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As the Senate passed the Inflation Reduction Act budget reconciliation bill, U.S. fuel retailers warned that including higher tax credits for sustainable aviation fuel (SAF) would reduce the supply of biodiesel and renewable diesel as all those fuels compete for feedstock.  The bill, which is now set to move for approval in the House, is part of the Biden Administration's efforts to lay the foundations for reducing America's greenhouse gas emissions, including emissions from the aviation sector.   The bill extends the existing biodiesel…
Any hopes held by international oil companies (IOCs) that the Baghdad-based Federal Government of Iraq (FGI) was just bluffing about blacklisting IOCs operating in the semi-autonomous Kurdish region of Iraq have been dashed. A letter sent on 12 June by Hassan Muhammad Hassan, the deputy director general of the state-run Basra Oil Company (BOC) called on ‘all lead contractors and sub-contractors’ of IOCs working in Iraqi Kurdistan to pledge that they would no longer work in Kurdistan and that any current contracts should be terminated…
Despite signs of weakening economic growth globally, regional diesel markets are tight and could tighten even further when winter comes and when Europe bans imports of Russian crude and fuels.  Distillate fuel inventories are low in the United States and Europe. Stockpiles in the U.S. haven't increased this summer as usual, and in one month since the end of June, they have seen the biggest drawdown for this time of the year in at least 32 years. The fuel market in Europe is even tighter as industries and utilities look to switch to oil products…
President Biden recently boasted on Twitter that gasoline prices in the United States have been falling for 50 days straight, noting this was the fastest decline in a decade.  The president added a sort of infographic to his tweet informing us that 50 percent of gas stations sold gasoline for $3.99 or less a gallon. What he forgot to mention was that demand for gasoline has been behaving very unnaturally for this time of year. Standard Chartered this week released a commodity alert that said that this year, driving season in the U.S. never…
China has begun its retaliation against Washington by announcing Friday the cancelation of a series of meetings with the United States, namely the suspension of issues it was working bilaterally with the US on, including related to military dialogue, climate change and anti-drug projects. Most important among these at a moment Washington has expressed concern that "the risk of a mistake could actually lead to some sort of conflict" (in John Kirby's words Thursday) - is the cancelation of military ties. This comes in addition to unveiling undefined…
The last two energy crises that threatened hundreds of energy companies with bankruptcy have rewritten the O&G M&A playbook. Previously, oil and gas companies made numerous aggressive tactical or cyclical acquisitions in the wake of a price crash after many distressed assets became available on the cheap. However, the 2020 oil price crash that sent oil prices into negative territory has seen energy companies adopt a more restrained, strategic, and environment-focused approach to cutting M&A deals. It’s therefore hardly surprising…
GDP fell 0.9% in the second quarter. This followed on the heels of a -1.6 GDP print in Q1. Back-to-back contractions in GDP have historically been defined as a recession, but the Biden administration and their apologists insist we aren’t in a recession. Peter Schiff appeared on the Megyn Kelly show to talk about the White House recession spin. He said this recession is just getting started. The mantra from the White House is that two consecutive quarters of negative GDP isn’t the “technical” definition of a recession and…
This article is the fourth in a series on the BP Statistical Review of World Energy 2022. The Review provides a comprehensive picture of supply and demand for major energy sources on a country-level basis. Previous articles covered overall energy consumption, carbon dioxide emissions, and petroleum supply and demand. Today, I want to cover the production and consumption of natural gas. In 2021, global natural gas consumption reached a new all-time high, surpassing the previous record set in 2019 by 3.3%. Natural gas is the cleanest-burning of the…
Oil production in Libya has hit 1.2 million barrels per day, the level the country was producing prior to its declaration of force majeure in April, according to the new leadership of the National Oil Company (NOC).  “Due to the great efforts from the #NOC subsidiaries and technical teams, we are happy to announce that our production rates have reached the pre-force Majeure levels of 1.200.000 barrels per day,” the NOC tweeted Sunday. On July 13, days after the Government of National Unity (GNU) stormed the NOC and forcibly replaced…
Earlier this week, Senator Joe Manchin and Chuck Schumer surprisingly revived a Democratic energy and healthcare bill that placed significant emphasis on clean energy spending, both for using such energy and producing it. Also this week, the Senate approved another bill, this time about semiconductors. This second bill has been in the making for years, and now that it is approved, if it passes the House vote, it will provide billions in funding not just for microchip research—but for microchip production—at home. The first bill features…
The former British colony of Guyana, a nation whose economy was hit hard by the pandemic, has emerged as the world’s hottest offshore drilling location. Since 2015 global energy major ExxonMobil as well as its partners Hess Corporation and CNOOC have made a slew of quality oil discoveries in the offshore Stabroek Block which have delivered resources in excess of 11 billion barrels of oil. This is driving a massive economic boom for Guyana, which was among the poorest nations in Lain America and the Caribbean. According to the IMF, the micro-state’s…
President Volodymyr Zelensky says Ukraine is ready to start shipping millions of tons of grain sitting at its southern ports and is waiting for Turkey and the United Nations, which have agreed to oversee the shipments, to start the operation. "Our side is fully prepared. We sent all the signals to our partners -- the UN and Turkey -- and our military guarantees the security situation," Zelenskiy's office quoted the president as saying on July 29, noting he had personally visited one of the ports, Chornomorsk, to assess the situation. "The infrastructure…
Oil piracy is as old as the industry itself, with criminals unable to resist the profits associated with black gold. Today, while the problem still persists in several parts of the world, effective monitoring and security systems have massively reduced the threat posed by oil pirates. In 2021, global piracy hit its lowest level since 1994. In fact, the most high-profile oil piracy accusation of recent times was of a very different nature from the usual oil pirate reports. Greece accused Iran of piracy after Tehran's Revolutionary Guards seized…
Earlier this month BP released its Statistical Review of World Energy 2022. The Review provides a comprehensive picture of supply and demand for major energy sources on a country-level basis. Each year, I do a series of articles covering the Review’s findings. In the previous article, I discussed the trends in global carbon dioxide emissions. Today, I want to cover the production and consumption of petroleum. Oil Demand Bounces Back For 2020, the Review reported the largest decline in oil1 consumption on record. After nine consecutive years…
East Africa seems to be split in favour of and against the East African Crude Oil Pipeline (EACOP) being built in Uganda and Tanzania. Environmentalists are concerned about the damage the pipeline and the development of an oil and gas industry could cause to the countries. But the governments of the East African states are hopeful about how the industry could support their economies, as oil majors look to Africa to develop new, low-carbon oil operations.  In 2015, French oil major Total (now TotalEnergies) and China National Offshore Oil Corporation…
While U.S. refiners are set to post over profit hikes of over 600% for the quarter, and global refiners are also reeling in revenues, the precipitous fall in gasoline prices and consumption over the past two weeks could reverse that going forward. After nearing $60 per barrel in June, the U.S. 321 gasoline crack spread fell last week to $37.57 per barrel, according to Reuters, with the EIA noting that while refinery production increased in June to take advantage of the high crack spread, gasoline demand began to decline in April.  Summer demand…
The world’s largest international oil and gas companies are expected to accelerate share repurchases, and some could raise dividends next week when Big Oil is expected to report another very strong quarter. Shareholders could be in for higher returns as Shell, BP, TotalEnergies, Exxon, and Chevron are all forecast to post exceptional and possibly record quarterly earnings for the second quarter due to high commodity prices and multi-year-high refining margins.  Some of the top international oil majors have already announced expectations…
The Nordstream 1 gas supply saga took another turn on Friday. Canadian newspaper Globe and Mail reported that German foreign minister Annalena Baerbock has warned Ottawa that if Canada kept sanctions in place that could effectively block the delivery of a missing gas turbine to Gazprom, Berlin could be forced to suspend military and economic aid to Ukraine. Baerbock reportedly indicated that a full stop of Russian gas flows via Nordstream1 could lead to popular uprisings in Germany. German media outlet RND quoted Baerbock on Wednesday stating that…
Global coal-fired electricity generators are producing more power than ever before in response to booming electricity demand after the pandemic and the surging price of gas following Russia’s invasion of Ukraine. The world’s coal-fired generators produced a record 10,244 terawatt-hours (TWh) in 2021 surpassing the previous record of 10,098 TWh set in 2018 (“Statistical review of world energy”, BP, July 2022). Coal-fuelled generation is on course to set an even higher record in 2022 as generators in Europe and Asia minimise…
During the campaign for the Democratic nomination for president, Joe Biden said he would make the Saudis “pay the price” for their killing of Washington Post contributor Jamal Khashoggi. He elaborated: “I would make it very clear we were not going to in fact sell more weapons to them. We were going to in fact make them pay the price, and make them in fact the pariah that they are.” Hard Lessons President Biden has had to learn some very hard lessons when it comes to the global oil industry. One of those lessons is that major…
The Permian Basin has dominated oil and gas deals in the U.S. in 2022, attracting almost half of all oil investments in the second quarter. Its abundant shale resources continue to attract investment from some of America’s most important oil firms, with no sign of slowing production. However, restrictions on new oil leases and threats of tighter environmental regulations from the U.S. government could see a curb in output unless Texas and New Mexico shift to a more environmentally friendly approach to oil and gas operations.  In the…
For a moment last week, it seemed that Libya might be snapping back into some version of itself more approaching normalcy than has been evident for some time. There was news from local sources that the country’s state-owned National Oil Corporation (NOC) had lifted the force majeure on the eastern oil terminals of Zueitina and Brega that had been in place on and off for weeks. This move was made specifically to allow an oil tanker ship to carry condensate for use in power generation in the country, but the expectations were that it would…
Oil and gas firms are increasingly realizing the importance of appealing to the Gen Z population, particularly as their voices on social media and other public forums are influencing the climate change response and national energy agendas. With more pressure than ever to transition away from fossil fuels to renewable alternatives, oil and gas firms may rely on this young generation for their survival in the coming decades.  Shell Plc is the first of the oil majors to announce its entrance onto the social media platform Tik Tok, to appeal to…
U.S. natural gas has rallied as much as 10% to a two-week high following forecasts for hotter than usual weather to continue across much of the country, with the sweltering heat and tight grid conditions reminiscent of the deadly summer heat wave of 2011. The heat has already raised power demand to record levels in Texas and other parts of the U.S., thanks to a sharp increase in cooling demand. Nymex natural gas for August delivery was quoted at $6.49/MMBtu in Friday's session, good for a nearly 70% climb in the year-to-date. The gains come despite…

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