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

• U.S. Oil Demand Surprises with Resilience

• Shell Nixes Carbon Offset Plans on the Quiet

• Upcoming Oil and Gas Events

• Tweet of the Day

U.S. Oil Demand Surprises with Resilience

Despite economic headwinds like inflation and higher interest rates, U.S. oil demand has remained resilient this year.

It has even expanded, although modestly, according to analysts from Standard Chartered.

Is anyone really surprised?

Oil demand is probably the most inelastic of commodity demands.

This means that regardless of the price, demand changes very little.

Well, unless gas tops $4 per gallon, that is.

But it hasn’t, so people are consuming more of all fuels.

Gasoline and jet fuel demand are both up, StanChart says, with gasoline demand rising by 98,000.

But while household fuel demand has held up and grown, industrial demand has shrunk.

Distillate demand has fallen by 169,000 bpd from last year.

That’s not a very good sign, but nobody expected higher interest rates to go unnoticed, did they?

If oil demand’s well, all’s well

Remember all the apocalyptic predictions for the U.S. economy earlier this year?

Recession, depression, stagflation, and everything else doomsayers could cram in.

Sure, it hasn’t been easy for many, but it seems that the soft landing prediction is about to come true.

And oil demand resilience is one of the signs supporting it – because of its inelasticity.

Basically, if people stop buying gasoline, then you know things are really going south.

But Americans are buying gasoline.

Why wouldn’t they, with the unemployment rate at a 50-year low?

And with costs falling in the shale patch, there’s going to be more local oil output.

This will ultimately help bring international prices down and make fuels more affordable.

At some point, we might even solve the inflation problem.

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Shell Nixes Carbon Offset Plans on the Quiet

Earlier this year, when Shell’s new CEO took the reins, he made a U-turn on plans to cut oil and gas production.

Now, it has surfaced that the Big Oil major also dropped plans for growth in the carbon offset sector.

Perfect timing

Wael Sawan was not shy at all when he said Shell was reversing course and would not decimate its oil and gas output.

He was, however, shy about the carbon offset business.

That was supposed to be a $100-million-a-year investment.

It was supposed to give Shell the opportunity to get its hands on some 120 million carbon offsets by 2030.

In case you’ve missed it, carbon offsets are a hot product right now.

A lot of companies buy them to reduce their carbon footprint.

In other words, to look good.

How uncomfortable, then, that just a week ago, the media reported on research saying that most carbon offsets are worthless.

They’re sold as a way to reduce deforestation—while also reducing emissions—but that’s not happening.

Is anyone still wondering why Shell gave up on the carbon offset plan?

They’re not dead yet

Despite the damning study, carbon offsets are a growing industry.

The research would probably just spur attempts to tighten quality assurance standards.

But there’s no way world industries are giving offsets up.

They are, after all, the easiest way to clean up your image.

I mean, to green up your image.

Shell, though, seems to be more interested in other things than greening up its image.

Imagine that.

Upcoming Oil & Gas Events

• August 28-September 1: International Meeting for Applied Geoscience and Energy Houston, TX

• September 7: Petroleum Alliance of Oklahoma Dove Hunt, Devol, OK

• September 11-14: American School of Gas Measurement Technology, Marriott Houston Westchase, Houston, TX

Around the Global Patch

🇧🇷 Global spotlight on Brazil's pre-salt oil triumph.
🇮🇳 August sees a drop in India's Russian oil imports.
🇸🇦 Saudi Arabia capitalizes on backwardation advantage.

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