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China state planner calls for sufficient gas, coal to ensure fertiliser supply

China’s state planner on Friday called on state companies to provide sufficient power supply to fertiliser producers amid soaring prices, as many parts of the country implement curbs on power consumption by industrial users. The National Development and Reform Commission (NDRC) has issued a series of orders in recent months to guarantee adequate supply of fertiliser after prices surged to record levels, raising concerns about food production. Earlier this week, the NDRC said it would release some potash, a type of fertiliser, from its state reserves and increase capacity utilisation ...

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China energy body urges support for coal, oil firms to build clean power

China’s National Energy Administration (NEA) on Friday proposed providing support for coal and oil companies to build solar power and other clean energy generation projects with their current resources. In a draft set of guidelines on deeper reform of the energy business environment, the NEA called for the promotion of integrated natural gas power and renewable energy projects, as well as coordinated development of fossil and renewable energy. President Xi Jinping this week said China would stop building new coal-fired power stations overseas in Beijing’s latest climate pledge, but the ...

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Gas price signals show need for increased supply

The price system, in the famous words of the economist and philosopher Friedrich Hayek, is “a mechanism for communicating information… which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities.” In international gas markets right now, those pointers are heading into the red. European gas prices have been hitting record highs. This week the October 2021 contract for European benchmark TTF gas went above per megawatt hour, equivalent to more ...

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The fork in the road for Asia’s oil and gas demand

At the current pace of policy change and decarbonisation, the long-term oil and gas demand outlook for Asia looks remarkably robust. Under Wood Mackenzie’s base case energy transition outlook (ETO), which sees the world broadly on a 2.5-degree warming trajectory, Asian oil demand doesn’t peak until the mid-2030s, while natural gas demand growth powers ahead through to 2050. But things could play out differently. Our accelerated energy transition (AET-2) scenario offers a view on how to achieve a 2 ˚C world aligned with the upper temperature limit of the 2015 ...

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Spot and term, Australian supply and Asian demand: Indelible links in the LNG market

When it comes to the trading of LNG cargoes, why do stakeholders see long-term and spot as two separate markets? To answer this question, one can examine the differences in the pricing basis between the two. But this may not provide the most accurate view since one can’t separate the two sides of the same coin. As the LNG market matures, the commodity’s spot price has emerged as the driving force behind prices of all contract types, including long-term contracts. This is especially relevant for exporting countries like Australia that ...

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EIA expects increasing consumption of natural gas by U.S. industry in 2021 and 2022

Based on our September Short-Term Energy Outlook, we expect industrial sector natural gas consumption to rise throughout 2021 and to exceed pre-pandemic 2019 levels. We forecast the growth to continue into 2022, and natural gas delivered to industrial consumers will average 23.8 billion cubic feet per day (Bcf/d) that year. If realized, this amount would be near the current record high for annual industrial natural gas consumption set in the early 1970s. Many industrial processes have limited or no alternatives to natural gas for use as both fuel and feedstock, ...

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EUROPE GAS-Prices ease as Norwegian supplies ramp up

British and European wholesale gas prices fell for a third straight day on Friday morning as Norwegian gas flows ramped up, alleviating some concerns over tight supplies this winter. The British day-ahead contract was down 4.00 pence at 166.00 p/therm by 0815 GMT. The UK October contract was down 2.40 pence at 170.00 pence/therm. The October gas price at the Dutch TTF hub, a European benchmark, was down 2.59 euros at 68.13 euros per megawatt hours (MWh). Analysts said prices were being pushed lower by stronger supply from Norway. Norwegian ...

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On the cusp of Europe’s winter season, gas storage hits 10-yr low

European gas storage levels are at their lowest in at least 10 years ahead of the crucial winter heating season, exacerbating the risk of further price spikes from already record-high levels. In European countries and Britain combined, storage sites are currently around 72% full, compared with 94% full at the same time last year, and 85% full on average over the past 10 years by the end of September, based on the latest Gas Infrastructure Europe data. Gas storage is used as a buffer at times of high demand and ...

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GASTECH 2021: Shell in talks with Iraq to boost BGC’s capacity to 2 Bcf/d

Shell is in talks with Iraq over boosting Basra Gas Co.’s processing capacity to 2 Bcf/d in the near future, the country chairman of Shell Group of Companies Iraq & UAE said Sept. 22, as OPEC’s second-biggest producer pumps more oil as its quota rises. Currently BGC is planning to boost its gas capacity to 1.4 Bcf/d from the current 1 Bcf/d over the next two years. It currently captures associated gas from three southern oil fields: Rumaila, West Qurna 1 and Zubair. BGC is a 25-year joint venture grouping ...

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Prices drop on rise in Norway flows

British and European wholesale gas prices fell on Thursday morning as stronger flows from Norway after the end of several maintenances. The British day-ahead contract TRGBNBPD1 was down 7.00 pence at 167.00 p/therm by 0932 GMT. Its Dutch counterpart on the TTF hub TRNLTTFD1 was down 1.95 euros at 68.15 euros per megawatt hour (MWh). The UK October contract TRGBNBPMV1 was down 4.50 pence at 172.50 pence/therm. Norwegian exports to the UK via the Langeled pipeline ramped up by 20 million cubic meters (mcm) on Thursday morning, as several planned ...

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UK does not back Nord Stream 2, nor needs long-term gas storage: minister

The UK does not support Russia’s Nord Stream 2 gas pipeline project to Germany and does not need its own long-term storage facility, UK Secretary of State for Business, Energy and Industrial Strategy Kwasi Kwarteng told a parliamentary committee Sept. 22. S&P Global Platts assessed the price of UK NBP day-ahead gas at 181 pence/therm Sept. 21, down 6 p/th day on day but up 44% since the start of the month. Having initially said otherwise, Kwarteng clarified his position saying the UK was not supportive of Nord Stream 2, ...

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UK energy fragility unmasked by surge in global gas prices

Like most other energy crises, Britain’s power and gas crunch has a short-term trigger (a sudden surge in international gas prices) but the underlying problems it has exposed have been building up for years. Britain’s choices over energy market design, price controls, gas-led power generation, charges and billing have reflected the balance of political forces and interest group lobbying, whether they have been deliberate or unconscious. Policymakers have wanted domestic gas and electricity supplies to be reliable and affordable while lowering emissions, but a surge in global gas prices has ...

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India refiners’ August crude processing lowest in 10 months

Indian refiners’ crude oil throughput in August dipped to its lowest in 10 months due to ongoing maintenance activities at multiple refineries, government data showed on Wednesday. Refiners processed 4.36 million barrels per day (18.44 million tonnes) of crude oil last month, the lowest since October 2020 and about 4.8% lower than 4.58 million bpd processed in July. Maintenance activities at some facilities limited production in August, Refinitiv analyst Ehsan Ul Haq said, adding that demand was likely to resume as the festival season approaches, provided cases of COVID-19 remain ...

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The Commodities Feed: LNG offers little respite to tight European gas market

Energy ICE Brent had a strong day yesterday, trading to its highest levels since the end of July. The rally in oil was part of a larger risk-on move in markets. This is despite a relatively hawkish FOMC meeting. Not only is Fed tapering expected to be announced in November, but rate hike expectations for 2022 are also growing amongst FOMC members Oil fundamentals remain constructive, particularly in the US. The EIA reported in its weekly inventory release that US commercial crude oil inventories declined by 3.48MMbbls over the last ...

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Chinese refineries maintain high oil product yield despite throughput falls

China maintained high yields for six oil oil products, remaining above 71% in August, despite crude throughput falling to 15-month low, data from the National Bureau of Statistics showed on Sept. 20. The yield for LPG, naphtha, gasoline, jet fuel/kerosene, gasoil and fuel oil was at 71.1% in August, compared with 67% a year ago and 71.5% in July. Crude throughput, on the other hand, fell 2.2% year on year and 1.2% from July to 58.35 million mt, NBS data showed. The high oil product yield was a result of ...

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