Good morning BB crew. Here’s your daily dose of all things oil, gas, and energy, without the hot air.

Some highlights from today:

• 📈 Oil prices flirting with $90/bbl

• 🚗 European auto’s unwinnable war

• 🤑 Saudi and Oman raising $$ from public markets

plus a lot more. Let’s get to it…

📈 The numbers

Crude prices are continuing their hot streak with Brent edging towards $90/bbl, reaching new highs for the year. The bullish momentum is being driven by expectations of extended cuts from OPEC+ (details of which are due this week).

🗞️ Well-headlines

 🇺🇸 North America 

• US crude production edged up by 1.6% in June to 12.84 mmb/d, a new post-Covid high, according to EIA official figures. Most growth is coming from Texas which has hit a new record since this data set began in 2005, and North Dakota is chipping in too.

• US LNG exports fell slightly in August to 7.32 mt as high temperatures increased domestic demand for gas, and maintenance reduced output at some facilities. Most cargoes (52%) went to Europe, followed by Asia (30%).

• The US oil rig count stayed flat last week at 512. The tally is now 22% lower than its last peak back in December 2022 when oil prices were ~$70/bbl. There tends to be a ~3 month lag between changes in oil prices and the rig count so expect to wait another few weeks to see the rig count react to the rise in oil prices that started in late June.

• California’s utility regulator is raising the gas storage limit of the Aliso Canyon gas storage facility in an attempt to prevent a repetition of the gas price spikes seen last winter.

🇪🇺 Europe

• Shell is selling its UK and German retail power and gas businesses to Octopus Energy. The value was undisclosed but rumors suggest it’s around the $50-$100 million mark. The sale comes as the anglo-dutch supermajor looks to return focus to its core oil & business under new CEO, Wael Sawan.

• The US government is backing Chevron in its dispute with Cyprus over how to develop the giant offshore Aphrodite gas field. Chevron and its partners want to pipe the gas to Egypt for international export via LNG, whereas Cyprus wants to build a floating processing plant.

• Moldova’s President has said that an $800m debt claim by Gazprom has been disproved by an audit. Gazprom is arguing that the small, poor Eastern European nation, which until 2019 was 100% reliant on Russian gas, hasn’t coughed up for past gas deliveries.

• Wood Group and Harbour Energy have reached a 5-year deal worth ~$330m for Wood to provide EPC services for a number of Harbour's offshore UK assets.

🇸🇦 The Middle East

• Saudi Aramco is looking to sell an additional $50 billion in shares. The world’s largest oil company, with a market cap of ~$2.3 trillion, is looking to cash in on a ~20% rise in its share price this year. The sale will help bolster the kingdom’s sovereign wealth fund and finance its diversification-away-from-oil spending spree.

• Oman’s OQ Gas Network is planning an IPO in Muscat. The company is set to list 49% of its shares and is expected to raise ~$800m, making it the largest IPO in Oman in nearly two decades.

📍Everywhere else

• Talks will continue today between unions and Chevron to avert strikes at the Gorgon and Wheatstone LNG facilities in Australia. Chevron’s latest pay offer last week was rejected by workers, increasing the chance of supply outages at these two giant facilities that produce ~5% of global LNG supply.

• Eni has announced plans to invest $7.7 billion in Egypt over the next 4 years. Eni is very active in Egypt, including as the operator of the giant Zohr gas field in the Eastern Med.

🌍 Geopolitics & macro

• Big wigs are gathering in New Delhi this week for the latest G20 summit, under the typically saccharine theme of “One Earth, One Family, One Future”. Global leaders haven’t found much to agree on recently but the hopes are that progress will be made on thorny issues like the war in Ukraine and climate change. Don’t hold your breath. China’s Xi Jinping and Russia’s Putin are sitting this one out.

• Russia’s President Putin and Turkey’s Erdogan are meeting in Sochi today. As well as sharing tips on autocracy, the pair are expected to discuss the UN-brokered grain deal that Russia withdraw from earlier in the year. The deal aimed to allow grain exports from Ukraine to ease global shortages.

💨 Carbon, Climate & other energy stuff

• BMW’s CEO has warned that the banning of internal combustion engines in Europe will force European car manufacturers into an EV price war with Chinese competitors. Given China’s dominance of key battery supply chains, this isn’t a battle Europe is likely to win, and risks decimating Europe’s famous automobile industry.

• India has fired up coal output in August to ensure power supply in unusually dry weather that has restricted hydro output. Your friendly reminder that countries will always prioritize energy stability above all else. Coal makes up ~70% of power generation in India.

• China’s biggest coal company, China Shenhua Energy, is planning to intensify the development of new coal plants to ensure grid stability. It currently has 11.75 GW of coal and gas plants under-construction and is reviewing paused and abandoned projects to see which could be revived.

🛢️Bottom of the barrel

We couldn’t help but have a little laugh at the expense of the poor souls stuck at Burning Man:

👋 Before you go

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Thanks for reading. Have a day out there. 🛢️🛢️