COLUMN: Consign coal to history? Forget it.

China pushed global coal demand to a record high in 2024, @IEA said in its coal flagship report.

The IEA has now ditched its "peak coal" theory and sees higher demand in 2025, 2026 and 2027.

@Opinion🧵1/10 bloomberg.com/opinion/articl… The IEA estimates that global coal demand surged to an all-time high of 8,771 million metric tons this year, up 1% from 20232, as electricity demand rose faster than expected.

The IEA revised, too, its historical data, so the rise comes from a higher baseline.

@Opinion 🧵2/10

🍫🍫🍫THE CHOCOLATE CRISIS — an UPDATED thread🆕🆕🆕:

Retail chocolate prices are rising (and will increase much further, while shrinkflation will reduce sizes) after wholesale cocoa prices surged to an unthinkable all-time high of ***$10,000 a ton*** on Tuesday.

1/15 @Opinion First, the magnitude of the rally:

In nominal terms, cocoa prices have surged to >$10,000 – up from ~$2,500 a year ago, and ~$650 a decade ago.

To put things into perspective: the previous record, which only fell in February after 46 years unbroken, was ~$5,500.

2/15 @Opinion

🍫🍫THE CHOCOLATE CRISIS — a thread:

Chocolate prices are about to rise — and bars and boxes will shrink too — after wholesale cocoa prices jumped beyond their 46-year old peak, setting a record high.

FREE-TO-READ (next 7 days):

1/ 10 @Opinion bloomberg.com/opinion/articl…
To understand the crisis, one has to travel to West Africa, home to ~75% of the worlds production. The king of cocoa is Ivory Coast, which accounts for 2 million tons of bean output, compared to global consumption of about 5 million tons.

2/10 @Opinion

The OPEC+ delay -- a few notes:

1) At the heart, OPEC is fighting about who pumps how much. Nigeria and Angola, which have struggled to meet their quota, refuse an official lower level for 2024. Leaving OPEC is real, but remote, possibility for Angola; but no for Nigeria | 1/7 2) The dispute, while important inside OPEC, may mean little for global supply-and-demand early next year. Saudi Arabia and Russia appear certain to keep their unilateral cuts in place to avoid a price drop in 1Q. Still, there's a non-zero chance the OPEC+ deal implodes | 2/7

TECK-GLENCORE M&A BATTLE:

Teck’s shareholders are voting until Apr 26 on the company’s split in the middle of Glencore's $23bn hostile approach. By the weekend, Teck would have a good idea of where the vote is going. It needs 2/3 support of the voting B-shares.

@opinion🧵1/12 Teck has tabled a plan to split the company in two (one mining base metals and another mining coal) – but keeping a financial link between them for years to come. You can read my take on the split – and why it amounts to greenwashing – below | 2/12 bloomberg.com/opinion/articl…

BREAKING: Canadian mining group Teck rejects unsolicited take-over proposal from Glencore (for about $23 billion, plus debt).

In February, I wrote this @Opinion about the M&A case for Glencore, and noted it already tried to buy Teck two years ago.

Link: bloomberg.com/opinion/articl… The full letter from Teck rejecting the unsolicited approach by Glencore is here: teck.com/media/Letter-A…

I have written only one story about fusion energy. For my university's newspaper 25 years ago. Thankfully, it isn't online.

Since then, I'm skeptical of surprisingly well-timed announcements by budget-starved laboratories about breakthroughs for technologies decades away |🧵1/10 But first, the FT story (confirmed now by others, including Bloomberg) about the US Lawrence Livermore National Laboratory near San Francisco set to announce that a fusion experiment released more energy than the lasers used in the experiment emitted 2/10 ft.com/content/4b6f0f…

For oil, what's more important in the Saudi-Chinese read-outs of President Xi's visit to the kingdom is what is **not** in them.

What's missing? The long rumored pricing of oil in yuan.

China read-out: english.news.cn/20221209/fad4b…
Saudi read-out: spa.gov.sa/viewfullstory.…
#OOTT 🧵 1/7 Saudi Arabia has priced its oil in US dollars since 1974 and channeled the surpluses into the US Treasury market (aka, the petro-dollar recycling).

For a history of oil and the petro-dollar, read this good paper from the Journal of Energy History: energyhistory.eu/en/special-iss… 2/7

OPEC+ appears ready to become a "spectator" of the market (as one delegate put it to me) as the G7 oil price cap talks continue. As things stand, it's likely to keep its output unchanged when it meets virtually Dec 4, although a small cut isn't completely ruled out | #OOTT 1/4 OPEC+ remains concerned about the impact of a slowing global economy and China's covid-zero policy on global oil demand growth. So the cartel retains a decidedly output "cut" bias, and the group can call for an emergency meeting if needed at any point | #OOTT 2/4

OIL MARKET: Washington eases its oil sanctions on Venezuela, allowing Chevron (for the next 6 months) to pump crude in the Latin American nation and export it into the United States. A major shift in the White House policy | #OOTT #Venezuela $CVX 🇻🇪 ⛽️ 🇺🇸 The easing of the oil sanctions come as the Venezuelan government and the democratic opposition re-started talks, brokered by Norway and Mexico. The talks between the two sides are the first direct contact in a year | #OOTT

FULL DOCUMENT: The #COP27 political-policy text (aka, “cover”) is full of diplomatic language gymnastics. Note, for example, the reference to “low-emission” energy to mean gas and nuclear (and probably carbon-captured oil). Full comuniqué is here: unfccc.int/sites/default/… 1/4🧵 A couple of additional points: no advance from COP26 on coal: the COP27 document simply reiterates the Glasgow wording: coal remains a phase down, not a phase-out (and, in reality, coal demand is going up, on track for a record high both in 2022-23, surpassing the 2013 peak) 2/4

When @jfarchy and I wrote in 'The World for Sale' the story of how Marc Rich inserted himself in the 1980s into a gov-to-gov oil deal between Iran and Burundi, we thought we were telling a commodity deal from a long gone buccaneering era (see below a fragment from the book) | 1/5 To trade oil with Iran and Burundi, Rich created a mysterious outfit called the Compagnie Burundaise de Commerce, (or Cobuco for short), directed by an enterprising employee who went by the pseudonym Monsieur Ndolo | 2/5

The annual @IEA's World Energy Outlook is out.

It present 3 *scenarios* for energy supply and demand to 2050. In all, it sees fossil fuel consumption will hit a peak in a few years, but the trajectory after that is very different in each scenario | 1/4
iea.blob.core.windows.net/assets/7e42db9… The report says that "the proximate cause of the crisis was Russia’s invasion of Ukraine". But it adds that "pressure on markets was visible before February 2022". Per the IEA: "The key underlying imbalance, which had been some years in the making, relates to
investment" 2/4

A few thoughts about the White House's claim that several OPEC nations communicated to Washington "privately that they also disagreed with the Saudi decision [to cut oil production], but felt coerced to support Saudi’s direction" #OOTT 1/6 Over the last three years, we have witnessed at least two instances when OPEC+ nations disagreed with Saudi Arabia, and were willing to have a very public fight about it (Mexico in April 2020, and UAE in July 2021). We saw nothing of that sort this time | #OOTT 2/6

OPEC+ agreed to a tiny oil output hike of 100,000 b/d for Sept, sending Brent back above $100 a barrel.

The increase (the 2nd smallest hike in the cartel's history, only behind one in 1986) comes despite President Biden's trip to Saudi Arabia | #OOTT 1/4 bloomberg.com/news/articles/… The OPEC+ 100,000 b/d output hike compares to an expectation in Washington only a few days ago that Saudi Arabia would lead the cartel to boost production by 400,000-500,000 b/d. For weeks, US officials have said they expected positive steps at the Aug 3 OPEC+ meeting | #OOTT 2/4

EU energy ministers are meeting today in Brussels to try to find an agreement to reduce natural gas demand ahead of winter. The European Commission proposed a voluntary 15% cut across all members - but many countries have rejected the plan | 1/5 #EnergyCrisis he Czech Republic, which holds the EU’s rotating presidency, has proposed 3 changes to the original proposal to win support from the likes of Spain, Italy and Poland. The tweaks water down (a lot) the original proposal, but probably are acceptable to everyone | 2/5 #EnergyCrisis

BIDEN IN SAUDI 1/6: US President Joe Biden lands in Jeddah later this afternoon for a two-day visit. Based on conversations with officials, I do NOT expect that Saudi Arabia (or the US) will announce an oil output increase during the July 15-16 visit | #OOTT BIDEN IN SAUDI 2/6: The July and Aug output from the kingdom is already decided. KSA is still mulling its options for next OPEC+ meeting (Aug 3). *If* Riyadh pushes ahead with an output increase for Sep, it would be as part of an OPEC+ deal, rather than unilateral action | #OOTT

FULL DOCUMENT: The G7 leaders communiqué | #OOTT #OATT #ONGT #CoalTwitter #Russia g7germany.de/resource/blob/… A few gems:

G7 rewrites its own history, weakening its pledge to end "direct public support for the international unabated fossil fuel energy sector by the end of 2022" adding now an exit clause: "except in limited circumstances"

BREAKING: Global oil demand growth will **accelerate** to 2.2m b/d in 2023, up from 1.8m b/d in 2022, the @IEA said on its first look into next year's S/D balances.

"Global oil supply may struggle to keep pace with demand next year," the IEA said | #OOTT #ButTheRecession As as last month, the @IEA report is full of dire warnings. Global energy policymakers can not say they weren't warned: the second half of 2022, and the full of 2023 look very, very difficult. The IEA doesn't send this warnings that often - pay attention | #OOTT

As the economic cost of the war mount, the cracks are emerging.

Today’s NYT editorial board:

“… in the end, it is still not in America’s best interest to plunge into an all-out war with Russia, even if a negotiated peace may require Ukraine to make some hard decisions…” And this from the same editorial:

“… but popular support for a war far from U.S. shores will not continue indefinitely. Inflation is a much bigger issue for American voters than Ukraine, and the disruptions to global food and energy markets are likely to intensify…”

OIL MARKET: @IEA launches 10-point plan to "restrain" oil demand, including recommending cutting highway speeds by 10 km/h; making public transport cheaper, car-free cities on Sunday, etc.. It's the 1970s-style savings program (and it's needed!) #OOTT iea.org/reports/a-10-p… OIL MARKET: @IEA believes that all its measures can reduce OECD oil demand by ~2.8m b/d via restrain measures. Reducing highway speeds by 10km/h alone can cut oil demand by 400,000 b/d, according to the agency's modelling.