WTI FUTURES prices show signs of an intensifying squeeze on inventories around the NYMEX delivery point at Cushing in Oklahoma: The six month-calendar spread closed in a backwardation of $7.44 (98th percentile for all trading days since 1990) on September 25 having traded briefly in a small contango of 8 cents (47th percentile) three months earlier on June 27:

"Put simply, it (Statistical Review) is bad PR," one company source said.

This has to be one of the most nonsensical comments I have read in a news story:

reuters.com/business/energ… Without reliable, accurate and comprehensive data, it is impossible to perform meaningful analysis or make sensible management decisions.

Equating "statistics" with "public relations" shows a shocking misunderstanding of how information and decision-making actually works

DOLLAR SHOCK - United States is exporting its inflation problem via rising interest rates and currency appreciation. Rising yields in the core of financial system (in this case USA) ripple outwards and cause instability on the periphery (UK, EU, China, emerging markets etc): RAPIDLY rising U.S. interest rates have been one of the primary triggers of international financial instability in 1982 (Latin America debt crisis), dollar crisis (1984/85), 1994 (Mexico's tequila crisis), 1997/98 (Asian debt crisis and Russia default) and now 2022:

This is the reason I try to use accelerate/decelerate when talking about inflation (as well as production/consumption growth in oil)

https://twitter.com/M_C_Klein/status/1557770196168757253

We (journalists, analysts, policymakers, commentators) too often use the language of levels (up, down, high, low) when we are really talking about rates of change (faster, slower, accelerating, decelerating). It sounds simpler but is actually wrong and seriously misleading.

U.S. RETAIL GASOLINE prices have fallen for eight consecutive weeks by a total of -96 cents per gallon (-19%) since June 13. Retail diesel prices have declined for seven consecutive weeks by a total of -82 cents per gallon (-14%) since June 20: FUEL-PRICE reductions are mostly explained by the decline in international crude prices. Refining margins remain higher than before Russia invaded Ukraine. Diesel prices remain elevated compared with gasoline as a result of the global diesel shortage:

ENJOYING the glorious summer evening “It is well known the safety lamp did not bring a marked fall in the number of colliery accidents. Its first effect was to encourage working of deeper and more fiery seams and to encourage the removal of pillars from areas which were too dangerous to approach with naked lights …

LIMEHOUSE - coal ships tied up in tiers in the Lower Pool of London awaiting unloading in 1832. In the late 1830s and early 1840s, coal prices were kept artificially high in London by limiting the number of ship loads sold each day (the "limitation of the vend") according to a sliding scale based on market prices

EMBARGO ECONOMICS: England's Parliament embargoed coal shipments from Newcastle, Sunderland and Blyth from February 1643 to deprive King Charles I of revenues to wage the civil war, creating a severe fuel shortage and soaring prices in London and the rest of the Southeast: In case you wondered, later coal price spikes in 1653, 1667, 1673 and 1675 were caused by the Anglo-Dutch wars, with coal shipments along England's east coast disrupted by attacks and the threat of them from the Dutch fleet and privateers, causing shortages in London

ENERGY EMBARGOES: In January 1643, England’s Parliament banned ships from bringing coal from Newcastle, then under Royalist control, to deprive King Charles I of revenues with which to wage war. The result was a severe coal shortage and a doubling of the price of fuel in London: By the summer of 1644, the coal shortage in London had become a crisis. The Venetian ambassador predicted “there will be riots this winter” unless shipments resumed. The crisis was averted when Scottish forces acting at the behest of Parliament captured Newcastle in October 1644

RECESSION indicators #1: wsj.com/articles/uber-… RECESSION indicators #2: wsj.com/articles/two-s…

EUROPEAN natural gas futures show signs of deteriorating liquidity, with large price gaps emerging, indicative of many traders and market-makers avoiding trading in size because short-term volatility has become too extreme and risks are too high: EXTREME short-volatility, price gapping and evaporation in liquidity are classic features of a market nearing an extreme high/low, in terms of time if not price. Recent examples are negative WTI prices in April 2020 and the peak in oil prices in Jun/Jul 2008

POWER GRID FAILURES never have a single cause. Grids should be managed conservatively with multiple layers of protection and reserves. Even if there is a single proximate cause, such as a single generator outage, the grid will only fail if those multiple layers have eroded IN TEXAS, the proximate cause of grid failure was likely the extreme cold temperatures across much of the state. But big freezes are not that infrequent in the state. ERCOT's system operating plan should have been able to cope with the cold. The question is why it failed.

TEXAS orders rotating power outages after generation fails to meet load during cold weather:

https://twitter.com/ERCOT_ISO/status/1361215084010352644

Forced load-shedding is a sign of a power system under extreme stress, with inadequate firm generation capacity, inadequate capacity to import power from neighbouring areas to support the network, and inadequate flexibility on the consumption side

GLOBAL OIL MARKET - current situation and outlook for 2021 (When I joined Reuters, I told my boss @richardmably my ambition was to tell a story without words, only charts): GLOBAL OIL MARKET - cyclical position:

“ONE COUNTRY, TWO SYSTEMS,” formula for Hong Kong is ending. Protestors reject China’s sovereignty; China rejects HKSAR legal autonomy; and United States no longer willing to treat HKSAR as a separate economic and financial territory: state.gov/prc-national-p… OCTS was based on a deliberate ambiguity about the territory’s status following the transfer of sovereignty from Britain to China, one that obscured differences over culture, identity, economic functions and ultimate control. But ambiguity has come under increasing strain

ECONOMIC GROWTH and technological change has always destroyed huge numbers of jobs in old industries while creating employment in new industries:
* Peasant farmers (enclosure)
* Spinners (steam engines)
* Weavers (power looms)
* Canal workers (railways)
* Coal miners (automation) * Stokers (oil/gas replace coal)
* Railway workers (automation)
* Secretaries and clerical workers (computers)
* Printers, typesetters (automation, computers)
* Telephone exchange, telegraph workers (automation)
* Switchboard operators (automation)
* Stevedores (containerisation)

USTR LIGHTHIZER’s negotiating strategy can be summarised as lay out an uncompromising position and then engineer a deadline/crisis to push the negotiations over the line and secure a deal. Current White House has been an enthusiastic supporter of this approach giving 100% backing LIGHTHIZER’s notable success was the USMCA deal in 2018, but it may have led observers to overestimate the usefulness of his strategy

SOME INFORMAL reflections on the U.S. decision to end all waivers for Iran sanctions: UNITED STATES, SAUDI ARABIA and UAE have now gone “all-in” on their campaign of maximum financial pressure on Iran through oil sanctions. Few if any more rungs left on the diplomatic escalation ladder

TARIFFS AND TRADE
Earlier in my career, I focused on trade liberalisation and negotiations
Current articles about trade are generating more heat than light, so I thought I’d offer some observations ... The General Agreement in Tariffs and Trade was reached in 1947. Tariffs and trade wars during the 1930s made all countries worse off. Policymakers had learned the hard way that there are no winners from a trade war, only losers