Week Recap: From Peak Oil in China to Tesla Trends

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Weekly Daily Standup Top Stories

Is China’s Demand for Oil Nearing Its Peak?

Highlights of the Podcast

00:00 – Intro

01:15 – Is China’s Demand for Oil Nearing Its Peak?

06:46 – State Rankings: Electric Vehicles per Capita in the United States

09:22- Oil Prices Soar as Geopolitical Risk Rises Rapidly

10:43 – Renewables Accounted for 14.6% of Global Energy Consumption in 2023

12:27 – Spot LNG shipping rates, European prices continue to drop

14:37 – Why Trump Would Be Better For The Climate Than Kamala

17:47 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Stuart Turley: [00:00:10] Hello, everybody. Welcome. The energy news beat daily stand up. This is actually the weekly recap. The weekly recap. This has been an absolute crazy week. We’ve had stories about how Trump could actually change things up. And it was from Chris Wright and say, hey, let’s go after ending energy poverty. And he would be really a heads up on that one. We’ve had other great stories. We’ve had the tanker stories. We’ve had, being blown up by the, the who these. And then we’ve also had, Ukraine, attacking oil assets in Russia. So buckle up. We’re going to turn this over to the staff. And, we’ve also just released out Liz Muller, founder and executive chair of Deep Isolation. She is a wonderful discussion about nuclear and, nuclear waste management. And, I mean, this was a really good, good conversation. So thank you. Buckle up. And if you have any questions, reach out to us. We want to talk to you. Have a absolutely wonderful Saturday. [00:01:14][64.5]

Michael Tanner: [00:01:15] Is China’s demand for oil nearing its peak? This is pretty interesting from the standpoint of there’s kind of two competing camps here. You’ve got the camps that could care less about China saying that their demand is not necessarily influential as much as it used to be on where oil prices are going. You’ve got another camp that is absolutely, extremely worried about what China is doing. And Iryna Slav over at Oilprice.com breaks down what I think is a really good look at, well, what if China’s oil demand is peaking? If you fall in the camp of, hey, China and their demand of, you know, for all types of refined products, not just crude oil, but all different types of. If you believe that’s critical to where oil prices will go, I tend to fall in that camp. I’m probably somewhere in the middle, but we could be a point where China’s oil demand may have peaked. And I think this is a great article that kind of lays out the case for that. So kind of the top three headlines here. China’s oil imports in July were down 12% from June and 3% from July of 2023, which kind of raises those concerns mainly about the economic health of that. There’s a couple factors that they claim are going into that the rise of EVs, the shift to LNG in trucks, which I think is probably the head the biggest one out of all these. And then finally, a slowdown in manufacturing in real estate, or kind of the three big buckets that are contributing to this trend. You know, there are some analysts, again, on one side saying that this slowdown is temporary, while others are arguing that China’s oil demand actually may have already pink, which clearly is going to have significant implications for the overall global oil markets. It’s it’s pretty interesting. So there’s a there’s a couple things here. Obviously, as I just mentioned in July, China imported about 12% less oil than it did in June. And in June of 2024, that was 3% less than it was a year ago, which is which is pretty interesting. And this coincided with a fall in prices. So you can definitely see how there’s some correlation there. Another interesting note is that India in July passed China as the biggest buyer of sanctioned Russian crude at a rate close to 2.1 million barrels per day, which represents a 4.2 monthly increase and about a 12% annual increase. You know, the other second or the third bucket that’s talked about will kind of skip around. Obviously, we talked about and we just covered, you know, the actual import of crude oil. But in the manufacturing real estate, we all know China is going through an extremely rough real estate and manufacturing growth, if only because we saw with with Evergrande and the bank situation going on there, hundreds of billions of dollars in loans, you know, out to a place where, well, we may or may not have people to live there. It’s in a precarious position. Not that they’re going through their own version of our 2008 financial crisis, but it could be getting there. And then this is something that our good friends over at routers, Clyde Russell, he actually posed this question of, well, has China oil demand not already peak? You know, his big notice was that China’s record import rate for crude oil last year and the perception that and I’m going to read straight from the article and the perception that most analysts and traders appear to believe that this year’s slowdown is temporary. The question I’m asking is, what if it isn’t super interesting? So, Russell, go ahead and points out that for the last 19 years, China oil imports have been basically on a straight upward trajectory before obviously dropping in 2020 and 2021 due to the pandemic, but picking up basically in 2022 and in 2023, reach an all time high of about 11.3 million barrels per day last year. If you’re a China oil bull, that was all the info you need to say, hey, we’re back, baby! But we’re seeing a drop off this year. And so the real question is, okay, is it going to come back again? There’s the EV story, which I don’t see. EVs is being like the largest reason why their oil demand is struggling. Obviously you. If you’re moving to an electric, you’re moving to electric vehicle. You’re getting your you’re getting your power via electricity. A lot of that is either coal or natural gas. So yes, obviously oil demand could drop a little bit from that. I think the biggest thing that we talked to that people aren’t talking about, which this article brings up, is the replacement of diesel with liquefied natural gas in trucks, most things around the country, if you ever driven on a highway not just in China, but in the United States, it’s all trucks. And if those are going to be moving towards LNG, that’s a large factor of kind of that’s a huge chunk of the overall quote unquote, gasoline demand that’s now shifting to natural gas. And, you know, as we know there’s plenty natural gas to go around. So the incentive is there to do that. Again. You we’ve got the manufacturing in real estate stuff. You know basically what this you know what I Reena finishes up by saying is what I’ll read from the article. What this means is that China may not return to its path of ever consuming growth volumes of crude. To be fair, however, it was unrealistic to expect it would. China relies on imports for close to 60% of its consumption, and China does and doesn’t like to rely on imports so much so it makes sense to do everything to reduce this dependency by encouraging alternative energy sources. In other words, China’s peak oil demand may be here, or it may be around the corner, but it’s only a matter of time before that peak oil comes. The sooner the market adjusts, the sooner it should start paying attention to other factors determining global oil prices, such as supply, which we’ll cover in the next article. But if you fall in the camp of where China oil demand is a main driver of prices, well, buckle up because it could get crazy. [00:06:45][329.7]

Stuart Turley: [00:06:46] State rankings electric vehicles per capita in the United States. Let’s cover this here a little bit. Being forced to drive an electric car. Americans are not going to like. California leads the nation in electric vehicle adoption. With over 1.1 million EVs and the highest per capita ownership. Washington, Hawaii, Oregon and follow California as EV adoption hotspots, while Mississippi and North Dakota lag behind California’s expensive charging infrastructure with over 15,000 stations, supports its EV leadership. But the visual there’s two charts that I want to bring up here. The first one is by Virani. This is the EV adoption by state in 2023. This is an amazing chart. If you take a look at EVs per 100,000 people, California’s top of the list. Washington, Hawaii, Oregon, then Colorado, Nevada and Texas is down around the middle of the pack, and I don’t even see Oklahoma on this list. Oklahoma didn’t even make it. So that’s pretty funny. Now, Mississippi has the fewest electric vehicles proportionally, with only 110 EVs per 100,000 people. California with the highest number of charging stations. But this producer, if you could bring this next chart chart showing three different Tesla model. First one is rural America. Take a look at that beautiful Tesla and the words of Donald Trump as a beautiful desk, as a beautiful thing. Take a look at Chicago’s Tesla. It’s got bullet holes in it. You gotta have I, I want me at Tesla to drive through Chicago. So that is definitely Chicago worthy. But now let’s take a look at Detroit. Another wonderful blue run city Detroit Tesla I’m sorry I can’t really dig at that one and had to make sure that we put this on this podcast today. So if you’re listening to this podcast, there are three different ones. Wonderful. Just a beautiful bright red Tesla. I would love to have one second, one down a silver Tesla. It’s got bullet holes in it. You’re from Chicago, but if you’re from Detroit, it looks like a dumpster with sloping roofs. So it’s actually very, very funny. [00:09:21][155.5]

Stuart Turley: [00:09:22] Oil prices soar as geopolitical risks rise rapidly. Right now as I’m recording this on Monday afternoon, WTI is at 7732. Brant is at 8133. So we take a look at the prices. Israel and Hezbollah traded strikes on Sunday in the biggest military exchange between the two since 2006. Reports where I saw some reports for like 40 different airstrikes were Israel to in preemptive strikes. Oil prices spiked dramatically Monday morning with Brant above 81 and WTI 77. So also Russia at targets Ukrainian energy infrastructure in huge missile and. In drone attack. This one is there. Getting serious over there. And again my hearts go out to the Ukrainian and Russian people all impacted. This could have been avoided. President Zelenskyy had signed the cease fire years ago and I am just sorry that it did not stick. Libya eastern government to halt oil production and exports. This is another big reason. When you take a look at the government to halt oil production and export. Libya has got some real problems going on in their oil side of the business. Renewable accounted for 14.6 of global energy consumption in 2023. Michael, I’d be remiss if I didn’t say that renewables is a marketing term for renewable energy that is not renewable nor sustainable without subsidies. So let’s just get ready to rumble into this. The wind and solar consumption reached 14.6 in 2023. China led the world in renewable energy production and capacity add ons. China has led the world in coal, LNG. I mean, they did everything. So I think that that was pretty funny. But look at this chart, this producer, if you could bring this chart up, that chart is a hockey stick. I mean, that thing is like starting in 2009 to 2023, it is nuts. 346GW of new capacity, smashing the 2022 record of 67%. China contributed quarter on quarter growth. Europe made significant strides at 56GW of solar. Holy smokes Batman. Yeah. [00:11:53][151.3]

Michael Tanner: [00:11:54] I mean, I think people would say, oh 14.6. That’s not that much. It’s probably what it should be is the funny part. [00:12:01][6.8]

Stuart Turley: [00:12:01] Well, it’s the cost that we’re not talking about. When we sit back and take a look, we put out all at 14.6% of the energy mix. How much did that 14.600 I’m not sorry. [00:12:19][17.6]

Michael Tanner: [00:12:19] I say this with oil production side. How much oil a well produces. It’s how much you paid to go get that. Exactly. Spot LNG shipping rates and European prices continue to drop. So speaking of exactly what we’re talking about, that regional difference between what’s going on in the United States with natural gas and what’s going on abroad. This was super interesting. Both Pacific and Atlantic LNG shippers have experienced a massive decline. This is according to Spark’s commercial analyst, Cassim Afghan Spark dirty Atlantic rates experienced a second week on week decrease, falling by $8,250 to a total of 61,500 per day, which was pretty crazy. I was up over 100,000 earlier last year, he said. It’s almost the it’s the largest week on week decrease in over a month, and marks almost a $15,000 decline in the Atlantic rates over the last two weeks. You know, early in September, October of 2023, rates will almost at 200,000 a day, a little by 180,000. We’ve also seen 100% drop in those prices. You know, the the front month delivery is $11.77 for liquid LNG on an MMBtu basis. So if you can get your LNG to Europe, you’ll get paid a decent amount too. It’s why the export capacity is so big. And why do you think they want to try to build LNG facilities here? Ain’t worth nothing here, but it’s definitely worth something over in Europe. It’s pretty unbelievable. Gas storage is sitting over in the EU is about 88.47% as of August 14th, and is another and that, you know, corresponds with 91.56% for basically a year prior to that. Pretty unbelievable. In Asia, the LNG cargoes settling for October, $13.75. That’s on an MMBtu basis. Pretty unbelievable. Front month jkm which is their spot. Natural gas. You’re not going 1446 do a pretty unbelievable last quote I’ll read. Quote. Chinese buyers are now predominantly cautious and remain in wait and see mode regarding winter cargo procurement. Doesn’t matter. Those are still great prices. So gives you you know, if you’re a you’re a U.S. natural gas trader. I’m sorry things have been tough for you. Maybe try moving Amsterdam. [00:14:31][132.1]

Stuart Turley: [00:14:32] Yeah, or start selling LNG. [00:14:34][2.0]

Michael Tanner: [00:14:35] If you can get it over there, it’d be great. Why? [00:14:37][2.4]

Stuart Turley: [00:14:38] Trump would be better for the climate than Kamala. This one’s kind of funny. I’m as producer. If you could bring this picture up, I ask grok because I asked grok on X, how are you want to phrase that? Create a picture of Kamala Harris and President Trump on a debate stage. And this picture actually kind of cracked me up. She almost looks a little bit like Michelle Obama, a cross between a cross-eyed Harris and Michelle Obama. Not sure I got tickled at it. That’s that’s just a straight picture. I thought it was kind of fun, but let’s go through this article. The Democrat supports extreme climate policies. Climate change happens, folks. It it happen. And when geoengineering is involved, like chem trails, just like RFK Jr is asking said he wants to stop. That’s geoengineering. And so when you think, okay, climate change it changes. But let’s get rid of the pollution factor. And that will make all the difference in the world. A common sense approach to energy policy will lead to a stronger and more secure America while cutting carbon emissions. Yay! Vice President Kamala Harris, though, has endorsed the far less worst climate schemes. She was an early co-sponsor of the 93 trillion Green New Deal has called for banning of fracking. She has not come back out and said, oh, she forced fracking, a point blank said. I will allow for fracking and said it. That’s because she had an interview yet. So it says 829 she has not had an interview, so and nobody has asked her about that. American natural gas exports displace higher emitting gas and coal use abroad, reducing global emissions. The fact that the Harris Biden administration has still failing to cancel drilling in Alaska and also banning the LNG, and they’re filing again to get this done. It is again, they’re ruining the opportunity for countries to take advantage of great low cost U.S. natural gas. Natural gas is one of the biggest reasons the United States has lowered our CO2 output, and we need to allow other countries to have the same advantage in order to do that. Regulations, not Republicans, are the biggest barrier to deploying clean energy in this country and out competing. China couldn’t agree with that one. The more the U.S. economy this went on, I couldn’t agree with more three times more carbon efficient than has China. But Americans producers aren’t rewarded. Boy, that is an understatement. Trump administration should remain China for all of its unfair practices. Tariffs. This is in the Washington Times, a second Trump term that cuts red tape and will make America great again. And I do respect President Trump for his drill baby drill. But that’s not the only thing that we’ve got at. [00:14:38][0.0][861.8]

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