On October 1, the U.S. Energy Information Administration (or EIA) released inventory data for the week ended September 26.
Analysts had expected an increase of 1.5 million barrels (MMbbls) in crude inventories last week. This series will cover actual changes in inventories.
U.S. propane stocks increased by 0.4 million barrels to 79.6 million barrels as of September 26. They’re now 18.7% higher than they were last year.
The U.S. Energy Information Administration reported a 112 Bcf natural gas inventory build for the week ending September 26.
With the approach of winter, natural gas prices might have hope. Despite the surging productions, inventories are still 10.7% below levels a year ago.
Since 2008, a considerable amount of U.S. natural gas supply has come online without an equivalent increase in demand thanks to the “shale revolution.”
Falling again from levels close to $4, natural gas prices retreated to $3.93 MMBtu after the EIA reported higher than expected inventory increases.
Consumption of natural gas in the U.S. is highly seasonal. Demand is highest during the winter due to heating demands, so storage levels decrease during these months.
Operates as a development stage company
The Pacific Basin is already crowded. The four largest coal producers are located in the region. Russia is planning to move more coal into the Pacific Basin. This could cause the oversupply to increase.
China accounts for almost half of the world’s raw steel production. In 2013, China produced 779 million tons of steel. This was a 7.5% increase over 724 million tons in 2012.
Coal is losing market share to renewable and nuclear energy sources. However, it could also lose some share to natural gas in the long run. Recently, Russia and China started working on a natural gas pipeline.
Coal is the cheapest fossil fuel, but it’s also the most polluting. With its massive electricity generation capacity—mainly coal-fired—China emits the most carbon dioxide in the world.
Coal accounts for less than a 20% share in electricity generation in Russia (RSX). Coal production is much higher than the domestic demand. As a result, most of Russia’s thermal coal is exported.
Apart from shipping companies, coal producers (KOL) around the world benefit from China’s coal imports. However, competition in the Pacific market remains steep.
Over the years, China has built a massive mining capacity. It extracts as much coal as it can. The current mining capacity stands at 4.2 billion tons—four times greater than the U.S.
In 2013, China produced 3.7 billion tons of coal. State-owned enterprises—like Shenhua Group and ChinaCoal—make up a significant part of China’s total coal production.
Thermal power will continue to hold a dominant position in China’s energy mix. However, China is betting big on nuclear, wind, and solar energy. It plans to add 132 GW of nuclear capacity by 2030.
The majority of China’s power transmission is carried out by the government enterprise State Grid Corporation of China (or SGCC). SGCC covers 88% of China’s territory—spread across six separate grids.
70%—or 883 gigawatts (or GW)—of China’s massive 1,260 GW capacity is fired by fossil fuel. Most of the fossil fuel is coal. China is the largest coal consumer and importer in the world.