David Fuller and Eoin Treacy's Comment of the Day
Category - General

    European Power Prices Fall Below Zero With Green Power Boom

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Electricity prices across Europe are set to fall below zero this weekend as the continent experiences a
    surge of summer winds combined with the peak season for solar generation.

    The sub-zero prices are a preview of what’s to come for European power markets if a flood of planned renewable power production isn’t met with a shift in demand. The hope is that eventually larger electric car fleets, smarter grids and better battery technology will catch up, but for now the mismatch is a headache for policy makers and companies. 

    The risk is that a prolonged slump in prices could undermine the case for future investments, add costs for consumers and waste energy that could be used to cut demand for polluting alternatives.

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    Richemont Drops on Signs Luxury Demand Is Weakening in US, China

    This article from Bloomberg may be of interest to subscribers. Here is a section:  

    Richemont led luxury-goods stocks lower amid concerns that demand in the US and China, two of the biggest markets for the industry, is starting to sputter.

    The Swiss owner of Cartier reported a surprise drop in revenue from the Americas in the three months through June.

    While Richemont’s sales from Asia rose sharply, China reported slower-than-expected economic growth Monday, signaling signs of a possible pullback in consumer spending.

    Richemont fell as much as 8.2%, the steepest intraday decline in more than year. LVMH dropped as much as 3.7% and Hermes fell as much as 4.2%.

    The luxury-goods industry has been counting on a rebound in China after that country’s reopening would make up for weakness in the US market. Now Richemont and its peers are contending with the prospect that its two main growth motors are weakening.

    Last week, Burberry Group Plc said the low end of the luxury market in the US softened.

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    Russia Pulls the Plug on Ukraine Grain Export Agreement

    This article from Bloomberg may be of interest. Here is a section:

    Moscow had repeatedly threatened to leave the pact, citing obstacles to its own exports. It last agreed to a two-month extension in May, which ends Monday. The corridor’s shutdown will hit key buyers like China, Spain and Egypt.

    “Unfortunately, the part concerning Russia in this Black Sea agreement has not been fulfilled so far,” Kremlin spokesman Dmitry Peskov said, according to Russian news agency Tass. “Therefore, it is terminated.” 

    The move jeopardizes a key trade route from Ukraine, one of the world’s top grain and vegetable oil shippers, just as its next harvest kicks off. It also comes after Russia on Monday said Ukrainian drones damaged a key bridge to Crimea.

    The pact — brokered by the United Nations and Turkey — has ensured the safe passage of almost 33 million tons of crop exports via the Black Sea since it was signed in July 2022, helping world food-commodity prices ease from the record levels reached after Russia’s invasion of Ukraine. However, it has been bogged down by red tape and slow vessel inspections in recent months.

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    Europe Is Pledging Ukraine Weapons It Can't Make

    This article from Bloomberg may be of interest. Here is a section:

    How the war unfolds in the coming months depends in part on how effectively NATO arms Ukraine, but also on North Korean, Iranian and Chinese supplies to Russia. Whatever the outcome of the war, say the authors, President Vladimir Putin’s nation will require years to rebuild its prewar capabilities. 

    Unfortunately, this view confirms the skepticism of many Western politicians, including the British elder statesman I cited above, about diverting billions to our own rearmament. Yet Russia retains some advantages over the West: Because its economy and industries are subject to direct control from the Kremlin, Putin can focus his nation’s arms production on the munitions he needs most in Ukraine.  

    Although many of the right things were said in Vilnius this week, it is essential to acknowledge the seriousness of NATO’s procurement crisis. A study of its European forces published last month, written by former British Army Brigadier Ben Barry and a cluster of other strategy gurus, asserted that “an important question is whether European allies are more serious now” about rearmament “than they were after Ukraine was first invaded in 2014.” The chief of the German Army, Lieutenant General Alfons Mais, has repeatedly asserted that his country has “fallen behind its own ambitions” to rearm. 

    We inhabit an era when few Western governments can muster the political support to address meaningfully big, difficult issues, of which climate change is foremost, but defense and the rebuilding of crumbling infrastructure come close behind. In a world full of threats, among which China presents a far graver menace than Russia, we shall be profoundly foolish if we fail to retool our industries and rearm our militaries. Ukraine is a historic test of Western will and staying power. Not for the first time in history, the outcome of the struggle will be determined not only on battlefields, but also in the factories of the West.

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    El Nino is threatening rice crops while grain supplies already are squeezed by the war in Ukraine

    This article from the Associated Press may be of interest. Here is a section:

    An El Nino is a natural, temporary and occasional warming of part of the Pacific that shifts global weather patterns, and climate change is making them stronger. The National Oceanic and Atmospheric Administration announced this one in June, a month or two earlier than it usually does. This gives it time to grow. Scientists say there's a one in four chance it will expand to supersized levels.

    That's bad news for rice farmers, particularly in Asia where 90% of the world’s rice is grown and eaten, since a strong El Nino typically means less rainfall for the thirsty crop.

    Past El Ninos have resulted in extreme weather, ranging from drought to floods.

    There are already “alarm bells,” said Abdullah Mamun, a research analyst at the International Food Policy Research Institute or IFPRI, pointing to rising rice prices due to shortfalls in production. The average price of 5% broken white rice in June in Thailand was about 16% higher than last year's average.

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    Extreme Heat Strains the Mexican Power Grid Earlier in the Summer

    This article from Undark may be of interest. Here is a section:

    While it is hard to know for sure what is causing the power shortages, it is common practice for the National Center for Energy Control to disconnect neighborhoods from the electric network to prevent the system from failing, says Flores. They do this to avoid bigger and harder-to-fix problems, Barrios says.

    Citizens dealing with power outages are scrambling to adjust to the disruption and danger. Luis Alejandro Calderón, an American citizen who lives in Nuevo Laredo, Tamaulipas, and his wife had to sleep on their balcony because they didn’t have electricity, and the heat inside was unbearable. The power shortage lasted more than 40 hours, so they stayed in a hotel in another area the next night, and a lot of their food went bad.

    “We have never had to deal with anything like this,” he said. “When there is a power cut, electricity is usually back in 15 minutes.”

    Mexico typically surpasses the peak energy demand from the previous year in July, but this year it already happened, leaving many worried that the coming weeks could hold even worse blackouts. “This is a product of the climate emergency, and that is not the government’s responsibility, but it is their responsibility to build an electric system that is prepared for this,” Barrios said.

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    Exxon to Buy Denbury for $4.9 Billion in CO2 Pipeline Push

    This article from Bloomberg may be of interest. Here is a section: 

    Carbon capture is the bedrock of Exxon’s climate strategy, which targets net-zero emissions by 2050 from its operations, and buying Denbury would give the oil giant critical and hard-to-replicate infrastructure as it pursues that goal. Exxon has pledged to spend $17 billion on lower-carbon investments through 2027. Capturing carbon from its own operations and third parties in hard-to-decarbonize sectors is a priority. 

    Denbury’s Rocky Mountain assets are connected to Exxon’s Shute Creek gas facility near LaBarge, Wyoming, which has captured more carbon than any other asset in the US.

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