Its official , the world is insane Belgium will shut one of four nuclear reactors as scheduled this week and continue with a second reactor taken offline in Feb . This is happening in the midst of an energy crisis and puts further pressure on coal , nat gas and oil inventories . Belgians are protesting high electricity prices , stainless steel maker Aperam had to stop production due to soaring energy costs , why would anyone reduce baseload supply ? The mayor of Antwerp said Europe's energy crisis can't be pinned on Putin , its a self-inflicted crisis by phasing out its primary energy production .
US natural gas inventories are the second lowest for this time of year for the last 12 years . Demand/consumption has risen to record levels both in the US and internationally yet with winter directly in front of us , the paper market is distorting the price with everyone on the sell side of the trade . The media keeps harping on the fear of demand destruction when inventories contradict the narative , as winter sets in and the furnaces start running demand will overwhelm supply .
There seems to be a race where central banks try to kill the economy before the economy runs out of oil and gas . The US and Canada still have very tight labor markets where everyone has a job and we all commute , Target announced it will be hiring 100,000 people (if they can find job seekers) . Despite media propaganda , the roads are busy , the mall parking lots are full and the economy keeps chugging along ,
Rising interest rates won't help Biden as his war on O&G and bloated giveaways are the root cause for this underlying inflation . A healthy domestic O&G sector would have had ample supply to absorb the demand surge and would have kept prices under control . Depending on where Ian (storm) hits the gulf coast it may cause offshore production losses but that won't be for another couple of days .
Its a bit of a bonus really when you look at this O&G price selloff , lower prices will only stimulate demand and speed the arrival of the day of reckoning .