The world clearly needs more oil and gas, and quick smart. But Opec barely has any more oil capacity, while the European energy majors have guided for flat production numbers for the rest of the year, even as governments and consumers cry out for more supply and management teams roll out the phrase ‘energy security’ again and again.
US president Joe Biden even went to Saudi Arabia to get some more barrels moving – but got nowhere, as Liberum analyst David Hewitt noted: “[Biden gave] the de facto Saudi leader the recognition he wanted, but without securing further production increases from the world’s leading holder of spare capacity”. This week’s Opec meeting could see some more promises but the real tell will be weeks down the line, based on whether members of the cartel can actually find excess supply.
On the gas front, the outage of the Freeport LNG terminal in Texas has tightened supply in both the US and Europe – the closure has stopped some volumes being sent across the Atlantic – as demand soars. The Henry Hub price hit a 14-year seasonal high last week, according to consultancy Rystad Energy, as soaring temperatures increase the demand for gas-fired cooling.