The offshore wind trade faces mounting obstacles amid rising rates of interest and supply-chain points. In the meantime, demand for jet gas is ready to extend into 12 months finish, whereas a glut of products is weighing on container charges for ships plying the world’s seas.
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(Bloomberg) — The offshore wind trade faces mounting obstacles amid rising rates of interest and supply-chain points. In the meantime, demand for jet gas is ready to extend into 12 months finish, whereas a glut of products is weighing on container charges for ships plying the world’s seas.
Listed here are 5 notable charts to think about in international commodity markets because the week will get underway.
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Jet Gasoline
With the busy vacation season proper across the nook, it’s an excellent time to examine in on air journey. International passenger jet gas demand is ready to leap 25% in 2023 from a 12 months in the past, in keeping with BloombergNEF forecasts, highlighting a continued post-pandemic restoration for the trade, notably in Asia. Whereas gas consumption has come off the July peak in current months, demand will tick increased by way of December as a result of Christmas and New 12 months’s festive durations. Each airways and vacationers ought to brace for increased prices given the comparatively elevated jet gas costs and crack spreads amid structural provide tightness and volatilities within the underlying crude oil market, BNEF says.
Transport
On the flip-side of pre-holiday traits, international freight charges are below strain from an extra of provides, decreased demand and a widespread financial slowdown. Shrinking commerce volumes of a number of the world’s most necessary metals like iron ore and metal, in addition to grains and plastic items, imply fewer ships are wanted to haul the merchandise world wide. That’s pushed down container and bulk freight indexes, with the Drewry World Container Index hitting pre-Covid ranges final month. The weak point prompted A.P. Moller-Maersk A/S, a bellwether for international commerce, to slash no less than 10,000 jobs because it prepares for a “subdued” setting forward.
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Oil
Oil is contemporary off its second straight weekly decline as softer demand as soon as once more weighs on costs. The shift in sentiment is obvious within the sharp retreat of West Texas Intermediate’s immediate unfold, which surged in September as Saudi Arabia and Russia prolonged their manufacturing cuts and issues mounted over tightening international provides. However a powerful construct in US stockpiles in early October and more moderen modest features on the key storage hub of Cushing, Oklahoma, have helped offset these worries, coupled with the expectation that for now, the Israel-Hamas warfare will stay contained.
Energy
California could also be affected by an excessive amount of of an excellent factor. The state’s dominant grid operator — the California Impartial System Operator — is more and more curbing solar- and wind-powered electrical energy technology because it faces fast progress of the renewable sources, in keeping with the US Power Data Administration. The cutbacks are coming largely because of congestion — when energy strains don’t have sufficient capability to ship out there power. Final 12 months, CAISO curtailed 2.4 million megawatt-hours of utility-scale wind and photo voltaic output, a 63% enhance from the prior 12 months. This 12 months is on monitor to exceed that quantity, CAISO information by way of July present, with photo voltaic accounting for the majority of the power restrictions.
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Power Transition
The unhealthy information is piling up for the US offshore wind trade after Orsted A/S, BP Plc and Equinor ASA turned the most recent builders to take giant writedowns on tasks. The impairments threaten future investments, probably jeopardizing President Joe Biden’s purpose to deploy 30 gigawatts of offshore wind capability by 2030. The setbacks come as wind builders face a slew of challenges, together with increased turbine prices, supply-chain bottlenecks and difficulties securing financing. The US stays far behind Europe and China within the race to construct offshore wind, regardless of beneficiant incentives from Biden’s landmark clean-energy subsidy program.
—With help from Claudio Lubis.
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