US Nears Two Months of Declining Petrol Prices
The US yesterday recorded average petrol prices slightly above $4, a level not seen since March, data from national gasoline trackers from the American Automobile Association and fuel savings website GasBuddy said.
President Joe Biden confirmed as much in tweet last Saturday, “Gas prices are now down by more than 90 cents a gallon. That’s over seven straight weeks of prices declining,” Americans have been struggling with high petrol costs in a summer snarled with high demand for travel after two pandemic summers and record levels of inflation affecting costs elsewhere.
Russia’s invasion of Ukraine in February put pressure on limited global petrol supply, when sanctions on the major oil producer from the US and other Western countries led to a steep rise in prices.
The US reported a record $5 average for petrol prices in June, and prices at the pump have been on a steady decline since.
Norway To Limit Power Exports To Avoid Domestic Crunch
Norway may soon introduce a rule to reduce its vast electricity exports if levels at reservoirs for hydropower generation drop to critically low levels in a bid to prevent power shortages and further rises in energy bills domestically. Bloomberg quoted energy minister, Terje Aasland, saying the government could introduce limits on electricity exports if the water in reservoirs drops to “very low” levels.
A cut in Norwegian power exports would be felt in Northwest Europe, which itself is grappling with issues at coal and nuclear power generating plants due to the low water level in rivers limiting coal supply via barges and warm river water unsuitable for cooling nuclear reactors.
China Oil Imports Pick Up After Slump
Reports said China’s crude oil imports rose slightly in July amid a general improvement in commodity imports during that month, Bloomberg reported, citing official data released by Beijing on Sunday.
The country’s crude oil imports stood at 37.33 million tons last month, although an increase from a four-year low booked earlier in the year was still lower than they were at the start of the year and a year ago. The total amount is equal to about 8.8 million bpd.
Earlier this month, energy analytics firm OilX estimated that China’s oil imports would pick up modestly in July, seeing them at 9.3 million bpd, or half a million bpd higher than the June average.
News about China’s recovering oil imports following demand destruction amid Covid lockdowns and economic growth worries immediately prompted a rise in oil prices, coupled with robust export data, also released by Beijing over the weekend.
Goldman Sachs Cuts Oil Price Forecast To $110 in Q2
Goldman Sachs revised down its Brent price forecast for this quarter to $110 a barrel, down from a previous projection of $140 per barrel, but the investment bank still believes the case for higher oil prices remains strong.
In recent weeks, oil prices have been driven down by low trading liquidity and “a mounting wall of worries,” Goldman said in a note on Sunday. Those worries include fears of recession, the SPR release in the U.S., the rebound in Russian crude oil production, and China’s snap COVID-related lockdowns, the bank’s strategists noted.
Goldman Sachs also revised down its fourth-quarter Brent price forecast to $125 a barrel from $130 per barrel previously expected. The 2023 projection, however, was left unchanged at $125 per barrel.
“We believe that the case for higher oil prices remains strong, even assuming all these negative shocks play out, with the market remaining in a larger deficit than we expected in recent months,” Goldman Sachs’s strategists wrote in the note carried by Bloomberg.
In yesterday’s note, Goldman said, “We still expect that Brent prices will need to rally well above market forwards.” Oil prices were trading at multi-month lows early on Monday, with Brent below $94 per barrel and WTI Crude just below $88 per barrel.
Canada’s Oil Province Will Soon Be A Renewable Energy Leader
Canadian province of Alberta, home of the country’s oil and gas sector for decades, is set to undergo a renewable energy capacity surge in the coming years. The country’s total renewables capacity is expected to grow from 19.6 gigawatts (GW) in 2021 to almost 45 GW in 2025, driven primarily by growth in onshore wind and solar energy projects.
This is not surprising for a country whose power mix is predominantly hydropower-based, but the region leading the charge is surprising. The bulk of these additions is set to take place in the western province of Alberta – known as the home of the Canadian fossil fuel industry – which today only holds about 3 GW of renewable capacity.
Significant large-scale projects in the region are scheduled to come online this year that will push Alberta’s capacity to close to 10 GW before 2023. That total will double again by 2025, reaching almost 21 GW, nearly half of the country’s total.
Rystad Energy said yesterday that this rapid growth will see Alberta race ahead of Canada’s other provinces and take the top spot in the country’s green table, outpacing Ontario – the current leader – with almost double the power generation capacity.
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