Ellen Wald and Ryan Ray discuss the week's events in energy, and what it all means to you.
Episode 125 - Shale webinar | Asian refineries | Libya | Israel and Bahrain | Tesla/Nikola
Jet Fuel So Cheap, Now Being Blended For Use By Ships
- possibility that this will help eliminate jet fuel overhang in the market
- Dr. Foreman from API discussed this back in August
- but be careful, too much straight kerosene can lower temperature at which fuel can catch fire
Oil refiners worldwide struggle with weak demand, inventory glut
- Chinese refining utilization is down
- But this could be due to temporary reasons
Exclusive: Shell launches major cost-cutting drive to prepare for energy transition
- slash budget For upstream by 30-40%
- want to cut expenses from service stations which are very profitable.
- want to cut LNG production
- but can Shell actually make a profit going into the power sector and renewables? Margins are pretty low there.
Libya NOC lifts force majeure from ‘safe’ fields, ports
- more oil is not what the oil market needs right now
- would OPEC+ players try to re-start conflict just to keep oil off the market?
Saudi Royal Family Divides Over Potential Embrace of Israel
- UAE/Bahrain deal with Israel is mostly economics - Israel is a big market for them
- WIll Saudi Arabia join? Saudi Arabia is a different place, larger population and King Salman really hates Israel.
U.S. Sending More Troops to Syria to Counter the Russians
- Is this turning into a little proxy war between the US and Russia?
- Runs contrary to Trump’s campaign promise to withdraw troops.
Nikola’s Troubles Raise Questions For Tesla And Elon Musk On Battery Day
Answering a question about the webinar
register - https://shor.by/warroomwebinar
Episode 124 - BP makes silly claims about oil demand | OPEC turns 60 | Dean Foreman
BP Says the Era of Oil-Demand Growth Is Over
- how is it possible to really believe that oil demand peaked in 2019?
- per capital usage in China, INdia, Pakistan, Africa still so much room for growth
- amount of GDP growth would have to slow at a staggering rate in order for oil demand to have already peaked
Citi, Vitol see oil demand recovery into 2021
Oil prices suffer a second weekly fall on demand worries
- Will OPEC made a change? Will they try to shift to a rapid response group?
OPEC Turns 60! Here’s a look at some key moments over the past 60 years.
Monthly Statistical Report - API
- Demand AND supply increased in August
- 2.5 million bpd of motor gasoline demand above where we were in April But still well below year over year and 5 year average
- Rig count bottomed out but production up. Result of shut in coming online and significant productivity gains
- Petroleum exports: role of China? On again off again. Geopolitical element combined with a business as usual element.
- Crude oil inventories: They’ve been heading down since June but are still above the 5 year average. What’s ahead in terms of seasonality? What about gasoline production?
- 3 million barrel per day increase shows underlying need for liquid fuels is still there.
Episode 123 - Oil demand falls | Bad auction in New Mexico | African plastic | Mini-reactors
Oil steady, Brent slips from 5-mth high amid demand uncertainty
Oil prices edge up on stimulus support despite ample supplies
- oil prices are waiting for a reason to move higher, demand-wise
About 61 Million Americans Have Stopped Commuting Due to COVID-19
- 3/10 people who commute by car said they no longer have to commute either because they lost their job or because they are working from home
- the number of drivers who get gas weekly dropped by 26% in August
U.S. oil and gas auction draws tepid bidding from weakened drillers
- Not just low oil prices but could also be because producers are concerned that a Biden administration might cancel drilling on Federal land
- Was this tier 1 acreage or not so valuable acreage?
Exclusive: Indian state refiners halt oil imports from Chinese companies - sources
- potential for China to leverage its consumption power over India. Would it force its suppliers to choose between the two? Saudi Arabia likely to go with China but who would supply India?
Big Oil Is in Trouble. Its Plan: Flood Africa With Plastic.
- What are the problems? Apparently there is no market for plastic but there is one in Africa?
- Is there still a market for plastic? Plastics makers are lobbying for the US to pressure Kenya to change its import policies for plastics during trade organizations
Mini-Reactors Are Gaining Traction in the Push for Greener Grids
- SMRs could be very powerful tools in emerging markets or in new industrial spaces or even for server farms
OPEC Countries Further Diversify Exports
- countries that used to just pump crude and sell it are now making more money from other exports - raw materials and refined products
Episode 122 - COVID recovery | Oil demand and driving season | Russian opposition leader | Israeli Pipielines | Green energy
Register for Shale oil Roundtable: https://shor.by/warroomwebinar
Shale oil production's brief comeback
- Can it really be called a “comeback”
- Is this a comeback or a dead cat bounce?
- DUC data from EIA - DUCs are up and to the right
- 800,000 bpd returning August-September
- ExxonMobil is idling but ready to increase activities again
- Permian has 3500 DUC wells which can be brought online fairly quickly
U.S. Recession Likely to End Late 2020 or 2021, NABE Survey Says
- Have we even gotten to the real recession?
- Trickle up recession
Russia should rethink its role in new energy economy
- Russia is too focused on natural gas and doesn’t have enough renewables
- Too focused on natural gas exports and ant gas prices very low
Can Biden Fix Climate Change With $1.3 Trillion?
- If the economy rebounds, there is no reason not to print $1.3 trillion for whatever they want
- tax the wealthy and get a healthier environment but where is the policy? How will we get there? What’s the role of SMRs? Renewable energy?
Methane Ruling article
Episode 121 - ANWR | Oxy | High-crush Sand | Novak and OPEC | Dean Foreman
Interior Secretary Approves Oil Drilling in Alaska’s Arctic Refuge
- Does anyone want to drill in ANWR anyway?
- Is there financial backing for this?
- However, its not a bad idea to have a forward-oriented energy policy that doesn’t assume that current low price conditions will persist years down the line.
Saudi Wealth Fund Moves Billions From Blue Chips to ETFs
- PIF sold positions in Citi, many oil companies, Facebook, Marriott, etc. and moving to ETFs
How a Texas shale supplier's founders made fortunes as the firm failed
- This is why new companies will continue to be founded and go bankrupt.
Russia's Novak expects no hasty OPEC+ decisions this month: reports
- Russia happy to continue pressuring OPEC cheaters into compliance while also increasing its own production as Urals blend is in strong demand in Russia.
API Monthly Statistical Report - July
- Demand is growing, though still 12% below where it should be
- Production is down to 10.3 million bpd
- With supply continuing to rationalize with a lag, that says higher demand, lower supply.
- US has reverted to being a net petroleum importer for the third consecutive month.
- Structural - we are seeing supply looking structurally lower. Drilling permits are lower. Enduring impact for industry.
- Potential turning point for economy even though its deeply negative. Slowing of industrial production for some time, but its starting to turn and means potential upward indicator.
- Gasoline: increased in 4.5% in July, month on month. Change from June to July generally barely positive. This is more than just seasonality, its actual recovery.
Higher refinery throughput.
- Coronavirus accelerated trend that was already in place. 131/132 refineries operating in US. Number going down but capacity is expanding at the remaining refineries - not just domestic demand but also refining products for export.
- Smaller refineries, especially in Texas and Louisiana had advantages of being so close to very low cost feedstock but those advantages disappeared for awhile when the differential between WTI and Brent disappeared. Now, its back, but not as much as before. Lower difference stymied their strategy.
- Refinery maintenance: if you can delay refinery turnaround you will in order to make as much money as you can.
- Rig Count vs. production. Rig count doesn’t necessarily indicate lower production.
- Jet fuel: up A LOT since June, but still way down from last year. Structural changes.
- How can refineries de convert jet fuel to something that can be used? It can be converted to low sulfur marine fuel.
- Trade is down but expectation is that trade will increase. China’s industry is nearly back to pre-pandemic levels. Marine shipping industry is there.
- Light vs. heavy crude: Saudi Arabian exports to US practically evaporated (less than 200,000 bpd) and Mexican and...