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By Clyde Russell, Asia Commodities and Energy Columnist

Hello Power Up readers! Leading U.S. shale producers are struggling to ramp up crude output even as worries over a tightening of global oil supply are exerting more influence on market dynamics.

Today’s top headlines:

• Oil prices fall as China woes offset boost from high U.S. fuel demand
• Texas power output hits another record during heatwave

• Column: Europe’s record gas inventories cap prices

A pump jack is seen at sunset near Midland, Texas, U.S. Picture taken May 3, 2017. REUTERS/Ernest Scheyder.

A Reuters analysis of investor forecasts shows U.S. shale producers are raising output by extracting more oil from each well, but also lack the level of activity to significantly boost volumes.

Companies are favouring higher earnings over volumes, and producers are expected to inch volumes higher this year by about 850,000 barrels per day.

Most analysts remain skeptical shale gains can outrun the well decline rates over the long term without a sharp boost in drilling activity. Shale output typically declines by 50% in the first three years, and active U.S. drilling rigs are down to 659, the lowest since March 2022.

The Woodside Petroleum Karratha Gas Plant on the North West Shelf Venture in Western Australia is seen in this undated handout photograph obtained July 24, 2009. REUTERS/Woodside Petroleum Ltd/Handout.

Chevron and Woodside Energy are holding talks with unions in a bid to avert strikes at their Western Australia state natural gas facilities, which together supply about 10% of the world’s liquefied natural gas (LNG).

Three LNG operations are facing labour action, and the market is showing concern as prices rise amid fears that any disruption will lead to supply tightness and force European and Asian buyers to compete for cargoes. About 99% of workers at offshore platforms that supply gas to the Woodside-operated North West Shelf LNG plant, Australia’s biggest, have voted in favour of a planned strike.

China’s renewed appetite for Australian coal after Beijing ended its unofficial ban on imports, coupled with strong overall demand for the fuel used to generate power is forcing a realignment of seaborne flows in Asia.

Since ending the ban earlier this year, China’s imports of Australian thermal coal have recovered close to levels seen before the measure was imposed in mid-2020 amid a political fight between Beijing and Canberra. But this has meant that India has been forced to go back to buying more coal from Indonesia as Australian cargoes head once again to China.

“We are laying the foundations so that future opportunities can arise from decarbonisation and digitisation.”

Germany’s Finance Minister Christian Lindner, announcing a cabinet decision to allocate 57.6 billion euros ($63.2 billion) for green investments next year, up 60% from a 2023 target.

U.S. President Joe Biden says a previously shuttered facility that is being turned into a wind tower manufacturing plant is proof that the country is on the cusp of a clean energy boom.

Speaking at the Arcosa plant in New Mexico, Biden said his signature Inflation Reduction Act is reversing the decline in U.S. manufacturing. The president is on a three-state swing through the American West touting his economic policies as he bids for re-election next year.

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