WTI crude oil added $1.87 to $114.07
(up 53% year-to-date).
Gasoline jumped 4.7% (up 80% ytd)
Natural Gas surged 8.0% (up 134% ytd)
May 23 – Reuters:
“California Governor Gavin Newsom… warned he would order strict cutbacks on water usage statewide if businesses and residents did not slash their own consumption in the face of a severe drought... ‘Every water agency across the state needs to take more aggressive actions to communicate about the drought emergency and implement conservation measures,’ Newsom said… ‘Californians made significant changes since the last drought but we have seen an uptick in water use, especially as we enter the summer months. We all have to be more thoughtful about how to make every drop count,’ the governor said.”
May 23 – Bloomberg:
“Global power grids are about to face their biggest test in decades with electricity generation strangled in the world’s largest economies. War. Drought. Production shortages. Historically low inventories. And pandemic backlash. Energy markets across the planet have been put through the wringer over the past year, and consumers have suffered the consequences of soaring prices. But, somehow, things are on track to get even worse. Blame the heat. Summer in much of the Northern Hemisphere is a typical peak for electricity use… Scientists are predicting scorching months ahead for the US. Power use will surge as homes and businesses crank up air conditioners. The problem is that energy supplies are so fragile that there just won’t be enough to go around…”
May 26 – Reuters:
“The extended drought in California could lead to hydropower producing 8% of California's electricity generation compared with 15% under normal precipitation conditions, the U.S. Energy Information Administration (EIA) said… The EIA expects that the dip in hydropower generation would lead to an 8% increase in electricity generation from natural gas, an increase in energy-related carbon dioxide (CO2) emissions by 6%, and a roughly 5% increase in wholesale electricity prices throughout the West… Earlier this month, California energy officials issued a sober forecast for the state's electrical grid, saying it lacks sufficient capacity to keep the lights on this summer and beyond if heatwaves, wildfires or other extreme events take their toll.”
May 26 – Bloomberg:
“A record volume of Russian oil is on board tankers, with unprecedented amounts heading to India and China as other nations restrict imports because of the war in Ukraine. Between 74 million and 79 million barrels from the OPEC+ producer were in transit and floating storage over the past week, more than double the 27 million barrels just before the February invasion of Ukraine, according to Kpler. Asia overtook Europe as the largest buyer for the first time last month…”
May 26 – Bloomberg:
“China’s oil trading giant Unipec has significantly increased the number of hired tankers to ship a key crude from eastern Russia. China International United Petroleum & Chemical Co., better known as Unipec, has chartered at least 10 tankers so far this month to transport Russian ESPO crude that’s loaded from Kozmino port…”