U.S. natural gas production will decline by 5 percent by 2050, and consumption will shed 4 percent if no new interstate pipelines are built, the Energy Information Administration said in its latest Annual Energy Outlook. This, in turn, will lead to higher gas prices, the authority also said, and this will, in turn, lead to higher electricity prices. “The higher natural gas prices that result from capacity constraints primarily affect natural gas consumption in the U.S. electric power sector, which is more price-sensitive than the residential, commercial, and industrial sectors,” the EIA explained. The share of natural gas in power generation is set to decline in the scenario of no new interstate natural gas pipelines but not by much. According to the EIA, in that scenario, the share of gas in 2050 will constitute 31 percent of the total, compared with 34 percent under the agency’s reference scenario. Yet, in absolute terms, the lack of new interstate gas pipelines will reduce gas-fired power generation by 11 percent in 2050 compared to the reference scenario. At the same time, any bans on new interstate pipelines—a prerogative of the federal government—will not lead to any significant carbon dioxide emission declines. “We project that restricting interstate U.S. natural gas pipeline capacity would only slightly lower energy-related carbon dioxide (CO2) emissions in the United States relative to the Reference case,” the EIA wrote. “Total CO2 from all fuel sources in 2050 are 4% lower in the No Interstate Natural Gas Pipeline Builds case than in the Reference case.” One more thing that the EIA did not include in its report, but energy expert David Backmon raised as an issue this week in a podcast, is the link between interstate gas pipeline capacity and increased U.S. LNG exports to Europe, per President Biden’s commitment to Brussels to make up for a solid portion of Russian gas. Without more pipelines, Blackmon argued, U.S. LNG producers would find it difficult to boost exports sufficiently. NN: Biden promises more gas and oil for the EU. But their is a problem…… he refuses to approve the wells, pipelines and terminals…. So how the hell is the product going to make it to market…… What he creates with his mouth he destroys with his foot….
Markets Stocks, Bonds Fall After Hawkish Brainard Remarks: Markets Wrap
U.S. equities and bonds fell as traders weighed hawkish Federal Reserve commentary and a new round of potential sanctions on Russia, ratcheting up global tensions over Moscow’s invasion of Ukraine. The S&P 500 declined, led by losses in technology and consumer discretionary, while Treasuries also retreated amid deepening concern about inflation and the policy response. Federal Reserve Governor Lael Brainard said the U.S. central bank will continue to tighten policy methodically and shrink its balance sheet at a rapid pace as soon as May. The 10-year Treasury yield rose for a third day to a three-year high, with the spotlight remaining on inverted yield curves that may signal an economic downturn, should the Fed tighten aggressively to quell price increases. “There’s lots of uncertainty about what’s going to happen next in a slew of areas pertinent to investing, including whether the U.S. economy is heading for a recession, how high inflation will go and what the Fed will do about it,” Ed Yardeni, president of Yardeni Research, said in a note. “The many unknowns have made for a volatile stock market so far this year.” Market moves continue to be shaped by the ramifications of tightening monetary policy and the war in Ukraine as raw-material costs stoke inflation. The U.S., European Union and Group of Seven are expected to announce additional sanction on Russia, including a ban on all new investments in the country. Additionally, the EU is planning to propose a mandatory phaseout on coal imports from Russia in a direct response to reports Moscow forces have committed apparent war crimes in Ukraine. European coal futures rose to a three-week high. Crude oil fell after the EU was said to be steering clear of sanctioning Russia’s oil and gas for now. Meanwhile, the Stoxx Europe 600 index inched higher and bond yields across Europe climbed as a report showed input costs for French services firms accelerated to a record. “This Fed has been clear as a bell about what we should expect from them,” Liz Young, head of investment strategy at SoFi, said on Bloomberg TV. “They did exactly what we expected that first time in March and now they’re being even more clear about 50 in May. So as we move toward May, stocks can get their expectation in line about what we might see.”
Iran oil production sinks again in March
OPEC’s second-largest producer, Iraq, produced just 4.15 million barrels per day (bpd) of crude oil in March, well below its quota under the OPEC+ agreement, according to data from Iraqi state oil marketing firm SOMO seen by Reuters. Iraq’s crude oil production was down by 112,000 bpd last month compared to the previous month, the data seen by Reuters on Tuesday showed. As part of the OPEC+ deal, OPEC’s second-biggest oil producer after Saudi Arabia was allowed to pump as much as 4.370 million bpd in March. Iraq’s production, however, per SOMO data, was more than 220,000 bpd short of that target, signaling that a growing number of members of the OPEC+ alliance are struggling and will be struggling to pump to quotas as the group lifts its nominal production targets each month by 400,000 bpd. Last week, the OPEC+ meeting concluded that no change in production plan was needed, agreeing to lift the group’s production by another 432,000 barrels per day starting in May. The 32,000 bpd above the originally agreed to 400,000 bpd is due to shifting baselines of five of its members. Saudi Arabia’s production quota has been lifted to 10.549 million bpd, with Russia’s quota raised to the same amount. The UAE’s quota is 3.04 million bpd, Kuwait’s is 2,694 million bpd, while Iraq’s is 4.461 million bpd. The extension of the agreement as-is was a largely expected move by the market. Yet,
the latest data showed that most OPEC members continue to underperform in reaching their agreed-upon targets, leaving a much wider supply gap in the market than many estimates had forecast.
In March, for yet another month, OPEC failed to achieve all the planned increase for the cartel as part of the OPEC+ agreement. OPEC’s oil production averaged 28.54 million bpd last month, just 90,000 bpd higher than in February, compared to the 253,000 bpd monthly increase allowed in the OPEC+ deal, the monthly Reuters survey found last week.
Germany agrees to end reliance on Russia’s fossil fuels
FRANKFURT, (Reuters) – Germany will face a steep recession if there is a stop to imports or delivery of Russian gas and oil, a top German bank lobby warned on Monday. Europe’s largest economy is heavily dependent upon Russia for energy, and nations banks echoed concerns over possible energy disruption expressed by big names in industry in recent days. Christian Sewing, the chief executive of Deutsche Bank, said in his role as president of Germany’s BDB bank lobby that banks expected sharply slower growth this year of around 2% due to the war in Ukraine.
“The situation would be even worse if imports or supplies of Russian oil and natural gas were to be halted. A significant recession in Germany would then be virtually unavoidable,” Sewing told journalists.
“The question of government aid measures for companies and sectors would then become even more urgent,” he said. Sewing once again called on the European Central Bank to act to fend off inflation. He said the ECB should end its net asset purchases soon and should send a signal with interest rates. “A signal that is urgently needed,” he said. NN: Thier is no good solution here. Putin has the EU by the balls and he damn well knows it. Threats of sanctions will not dissuade him. Putin knows he has all the aces he has been cafeuul setting them up for years….. And threat of him being tried as a war criminal is a sick joke. He will never stand trail in the Hague. Worse he is not a stupid man… Evil Yes stupid NO….. nothing beats a live demonstration to get your point across. Biedn makes idle threats Biden speaks with actions. What you see happening in the Ukrainians is sad and may not mean much to you. But to a Romanian or a Pole its speaks volumes… Its their worse nightmare. And i think they al know deep down inside the US and the EU will sell them out when the time comes and yes the time is coming.
Suspension Of Russian Oil, Gas Threatens Germany With Recession
Halting Russian oil and gas supplies to Germany would plunge Europe’s largest economy into recession, German banks have warned. According to a Reuters report, the BDB industry body expects a sharp decline in economic growth this year, to some 2 percent, because of the war in Ukraine—and that’s if supplies continue. “The situation would be even worse if imports or supplies of Russian oil and natural gas were to be halted. A significant recession in Germany would then be virtually unavoidable,” the chief executive of Deutsche Bank, Christian Sewing, told media. “The question of government aid measures for companies and sectors would then become even more urgent,” Sewing added. Last week, after Russia’s president announced that Gazprom would from April only accept payment in rubles for its gas, the German government triggered Phase 1 of an emergency plan to kick in if there is a supply disruption.The plan could see rationing of gas supply. Other EU member states, including Greece and the Netherlands, have also placed their systems and stakeholders on high alert. Italy and Latvia also issued warnings of potential disruptions. Germany, however, is particularly vulnerable to gas supply disruptions as it depends on Russia for about half of the gas it consumes. Earlier last month, German industrialists urged the government to devise an early-warning system, noting that there are “concrete and serious indications that the gas supply situation is about to deteriorate,” Now, German bankers have joined the calls for action to prevent the worst, addressing those calls to the European Central Bank. Deutsche’s Sewing called on the ECB to end its bond-buying activities and “send a signal” about interest rates, which, he said, was “urgently needed”. NN: I find it truly amazing… Its not about ending bond buying, Not even rationing…… or endless committee meetings. Its as plain as the nose on your face. The EU is Putin’s bitch as i have been warning about for 3 years. Since 2018 the EU shit canned its energy industry and double its dependence on Russia for its energy needs. Now those stupid actions are changing the world equation. This is the repeat of the seventies Arab oil Embargo… This time it is OPEC+. The Arabs and Russia are responsible for 90% of the worlds exportable oil and gas production….. The last oil embargo sparked off massive inflation, 17% interest rates.. A global financial crises and a stock market wipe out…. This embargo will be worse and so will the devastation of the global economy. And throw in the start of World War III for even more fun.
Biden Floats Putin War-Crimes Trial, More Russian Sanctions
WASHINGTON – President Joe Biden on Monday called for a war crimes trial against Russian President Vladimir Putin and more sanctions against Russia following reports of atrocities in Ukraine. “You may remember I got criticized for calling Putin a war criminal. Well, the truth of the matter, you saw what happened in Bucha… He is a war criminal,” Biden said. Biden noted that there needs to be more evidence gathered of war crimes and said that weapons need to continue to be provided to Ukraine. “This guy is brutal and what’s happening in Bucha is outrageous, and everyone’s seen it,” Biden said. Biden also said he is “going to continue to add more sanctions,” but declined to offer details. Ukrainian officials and journalists found many dead civilians in Bucha, a city near Kyiv, Ukraine’s capital, after Russian troops retreated from the area. Oleksiy Arestovych, an adviser to Ukrainian President Volodymyr Zelenskyy, said that 280 people were buried in mass graves. An Associated Press reporter saw the bodies of at least 21 people in various spots around the city. Ukrainian officials said the bodies of 410 civilians were found in Kyiv-area towns that were recently retaken from Russian forces. NN: Another serious osculation. I see this driving the world to oil and gas embargoes
German regulator takes over Gazprom Germania to ensure energy supply
FRANKFURT (Reuters) – Gazprom Germania, an energy trading, storage and transmission business ditched by Russia’s Gazprom on Friday, will be transferred to Germany’s regulator to ensure energy security, Economy Minister Robert Habeck said on Monday. All voting rights in the company will be moved to the regulator, the Bundesnetzagentur, Habeck told a news conference. “The order of the trust administration serves to protect public security and order and to maintain the security of supply,” Habeck said. “This step is mandatory.” Habeck added that security of supply was currently guaranteed at a time of crisis in energy ties between Germany and Russia in the wake of Russia’s Feb. 24 invasion of Ukraine. The Bundesnetzagentur will be take over control up to Sept. 30, 2022. It will be entitled to remove executives, hire new staff and ask management how to proceed. “Our goal will be to run Gazprom Germania in the interests of Germany and Europe,” Klaus Mueller, head of the Bundesnetzagentur, said in a statement. Gazprom gave no details or explanation of its decision to terminate its participation in Gazprom Germania and all of its assets, which include subsidiaries in Britain, Switzerland and the Czech Republic. Gazprom has been in the sights of European Union regulators for months over allegations, which it denied, that it was holding back gas that could have been released to lower soaring prices. Sources said last week that its offices in Germany had been raided by EU antitrust authorities. The Economy Ministry said the move was to stave off possible acquisition of Gazprom Germania by JSC Palmary and Gazprom export business services LLC, both of Russia. It was unclear who was behind the companies, the ministry said, implying that an acquisition was legally not permissible, given the investors were from outside the EU and about to operate critical infrastructure. German Finance Minister Christian Lindner on Monday rejected an EU embargo on Russian gas imports as mounting civilian deaths in Ukraine increase pressure on the bloc to impose sanctions on Russia’s energy sector. “We are dealing with a criminal war,” Lindner said before talks with his EU colleagues in Brussels. “It is clear we must end as quickly as possible all economic ties to Russia. We must plan tough sanctions, but gas cannot be substituted in the short term. We would inflict more damage on ourselves than on them NN: The anti is still going up. Now Germany is seizing Gazprom assets…. I am sure Putin will react.
Russia’s March oil output down to 11.01 million bpd, analysts warn of further declines
(Reuters) – Russian output of oil and gas condensate fell to 11.01 million barrels per day (bpd) in March from 11.06 million bpd in February, according to Reuters calculations based on an Interfax report on Monday that cited an unnamed source. A Russian analytical unit affiliated with the Energy Ministry did not publish monthly oil and gas output data on April 2, according to two clients, the first delay in years amid reports of a production decline. Russia’s oil and gas condensate production was 46.57 million tonnes in March, Interfax news agency said, compared with 42.23 million tonnes in February, which was three days shorter. Reports of lower production in March, though minor, come as exporters experience difficulties in placing some barrels amid Western sanctions over Moscow’s military operation in Ukraine. On Friday, sources said that on March 31, the oil output was down to 10.6 million bpd, the lowest daily level since September 2021. It was not immediately clear whether the reduction was a one-off factor or a sign of a more prolonged decline.
At the same time loadings of Russian flagship oil blend, Urals, fell from the Western ports in the Baltic Sea by 5% from the initial schedule last month due to cargo cancellations.
On Monday, citing a source familiar with the data, Interfax news agency said that Russian oil exports outside the ex-Soviet Union increased by 15.8% in annualised terms in the first quarter to 57.1 million tonnes (4.65 million bpd). It said Russian natural gas output rose 0.8% year on year in March to 67.5 billion cubic metres. The declines seen in oil production in Russia are related to changes in logistics and financing, Deputy Prime Minister Alexander Novak was quoted as saying on Friday, without providing detail. As European customers are taking a cautious approach when dealing with Russian oil, analysts expect that Russia may have to cut production this month by between 1 million bpd and 1.5 million bpd.
“I wouldn’t vouch for how fast production will decline. On average (decline) by 1 million bpd looks plausible, but it could eventually be even more,” Alexei Kokin from brokerage Otkritie said about expectations for April.
The energy ministry did not reply to a Reuters request for a comment on possible production cuts this month. Russia calls its actions in Ukraine a “special operation” that it says is not designed to occupy territory but to destroy its southern neighbour’s military capabilities and capture what it regards as dangerous nationalists. NN: our calculations are 3 million BPD of Russian oil dropped out of the market in March. And for April it could be as high as 5 MBPD…. Putin can piss more oil then the 1MPD of shit oil the US will TRY to release from the strategic sock pile…
Peskov: Russia to seek payments in rubles for more goods
https://youtu.be/FsqNDbCuy_o
Kremlin spokesman Dmitry Peskov said on Sunday that Russia is likely to extend its requirement of payments in rubles from gas to other exported goods. Peskov also warned that the sanctions against Russia could result in “the erosion of confidence in the dollar and the euro” and prompt other countries to “work out options for mutual settlements of national currencies.”Earlier, Russian President Vladimir Putin required “unfriendly” countries to pay for Russian gas in rubles and warned gas contracts will be frozen if they refuse to do so. However, European countries insisted they will continue paying for the gas in dollars or euros and Moscow clarified they will be able to do so through the Gazprom bank which will then convert the received money into rubles. NN: When the EU relies upon Russia for 50% of their energy needs and 25% of their food supplies. I would suggest that Putin has got them by the balls.
Oil Prices Don’t Fully Reflect Russian Supply Risks, Vitol Says
https://youtu.be/Pxhz-ATYFkU
(Bloomberg) — Oil prices have fallen to levels that don’t reflect the risk of disruptions to Russian exports or the ability of China to keep the coronavirus pandemic under control, according to the world’s biggest independent crude trader. While Brent surged to almost $140 a barrel soon after Russia’s attack on Ukraine in late February, it sunk 13% last week to around $104. That was due to the U.S. announcing an unprecedented release of strategic reserves to tame fuel prices and virus cases rising in China.
Those developments overshadowed the potential for a drop in oil from Russia over the coming months. Traders, shippers, insurers and bankers are wary of taking on Russian barrels as Western governments isolate and sanction Moscow for its invasion.
“Oil feels cheaper than most would’ve predicted,” Mike Muller, Vitol Group’s head of Asia, said Sunday on a podcast produced by Dubai-based consultant and publisher Gulf Intelligence. “Oil prices could be higher given the risk of disruption of supplies from Russia. But people are still lost figuring out those numbers.” Flows of Russian crude and oil products may be down by between 1 and 3 million barrels a day through the third quarter, according to Muller. The country normally exports around 7.5 million barrels every day. China has placed almost all of Shanghai’s 25 million residents under some form of lockdown to contain the spread of omicron variant of the virus. The government has ordered local officials to curtail the outbreak “as soon as possible.” “I happen to be in the camp that thinks China will continue to suppress this,” Muller said. “The Chinese are certainly making a good fist of arresting it.” Beijing will probably announce more economic stimulus measures before the Communist Party Congress later this year, Muller said. Such a move would likely bolster demand for oil in the world’s biggest importer. “China will throw the kitchen sink at making sure the economy delivers,” he said. “We are going to see China put a massive effort into infrastructure spending and propping up the economy. You’re going to see a big outlay.” There’s also less chance of the 2015 nuclear agreement between Iran and world powers being revived in the coming months, according to Muller. A deal would limit Tehran’s atomic activities and lift U.S. sanctions on its energy exports, enabling it to ramp up oil production. American officials said late last month that a pact wasn’t “imminent,” while Iran has made similar comments. Envoys are yet to say when they’ll return to Vienna for negotiations and many U.S. allies in the Middle East — including Israel and Saudi Arabia — are wary that a revival of the deal would hand Iran an oil windfall and allow it to continue arming proxy groups in the region. “Everyone was expecting a return of Iranian supplies,” Muller said. Now “nobody believes that’s going to happen in the second quarter. It looks much less likely than it did a few weeks back.” Geneva-based Vitol traded 7.6 million barrels of crude and oil products last year, and made revenue of $279 billion. NN: Another oil shock is coming. By my reckoning 3 million barrels a day in Russian crude production is coming off line.T his is critical as we enter high demand driving and fly me vacation season.