Analysis Energy
US oil industry hit hard by cyber attack
The electricity market is once again characterized by extremes this week. We have seen this more often in recent months, but the price decreases are becoming more extreme. The US oil market has been severely disrupted this week by a cyber attack on Colonial Pipeline, the operator of a major pipeline transporting gasoline, diesel and kerosene along the East Coast.
The Colonial Pipeline pipelines supply fuel to almost all major cities on the east coast. Consumers panicked and hoarded petrol and diesel en masse. As a result, petrol pumps ran out of stock much faster than usual. Due to the large peak in demand, not all stocks could be replenished in time and prices at the pump in the US rose.
Less oil processed
Several oil refineries around the Gulf of Mexico have had to cut production due to the hack. They supply a large part of their production directly via Colonial Pipeline and have limited storage facilities directly at the refineries.
The US problems have not had much effect on the price of crude oil. It has held steady at around $68 a barrel for Brent crude this week. Analysts do expect crude oil inventories to increase slightly in the coming week due to the problems in the US. Especially concerns about rising inflation and sluggish demand from India are keeping traders busy. However, most analysts do not expect a major shift in the price, although a small price decline cannot be ruled out.
Diesel price stable
There was hardly any movement in the diesel price last week. On Monday, May 10, 100 liters of diesel cost €103,71 to drop to €103,54 per 100 liters on Wednesday. According to analysts, the lagging demand for jet fuel in particular has an impact on petrol and diesel prices. Oil companies find it more difficult to sell kerosene and therefore lower the price. According to analysts, they are trying to compensate for the lost margin with a higher petrol price and to a lesser extent in the diesel price.
Deep troughs in the electricity market
The electricity market remains a market of extremes. On Sunday 9 May, the price of electricity dropped to €7,24 per MWh. The lowest level since July 2020. Sunny weather in combination with moderate winds ensured an ample supply of green electricity, while the demand on Sunday is smaller than on weekdays. Later in the week, the price rose again quickly. The showery weather in particular reduced the supply of solar power. Today (Friday 14 May) the price on the EPEX spot listing is €71,89 per MWh. Several analysts expect electricity prices to be around €60 per MWh in the coming week. Due to the predicted changeable weather, they will have a big blow to the arm.
In 2020, significant investments were made in expanding renewable energy. Global capacity increased by 280 gigawatts. That is an increase of 45% compared to 2019. That is the strongest increase since 1999, according to figures from the International Energy Agency (IEA). China accounts for about half of the total expansion. In particular, the country has realized many new wind farms in the past year.
Energy neutral agriculture
A group of livestock farmers around Woerden started working together to investigate what their future could look like in the peat meadow area around Woerden. Energy neutral agriculture is an important part of this. The energy is usually generated with wind turbines and solar panels.
Livestock farmer Jan Pak is enthusiastic about energy-neutral agriculture, but does see opportunities for improvement. "In my opinion, permits for wind turbines should be more generous. It should be easier to install a 25-metre wind turbine. The higher the wind turbine, the higher the efficiency. The infrastructure for processing the generated energy must also be improved. If that happens." , we can generate much more solar and wind energy in the peat meadow area," says Pak on the website of the province of Utrecht.
Jurphaas Lugtenburg
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