BlackMask Breaking News

U.S. crude oil inventories fell by more than expected last week, according to the Energy Information Administration (EIA). Crude oil inventories dropped by 1.725 million barrels, against expectations for a build of 1.38 million barrels, the EIA reported. The crude stockpile build came on the back of a drawdown of 3.6 million barrels from the U.S. Strategic Petroleum Reserve (SPR), which was one of the smallest in months. The Biden administration has drawn down twice as much or more from the SPR in recent weeks in a bid to flood the domestic market with crude supply and keep pump prices of gasoline low for the elections. Since November 2021, more than 200 million barrels have left the nation’s emergency oil stockpile, resulting in SPR balances standing at their lowest since 1984. President Joe Biden is slated to announce later on Wednesday a further release of 15 million barrels from the SPR, according to media reports. The new releases are to offset upward price pressure on crude from OPEC+’s announcement earlier this month that the oil-producing alliance will cut 2 million barrels per day from global supply from November onwards. Gasoline prices at U.S. pumps reached a record high of $5 in mid-June but have come down since to well below $4 on average. The EIA also reported that distillate stockpiles rose by 0.124 million barrels last week. The expectation had been for a draw of 2.167 million barrels. Gasoline inventories, meanwhile, dropped by 0.114 million barrels, against expectations for a draw of 1.114 million barrels, the EIA said. NN: Bidden is desperate and stupid. A combination that usually ends up very badly

While the OPEC+ agreement to cut crude oil production and the U.S. reaction to it dominate headlines, a much more immediate crisis is getting worse by the day. Global diesel and other distillate fuel stocks have been on the decline for a while now, and there is no reversal of this trend in sight. Demand, on the other hand, has been growing, leading to a widening shortage. The situation has become so grave that U.S. buyers have begun snapping up diesel cargos originally sailing for Europe.

Reuters reported earlier this month that at least three tankers carrying diesel from the Middle East had changed their course mid-journey and were now traveling to the United States. And this new competition is about to intensify.

The foundation of the shortage is the gap between refining capacity and fuel demand. The pandemic saw a lot of refineries close, especially in the United States. It wasn’t just the pandemic itself—the anticipation of a boom in demand for EVs that would render a lot of refining capacity obsolete also had a part to play, as Reuters’ John Kemp noted in a column last week. This boom has yet to materialize, however. In the meantime, fuel demand remains robust, resulting in a shortage. In Europe, there have been contributing factors, such as the French refinery workers’ strike, which has made the shortage much worse than it would have been otherwise, and the upcoming planned maintenance-related refinery closures

Europe is currently buying a lot of Russian diesel to fill the gap, but this will have to stop next February as the embargo on Russian fuels kicks in, further aggravating an already complicated situation with the supply of middle distillates in a major consuming region 

Argus reported this week that Europe is in for a major diesel supply shock because of low inventories and strong demand. And the level of inventories had a lot to do with the unplanned outages at European refineries before maintenance season, including the four-week drop in French fuel output amid the workers’ strike. On top of that, the article quoted traders as saying there has been little incentive to build diesel inventories in the current market situation: diesel is strongly backwardated right now, so from the perspective of refiners and commodity traders, there is little sense in stockpiling. In the United States, meanwhile, distillate stocks have fallen to 106 million barrels, which is the lowest since records of these stocks began back in 1982, Reuters’ Kemp reported. Europe is doing a little better, with distillate stocks at 360 million barrels at the end of September, the lowest seasonal since 2007. The U.S. has been exporting a lot of diesel to troubled Europe, but now things are changing, and not just because cargoes are being diverted from Europe to the U.S. coast. Refiners in the United States are bracing for a possible ban on fuel exports. Floated earlier this year by the White House, the idea of banning fuel exports to secure supply for the local market prompted the CEO of the American Petroleum Institute and the head of the American Fuel and Petrochemical Manufacturers to warn against such a move. A ban on exports could “decrease inventory levels, reduce domestic refining capacity, put upward pressure on consumer fuel prices, and alienate U.S. allies during a time of war,” Mike Sommers from the API and Chet Thompson of the AFPM wrote to Energy Secretary Jennifer Granholm. Yet right now, U.S. buyers are snapping up diesel cargos from Europe in a way similar to how Europe has been snapping up LNG cargos originally meant for Asian destinations. And supply is not going up fast enough because there is not enough refining capacity for it to go up fast enough or even meaningfully enough. And this spells a lot more trouble for both Europe and the U.S., especially in the inflation department.

After a relentless four-week climb, U.S. national average gas prices have declined, falling 5.4 cents from a week ago to $3.86 per gallon on Monday. Still, the national average is still 20.6 cents higher from a month ago and a good 56.6 cents per gallon higher than a year ago. But while prices at the pump for gasoline have declined, diesel prices are on the opposite trajectory, rising 18.7 cents in the last week to $5.26 per gallon. “After a sharp rise in the national average over the last few weeks, we’ve seen an abrupt, yet expected decline as refinery issues have eased in the West and Great Lakes, overpowering some increases elsewhere. Though at the same time, diesel prices have soared. We’ll see a continued sharp drop in gas prices on the West Coast, including areas like Las Vegas and Phoenix, which are supplied by refiners in California, as refinery outages have been addressed,”  Patrick De Haan, head of petroleum analysis at GasBuddy, has said. Another reason for falling gas prices: falling crude prices. Oil prices have continued slipping further as the market reassessed the OPEC+ production quota cut, and the IMF warned about the increased risk of a global recession. After rising sharply following the announcement by OPEC+ that it will cut crude production by 2 million barrels per day, oil prices have resumed their downward trajectory as the effects of the meeting began to wear off.  Recession fears have remained a steady undercurrent in the oil markets recently for much of the current year, as have the tight supply situation that exists in the energy markets overall. The International Monetary Fund said on Tuesday that the world economy was headed for “stormy waters” as it downgraded its global growth projections for next year and also warned of a harsh worldwide recession if policymakers mishandled the fight against inflation. NN: their really is no mystery. Gasoline prices usually drops after the summer driving season. And diesel fuel (heating oil) prices climb as we enter winter. The big difference this time is Diesel Fuel could run out in the North East which is the biggest consumer of heating oil in America.

https://youtu.be/w-YRhUBgHZk

White House ‘plans to release another 15 MILLION barrels of oil’ from the US’s emergency stockpile this week in a bid to balance markets and crack down on rocketing gas prices  right  before midterm

• President Biden is planning to release up to 15 million barrels of oil from the United States’ emergency oil reserves as he tries to stem soaring gasoline prices
• The oil release would be the latest portion of a deal Biden struck last spring to release 180million barrels of oil from energy companies
• Sources close to the White House said Biden is hoping the release of oil reserves will be able to drop national prices just in time for the midterms as he tries to stem soaring gasoline prices. At least temporarily
  

The oil release would be the latest portion of a deal Biden struck last spring to release 180million barrels of oil from energy companies. His administration  will announce the latest reserve release later this morning. Biden said last week gasoline prices are too high and he would have more to say about lowering the costs this week. David Turk, the president’s deputy energy secretary, also said last week the administration can tap the Strategic Petroleum Reserve (SPR) in coming weeks and months as necessary to stabilize oil. News of the move to temper gasoline prices come just weeks before the pivotal midterm elections will put Biden’s approval to the test. A source familiar with the White House deliberations said Biden was looking to ease gas prices before the midterms. ‘The administration has a small window ahead of midterms to try to lower fuel prices, or at least demonstrate that they are trying,’ the unnamed source said. ‘The White House did not like $4 a gallon gas and it has signaled that it will take action to prevent that again,’ they added.  Average US gasoline prices hit about $3.89 a gallon on Monday, up about 20 cents from a month ago and 56 cents higher than last year at this time, according to the AAA motor group.  Gasoline prices hit a record average above $5.00 in June. NN: This is an act of desperation. Any price decrease in oil will be a buying opportunity

PM Truss has set back the women’s movement.. What a fucking IDIOT! Soon she will be history

British electricity and gas utility company National Grid PLC warned on Monday about potential blackouts the public might face between 4:00 pm and 7:00 pm on “really, really cold” days in January and February if the country fails to receive a sufficient amount of gas from Europe. The comment came from the firm’s Chief Executive Officer (CEO) John Pettigrew at the Financial Times’s Energy Transition Summit. “In the context of the terrible things that are going on in Ukraine and the consequences of that, [it was] right that we set out what some of the potential risks could be,” he noted. Earlier, National Grid said it may impose periodical three-hour power cuts in some areas of the country during the winter amid the ongoing energy crisis.

Unusually cold autumn weather to blast eastern U.S. next week

Temperatures could fall some 20 degrees below average

A blast of frigid air is set to descend on the eastern United States next week, in some places offering an early taste of winter, with snow even possible for some. Freezing lows and killer frosts could extend all the way south to near Atlanta and Birmingham, Ala., with temperatures in the upper 30s reaching the Gulf of Mexico. The cold blast looks to set in beginning Monday and could last about a week before relenting. Even thereafter, there are signs that chilly weather could stick around for the remainder of the month. There’s also a chance that snowflakes may fly in parts of the Great Lakes, Midwest or New England. Accumulations, if they occur, won’t be much, but it’s a harbinger of the coming winter season. Across the West, meanwhile, the seesaw weather pattern, bottomed out in the East, will feature a northward bulge in the jet stream that will allow anomalous heat to swell. Hot, dry weather is expected in the Pacific Northwest, with highs 20 degrees above seasonal norms.

Sharp cold front to surge southeast

A cold front was pushing across the Ohio Valley on Thursday morning, set to swing through the East Coast during the evening and overnight. It was bringing a slug of showers and a few thunderstorms, a day after having produced at least a half-dozen quick-hitting tornadoes in southeast Wisconsin. That cold front is paving the way for a more potent blast of cold air to follow on its heels early next week. This second, more robust front will take shape in south central Canada near the international border late Sunday or early Monday. By Monday night, temperatures will be 15 degrees below average in Chicago and across the majority of the Midwest and Great Lakes. The chill will surge south and east, reaching the Gulf and Atlantic coastlines by later Tuesday. The entire Upper Midwest will dip into the 20s on Monday night, and the remainder of the Midwest and Great Lakes will fall through the 30s. Kansas City will even dip below freezing, and both Indianapolis and Columbus should hover around that 32-degree mark. On Tuesday, Nashville, D.C., Raleigh and Philadelphia will be on the fringe of the more significant cold air mass, with highs in the mid- to upper 50s projected. Deeper within the core of the cold, another day in the 40s is anticipated. By Wednesday, low temperatures will plunge into the 20s and 30s from the Midwest to the Northeast and Mid-Atlantic, where frosts and freezes will end the growing season in many locations.    Some models are highlighting the potential for the upper 30s to around 40 to even make it into the Florida Panhandle and along the Interstate 10 stretch during this time frame. It appears as though the cold episode should persist until the end of the workweek, potentially easing some before a reinforcing batch of cold air wafts southeast. NN:  Burn more coal.. Looks like they turned off global warming… again! I am not afraid of global warming, I am not afraid of global cooling.  What really scares me is climate change stupid! It’s going to be a long cold winter and their are not enough supplies.

Don’t expect US shale producers to ride to the rescue as the world clamors for more oil, according to Energy Aspects. Oil output from shale basins is at risk of peaking in just two years as drillers combat rising costs, analysts including Amrita Sen wrote in a note to clients dated Tuesday. Rampant inflation is prompting at least five producers to consider the unusual step of cutting rigs at the start of the year, while none plan to boost activity substantially, according to the report. That’s bad news for the global market, which needs US barrels to help make up for OPEC’s production cuts and supplies upended by Russia’s invasion of Ukraine. It’s also a blow to the Biden administration, which has pressured American drillers to raise output in its quest to tame pump prices and is urging refiners to stockpile more gasoline and diesel.  “As much as the Biden administration would like for domestic oil producers to ride to the rescue in the short term, there’s little chance the administration can do anything to reverse this activity slowdown,” Energy Aspects said. Private-equity backed operators — the growth engine for West Texas’s Permian Basin, the most prolific US oil play — are the most likely to curb activity, the analysts said. Forward prices for US crude — currently hovering around $78 a barrel for next year — would need to rise above $80 for producers to ramp up, according to the report. Prime drilling land is dwindling, with only a few counties in the Permian still offering the so-called Tier 1 acreage that drives profits, the analysts said. Energy Aspects isn’t alone in its warning for shale output. Fellow consultant Rystad Energy sees oil flows peaking in 2025 right before global demand surges and then plateaus through 2030, according to head of shale well research Alexandre Ramos-Peon. This consumption slowdown would coincide with the world’s climate initiatives to shift away from fossil fuels. NN: Their is no switching away from fossil fuels in this life time… At best is slowly  diversifying supplies…… Smart people have still not dreamed up enough alternatives that make particle nor economic sense. Ask the soon to be freezing people in Germany and going broke masses trying to pay energy bills shooting to the moon. This is  what happens when you get ahead of yourself.

The JPMorgan chief executive officer said of the largest US bank  said his “gut” tells him that the Fed funds rate will probably have to rise higher than the 4% to 4.5% level many economists are predicting, as inflation persists.  Dimon said he has “total faith and trust” in Fed Chair Jay Powell, and that stagflation is far worse than most of the other potential outcomes as the Fed works to cool price pressures. And in a sign that markets may be getting ahead of themselves, Dimon also said that the consumer could be strong for another nine months (around the time the recession hits). In other words, Dimon, who has warned about recession and a further stocks crash, has also repeatedly stressed that consumers are still healthy.

• JPMorgan is sitting on $1.2 trillion in cash
• China can micro-manage growth at 3-4%
• CCAR has become untethered from reality (which we know since clearly nobody could have possibly predicted the UK’s pension fund crisis)
• Commodity prices around the world are very fragile

The “President of the United States needs to stand up and say we may not meet our 2050 climate objectives because this is a fucking war”.

He also said “time to stop going hat in hand to Venezuela and Saudi and start pumping more oil & gas in the USA”

Echoing what he has said before, Jamie said this is the way the USA maintains its standing, is by pumping more oil and gas and using energy security to ensure Western unity.

And he did say when it comes to ESG “investors don’t give a shit” warning not to “cede governance to do-gooder kids on a committee”.

He stressed the need for strong American leadership that is not being provided by either party. His conclusion: the world needs American diplomacy and neither Trump or Biden can lead the USA.

Oct 17 (Reuters) – Oil prices rose on Monday after China rolled over liquidity measures to help its pandemic-hit economy, igniting hopes for a better fuel demand outlook from the world’s top crude importer. Brent crude futures rose 66 cents, or 0.7%, to $92.29 a barrel by 0430 GMT, recovering from a 6.4% fall last week. U.S. West Texas Intermediate crude was at $86.17 a barrel, up 56 cents, or 0.6%, after a 7.6% decline last week. China’s central bank rolled over maturing medium-term policy loans while keeping the interest rate unchanged for a second month on Monday. Analysts said the full rollover is a signal that the central bank would continue to maintain loose monetary policy.  The country also vowed to greatly increase domestic energy supply capacity and step up risk controls in key commodities including coal, oil and gas, and electricity, a senior National Energy Administration official said on Monday. China will further increase reserve capacities for key commodities, another state official told a news conference in Beijing. Oil found support from a combination of factors, including Chinese President Xi Jinping’s comments at the Party Congress that reassured accommodative policies for the economy, a positive sign for demand outlook, CMC Markets analyst Tina Teng said. China is expected to release trade and economic data this week. Although its third-quarter GDP growth could rebound from the previous quarter, President Xi’s stringent COVID-19 policy has the world’s No. 2 economy facing what will most likely be its worst performing year in almost half a century.  Looking ahead, oil prices are expected to remain volatile as production cuts by OPEC+ will tighten supplies ahead of the European Union embargo on Russian oil, while a strong U.S. dollar and further interest rate increases from the U.S. Federal Reserve limit price gains. Member states of the Organization of the Production Exporting Countries and their allies, including Russia, lined up on Sunday to endorse the steep production cut agreed to this month after the White House, stepping up a war of words with Saudi Arabia, accused Riyadh of coercing other nations into supporting the move.  OPEC+ pledged on Oct. 5 to cut output by 2 million barrels per day, which will lead to an actual drop of about 1 million bpd as some members are already producing below their targets. “Tighter inventories for oil and oil products along with looming supply risks should keep prices volatile,” analysts at ANZ Research said in a note. NN: