"The Calm Before The Storm In Oil Markets" by Tom Kool of OILPRICE and seen at YahooFinance

[Tom Nolan + 2,443]

Newsquawk Asia-Pac Market Open - May sell-off persisted, S&P 500 slipped beneath 4k

• US stocks finished with firm losses as the May sell-off continued in which the S&P 500 closed beneath the 4,000 level for the first time since March 2021.
• DXY initially printed fresh YTD highs above 104.00 but then faded the gains as yields declined.
• Oil prices declined amid ongoing global demand woes, slim progress on the EU embargo, and cuts to Saudi's June OSPs.
• EU's Von Der Leyen noted that progress was made with Hungary regarding the Russian oil embargo but added that further work is needed.
• Looking ahead, highlights include New Zealand Credit Card Spending, Australian NAB Business Confidence, Japanese Household Spending and 10yr JGB Auction.

EQUITIES

• US stocks suffered firm losses as the May sell-off persisted with the S&P 500 falling beneath 4,000 into the close while the Vix rose above 35, while the downside was more a continuation of ongoing concerns, including recession fears, supply chain issues in China with its zero-COVID policy, global central bank tightening and geopolitical woes rather than fresh newsflow.
• SPX -3.12% at 3,994, NDX -3.98% at 12,187, DJIA -1.99% at 32,245, R2K -4.24% at 1,761.
• Click here for a detailed summary.

FX

• DXY saw two-way trade within the 103.38 and 104.19 parameters and hit a fresh YTD high, although came off highs and into the red as Treasury yields started to decline.
• Euro returned flat after early momentum stalled just shy of the 1.0600 handle, while there is still no breakthrough in terms of the Russian oil embargo with further work needed.
• GBP is relatively unchanged after failing to sustain a brief incursion above 1.2400 and despite comments from hawkish BoE dissenter Sauders.
• JPY marginally strengthened against the greenback with the currency slightly helped by broad risk aversion across stocks.

COMMODITIES

• Oil prices tumbled back into their April ranges on Monday with ongoing global demand woes, slim progress on the EU embargo, and cuts to Saudi's June OSPs.
• Spain and Portugal have the green light from European Commission for their proposal to limit gas prices in Iberia with Spain to present a legal instrument to implement the price cap as soon as Tuesday, according to Reuters.
• Venezuela's PDVSA started importing Iranian heavy crude for domestic refining, according to documents cited by Reuters.

FOR MONDAY MAY 9th - https://www.zerohedge.com/markets/newsquawk-asia-pac-market-open-may-sell-persisted-sp-500-slipped-beneath-4k

 

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Crude-Oil/Saudis-UAE-The-World-Has-A-Serious-Energy-Spare-Capacity-Problem.html

Saudis, UAE: The World Has A Serious Energy Spare Capacity Problem

By Tsvetana Paraskova - May 10, 2022, 11:00 AM CDT

• Prince Abdulaziz bin Salman: “The world is running out of energy capacity at all levels,”.
• Saudis see underinvestment in refining capacity as on of the reasons for soaring fuel prices.
• UAE’s Energy Minister Suhail al-Mazrouei: OPEC may not be able to guarantee sufficient oil supply.

[Tom Nolan + 2,443]

U.S. Gasoline Prices Hit All-Time High

By Irina Slav - May 10, 2022, 10:00 AM CDT

• GasBuddy: national average hit $4.351 per gallon.
• 180 million barrel SPR release failed to materially lower prices at the pump.

https://oilprice.com/Energy/Energy-General/US-Gasoline-Prices-Hit-All-Time-High.html

[Tom Nolan + 2,443]

How Russia’s War Is Impacting Global Metals Prices

By Ag Metal Miner - May 10, 2022, 12:00 PM CDT

• Global aluminum prices took a hit, impacted by China’s zero-COVID initiatives.
• Meanwhile, the EU is still ironing out the details of a full oil embargo on Russia which could remove even more supply from the tight crude market.
• Tight energy markets could send base metal prices higher.

https://oilprice.com/Metals/Commodities/How-Russias-War-Is-Impacting-Global-Metals-Prices.html

[Tom Nolan + 2,443]

Is Central Asia’s Crypto-Mining Boom Going Bust?

By Eurasianet - May 10, 2022, 1:00 PM CDT

• Central Asia’s cheap energy made it a hotspot for crypto mining.
• New rules in Uzbekistan and Kazakhstan have been introduced to punish illegal crypto operations.
• Registered cryptocurrency miners connected to the national electricity grid will now have to pay double the rates of typical consumers in Kazakhstan.

https://oilprice.com/Energy/Energy-General/Is-Central-Asias-Crypto-Mining-Boom-Going-Bust.html

[Tom Nolan + 2,443]

https://oilprice.com/Latest-Energy-News/World-News/Russian-Gas-Flows-To-Europe-Via-Ukraine-To-Stop-Wednesday.html

Russian Gas Flows To Europe Via Ukraine To Stop Wednesday

By Julianne Geiger - May 10, 2022, 1:30 PM CDT

Russian gas headed to Europe through Ukraine will stop flowing on Wednesday, Ukraine’s Gas Transmission System Operator (GTSOU) said on Tuesday. The flows will stop at 7 a.m. local time after Russia’s occupying forces disrupted gas transit operations in the area.

According to the operator, Ukraine will no longer be able to accept gas transit from Russia via Sokhranivka. The move has the potential to disrupt supplies to Europe if an alternative path isn’t found.

Ukraine has voiced its criticism of Europe’s reliance on Russian gas since Russia invaded, with Ukrainian president Volodymyr Zelensky accusing Europe of paying for Russian gas with Ukrainian lives. Ukraine has also previously warned Russia that its occupation in its Luhansk region could disrupt the flow of gas to Europe due to safety concerns.

Sokhranivka is a key entry point on the border between Russia and Ukraine. Nearly one-third of the Russian gas headed through Ukraine goes through Sokhranivka, which is now under force majeure.

The GTSOU said in a statement on Tuesday that it could not operate at its Novopskov gas compressor station in Luhansk due to “the interference of the occupying forces in the technical processes.” Russian forces and separatist fighters have occupied the area since Russia invaded Ukraine.

GTSOU has stated that it could reroute the gas through the Sudzha interconnection point—controlled by Ukraine—although Gazprom has said this move was “technologically impossible”.

Gazprom has said it had seen no proof of interference with normal operations.

Roughly 33 million cubic meters of gas flow through this transit route.

European gas futures jumped by more than 8% on Ukraine’s warning that gas flows to Europe could be disrupted.

By Julianne Geiger for Oilprice.com

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• Saudi Energy Minister: Insufficient Investment To Blame For High Fuel Prices

[Tom Nolan + 2,443]

Oil Prices Go For Wild Ride On Heightened Volatility

By Julianne Geiger - May 10, 2022, 12:47 PM CDT

Crude oil prices remain exceptionally volatile on Tuesday, with WTI fluctuating between sub-$100 and nearly $104 per barrel after sinking from more than $110 on Monday as bearish and bullish factors push and pull crude benchmarks.

Monday saw crude oil prices drop sharply as China lockdowns and Saudi Arabia’s crude oil price cutting contributed to worries about a possible slump in crude oil demand in the world’s top crude importer.

But oil prices seesawed on Tuesday as the EU continued to try to reach a consensus on a Russian crude oil ban. While it seems that any EU-driven crude oil ban would need to be tempered to get all parties on board with the plan, France’s European Affairs Minister Clement Beaune has said that a deal could be reached within a matter of days. On the bearish side, a strong dollar has made crude more expensive for any buyer using anything other than dollars. Adding to this bearish sentiment on Tuesday was a sharp selloff for equities.

 

The general unease that exists in the market has brought about a new type of volatility—volatility that swings in terms of dollars whenever anything of note—or not—happens, including Tuesday’s comments by the UAE and Saudi Arabia that suggested the world was running out of oil production capacity.

At 12:50 p.m. ET, WTI crude prices were trading down $3.18 (-3.08%) at $99.89—after falling and rising several times earlier in the day. Brent crude was trading down $3.52 (-3.32%) at $102.67 per barrel after whipsawing in a similar pattern to WTI.

Oil prices are expected to remain volatile on Tuesday, with API’s inventory report set to be released at 4:30 p.m. ET.

By Julianne Geiger for Oilprice.com

More Top Reads from Oilprice.com:

• U.S. Shale Swings From Losses To Record Cash Flows
• China’s COVID Lockdowns Force Aramco To Slash Oil Export Prices
• Saudi Energy Minister: Insufficient Investment To Blame For High Fuel Prices

https://oilprice.com/Latest-Energy-News/World-News/Oil-Prices-Go-For-Wild-Ride-On-Heightened-Volatility.html

[Tom Nolan + 2,443]

Big Oil Sells Billions Of Dollars Of Assets To Less Transparent Firms

By Charles Kennedy - May 10, 2022, 12:30 PM CDT

Oil companies with climate goals and commitments are increasingly selling assets to private and less scrutinized operators with lower environmental standards, which does not help the global push to cut overall emissions, Environmental Defense Fund (EDF) said in a new report on Tuesday.

Deal-making in the oil and gas industry has been increasingly shifting to companies with lower climate commitments becoming buyers of more and more oil and gas assets over the past five years, the U.S.-based non-governmental organization said in the study.

“If assets move from industry leaders on the energy transition to industry laggards, emissions could increase and transparency could decrease, regardless of why M&A transactions take place,” the fund said in its report titled “Transferred Emissions: How Risks in Oil and Gas M&A Could Hamper the Energy Transition.”

After analyzing global upstream oil and gas M&A data from 2017 through 2021, EDF found that assets are flowing from public to private markets at a significant rate and that assets are increasingly moving away from companies with environmental commitments.

Since 2017, a total of 155 deals worth $86.4 billion have moved assets away from net-zero-aligned companies, the report found. Moreover, 298 deals worth $144.9 billion have transferred assets from companies with flaring commitments to those without, and 211 deals totaling $115.6 billion have pushed assets away from companies with methane goals to companies without explicit methane goals.

“The movement of upstream oil and gas facilities to private markets with traditionally less transparency and to companies with reduced environmental commitments suggests that a growing number of assets are at risk of weak climate stewardship,” according to one of the key findings in the report.

“These transactions can make it look as though sellers have cut emissions, when in fact pollution is simply being shifted to companies with lower standards,” Andrew Baxter, director of energy transition at EDF, said in a statement. “Regardless of the sellers’ intent, the result is that millions of tons of emissions effectively disappear from the public eye, likely forever. And as these wells and other assets age under diminished oversight, the environmental challenges only get worse.” 

By Charles Kennedy for Oilprice.com

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• China’s COVID Lockdowns Force Aramco To Slash Oil Export Prices
• Saudi Energy Minister: Insufficient Investment To Blame For High Fuel Prices
• China’s COVID Lockdowns Push Copper Prices Lower

https://oilprice.com/Latest-Energy-News/World-News/Big-Oil-Sells-Billions-Of-Dollars-Of-Assets-To-Less-Transparent-Firms.html

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/Fears-Of-An-Economic-Slowdown-Drag-Oil-Prices-Lower.html

Fears Of An Economic Slowdown Drag Oil Prices Lower

By Josh Owens - May 10, 2022, 2:00 PM CDT

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Chart of the Week

- Russian crude exports have reached post-pandemic highs despite falling production rates, with robust buying coming on the back of heavily discounted barrels.  

- The main export grade of Russia, the medium sour Urals, has been trading at discounts below -$30 per barrel to Dated Brent, becoming arguably the cheapest major crude stream on the market. 

- Crude exports out of Russia’s terminals averaged 5.03 million b/d in April, spearheaded by a vast uptick in Indian buying, quadrupling to 900,000 b/d compared to February numbers. 

- That being said, flows might drop after May 15 when EU sanctions barring transactions with Rosneft and Gazpromneft come into effect. 

Market Movers

- Norway’s national oil company Equinor (NYSE:EQNR) sold its stake in Norway’s giant legacy Ekofisk field to private equity-backed Svar Energi, along with a 19% in the Martin Lange field, for a total of $1 billion. 

- The Canadian government has fast-tracked talks with Spain’s Repsol (BME:REP) and Canadian Pieridae Energy (PEA) to build two LNG terminals on the country’s east coast, simultaneously negotiating with potential European buyers.

- Shareholders of Occidental Petroleum (NYSE:OXY) vetoed a proposal by Dutch activist investor group Follow This to extend the oil firm’s current carbon emissions reduction targets. 

Tuesday, May 10, 2022

Fears of an economic slowdown are bleeding into the oil market. Oil demand is being threatened by extended lockdowns in China, inflation-driven interest rate hikes, and fears of Europe potentially dropping into recession if the Russia-Ukraine war continues to escalate. Ebbing inventories, with the US poised to see stock draws across the crude/product spectrum, contributed some support but failed to halt ICE Brent futures from falling towards the $100 per barrel mark.  

Saudi Arabia Blames High Fuel Prices on Lack of Investment. Insufficient investment in global refining capacity has been one of the key drivers in soaring product prices, according to Saudi Arabia’s energy minister Prince Abdulaziz bin Salman, reiterating the claim that lack of investment is keeping oil markets from rebalancing. 

EU to Offer Defiant Countries More Funds. The European Commission plans to offer Eastern European EU nations that have so far objected to an embargo on Russian oil (Hungary, Slovakia, and the Czech Republic) more money to upgrade oil infrastructure, though their sanctions waivers are still to be agreed upon. 

US NatGas Futures Plunge. With meteorologists moderating their forecasts for a milder-than-expected May and European demand weakening amidst high rates of gas inventory replenishment, front-month Henry Hub gas futures have dropped some 15% to $7 per mmBtu. 

EU to Drop Shipping Sanctions Against Russia. The European Union is expected to drop a proposed ban on EU-owned vessels from transporting Russian oil anywhere in the world, with Greece, the continent’s leading shipping nation, threatening to veto the sanctions proposal if it were maintained. 

Venezuela Starts Refining Heavy Iranian Oil. Venezuela has begun importing Iranian heavy crude to feed its domestic refineries, widening the swap agreement between the two countries that first saw PDVSA importing condensate to dilute its heavy waxy crude. 

Germany Hits Negotiation Roadblock with Qatar. According to media reports, Germany and Qatar have hit difficulties in talks over their LNG deal, with emissions-cutting Berlin remaining wary of committing to 20-year contracts whilst Qatar opposes any form of reselling clause. 

Iraq Goes Hard on Kurdish Crude. Federal Iraqi authorities said they would startbringing oil production from the semi-autonomous Kurdistan region under their control after talks with the regional government in Erbil ran aground, with the allocation of oil revenues remaining the key point of contention. 

US Mulls Revival of Oil Spill Tax on Crude Exports. The Biden Administration is appealing a 2019 court ruling that found US crude exporters should be exempt from a 9 cent per barrel oil spill cleanup tax, saying the decision blocks a critical source of funding.

South Sudan Wants to Nationalize its Oil Industry. The government of South Sudan intends to take over the operations of international oil firms in the country after respective production-sharing contracts expire, impacting primarily China’s CNPC (SHA:601857)and Malaysia’s Petronas. 

Petrobras Vows to Keep Fuel Pricing Market-Based. Newly appointed top executives at Brazil’s national oil company Petrobras (NYSE:PBR) stated they would stick to market-oriented pricing policies, hiking diesel prices by 9%, despite public criticism coming from President Jair Bolsonaro who wants to see fuel prices capped.

Israel Sees Another Offshore Gas Discovery. Mediterranean-focused gas producer Energean (LON:ENOG) announced it had made another commercial gas discovery off the coast of Israel, although the 8 bcm of recoverable gas reserves was just a fraction of the pre-drilling 21 bcm resource estimate. 

Indonesia’s President to Meet Elon Musk over Nickel Deal. Indonesian President Joko Widodo is expected to meet Elon Musk during an official US visit, with EV car maker Tesla (NASDAQ:TSLA) reportedly closing in on a nickel supply deal that could see a larger part of the supply chain remain in the country.

By Josh Owens for Oilprice.com 

More Top Reads from Oilprice.com:

• U.S. Shale Swings From Losses To Record Cash Flows
• China’s COVID Lockdowns Force Aramco To Slash Oil Export Prices
• Saudi Energy Minister: Insufficient Investment To Blame For High Fuel Prices

[Tom Nolan + 2,443]

https://oilprice.com/Energy/Energy-General/The-Call-For-Windfall-Taxes-On-Energy-Firms-Is-Growing.html

The Call For Windfall Taxes On Energy Firms Is Growing

By City A.M - May 10, 2022, 3:00 PM CDT

• High oil and gas prices have led to some massive profits for energy giants.
• There are growing calls for a potential one-off windfall tax on Big Oil.
• Many are skeptical that such a tax could backfire and deter investment, and make the energy crisis even worse.

Join Our Community

Tesco chairman John Allan has joined calls for energy giants to be slapped with a windfall tax to ease the pressure on households suffering the most from the cost-of-living crisis.

Speaking on BBC Radio 4’s Today program he argued there was an “overwhelming case” for a one-off levy on North Sea oil and gas companies, revealing some of the supermarket’s customers have started rationing the amount of food they buy at the supermarket.

He warned the country was facing “real food poverty for the first time in a generation,” and that people were finding it even harder to mitigate soaring energy costs.

Allan explained: “There’s an overwhelming case for a windfall tax on profits for those energy producers, fed back to those most in need of help with energy prices.”

The Tesco boss’ comments follow the proposals from the Labour Party for a one-off £1.2bn levy on North Sea oil and gas companies, with energy firms reporting hefty profits amid soaring oil and gas prices.

The tax would contribute to opposition plans to provide a £600 annual saving to household energy bills for low-income households.

Calls for a levy rebuffed amid investment commitments to UK energy infrastructure

Earlier today, British Gas owner Centrica posted a trading update, revealing it expects to post annual earnings at the top of its forecast range in July later this year.

It now expects to make earnings of between 6.7p and 10.8p per share, up from 4.1p last year.

The company said it has been boosted by “strong” volumes across its nuclear and gas production operations while its trading business has also increased volumes of gas and renewable energy to improve UK supply amid pressure from the Russian invasion of Ukraine.

UK-based energy giants BP and Shell also reported record underlying earnings in their latest quarterly updates this month and raised their buyback pledges for shareholders.

The rebound in performance was powered by fossil fuel trading, with oil prices remaining elevated above $100 per barrel after eight years of trading below the milestone, while gas prices also remain historically above conventional levels, topping £8 per therm in March.

Both firms suffered heavy losses during the pandemic amid reduced demand and lockdowns across developed economies.

By contrast, supermarkets such as Tesco remained open during the pandemic with increased trade.

Last month, Tesco revealed profits of more than £2bn for the full-year of 2021, with earnings trebling over a 12-month window.

Unlike other corporations, North Sea oil and gas companies already pay an elevated level of tax – with a special 40 percent levy on North Sea companies, 19 percentage points above the corporate taxes paid by everyone else.

The Office for Budgetary Responsibility has predicted UK fossil fuel companies will raise £21bn between 2021-25, averaging £4-5bn a year – a 740 percent increase in returns between 2015-20.

Prime Minister Boris Johnson dismissed calls for a windfall tax following the results from BP and Shell, concerned it would deter key investment in oil and gas exploration.

This outlook was shared by Emily Fielder, head of communications at the Adam Smith Institute, who told City A.M. that calls for a windfall tax “make for a good headline” but are “economically short-sighted.”

She explained: “Whilst it is unlikely to benefit those who are in most in need of help with their energy prices, it will undermine trust between the Government and energy providers, disincentivizing investment to improve infrastructure and ultimately pushing up prices higher in the long-run. The inevitable decrease in investment in green energy will jeopardize our world-leading push for Net Zero and decarbonization.”

Commenting on potential solutions for households, Fielder said: “Those struggling to pay their energy bills need more targeted support, such as one-off cash payments, rather than politically expedient, but essentially ineffective and damaging policies.”

Oil and gas features prominently in the government’s recently unveiled supply security strategy, with the UK looking to reduce its reliance on Russian energy sources and ramp up domestic production to make the country less vulnerable to future energy shocks.

While Chancellor Rishi Sunak has so far not imposed fresh levies on energy firms, he has publicly demanded UK energy giants stick to ambitious domestic investment plans – with BP and Shell committing £18bn and £25bn respectively to energy production over the course of the decade.

By City AM

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[Tom Nolan + 2,443]

https://oilprice.com/Alternative-Energy/Solar-Energy/Is-This-The-Most-Disruptive-Event-Ever-For-US-Solar.html

Is This The Most Disruptive Event Ever For U.S. Solar?

By Rystad Energy - May 10, 2022, 4:00 PM CDT

• DOC investigation into panel imports from southeast Asia could put planned US solar capacity installations at risk.
• The investigation comes as domestic US solar companies are concerned about the rise of Chinese manufacturers.
• Imports from Thailand, Vietnam, Cambodia and Malaysia accounted for 85% of all solar panel capacity brought into the US in 2021.

Join Our Community

As much as 17.5 gigawatts (GWac) of planned US solar capacity installations in 2022 are in doubt after the Department of Commerce (DOC) opened an investigation into panel imports from southeast Asia, Rystad Energy research shows. The US was expected to install 27 GWac of solar energy capacity in the utility, residential, and commercial and industrial (C&I) markets this year, but with rising commodity prices and this new threat of tariffs on vital imports, 64% of those additions are now in jeopardy. The recent launch of an Antidumping and Countervailing (ADCV) investigation by the DOC has US suppliers worried about potential penalties on panel imports, which would likely be backdated. In response, Chinese panel manufacturers are halting shipments to the US until the results of the investigation and any retroactive action by the DOC is revealed. A preliminary judgment is scheduled for August, with a final decision due by January 2023.

The investigation comes as domestic US solar companies are concerned about the rise of Chinese manufacturers using cheap raw materials and shifting cell and panel assembly to southeast Asia to circumvent an existing ban on Chinese imports. With imports frozen while the investigation is pending, annual capacity additions could plummet from 22.6 GWac in 2021 to 10.07 GWac this year, the lowest annual total since 2019.

The DOC is investigating imports from four Southeast Asian countries that play a pivotal role in the US market – Cambodia, Malaysia, Thailand and Vietnam. Imports from these countries accounted for 85% of all solar panel capacity brought into the US in 2021, totaling 21.8 GWac. In January and February of 2022, their total share of imports was 99%.

Related: What Thomas Edison Can Teach Us About Our Electricity Crisis

“In an attempt to limit cheap Chinese solar panels entering the market from Southeast Asia, and with one eye on the goal of shoring up a domestic supply chain, the US has seriously dented its solar capacity forecast for 2022 and beyond. This could be the most disruptive event ever to face the US solar industry,” says Marcelo Ortega, renewables analyst with Rystad Energy.

How the freeze happened

On 25 March 2022, the US DOC decided to investigate a petition by domestic PV manufacturer Auxin Solar concerning composite silicon (cSi) solar PV panels sourced from Cambodia, Malaysia, Thailand and Vietnam. Auxin claimed that Chinese panel manufacturers circumvent ADCV rules by offshoring cell and panel assembly processes to the four countries while still using cheap Chinese raw materials.

In a 2012 investigation into Chinese manufacturers, ADCV tariffs were eventually applied at different rates to different suppliers. The most common rate was 30.66%, but some rates fell as low as 24%, while other suppliers were slapped with a 250% tariff. If the DOC decides a tariff extension is warranted, equipment imported after the investigation announcement would be permitted, but tariffs could be backdated on imports as far back as November last year. Between November 2021 and February 2022, US buyers imported $1.46 billion of solar panels from the four southeast Asian countries under investigation, meaning Chinese suppliers could be collectively liable for anywhere between $365 million and $3.6 billion in additional tariffs. Chinese panel manufacturers are unwilling to risk such prohibitively high fines, and many have opted to entirely halt panel exports to the US.

The probe is not limited to cSi PV panels but also includes PV cell imports. This is significant for the US domestic panel manufacturing industry as its 5 GW of capacity is mainly panel assembly and relies heavily on cell imports from overseas. Last year, 46% of imported cells came from the countries under investigation. US manufacturers are also feeling the effects of the investigation. Although the threat of sanctions may incentivize suppliers to build US PV manufacturing facilities, it would take at least 18 months to build a domestic supply chain from polysilicon to assembled panel. If investment decisions are made after August 2022, when preliminary results are to be announced, this capacity would be operational in January 2024 at the earliest.

Antidumping probe adds more stress to US market

Even before the probe, the US PV industry began 2022 in a tough spot. More than 7 GWac of solar PV was delayed last year by more than six months due to high commodity prices, federal tax credit uncertainty and unfavorable policies. This included the US government’s December 2021 decision to ban imports containing goods from China’s northwest region of Xinjiang due to reported human rights abuses committed against the Uyghur people. With 40% of the world’s silicon production based in Xinjiang, this policy effectively halved the number of panels that can be imported to the US, disrupting the already ropy supply chain.

In theory, if panel manufacturers can prove they source silicon and components from outside of Xinjiang, their exports will be unaffected. However, before the ban, suppliers did not need to track the origin of their inputs, and any traceability system takes time to implement. In practice, the rules set out in the new bill are ambiguous and entail unknown risks for suppliers and financiers. Although the legislation enforces a ban on all Xinjiang goods, the US already has a partial ban on panels with silicon sourced from this region. In June 2021, US Customs and Border Protection (CBP) banned imports of solar panels containing silicon produced by four Xinjiang-based silicon producers. This resulted in CBP detaining imports until the polysilicon source could be proven. Chinese panel suppliers claim between 40 megawatts (MW) to 100 MW of panel capacity has been detained, though the exact level remains unknown.

By Rystad Energy

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• China’s COVID Lockdowns Force Aramco To Slash Oil Export Prices
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[Tom Nolan + 2,443]

Oil Prices Fall On Rising Crude, Product Inventories

By Julianne Geiger - May 10, 2022, 3:49 PM CDT

https://oilprice.com/Latest-Energy-News/World-News/Oil-Prices-Fall-On-Rising-Crude-Product-Inventories.html

[Tom Nolan + 2,443]

Oil Prices Extend Gains As Distillate Inventories Plunge To 17 Year Lows

by Tyler Durden

Wednesday, May 11, 2022 - 09:35 AM

Oil prices are surging this morning, after COVID infections in Shanghai and Beijing dropped on Tuesday, providing some cautious optimism of improvement after lockdowns sparked growth scares... but that also comes as IIF tweets about global recessions and US inflation prints hotter than expected, prompting fears of a more aggressive Fed stomping on growth.

The oil market hasn’t been “consistent at all as of late, which has turned many away from trading the commodity,” said Rebecca Babin, senior energy trader at CIBC Private Wealth Management.

“Trading crude right now is like trying to figure out the mood swings of a teenager. It can feel like a futile endeavor.”

Traders continue to monitor the EU’s efforts to agree sanctions on Russian oil imports. On Wednesday, Hungary said it will only agree if shipments via pipelines are excluded.

https://www.zerohedge.com/energy/wti-slides-after-big-surprise-crude-build

[Tom Nolan + 2,443]

Record Airfares And Soaring Food Prices: What's Behind Today's Surprise CPI Beat

by Tyler Durden

Wednesday, May 11, 2022 - 09:35 AM

Now that we've had the time to digest it, here is what we learned this morning.

The BLS reported that headline CPI prices eased down to a 0.3% (0.33% unrounded) M/M clip from a blowout 1.2% print last month, though this was higher than expectations for a 0.2% gain. Energy prices slid 2.7% M/M as a pullback in retail gasoline prices led to a 5.4% drop in energy commodities, which was partially offset by a 1.3% increase in energy services (look for energy prices to jump again in May, now that gasoline is back to all time highs). Looking at the other notable components, food stayed hot as food at home climbed 1.0% mom and food away from home rose 0.6% mom.

https://www.zerohedge.com/markets/record-airfares-and-soaring-food-prices-whats-behind-todays-surprise-cpi-beat

[Tom Nolan + 2,443]

Widespread US Diesel Shortages Send Crack Spreads To Mindblowing Highs

by Tyler Durden

Wednesday, May 11, 2022 - 05:30 AM

By John Kemp, senior market analyst

Global stocks of refined petroleum products have fallen to critically low levels as refineries prove unable to keep up with surging demand especially for the diesel-like fuels used in manufacturing and freight transportation. The result has been a surge in prices refiners receive for selling fuels compared with prices they pay for buying crude and other feedstocks, boosting their profitability significantly.

In the United States, refiners currently receive roughly an average of more than $150 per barrel from the sale of gasoline and diesel at wholesale prices, while paying only around $100 to purchase crude....

https://www.zerohedge.com/markets/widespread-us-diesel-shortages-send-crack-spreads-mindblowing-highs

 

[Tom Nolan + 2,443]

Europe May Face LNG Crisis This Winter

by Tyler Durden

Wednesday, May 11, 2022 - 04:00 AM

Via Rystad Energy,

• Rush to wean off Russian gas has made European consumers highly vulnerable to LNG price shocks.

• Global LNG demand outstrips supply in 2022.

• New LNG projects are unlikely to provide relief until 2024.

A liquified natural gas (LNG) crisis is brewing for European countries dealing with energy insecurity in the wake of Russia’s invasion of Ukraine, as demand will outstrip supply by the end of this year, Rystad Energy research shows. Although soaring demand has spurred the greatest rush of new LNG projects worldwide in more than a decade, construction timelines mean material relief is unlikely only after 2024. Global LNG demand is expected to hit 436 million tonnes in 2022, outpacing the available supply of just 410 million tonnes. A perfect winter storm may be forming for Europe as the continent seeks to limit Russian gas flows. The supply imbalance and high prices will set the scene for the most bullish environment for LNG projects in more than a decade, although supply from these projects will only arrive and provide relief from after 2024.

https://www.zerohedge.com/energy/europe-may-face-lng-crisis-winter

[Tom Nolan + 2,443]

Relentless Price Hikes Send U.S. Gasoline Price To Fresh Record High

By Tsvetana Paraskova - May 11, 2022, 8:30 AM CDT

• U.S. average nationwide gasoline prices hit $4.404 per gallon on Wednesday.
• Diesel prices also hit a new high on Wednesday, reaching $5.553 a gallon.
• This time last year, the national average U.S. gasoline price stood at $2.985 per gallon.

https://oilprice.com/Energy/Energy-General/Relentless-Price-Hikes-Send-US-Gasoline-Price-To-Fresh-Record-High.html

[Tom Nolan + 2,443]

Record High Diesel Prices Will Ripple Across The Economy

By Tsvetana Paraskova - May 10, 2022, 7:00 PM CDT

• Diesel prices have hit record highs due to very tight domestic inventories and a global supply shortage.
• A combination of spiking demand as the world recovers from Covid and falling supply due to Russia’s invasion of Ukraine has hit diesel markets hard.
• Not only are diesel prices at record highs, but they are also at their largest differential to gasoline in history.

https://oilprice.com/Energy/Energy-General/Record-High-Diesel-Prices-Will-Ripple-Across-The-Economy.html

[Tom Nolan + 2,443]

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