Global gas market set for reasonably bullish 5-yr outlook -Vitol CEO
Global gas prices are at “extreme levels” due to low inventories and strong demand in Europe and China, and the market is set for a reasonably bullish five-year outlook, said Russell Hardy, chief executive officer of Vitol. In a pre-recorded interview for the annual Platts APPEC 2021 conference, Hardy said global oil demand remained 4 million barrels per day behind the pre-COVID-19 levels of 2019. Extreme cold weather last winter thinned natural gas stocks in the West and inventories have failed to be rebuilt in time, resulting in record prices near $26 per million British thermal units (mmBtu). “The low inventories have not been replenished in the way we like … the prices are at extreme levels that are way in excess of the cost for the supply chains to manage to manufacture fertilizer and other chemicals,” said Hardy. Weather will be the single dominant factor driving demand and supply this winter, and the market is embracing for a few more months of volatility, he said. Demand, however, has been less elastic especially from growth centres like China, where imports for both liquefied natural gas and pipeline gas have expanded strongly, he said.
Panic buying leaves up to 90% of fuel pumps dry in major British cities
Up to 90% of British fuel stations ran dry across major English cities on Monday after panic buying deepened a supply chain crisis triggered by a shortage of truckers that retailers are warning could batter the world’s fifth-largest economy. A dire post-Brexit shortage of truck drivers in Britain has sown chaos through supply chains in everything from food to fuel, raising the spectre of disruptions and price rises in the run up to Christmas. Just days after Prime Minister Boris Johnson’s government spent millions of pounds to avert a food shortage due to a spike in prices for natural gas and its byproduct, carbon dioxide, ministers repeatedly asked people to refrain from panic buying. But queues of dozens of cars snaked back from petrol stations across the land on Sunday, swallowing up supplies and forcing many gas stations to simply close. Pumps across British cities were either closed or had signs saying fuel was unavailable, Reuters reporters said. “Some of our members, large groups with a portfolio of sites, report 50% are dry as of yesterday, some even report as many as 90% are dry as of yesterday,” Brian Madderson, chairman of the Petrol Retailers Association told Sky. The Petrol Retailers Association (PRA) represents independent fuel retailers who now account for 65% of all UK forecourts. “So you can see it is quite acute,” Madderson said. “Monday morning is going to start pretty dry.” BP said on Sunday that nearly a third of its British petrol stations had run out of the two main grades of fuel as panic buying forced the government to suspend competition laws and allow firms to work together to ease shortages. Business secretary Kwasi Kwarteng said the suspension would allow firms to share information and coordinate their response. “This step will allow government to work constructively with fuel producers, suppliers, hauliers and retailers to ensure that disruption is minimised as far as possible,” the business department said in a statement. The government on Sunday announced a plan to issue temporary visas for 5,000 foreign truck drivers. But business leaders have warned the government’s plan is a short-term fix and will not solve an acute labour shortage.
British PM to consider using army to supply fuel to petrol stations
The British army could be called on to deliver fuel to petrol stations running dry across the country under an emergency plan expected to be considered by Prime Minister Boris Johnson on Monday, the Guardian reported on Sunday. The fuel panic comes as Britain faces several crises: an international gas price surge that is forcing energy firms out of business, a related shortage of carbon dioxide that threatens to derail meat production, and a shortage of truck drivers that is playing havoc with retailers and leaving some shelves bare. BP said nearly a third of its British petrol stations had run out of the two main grades of fuel on Sunday as panic buying forced the government to suspend competition laws and allow firms to work together to ease shortages. Lines of vehicles formed at petrol stations for a third day running as motorists waited, some for hours, to fill up with fuel after oil firms reported a lack of drivers was causing transport problems from refineries to forecourts. Some operators have had to ration supplies and others to close gas stations. “With the intense demand seen over the past two days, we estimate that around 30% of sites in this network do not currently have either of the main grades of fuel,” BP, which operates 1,200 sites in Britain, said in statement. “We are working to resupply as rapidly as possible.” Anglo-Dutch oil group Shell said that it had also seen increased demand for fuel. In response business minister Kwasi Kwarteng said he was suspending competition laws to allow firms to share information and coordinate their response. “This step will allow government to work constructively with fuel producers, suppliers, hauliers and retailers to ensure that disruption is minimised as far as possible,” the business department said in a statement. Transport minister Grant Shapps had earlier appealed for calm, saying the shortages were purely caused by panic buying, and that the situation would eventually resolve itself because fuel could not be stockpiled. “There’s plenty of fuel, there’s no shortage of the fuel within the country,” Shapps told Sky News. “So the most important thing is actually that people carry on as they normally would and fill up their cars when they normally would, then you won’t have queues and you won’t have shortages at the pump either.” After meeting Kwarteng, industry figures including representatives from Shell and Exxon Mobil Corp said in a joint statement issued by the business department that they had been reassured, and stressed there was no national fuel shortage. ‘Manufactured situation’ Earlier, Shapps said the shortage of truck drivers was down to Covid-19 disrupting the qualification process, preventing new labour from entering the market. Others pinned the blame on Brexit and poor working conditions forcing out foreign drivers. The government on Sunday announced a plan to issue temporary visas for 5,000 foreign truck drivers. But business leaders have warned the government’s plan is a short-term fix and will not solve an acute labour shortage that risks major disruption beyond fuel deliveries, including for retailers in the run-up to Christmas. Shapps called the panic over fuel a “manufactured situation” and blamed it on a hauliers’ association. “They’re desperate to have more European drivers undercutting British salaries,” he said. An Opinium poll published in the Observer newspaper on Sunday said that 67% of voters believe the government has handled the crisis badly. A majority of 68% said that Brexit was partly to blame. Opposition Labour Party leader Keir Starmer, speaking at his party’s annual conference in southern England, said ministers had failed to plan for labour shortages following the 2016 Brexit vote and called for a bigger temporary visa scheme.