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MORNING ENERGY NEWS  | 10/12/2021
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White House refuses to allow the world’s largest oil producers to produce more oil. 


Reuters (10/11/21) reports: "The White House stands by its calls for oil-producing countries to "do more" to support the global economic recovery, an official said on Monday, as crude prices hit multi-year peaks. The official said the administration was closely monitoring the cost of oil and gasoline and 'using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets.' It has raised the concern at a senior level with several members of the Organization of the Petroleum Exporting Countries and their allies, known as OPEC+, according to the official. Benchmark Brent is at a level not seen since 2018, while U.S. crude prices hit highs not reached since 2014 due to a combination of factors. Worldwide demand has rebounded faster than anticipated, and high natural gas prices are spurring some nations to switch power generation to oil from gas...U.S. oil production, which peaked near 13 million bpd in late 2019, remains far below that level even though daily fuel demand has rebounded to pre-pandemic levels."

"The way to reduce gas prices is by increasing oil supply. That means not sending policy signals that the Administration’s goal is to put the industry out of business." 

 

– Wall Street Journal Editorial Board

California doesn’t want people to buy small gas-powered generators, but is fine with backup generators running 15% of its grid. 


News Data (10/8/21) reports: "The Golden State shines within the public sphere for making great strides in decarbonizing its electric grid, but there is an uncomfortable reality underneath the glow—a whole lot of diesel generation is being built. Modern realities of the grid include public-safety power shut-offs and wildfires as well as inadequate infrastructure maintenance from utilities and spotty utility regulation. This means that some of the Big Tech companies that store and distribute our images, words and videos on the internet must build a large amount of backup generation to make it all possible—and a lot of it is diesel-fueled. The number of backup generators—sometimes known as BUGs—in the San Francisco Bay Area and in Southern California has grown dramatically in the past few years, as noted in a recent study from economic and public-policy research firm M.Cubed. Backup generation of all types rose by a significant 34 percent over the last three years in the Bay Area alone...The total diesel capacity in California is now big enough to power 15 percent of the state's electric grid, which has about an 80-GW capacity. As of 2021, in those two districts alone, there are 23,507 BUGs with a capacity of 12.2 GW, or 87,223 MWh per year."

Going green and going into the red. “The cost of energy in Spain is now six times higher than a year ago.”


Spanish News Today (10/11/21) reports: "In what is by now a familiar trend, the average daily price of electricity in the wholesale market will rise by 5% on Monday, October 11th to 184.48 Euros per megawatt-hour, thus resuming its upward climb after several decreases in the past few days...Consumers will face the highest costs today between the hours of 8pm and 9pm when each megawatt-hour will cost 241.27 Euros."

And Joe is trying to get America on the same track...


Oil Price (10/9/21) column "For weeks now, there has been virtually no other news but the energy crunch that surprised Europe in September and has since then gone on to roil every market and industry and spur fears of blackouts, astronomical utility bills, and rising food prices. The official version of events is that rising energy demand coincided with tight energy supply. The unofficial version has to do with Europe’s energy transition agenda and the possibility it may have rushed to it without enough long-term planning. And now, the U.S. has basically an identical agenda, focusing on boosting wind and solar power generation capacity, reduce demand for oil and gas, and encourage people to buy EVs instead of cars with internal combustion engines...The quick deterioration in the energy situation in Europe should make anyone planning major energy system overhauls think twice before following the exact same scenario that Europe did. It should motivate the development of alternative paths to net zero or maybe even reconsider the necessity for net-zero commitments. Sadly, this is unlikely to happen."

Energy Markets

 
WTI Crude Oil: ↑ $80.81
Natural Gas: ↓ $5.32
Gasoline: ↑ $3.27
Diesel: ↑ $3.48
Heating Oil: ↓ $251.46
Brent Crude Oil: ↑ $83.67
US Rig Count: ↑ 637

 
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