Good morning; here's what the Oilman has for you today:

• Goldman Predicts 2 Million Bpd Oil Deficit in H2

• Developer Cancels Massive Wind Project in Soaring Costs

• Upcoming Oil and Gas Events

• Tweet of the Day

Goldman Predicts Oil Deficit

Goldman Sachs has forecast the oil market would swing into a 2-million-bpd deficit in the second quarter.

The gap will boost prices as demand surges to a record high.

Wait, what happened to peak oil?

There’s been so much talk about peak oil demand, energy transition, EVs, and stuff many must think oil demand is naturally going down.

Only it isn’t.

Demand for oil is growing, and it’s growing regardless of prices.

It grew last year, when prices were north of $100 for months.

It’s growing this year despite inflation and recession fears.

And that’s because everything runs on oil except for the things that run on gas.

A supply squeeze was a matter of time.

Producers tighten, consumers stay thirsty

“We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Goldman analysts said.

And they’re not the only ones.

Because while everyone’s been watching central banks, demand for oil has been growing.

And supply has been shrinking.

It’s not just OPEC and the Saudis, either.

It’s the U.S. as well and now even the EIA has admitted it.

June's output in the shale patch turned lower than the EIA expected it.

Now, the EIA forecasts a decline from August.

That sure is going to contribute to that 2-million-bpd supply gap.

But hey, Iran’s exporting oil at the strongest pace in six years, so that should be all right. For China, at least.

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Developer Cancels Massive Wind Project in Soaring Costs

Vattenfall has canceled a 1.4-GW offshore wind project in the UK.

The Swedish state company said costs for the Norfolk Boreas project had gone up by 40%.

The myth of cheap renewables gets bust after bust

“What we see today, it simply doesn’t make sense to continue this project,” Vattenfall’s CEO said about the UK project.

And that project is not the only one that doesn’t make sense.

Most, if not all, offshore wind power projects in Europe don’t make sense right now.

Because of costs.

The CEO of Orsted said it plainly in earlier July.

He also plainly demanded more money from the UK government.

That’s some profitable industry right there.

It’s only going to get worse

What’s happening in the wind was entirely foreseeable.

But it must come as a shock for those who only read BNEF and Ember forecasts.

In fact, most mainstream forecasts kept on repeating the “cheaper and cheaper” mantra long after raw material costs spiked.

Then they went on spiking, and the forecasters ignored them.

Until the industry itself cried wolf.

And now, even climate advocacies are sounding the alarm.

What do they propose?

You’ll never guess: more money from the government.

“Policymakers must take note and swift action to ensure further developers and wind farms do not follow the same path,” per the Carbon Trust.

Yeah, that’s how healthy and totally viable the wind power industry is.

Upcoming Oil & Gas Events

• July 28: SOOGA Annual Industry Boat Ride, Valley Gem, Marietta, OH

• July 31-Aug 2: 2023 Railroad Commission of Texas

• August 3-4: OOGA Summer Meeting, Belmont Hills Country Club, St Clairsville, OH

Around the Global Patch

🌍 Solar panel stockpiling, Europe's record high.
🇩🇪 Germany's energy shift: Industrial future threatened?
🇧🇷 Petrobras leases Brazilian shipyard for expansion.

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