American oil and gas drillers could get some much-needed wind in their sails if the costs of drilling decline as expected in the coming months. Bloomberg's Kevin Crowley reports: While inflation is persisting across the US — albeit at a slower pace — the country’s oil fields are a rare corner of the economy where prices are actually dropping. Drill pipe prices have halved this year, daily rig rates are down by more than 10% and the costs of steel and diesel are also trending lower. The number of active oil rigs has dropped 13% from this year’s peak, indicating there’s a surplus of … [Read more...]
Metal Prices Fall as Manufacturing Signals Weakness
Manufacturing surveys in China, Europe, and the United States have recently signaled weakness alongside that of metal prices. Reuters's Andy Home reports: China's manufacturing sector contracted for the third straight month in June. The official purchasing managers' index (PMI) came in at 49.0, a slight improvement on May but still below the 50-point mark that separates expansion from contraction. The Caixin PMI, which is generated from surveys of smaller, more export-oriented companies, was slightly better at 50.5 but that was down from May levels. Taken together, the PMIs suggest … [Read more...]
LITHIUM RUSH: Automakers Buying Mines to Secure Supply
Automakers are searching the globe looking to secure their own supplies of lithium to build the batteries in their electric cars. Clifford Krauss and Jack Ewing report in The New York Times: Eager to avoid falling further behind Tesla and Chinese car companies, many Western auto executives are bypassing traditional suppliers and committing billions of dollars on deals with lithium mining companies. They are showing up in hard hats and steel-toed boots to scope out mines in places like Chile, Argentina, Quebec and Nevada to secure supplies of a metal that could make or break their companies … [Read more...]
Could Drought Cut Food Price Drops Short?
A recent declining trend in food prices could be threatened by droughts in the American breadbasket. David Uberti reports in The Wall Street Journal: Food costs were finally starting to show signs of easing after the pandemic and Russia’s invasion of Ukraine sent prices skyrocketing. Now, a drought across America’s breadbasket is a threat to further relief. The dry spell has spanned the wheat fields of the Great Plains and the Corn Belt in the Upper Midwest, leaving some areas with fractions of their normal rainfall as they head into crucial growing periods for corn and soybeans. The fear … [Read more...]
Inflexible Natural Gas Power Generation Threatening National Security
The horizontal drilling and fracking technology revolution have unleashed vast quantities of new natural gas supplies. There are some problems with that. Natural gas isn't flexible enough to deal with volatile weather patterns, and its use as the primary fuel for American power generation could threaten national security. Naureen Malik reports for Bloomberg: Although natural gas is often promoted as a “bridge fuel” to span the transition from coal power to renewable energy, the country’s vast network of gas plants, pipelines and the regulations that govern them was largely built without the … [Read more...]
More American LNG to Power Germany for 20 Years
Germany has signed another deal for American LNG supplies with Venture Global. Derek Brower, David Sheppard, and Shotaro Tani report for the Financial Times: Germany has signed another long-term deal to import more US liquefied natural gas, as Berlin moves to replace Russian energy in its economy amid Moscow’s war in Ukraine. SEFE, or Securing Energy For Europe — the company born out of Berlin’s effective nationalisation of the German operations of Russia’s state-owned Gazprom — will purchase 2.25mn tonnes a year of the super-chilled gas from Venture Global LNG, an American developer of … [Read more...]
Drilling Declines in the Shale Patch
The high cost of drilling and low prices for oil are discouraging oil companies from drilling in America's oil patch. Myles McCormick reports in the Financial Times: The prolific US shale oil and gas industry is decelerating in the face of weakening commodity prices, suggesting production growth will stall at a time of booming demand. Evidence of stagnating activity is mounting. A survey by the Federal Reserve Bank of Dallas posted a score of zero for business activity growth in the second quarter among some 150 oil and gas groups in its region — suggesting any expansion had hit a wall. It … [Read more...]
The Saudis Are Making Biden’s America the World’s Oil Cut Whipping Boy
When Joe Biden took control of the White House, relations with the Saudis almost immediately deteriorated from their Trump-era heyday. Biden insulted the Saudis repeatedly, and they have gotten his message and returned their own by beginning to free themselves from American influence and even harm American interests when counter to their own. Now the Saudis are preparing to use American markets as the whipping boy for their attempt to raise oil prices by cutting production. Javier Blas reports for Bloomberg: When Saudi Arabia needs to quickly convince the oil market that supply is tightening, … [Read more...]
Norway Prepares for Ocean Floor Mining
Norway, a powerhouse oil and gas producing country, has now outlined a plan to tap its undersea mineral resources. The government of Norway released a statement on its plan, explaining: The government proposes to open parts of the Norwegian continental shelf for commercial seabed mineral activities. In addition, the government presents a strategy demonstrating how Norway aims to be a global leader in a fact- and knowledge-based management of seabed mineral resources. Environmental considerations will be safeguarded throughout the value chain, and extraction will only be permitted if the … [Read more...]
GHOST TRADE: EU Plan Retaliation Against Countries Aiding Russia
Countries helping Russia circumvent European Union sanctions are being targeted by a new round of rules. Henry Foy reports in the Financial Times: The EU has agreed on an 11th package of economic sanctions aimed at punishing Russia for invading Ukraine, including unprecedented new powers to punish countries suspected of helping Moscow circumvent the existing restrictions. The new measures come as G7 states seek to tighten loopholes faster than Moscow can find new ways to evade them and crack down on routes that are supplying the Kremlin with goods and technologies used to manufacture … [Read more...]
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