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By Gavin Maguire, Global Energy Transition Columnist

Hello Power Up readers, I’m based in Colorado, and the editor for this edition of Power Up.

The health of the Chinese economy has been a key driver of crude oil and fuel market sentiment lately, with a slew of weaker-than-expected economic data overshadowing signs of tightening oil market fundamentals this week, including a steep fall in U.S. crude oil inventories and yet another drop in Saudi crude exports.

Down Under, Woodside Energy and labour unions representing workers at Australia’s largest liquefied natural gas (LNG) facility remain at odds over continuing wage discussions.

And in Washington DC this week, U.S. President Joe Biden used the first anniversary of his signature Inflation Reduction Act to pitch the landmark clean-energy law as an economic powerhouse to a public that remains largely unaware of its contents.

Today’s top headlines:

• Oil edges up as China seeks to calm economic fears
• Venezuela fails to curb oil leaks, gas flaring despite pledges
• Ukraine has no plans to talk with Russia on gas transit contract renewal – VOA

.. and a side of fiscal stimulus, please.

REUTERS/Thomas Peter 

Downbeat news on China’s economy set the tone for global markets this week, including an unexpected cut to policy rates, weaker-than-expected factory output and retail sales, and the suspension of a youth jobless data report that hit record highs the previous month and is a closely watched gauge of economic strength.

A spokesman for China’s main statistics office said the data suspension was needed to “optimise” collection methods, but was interpreted by financial and energy markets as fresh bearish evidence of a severe slowdown in the world’s second-largest economy and top global manufacturer, exporter and trade partner.

The oil market appears to be particularly concerned about China’s ailing economy, with Brent and U.S. light crude futures both undergoing steep declines so far this week as traders dial down their demand estimates in the world’s second-largest refiner. The drops in oil prices came despite supportive data in the shape of a steep drawdown in U.S. crude stockpiles and a third consecutive monthly fall in crude oil exports from Saudi Arabia.  

However, crude prices perked up slightly on Thursday after China’s central bank said it would support the country’s economy through “precise and forceful” policy. 

Woodside Energy Group’s exhibition booth is seen at the World Gas Conference 2022 in Daegu, South Korea May 23, 2022. REUTERS/Florence Tan/File Photo

Woodside Energy said “positive progress” was being made on wage disputes at Australia’s largest liquefied natural gas (LNG) facility even as a union alliance said key differences remained ahead of further talks next Wednesday.

Woodside’s North West Shelf, along with Chevron’s  Australian LNG operations of Gorgon and Wheatstone, supply about 10% of the global LNG market.

About 99% of workers at offshore platforms that supply gas to the Woodside facility have voted to authorise the union to take industrial action, with any strike potentially disrupting shipments and sending prices for the super-chilled fuel higher.

After the vote, the union can decide whether to go ahead with any action, which must take place within 30 days.

More details on the impact of the dispute on world gas markets here. 

U.S. President Joe Biden at a White House event marking the anniversary of the Inflation Reduction Act.  REUTERS/Kevin Lamarque

U.S President Joe Biden on Wednesday used the first anniversary of his signature Inflation Reduction Act to pitch the landmark clean-energy law as an economic powerhouse to a public that remains largely unaware of its contents.

The wide-ranging law provides billions of dollars in tax credits to help consumers buy electric vehicles and companies produce renewable energy, as Biden aims to decarbonize the mighty U.S. power sector. It also helps seniors pay for prescription drugs, expands some elements of Obamacare and raises taxes on wealthy Americans and corporations.

Biden, speaking at the ceremony, said the legislation already created 170,000 clean energy jobs and will create some 1.5 million jobs over the next decade, while significantly cutting the nation’s carbon emissions.

The legislation, Biden said, has shifted production of critical components away from China and into the United States. “We are building here and sending over there,” Biden said.

Wall Street analysts say the legislation has shown early signs of its economic power and predicted that it will eventually lead to billions of dollars in new investments and thousands of new jobs.

Many Americans, however, don’t know much about it, according to Reuters opinion polls. More details in this story.

“Over the past year, there have been signs that the legislation is contributing to a surge in clean energy manufacturing and related industries such as semiconductors, and factoring into companies’ investment decisions, including in the auto, utilities and oil and gas sectors.” 

Moody’s, on the impact of the Inflation Reduction Act

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