these high prices, we don’t think it is good for the consumers. We don’t want $2 and we don’t want $20, we want to have a reasonable price that is sustainable,” al-Kaabi told Reuters at the end of September.

This week, the worsening global energy crisis sent Asia’s spot LNG prices soaring by 40 percent on Wednesday, as a cargo for delivery into North Asia in November was priced at as much as $56/mmBtu—a record high that beat the previous record from last week of $34.52/mmBtu.  

By Tsvetana Paraskova for

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On 10/6/2021 at 3:24 AM, Tom Nolan said:

The jet stream has started an unprecedented shift north, which could wreak havoc on weather in the US and Europe

Aylin Woodward
Sat, October 2,
  • The polar jet stream is a band of wind that separates cold Arctic air from warmer air to the south.

  • A new study suggests that as the Earth warms, this band is moving north and out of position.

  • That could cause more droughts and heat waves in southern Europe and the eastern US....

The good news is it might stop raining in England 🤣

  • Like 1

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Record High Natural Gas Prices Will Send Oil Demand Even Higher

By Irina Slav - Oct 08, 2021, 9:00 AM CDT

Record-high natural gas prices are prompting more utilities to switch from gas to oil derivatives, fanning the flames of an already strong oil price rally.

A Reuters report quoted an OANDA analyst as saying that there were a lot of bullish factors for oil right now, and they weren't going away anytime soon. Among these factors was rising fuel demand due to growing economic activity and persistent fears that the coming winter will be cold and energy supplies will be tight.

This means that the current deficit on oil—and gas—markets will also continue, potentially pushing prices even above $100 per barrel, which level Bank of America said earlier this month would tip the world into a recession.

According to JP Morgan, gas-to-oil switching is still not so widespread as to lift oil prices much further.

"This means that our estimate of 750,000 barrels per day of gas-to-oil switching demand under normal winter conditions could be significantly overstated," the bank's analysts said in a note quoted by Reuters.

Yet, another report, also by Reuters, said that other analysts expected a lot of gas-to-oil switching this winter, which would drive oil prices higher and drive some UK energy suppliers out of business.

"This has never happened before at such a global scale. The market has always tried to substitute from costly oil to much cheaper natural gas," Reuters quoted a SEB commodity analyst as saying.

Now the tables have turned, and both commodities are soaring amid not only forecasts for a cold winter, however inaccurate they might be at this point in time, but also expectations for higher energy demand during this winter season.

Meanwhile, supply remains tight. OPEC+ refused to boost production by more than 400,000 bpd monthly. Russia's President Vladimir Putin said the country will step up gas deliveries to Europe, but some analysts doubt that it has the capacity to do so, even if it is willing to do it without expecting concessions in return, which is likely.

"Currently, the Russian domestic gas market remains tight, with its inventories running low, output already near its peak and winter looming in Russia as well, limiting gas export capacity," said Adeline Van Houtte from the Economist Intelligence Unit.

By Irina Slav for

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Dry Bulk Shipping Rates Hit $80,000 Per Day As Buyers Scramble For Coal

US Desperate For Coal Miners To Meet Soaring Global Demand

Coal supply shortages in Asia and Europe are pushing prices for the dirtiest fossil fuel to record highs and have become a challenge for US suppliers due to a shortage of miners, according to Bloomberg

For the last three and a half decades, the number of coal mining jobs in the US has collapsed from 180,000 to 42,500 in August. The industry remains 9,500 miners short from pre-COVID times...

...Mining companies are getting creative in hiring, said Rich Nolan, CEO of the National Mining Association trade group.

Along with higher pay, some firms offer benefits like daycare. "Everyone is scraping for employees," Nolan said. "They're using every trick in the book to attract qualified workers."

Some mining firms are desperate enough that they are offering $100k per year for new talent. 

Miners might not meet the surge in demand due to years of decommissioning mines to reduce carbon emissions and transition the economy from fossil fuels to green energy. A sustainable energy transition will likely take decades, not years: 

"There is an energy transition taking place," said Xcoal's Thrasher. "But it's going to take longer than people think."

To sum up, Asia and Europe need fossil fuels as the green energy transition is unreliable, triggering one of the great power crunches the world has ever seen. But the US might come up empty handed as labor shortages plague the industry.

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Europe's Gas Prices Surge To Avert Risk Of Winter Shortage

By John Kemp, Reuters energy analyst and reporter

Europe’s gas and electricity prices are setting record highs on a daily basis and rising at an accelerating rate as the market tries to destroy enough demand to protect depleted inventories ahead of the winter.  Gas storage sites in the European Union and United Kingdom are currently just under 76% full, compared with a ten-year seasonal average of almost 90%, according to data compiled by Gas Infrastructure Europe...

...If this winter sees an average drawdown, storage sites would be reduced to just 19% full by next spring, the second lowest for a decade, leaving the region with a persistent gas shortage next year.

If the winter sees a moderately strong draw, in the 75th percentile, storage would be reduced by 68 percentage points to a record low of just 8% next spring, increasing the probability supply will actually run out in some areas. 

If the winter sees a maximum draw, similar to 2017/18, storage would be almost exhausted by next spring, making local shortages almost inevitable...

...Until there is a clear signal consumers have begun to respond by reducing gas use, prices are likely to remain exceptionally high to avert a much worse situation early next year. [END]

ESG Shock Arrives: Oil Market Needs Half A Trillion Dollar Injection To Avoid Supply Collapse, Price Surge

...We quoted DB strategist Francis Yared who said that "ESG is a negative supply shock that internalizes the climate cost of the production of goods and services." This negative supply shock will be inflationary until technological progress absorbs these costs. That could take years. ..

..DB's credit strategist Jim Reid also chimed in, writing that "maybe in the fullness of time this surge in mining between 2010-2015 will be the exception rather than the norm and that, in a rapidly changing and ever more ESG sensitive world, it will be  harder to get oil out of the ground. Pricing climate-change externalities more generally could make things more expensive over time. Are we on the verge of another change in inflation expectations due to oil and energy, one that is in large part due to ESG."

Now that the direct effects of this catastrophic policy are becoming all too apparent, and nowhere more so than in Europe where gas prices have exploded to staggering levels...

...the attempt to “de-carbonize” and move from fossil fuels to renewable energy sources, "the problem is to make sure that sufficient carbon-rich energy remains available until renewables are able to pick up the load. That hasn’t happened."

He is right, of course, but what is worse is that while more capital is flowing to renewables, less capital is going to existing fossil fuel sources, which while perhaps on the way out (over the next 4-5 decades) still need hundreds of billions to maintain a baseline production capex, even as the virtue-signaling Blackrocks of the world seek to starve them of all growth capex.

Putting it all together, overnight Moody’s Investors Service published a report which found that oil explorers need to raise drilling budgets by 54% to more than half a trillion dollars to forestall a significant supply deficit in the next few years.

Crude and natural gas drillers - chastened by last year’s unprecedented collapse in demand and prices, as well as the ongoing capital stigma associated with anything that is "not green" - haven’t responded to the recent market rebound as the industry typically does by expanding the search for untapped fields. While international crude and U.S. gas have risen more than 50% and 120% this year, respectively, drilling outlays are only forecast to increase by 8% globally, Moody’s analysts Sajjad Alam wrote.

Needless to say, that's too little to replace what those companies will pump from the ground in 2022, setting the stage for even tighter supply scenarios. Any such squeeze would come atop the current crises afflicting Asian and European economies scrambling to shore up fuel stockpiles as winter approaches and prices seemingly break records on an almost-daily basis. It would also mean sharply higher oil prices.

"The industry will need to spend significantly more, especially if oil and gas demand keeps climbing beyond pre-pandemic levels through 2025," the Moody’s analysts wrote.

Oil and gas companies are expected to spend $352 billion on drilling and related activities this year, Moody’s said, citing estimates from the International Energy Agency. If they raised to to the credit-rating firm’s recommended $542 billion, that would be the highest worldwide since 2015. Alas, with investors terrified of looking like uncouth cavemen to the powerful ESG lobby, there is no chance they will get a number even remotely close. [END]

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WTI Oil Price Breaks $80 For The First Time Since 2014

By Tsvetana Paraskova - Oct 08, 2021, 9:45 AM CDT

Oil prices rose early on Friday, headed to another week of gains with the U.S. benchmark reaching $80 per barrel, as the world scrambles for natural gas and coal supply for the winter.

As of 10:29 a.m. EDT on Friday, WTI Crude was up 2.03% at $80.05, and the international benchmark, Brent Crude, had risen 1.76% to $83.39.


Oil prices were headed to a 4-percent gain this week amid restricted supply and rising demand, also due to a gas-to-oil switch amid record-high natural gas prices in Europe and Asia.

The OPEC+ group kick-started this week’s oil price rally after it decided on Monday to keep plans for easing the cuts unchanged, despite calls for more supply from consuming countries, including the United States. OPEC+ will increase supply in November by 400,000 barrels per day (bpd)—the minimum the market was expecting ahead of the meeting. As a result of the decision, WTI Crude prices hit their highest level in seven years.

Oil settled lower on Wednesday after the EIA reported a crude inventory build and energy prices globally fell after Russian President Vladimir Putin suggested that Russia could increase natural gas supply to Europe this winter.

On Thursday, prices reversed losses after reports that the U.S. Department of Energy was walking back previous comments that it was considering a release of the Strategic Petroleum Reserve and a ban on crude oil exports.

Tighter energy supply ahead of the winter continued to support oil prices early on Friday.

“US commercial inventories of distillates — which include diesel for public transportation and industrial use and heating needed in winter — have slumped to the lowest level since 2000 when measured on the basis of demand cover,” Vanda Insights said.

“In general, the risk of tightening markets into the winter months have not gone away, and especially the prospect of gas-to-oil switching could add another layer of demand for crude oil,” Saxo Bank said on Friday.

“A break higher in Brent could see it target the 2018 high at $86.74,” the bank’s strategy team added.

By Tsvetana Paraskova for

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China To Coal Miners: Raise Production Now

By Charles Kennedy - Oct 08, 2021, 11:00 AM CDT

Chinese authorities have ordered 72 coal mines in Inner Mongolia to boost production by almost 100 million tons amid an energy crunch that has seen factories shut down and prompted fears of a disruption to the global economy.

"This demonstrates the government is serious about raising local coal production to ease the shortage," one trader told Reuters.

The energy crunch that started in Europe and quickly spread to Asia has hit China—as well as India—particularly hard because of their energy consumption rates and the high dependence on imports.

Earlier this week, media reported China had resorted to Australian coal once again to plug the supply hole gaping in its energy security. Last year, China imposed an unofficial ban on Australian coal imports amid a political spat between the two governments.

Last week, China restricted power use in at least 20 regions and provinces that contribute more than half to the Chinese economy. It has also stepped up gas imports, contributing to a price rally that may before long become unprecedented.

Whether local production could respond so quickly to the deepening gap between supply and demand for energy remains to be seen. The 72 mines that were asked to start boosting production immediately have a combined capacity of 178..45 million tons annually, so the proposed boost, at 98.35 million tons, represents quite a substantial one.

This is only the latest attempt by Beijing to ensure enough energy supplies for the winter. At the end of September, the authorities told energy companies to do whatever it takes to make sure China has enough raw materials for power generation and heating, with Bloomberg reporting the message, loud and clear, was "blackouts will not be tolerated."

Yet blackouts remain a possibility not only in China but in part of Europe as well if the crisis continues and forecasts for a cold winter turn out to have been accurate.

By Charles Kennedy for

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Why should Russia care about IEA?

IEA have they ordered Gas or Oil ?  No

Did the Financial Times ordered any Gas ? No

Did the Uk order any Gas? No at least not this year

Those aren't any Gazprom Clients therefore no Gas was to deliver.

There is no discussion that Gazprom delivers their Clients with small or larger contracts.

Some Nato fools think, that Russia is delivering Gas free of charge. 



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I was watching some youtube stuff on the china coal crises.  They cannot raise production as fast as they want.  So,..., they are now buying as much natural gas as they can get their hands on for winter. 

So, ... power companies in the US that switched to oil will continue to do so at least for the next few months until winter is over provided it is still cheaper than natural gas.  I guess a lot of China's power plants can burn gas or coal depending on price.  


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The woke crazed GO GREEN COMMUNITY is to blame for this. They are in such a mad rush to DEEP SIX fossil fuel economy with their BLINDERS ON that the people who are not yet committed to this are the ones suffering the most.

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US Heating Oil Supplies Lowest In Decades Ahead Of Winter

Tyler Durden's Photo
by Tyler Durden
Saturday, Oct 09, 2021 - 11:45 AM

Americans are hoping the energy crisis in Asia and Europe won't spread stateside. But industry insiders warn that winter blackouts across the US are possible as low fossil fuel stockpiles may lead to shortages amid heightened demand. 

The latest concern is ultra-low stockpiles of heating oil (distillate fuel oil). In the winter of 2019–2020, about 5.5 million households used heating oil as their primary heating source, and 81% of those households were in the Northeast. 

Energy Information Administration (EIA) reports there are only 31.2 days of the demand for heating oil, the lowest levels since 2000. 

Low stockpiles ahead of cooler weather could be problematic for consumers who may be burdened with high energy costs, or worse, fuel shortages. Below is the two-week forecast for the US Lower 48, underlining cooler weather trends are nearing and how consumers shouldn't wait until the last minute to fill up their tanks. 

Suzanne Danforth, an analyst at Wood Mackenzie Ltd., told Bloomberg low stockpiles of heating oil won't be as severe as the gas crisis in Europe where prices went parabolic, though she warned: "It's going to be tight, very tight."

One of the reasons behind low supplies is due in part to the deep freeze in Texas earlier this year that paralyzed refiners and knocked out as much as 5.5 million barrels a day of processing capacity, causing a tremendous drawdown of diesel inventories. 

Inventories continued tightening through the year as a surge in truck drivers was seen to transport goods across the country. There's also been a rise in jet fuel demand as travel rebounded, and let's not forget farmers' increasing diesel demand during harvest. The timing of refiners shutting down for maintenance could amplify the tightness. 

Wood Mackenzie's Danforth said refiners should come back online in November and December and return to "full diesel mode" that would begin to alleviate the market in early 2022.

Compound low heating oil supplies with low propane supplies with low coal supplies, and it appears an energy crunch is possible for the US. Let's hope that's not the case because surging energy prices would mean another loss for "team transitory" and may force the Federal Reserve to taper quicker.


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Kemp: Forget Russian Intentions, Fundamentals Drove Up Europe's Gas Price

By John Jemp, Reuters energy market analyst and reporter

European policymakers and some traders blame Russia for the low volume of gas stored across the region which has sent both gas and electricity prices surging to record highs.

Russia's pipeline gas export monopoly Gazprom has met commitments for long-term contracts, its clients confirm. But it has not raced to book extra pipeline capacity for spot buyers, despite European calls for more supplies....

...Energy prices have always been strongly cyclical. In this instance, an exceptionally severe cyclical slump in 2020 has produced an equally extreme cyclical upswing in 2021.

Energy production and consumption fell sharply last year, with consumption generally falling earlier and faster than production, leading to a big rise in inventories, and intensifying the downward pressure on prices. Since then, the process has reversed. Energy consumption has recovered rapidly, while production has come back more slowly, leading to a big inventory draw and intensifying the price rise.

In the gas market, the long cold winter across North America and Eurasia depleted inventories even further and accelerated the routine cyclical swing from slump to boom conditions.  Compared with five-year averages, energy inventories have moved from large surpluses in 2020 through neutral in the winter of 2020/21 to deficits by late 2021.


In Europe, the volume of gas in storage started the winter of 2020/21 at a near-record level of 1,069 Terawatt-hours (TWh) but ended at just 323 TWh. The winter drawdown of 2020/21 was the second-largest on record and left inventories at their lowest for three years.


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Is Gunvor Getting Flushed? How NatGas 'Netbacks' Are Crushing The Secretive Commodity Trader

Tyler Durden's Photo
by Tyler Durden
Friday, Oct 08, 2021 - 09:00 PM

Earlier this week, we noted that some of the world's largest commodity traders were facing massive margin calls from wrong-way spread trades in the natural gas markets.

According to reports, it appears the trading shops have all been hammered by a spread (or arbitrage trade) gone wrong.

For years, the prices of European (red) and US natural gas (green) have traded within a well-defined range. When the spread between the two reaches one extreme or the other, you buy one and sell the other – easy, right ?


  • Recently it has changed its LNG head in Singapore and we are also aware that Gunvor Singapore uses a strategy called “the box” whereas the trader locks the arbitrage spread at predetermined levels by swap hedges.

  • U.S website Zerohedge reports that Gunvor is facing massive margin calls as the global natural gas arb explodes.

  • Among the injured will be ABN amro, Credit Agricole, Rabobank, SG, Natixis, ING and Unicredit.

  • The margin calls are between $3.6B and $6.1B in the coming months for a company with a $2.5B net equity.


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As such, any contagion from the ongoing turmoil sweeping China's heavily indebted property sector will impact not the banks, which are all state-owned entities and whose exposure to insolvent developers can easily be patched up by the state, but the property sector itself, which as Goldman recently calculated is worth $62 trillion making it the world's largest asset class, contributes a mind-boggling 29% of Chinese GDP (compared to 6.2% in the US) and represents 62% of household wealth.

"Catastrophic" Property Sales Mean China's Worst Case Scenario Is Now In Play

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by Tyler Durden
Sunday, Oct 10, 2021 - 10:11 AM

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Energy Crisis May Unleash Winter Blackouts Across US, Insider Warns 

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by Tyler Durden
Thursday, Oct 07, 2021 - 07:40 PM

The energy crisis that is rippling through Asia and Europe could unleash electricity shortages and blackouts in the U.S., according to Bloomberg

Ernie Thrasher, CEO of Xcoal Energy & Resources LLC., told energy research firm IHS Markit that U.S. utilities quickly turn to more coal because of soaring natural gas prices. 

"We've actually had discussions with power utilities who are concerned that they simply will have to implement blackouts this winter," Thrasher warned.

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Gazprom Plant Connected To Russia-China Gas Pipeline Shuttered Due To Fire

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by Tyler Durden
Friday, Oct 08, 2021 - 11:50 AM

China's energy crunch has resulted in power rationing in more than half of the provinces and affected the world's biggest production base for electronic gadgets to semiconductors to appliances, among other things. Beijing has ordered energy firms to "secure supplies at all costs" as winter fast approaches to avoid shortages. But as we learn this morning, a Gazprom gas processing plant, connected to Russia's sole gas pipeline to China, shuttered operations following a fire at the facility, according to Bloomberg

Irina Dmitruk, the spokeswoman for the Gazprom unit, said the blaze at the Amur processing facility in eastern Siberia was extinguished around 0500 London time. 

Bloomberg's top energy analyst Javier Blas tweeted what appears to be a video of the fire at the processing plant. He said, "still unclear what's the damage."

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