Daily Energy Report
Saudis extend 1 mb/d cut, Russia to cut exports, Asia crude imports hit record, Libya back in oil market, US grid needs help, electricity emergency in Iran, flood disaster in China, and more
Chart of the Day: What is going on with US energy consumption?
Figure (1) above shows a trend in US energy consumption between 2017 and April 2023. Usually, energy consumption increases with increased population and economic growth, but the data show that energy consumption in the first four months of the year (the red line), is lower than energy consumption in 2018 and 2019.
EOA’s Main Takeaway
We are asking our readers to help us reconcile this inconsistency. All we know is that energy consumption of all sources increased or was virtually flat except coal, which suffered a major decline. We know we have improvement in energy efficiency and energy intensity, but energy intensity has been relatively flat recently. So why is US energy consumption down? Is it a “hidden recession”?
Knowing the answer is significant for several reasons. Think about this: If energy consumption is declining, investing more in renewables means a replacement of coal and other energy sources. If energy consumption rises again, it means a limited substitution: renewables are not replacing coal, for example, because additional renewables are meeting the growing energy demand. We do not have a good answer, but we look forward to hearing from you.
Story of the Day
Saudi Press Agency: Saudi Arabia to Extend 1 mb/d Oil Production Cut
Bloomberg: OPEC+ to Discuss Impacts of Saudi Arabia Cut
Saudi Arabia's Ministry of Energy has announced that it will extend its voluntary oil production cut of one million barrels per day, which started in July, for another month into September 2023. This could be further extended or even deepened. As a result, Saudi Arabia's production for September 2023 will be approximately 9 million barrels per day. This cut is in addition to a previously announced voluntary cut that extends until the end of December 2024. The decision is meant to bolster the efforts of OPEC Plus countries to maintain stability and balance in the oil markets.