45 min
229 - Oil falls amid China growth uncertainties | Dr. Dean Foreman returns Energy Week
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- News
Oil falls amid China growth uncertainties
https://www.reuters.com/business/energy/oil-prices-come-off-earlier-gains-banks-cut-china-growth-forecasts-2023-06-19/
- the issue is headwinds, but is China's economy really that bad
- the real issue is that expectations for China's great economic reopening haven't materialized.
- China's demand growth was baked in and now that it's coming in below expectations
- at the same time...China's refineries processed second most oil in May on record
Column: China stored massive volume of crude oil in May, giving it options
https://www.reuters.com/markets/commodities/china-stored-massive-volume-crude-oil-may-giving-it-options-russell-2023-06-19/
- China added to crude oil stockpiles at the fastest rate in nearly three years in May, as robust imports outweighed near-record refinery processing.
Toyota unveils sweeping plans for new battery tech, EV innovation
https://www.reuters.com/business/autos-transportation/toyota-market-next-gen-battery-evs-2026-built-by-new-ev-unit-2023-06-13/
- Solid-state batteries can hold more energy than current liquid electrolyte batteries
- Toyota said it aims to launch next-generation lithium-ion batteries from 2026 offering longer ranges and quicker charging.
- This could be much better for the modern model of driving.
- While the range would be longer and the charging time faster and more palatable, but the weight might still be an issue
New Land Grab by Oil Giants Is Deep Underground
https://www.wsj.com/articles/new-land-grab-by-oil-giants-is-deep-underground-34cd5e97
Welcome Back Dr. Dean Foreman, Chief Economist for Texas Oil and Gas Association! www.txoga.org
- Are we heading towards 13 million barrels per day of oil production from the US? It's not getting there.
- Many states don't have the same activity levels as they did pre-pandemic
- Texas is more important than ever for oil production - natural decline rates in Texas are less than in other places
- Market is structurally tight, esp when you look at inventory levels
- Why is OPEC cutting? Each time, Fed Reserve contemplates a rate hike, economic uncertainty results.
- Going back to the OPEC cuts last year was to offset monetary policy from Fed.
- The China factor? China's economy is coming back but slowly over the course of the year.
- Natural gas production is at all time highs
- How much is flowing into global markets? Storage levels of natural gas are high in Europe and the U.S.
- Seasonal and regional markets for natural gas remain.
- Permian Basin most of the natural gas is associated
- How to incentivize natural gas drilling when prices are so low
- Appalachian region is constrained by pipelines
- Record level of natural gas exports, but really strong production and really strong consumption. Productivity levels have held this up.
- US is sitting at under $3 per mbtu, Europe is $9/$10 per mbtu
- Hot summer could pressure the LNG situation. But also a comeback in China's economy could pressure the LNG situation. China gave up many cargoes of LNG that it had contracted for to Europe because they were willing to pay super high prices
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com
Oil falls amid China growth uncertainties
https://www.reuters.com/business/energy/oil-prices-come-off-earlier-gains-banks-cut-china-growth-forecasts-2023-06-19/
- the issue is headwinds, but is China's economy really that bad
- the real issue is that expectations for China's great economic reopening haven't materialized.
- China's demand growth was baked in and now that it's coming in below expectations
- at the same time...China's refineries processed second most oil in May on record
Column: China stored massive volume of crude oil in May, giving it options
https://www.reuters.com/markets/commodities/china-stored-massive-volume-crude-oil-may-giving-it-options-russell-2023-06-19/
- China added to crude oil stockpiles at the fastest rate in nearly three years in May, as robust imports outweighed near-record refinery processing.
Toyota unveils sweeping plans for new battery tech, EV innovation
https://www.reuters.com/business/autos-transportation/toyota-market-next-gen-battery-evs-2026-built-by-new-ev-unit-2023-06-13/
- Solid-state batteries can hold more energy than current liquid electrolyte batteries
- Toyota said it aims to launch next-generation lithium-ion batteries from 2026 offering longer ranges and quicker charging.
- This could be much better for the modern model of driving.
- While the range would be longer and the charging time faster and more palatable, but the weight might still be an issue
New Land Grab by Oil Giants Is Deep Underground
https://www.wsj.com/articles/new-land-grab-by-oil-giants-is-deep-underground-34cd5e97
Welcome Back Dr. Dean Foreman, Chief Economist for Texas Oil and Gas Association! www.txoga.org
- Are we heading towards 13 million barrels per day of oil production from the US? It's not getting there.
- Many states don't have the same activity levels as they did pre-pandemic
- Texas is more important than ever for oil production - natural decline rates in Texas are less than in other places
- Market is structurally tight, esp when you look at inventory levels
- Why is OPEC cutting? Each time, Fed Reserve contemplates a rate hike, economic uncertainty results.
- Going back to the OPEC cuts last year was to offset monetary policy from Fed.
- The China factor? China's economy is coming back but slowly over the course of the year.
- Natural gas production is at all time highs
- How much is flowing into global markets? Storage levels of natural gas are high in Europe and the U.S.
- Seasonal and regional markets for natural gas remain.
- Permian Basin most of the natural gas is associated
- How to incentivize natural gas drilling when prices are so low
- Appalachian region is constrained by pipelines
- Record level of natural gas exports, but really strong production and really strong consumption. Productivity levels have held this up.
- US is sitting at under $3 per mbtu, Europe is $9/$10 per mbtu
- Hot summer could pressure the LNG situation. But also a comeback in China's economy could pressure the LNG situation. China gave up many cargoes of LNG that it had contracted for to Europe because they were willing to pay super high prices
This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com
45 min