1. After China's long, widespread & severe covid lockdowns (which caused it to import very low fossil fuel imports in 2022, due to its covid- lockdown moribound economy) ended in December 2022, there were expectations the Chinese economy would rebound quickly, & strongly. This, however, has not occured.
When China's economy does rebound (later in 2023?), its need for more fossil fuel imports will, very likely, raise fuel prices significantly..good for WHC's SP (& Australia's economic trade surplus)
CNBC E. Smith 30.5.23"China’s much-vaunted economic rebound after its emergence from strict zero-Covid lockdown measures has yet to fully materialize, prompting some economists to speculate that further fiscal stimulus or monetary policy easing could be coming down the pipeline.
China’s services and consumption data came in strong in April, aligning with expectations of consumers leading the charge as pent-up demand is unleashed — but the rebound in the call for services isn’t yet spilling over into greater demand for goods, partly because unemployment remains high".
https://www.cnbc.com/2023/05/30/chinas-disappointing-rebound-could-bring-in-more-stimulus-economists-say.html
2. [It should be noted that climate scientists are now stating we are now very likely to be entering an El Nino weather period- which they say will cause the next 2023/24 winter to be much colder than average, in nthn Europe.
Fossil fuel demand for heating will rise considerably, cf the 2022 European unseasonably warm autumn & winter]
Brookings Institute S. Gross early March 2023 said
"...A combination of warm weather and efforts
to conserve and replace natural gas have kept
European gas demand this winter [up to March 2023} lower than average
and averted a crisis. In fact, natural gas prices in
Europe are now below their prewar level.30 If these
trends continue, storage could exit the winter approximately half full.
However, I fear that Europe has not yet seen the high
point of natural gas prices. A slowdown in China’s
economy due to COVID helped to keep LNG prices
down somewhat in 2022, but China’s economy looks
to be rebounding as the population recovers from a
burst of infections. New LNG receiving terminals are
coming online in Germany, but global competition for
LNG to feed those terminals is likely to be fierce. No
new LNG production facilities are coming online in
2023, meaning that the global market is expected to
be tight, and expensive (after China rebounds). And there is no guarantee that
the weather will cooperate next winter, as it has during
this one. Europe seems poised to get through this
winter comfortably but cannot let down its guard or
pull back on demand reduction programs in advance
of next winter.
Clearly, an energy system based on renewable
electricity and other non-fossil sources prevents
geopolitical dustups over fossil fuels, but the world
just isn’t there yet. Even for renewable electricity,
which is affordable and feasible today, the transition
takes time and investment capital. In other industries,
the technologies to move away from fossil fuels
are immature, such as those required for steel or
ammonia production. Other uses of fossil fuels are
diffuse and particularly time- and resource-intensive to replace. For instance, natural gas heating is
prevalent in much of Europe. Changing to electric
heat pumps means replacing the heating systems in
millions of individual homes and businesses. Europe
has used conservation and fuel switching as strategies to alleviate the current crisis, but a complete
switch away from natural gas will take many years.
The great challenge for policymakers and the energy
industry is that the world wants more fossil fuels right now
(words in brackets, & all emphases mine), but not forever. We need to feed the energy
system we have today while we work to transform it
into the system we want for the future. In the meantime, it’s helpful to remember that the goal is fighting
emissions, not fossil fuels".
https://www.brookings.edu/wp-content/uploads/2023/03/FP_20230301_climate_energy_2023_gross.pdf
(Warning: long Read)
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