A Ukrainian kamikaze drone plowed into a major oil refinery inside Russian territory, sparking a huge fireball explosion.

Goldman Sachs and Nomura have raised their probability estimates of a US recession. Nomura is expecting the US to get into recession in Q4. 

Read more at: Traders Market Weekly: When Logic Hits You in The Face

As gasoline prices soar and the US considers invoking Cold War-era laws to boost production, there’s a massive pool of oil refining capacity on the other side of the Pacific Ocean that’s sitting idle. 

European natural gas prices creep up as Russia tightened its squeeze on gas exports to Europe, despite a lower demand and high fuel costs curbing industrial demand.

The IEA warned that Russia could cut off gas supply to EU completely and that the EU countries need to be prepared for such an eventuality and plan contingencies accordingly. 

Italy, one of the biggest buyers of Russian gas, is temporarily increasing coal-fired generation, joining nations such as Germany, Austria, and the Netherlands in reviving mothballed power stations or removing limits on the dirtier-burning fuel. 

The Netherlands is choosing to utilize nuclear power. 

Countries like Norway are increasing their natural gas production. 

A French nuclear power crisis is worsening the situation. A recent flurry of unexpected issues at the Électricité de France (EDF), the state nuclear power operator representing the largest nuclear fleet in Europe, has caused French nuclear energy output to tumble to its lowest levels in 30 years. Around half of the EDF’s massive nuclear fleet has been taken offline, delivering a massive blow to the EU’s energy independence and security in the midst of a worldwide energy crisis. 

Governments are also making attempts to inform consumers to curb consumption. 

India's Russian oil imports jump 50 times. 40% of these imports are done by #Reliance and Nayara (Rosneft). This takes Russian oil to over 10% of India's imports. 

Along similar lines, Russia has overtaken Saudi Arabia to be China's largest crude oil supplier.

Iraq seeks to raise oil production to 8 mn bpd by 2027 

Read more at: Iraq seeks to raise oil production to 8 mn bpd by 2027

The Government of Tanzania & its partners Equinor, Shell & ExxonMobil have announced the signing of the historic Host Government Agreement, which will greenlight a gas and LNG mega project. 

The US$30 billion project aims to produce 10 million tons per annum of LNG for export with transformational potential for industrialization by bringing investment, technology, skills, and infrastructure to the country, which will benefit Tanzanian businesses and its citizens. 

As Covid restrictions recede, air travel has seen a surge. 

Jet Fuel crack spreads have hit record highs. 

This has pushed Asian refiners to adjust Q3 product slate in favor of jet fuel.

For a while, the Henry Hub prices were converging with the Dutch TTF Prices because of the US LNG export potential and the Europe gas crisis. 

As of now, the two price indexes are diverging, due to limited LNG export and import capacity and the Freeport fire. 

Conoco sees volatility in the natural gas market to last for a few years and is making LNG investments in Qatar with this in mind. 

European coal prices have surged to $424/tonne. 

The main reason for this is the restart of coal-fired power plants by several EU countries. 

To put things in perspective, just a year ago, they traded at $100/tonne. 

Goldman Sachs economist Jeff Currie, who rose to prominence during the 2000s by forecasting the commodity super-cycle and oil spiking above $100 a barrel, predicts that we are 18 months into a 10-year-long oil supercycle regime and that Brent prices can move up another $40 in the coming months. 

The reasons given include lack of investments in oil (due to ESG concerns) and shortage of refining capacity. 

In the US, inflation just hit a 40-year high: 

Gas +69.8% + 

Fuel Oil +108.7%

Meat, Poultry, & Fish +15.1% 

Milk +17.9% 

Eggs +34.2% 

Coffee +17.3% 

Used Cars +18.1% 

Airline Fares +39.8% 

Rent +33.8% 

It is a similar story across the world.

The German PPI jumped by 33.6% in May YoY (the highest increase since 1949, when this index was set up): 

Electricity prices +90.4% 

Fertilizers 100.9% 

Eni, Conoco Win Prized North Field East Stakes in Qatar. 

Glencore pleaded guilty to seven counts of bribery in connection with oil operations in five countries.