What was accomplished at COP26?

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DAILY ENERGY NEWS | 11/16/2021

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COP26 aftermath part 1: IEA says that lower oil prices may be on the horizon because of "rising oil supplies."

CNBC (11/16/21) reports: "The International Energy Agency said on Tuesday that soaring oil prices could soon turn lower as the U.S. leads a rebound in global supply. Oil prices have soared above $80 a barrel over the last few weeks, hitting their highest level in seven years, as demand outstripped supply. The momentum behind the price rally has even tempted some forecasters to predict a return to $100-a-barrel oil, although not everyone shares this view. “The world oil market remains tight by all measures, but a reprieve from the price rally could be on the horizon,” the IEA said in its closely watched monthly report. 'Contrary to hopes expressed in Glasgow at COP26 this is not because demand is declining, but rather due to rising oil supplies.' Demand for oil is also strengthening because of robust gasoline consumption and increasing international travel as more countries re-open their borders, the influential energy agency said. Higher oil prices, weaker industrial activity and an alarming resurgence of Covid-19 infections in Europe, however, will likely temper price rises, the group added."

COP26 aftermath part 2: Countries sign up to eliminate "inefficient fossil fuel subsidies" and less than a week later Japan is subsidizing oil vendors to reduce the price of gasoline.

NHK (11/16/21) reports: "Amid soaring crude oil prices, Minister of Economy, Trade and Industry Hagita has urgently provided subsidies to oil wholesalers when the average price of regular gasoline exceeds a certain price to curb the rise in retail prices of gasoline and kerosene. It has announced that it will incorporate the measures into the new economic measures that will be decided on the 19th of this month. Minister of Economy, Trade and Industry Hagiuda responded to a reporter's interview after the first meeting of the Digital Extraordinary Administrative Investigation Committee held at the Prime Minister's Office on the 16th, and in response to the soaring crude oil prices, new economic measures to be decided on the 19th of this month Clarified a policy to include 'timed / emergency evacuation measures' to curb the impact on the economy. Specifically, it is a mechanism to subsidize oil wholesale companies when the national average retail price of regular gasoline exceeds a certain price, and for the time being, an average of 170 yen per liter is assumed. According to the people concerned, we are considering subsidizing gasoline within the range of 5 yen per liter, and the period will be from the end of next month to March next year."

"We must set aside the fantasies of academics and activists and engage business and the public in charting a path that respects technical, economic, regulatory, and behavioral realities. Failure to do so will result in a backlash, as in the French yellow-vest protests and the UK’s failed attempt to mandate expensive heat pumps in homes. Popular resistance to drastic actions will also likely be a factor in upcoming US elections, particularly when the electorate realizes that the US accounts for only 13 percent of global emissions."

– Steven E. Koonin,
American Enterprise Institute

More from Moscow.

Wall Street Journal (11/15/21) column: "Saule Omarova continues to make the case against her nomination to be Comptroller of the Currency, as critics need only to quote her own words. The latest example is a video interview she gave in February in which the Cornell professor opined on 'the case for a U.S. national investment authority.' The conversation at one point turned to climate change and its impact on fossil-fuel producers, and Ms. Omarova was on the case. 'A lot of the smaller players in that industry are going to, probably, go bankrupt in short order—at least, we want them to go bankrupt if we want to tackle climate change,' she said in the session that was part of the Jain Family Institute’s 'Social Wealth Seminar' series. She went on to say 'that creates a lot of this sort of loss of jobs, a lot of displacement, and economic fallback that we cannot afford, really,' which is nice of her to concede. Bankruptcy isn’t painless, especially when the government drives you out of business. So first put private companies out of business “in short order,” then put government central planners to work to restructure them as the political class wants. Give Ms. Omarova credit for candor. Most progressives disguise their real intentions."

Didn't Biden just shut down a nickel mine in Minnesota?

Mining.com (11/15/21) reports: "Nickel and zinc are now deemed critical minerals by the United States. The US Geological Survey (USGS) is proposing both metals be included in the redrafted critical minerals list. The list has grown from 35 to 50 since the last iteration in 2018, but that largely reflects the splitting out of rare earth elements and precious group metals into separate entities. Four minerals – helium, potash, rhenium, and strontium – have been dropped. The United States is the world’s leading producer and net exporter of helium, while import dependency for the other three is mitigated by “low disruption potential”. Uranium was also dropped after being reclassified as a 'mineral fuel' Nickel and zinc are the only two new additions, and each reflects an evolution of the methodology used to determine whether a mineral is critical to the well-being of the US economy."

Brandon is doing his best to bring back to the Obama era...

Yahoo Finance (11/10/21) reports: "U.S. consumers faced the biggest jump in their energy bills in more than a decade last month, with costs soaring for electricity, natural gas and fuel oil as cooler weather approaches. The price of electricity in October increased 6.5% from the same month a year ago while consumer expenses paid to utilities for gas went up 28%, according to numbers released Wednesday by the U.S. Bureau of Labor Statistics. Fuel oil rose 59%, and costs for propane, kerosene and firewood jumped by about 35%, the data show. That increase in electricity costs was the most since March 2009 and the jump in utility-piped gas service the biggest since August 2008, according to the Federal Reserve Bank of St. Louis, which uses the labor statistics data for historical comparisons. October’s increases are another sign of higher heating bills to come for U.S. households as winter approaches. "

Energy Markets

WTI Crude Oil: ↓ $80.67
Natural Gas: ↑ $5.23
Gasoline: ~ $3.41

Diesel: ~ $3.64
Heating Oil: ↑ $242.26
Brent Crude Oil: ↑ $82.13
US Rig Count: ↑ 664

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