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MORNING ENERGY NEWS | 10/06/2021

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Here’s a reminder that Biden is very good for Saudi Arabia and Russia.

Daily Journal (10/6/21) column: "While the greens in America, including their champion zealot, President Joe Biden, howl their primal screams about climate change, the rest of the world is turning to coal. The dark stuff. The satanic fuel. But it’s back big-time across the globe. So is old-fashioned petroleum...Then, there is the situation with oil. The price has been rising as demand remains steady. The Wall Street Journal reported OPEC nations predict demand for their oil will at least double during the coming decades. That doesn’t sound like a fuel source that is going out of fashion. This is all happening just at the very moment Democrats in Congress are about to pass green energy bills that will cripple our fossil fuel industry. These fuels could make America the energy powerhouse of the 21st century. I...The shame of all this is when Trump left office, America was all but energy self-sufficient and even an energy exporter. Thanks to the shale oil and gas revolution, the U.S. has access to more oil and gas (and coal) than any other nation. We have many hundreds of years of energy supply. Now that the rest of the world is thirsting for U.S. oil, gas and coal, the Left wants to shut down all domestic production by 2035, even though our fossil fuels are the cleanest. So, instead of the world’s energy coming from the U.S., it will come from Russia, Saudi Arabia and the OPEC nations. To borrow a Trumpism: Those nations now are laughing behind our backs."

"The focus on ESG and green transformation has reduced producers' normal long-cycle capex response to surging prices and rising demand. Without a response from producers, the only other option is for prices to reach levels that triggers demand destruction..."

– Ole Hansen, Saxo Bank

BoJo keeps using the phrase Build Back Better. I don't think it means what he thinks it means.

Bloomberg (10/6/21) reports: "European gas prices surged again, bringing their gains over just two days to 60%, as the impact of soaring energy costs rippled through equity and bond markets and the European Union sounded the alarm. Dutch and U.K. gas futures continue to hit fresh records along with rising power prices. Rocketing energy costs are stoking inflationary pressures and fueling concern that economic growth will slow, prompting a slump in European stocks. 'It looks like a classic short squeeze to me,' said Ronald Smith, a senior analyst at BCS Global Markets, who expects the latest spike to be short-lived. “I expect we’re going to see some traders going bankrupt and liquidating their positions.' Global gas and coal markets have tightened just as the heating season starts in the northern hemisphere, with limited supply failing to catch up with recovering demand. Colder weather is forecast for Europe next week, with temperatures across the mainland set to drop below normal levels. "

And it isn't just jolly old England getting crushed by decades of green dreams...

Bloomberg (10/6/21) reports: "European industry is being pushed closer to breaking point as the region’s energy crisis worsens by the day. Power and gas prices are hitting fresh records almost daily, and some energy-intensive companies have temporarily shut operations because they’re becoming too expensive to run. As winter approaches and Europeans start to turn on their heaters, the squeeze will intensify, pushing more executives into tough decisions about keeping plants open. Ammonia producer SKW Stickstoffwerke Piesteritz GmbH is among those that’s been forced into drastic steps. The German company, which burns through 640 gigawatt hours of natural gas each year, equivalent to about 50,000 households, said Tuesday it will cut production by 20% to offset rising gas prices. 'It doesn’t make sense to make ammonia at these price levels,' said Chief Executive Officer Petr Cingr. 'A complete production stop looms if the government doesn’t act.' On Wednesday, the European Union issued a fresh warning and said it will outline measures including tax cuts and state aid that governments can use to help. 'This price shock cannot be underestimated,' EU energy chief Kadri Simson said. 'If left unchecked, it risks compromising Europe’s recovery.'"

**When the crisis reaches America don't say we didn't warn you: "*Just like Europe, the Biden administration has made energy policy a subset of climate policy."***

Foreign Policy (10/5/21) article: "Will the United States go down the same path and soon experience a European-style energy crisis? There are many parallels, and both the February electricity crisis in Texas and rolling power blackouts in California give a preview of what could lie ahead....For the first time in decades, Washington seems to be ignoring energy geopolitics, too. Just like Europe, the Biden administration has made energy policy a subset of climate policy. An energy crisis is affecting almost every part of the globe, marked by record-high energy prices, tight supplies, and power blackouts. Some of the world’s richest countries and U.S. states such as California have been struggling to keep their electricity systems stable....The first energy crisis in decades has come as a shock to many, who seem to have forgotten how energy insecurity reverberates onto every major sphere of public life: the economy, national security, the environment, and public health. As the world’s most traded good, energy is involved in everything we buy and consume, so energy prices and shortages significantly impact economic growth. Because energy is the most important input in manufacturing, stable prices and supplies are key to economic competitiveness. Electricity and fuels for heating, cooking, and transport are major items in every household budget, and price increases disproportionally affect the poor."

Energy Markets

WTI Crude Oil: ↓ $77.55
Natural Gas: ↓ $5.84
Gasoline: ↓ $3.22

Diesel: ↑ $3.38
Heating Oil: ↓ $231.08
Brent Crude Oil: ↓ $81.24
US Rig Count: ↓ 621

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