US inflation hit 40-year high in June

Record gas prices

Inflation surged to a new pandemic-era peak in June, with US consumer prices jumping by 9.1% year-over-year, according to fresh data released  by the Bureau of Labor Statistics. That’s the highest level in more than 40 years and higher than the previous reading, when prices rose by 8.6% for the year ended in May. It is also much higher than the 8.8% that economists had predicted, according to Refinitiv.

The Consumer Price Index for June also showed that overall prices that consumers pay for a variety of goods and services rose by 1.3% from May to June. Much of the June increase was driven by a jump in gasoline prices, which were up nearly 60% over the year. Americans faced record-high gas prices last month, with the national average topping $5 a gallon across the country. Electricity and natural gas prices also rose, by 13.7% and 38.4%, respectively, for the 12-month period ended in June. Overall, energy prices rose by 41.6% year-over- year.

https://edition.cnn.com/

Energy Prices Rose 59% In 2021

Economic recovery from the Covid-19 pandemic

Energy prices at the end of 2021 were 59% higher than they were at the beginning of the year, according to a new report by the Energy Information Administration (EIA).

The boom in energy prices—which was more than the gains seen by other commodities—was largely the result of economic recovery from the Covid-19 pandemic. Most other commodity prices in the S&P Goldman Sachs Commodity Index (GSCI) saw about a  20% increase, with the exception of precious metals, which saw a decline.

Within the energy portion of the commodity index that tracks the performance of global commodities markets, RBOB (wholesale gasoline) saw the largest gain at 67%, followed by heating oil, then WTI and Brent. Gasoil and natural gas rounded out the energy segment of the GSCI.

https://oilprice.com/

China Energy Curbs Could Cut Economic Growth to 6%

Power-rationing will continue into next year

China’s targets to decrease the energy-reliance of its economy means power-rationing will continue into next year, and if strictly enforced, could reduce economic growth in 2021 well below consensus forecasts to 6%, according to Barclays Plc.

“The government faces a tough choice between a more significant economic slowdown and relaxing its dual targets for overall energy use,” Barclays economists led by Jian Chang said in a report. Most economists expect gross domestic product to expand by about 8% this year. China set a nationwide target of decreasing the “energy intensiveness” of its economy — the amount of energy used per unit of GDP — by 3% this year as it seeks to reduce pollution. Beijing warned in August that most provinces were not on track to meet the target, leading some to cut power use to energy-intensive sectors like aluminum and steel production.

https://www.bnnbloomberg.ca/

A Very Predictable Global Energy Crisis

Emissions of carbon dioxide are not the planet’s single biggest problem

Gas prices in Europe are breaking record after record. The UK is facing supply shortages reminiscent of the late 1970s winter of discontent. Chinese factories are shutting down because of power shortages, and the outlook is grim. In fact, it may be the first crisis of many.

When gas prices in Europe started rising faster and faster last month as the continent prepared for winter and found out it was not the only one, gas suddenly became important. That’s after being excluded from the list of low-carbon energy sources and after the EU’s green transition chief Frans Timmermans said gas had no place in the transition. It now appears Timmermans and his fellow Brussels bureaucrats could not have been more wrong.

For years Europe has been retiring coal plants and building solar and wind farms as it strived to become the greenest continent on earth and lead the energy transition on the premise that emissions of carbon dioxide are the planet’s single biggest problem because they lead to unfavorable climate changes. This has been coupled with investment declines in oil and gas production, as this only made sense. Now, the EU has got the first bill for its low-carbon feast.

https://oilprice.com/

Elon Musk says he’s ‘pro-nuclear’ power

Elon Musk is surprised by some of the public sentiment’ against nuclear industry

Musk’s comments came in response to a question about rising energy demands that may come with a shift to electric vehicles. Despite his support for nuclear power, Musk said meeting this increased demand will depend on “large sustainable power generation developments, primarily wind and solar.”

While utilities will need to boost their production capacity, they can only do so much because power lines also have a limited capacity to distribute electricity to homes and businesses, he added.

“This is why I think it’s actually very important that a necessary part of the solution is local power generation,” Musk said, referencing Tesla Energy’s solar roof and battery products.

https://www.businessinsider.fr/

The U.S. Could See Record Natural Gas Production In 2022

Increased interest from investors and markets

Natural gas production in the US is set to grow to a new record in 2022, at 93.3 billion cubic feet per day (Bcfd) and will continue to rise further, exceeding 100 Bcfd in 2024, a Rystad Energy analysis shows. As a result, the performance of the country’s key gas basins is going to attract increased interest from investors and markets, with CO2 emissions intensity, capital efficiency and potential bottlenecks drawing close scrutiny.

The country’s output reached a record in 2019, at 92.1 Bcfd, but production declined subsequently to 90.8 Bcfd in 2020 as a result of the Covid-19 pandemic. Rystad Energy expects that 2021 volumes will fall even further, to 89.7 Bcfd but the trend will quickly change as the effect of the pandemic subsides and activity builds up across the country’s major gas basins.

https://oilprice.com/