Ellen Wald and Ryan Ray discuss the week's events in energy, and what it all means to you.
Episode 171 - Natural-Gas Prices Surge | Oil giant Shell sets sights on sustainable aviation fuel take-off |Dr. Dean Foreman API
Natural-Gas Prices Surge, and Winter Is Still Months Away
- historically speaking crude oil prices actually do warrant new drilling but companies aren't.
- Why aren't companies drilling more? Lack of money? Why isn't the money interested?
Oil falls as storm-hit U.S. supply trickles back into market
- Will Europe be forced to turn to burning fuel oil this winter for electricity when natural gas and coal are too expensive and will that push oil prices up?
- Change in policy could dampen sentiment for movement.
Equinor to pump up gas supply for tight European market
- Can Norway save the day for Europe? Perhaps.
Trade group wants restrictions on U.S. natural gas exports
- Will restricting LNG exports help curb US natural gas prices?
- IECA says US natural gas prices would need to double from where they are now to spur more drilling. Chemicals, Food, Materials could become more expensive or face shortages.
- Government intervention in terms of promoting natural gas drilling.
Oil giant Shell sets sights on sustainable aviation fuel take-off
- How big of a "thing" is this? Crops could be used to feed people - industrial agriculture is NOT sustainable.
China faces a potential Lehman moment. Wall Street is unfazed
China’s Evergrande Moment Is Looking More LTCM Than Minsky
What is China going to do? Ryan's Read: China will do whatever it has to. Can't seperate this story from Taiwan.
Dr. Dean Foreman and API Monthly Statistical Report
Global natural gas issues:
- For this time of year we have never had higher prices
- Reflects Russian gas inventories are historically low, wind is underperforming & gas needed to prevent brownouts and LNG shipments being snapped up like crazy
- Global natural gas market? Not yet because still so much less being trading internationally than oil
- Rush to get cargoes available.
Domestic natural gas:
- Baker Hughes rig counts have actually gone down despite higher prices
- Should be able to drill all day and make money
- Producers in Gulf Coast have access to premium markets and should be able to export to internationally markets
- Producers in PA, etc. don't have access to global value...
Episode 170 - Is the Delta wave over? | Still 50% of offshore production offline | German Power, Carbon Rise to Record on Soaring Gas Price
Economic Costs Accumulate as Countries Worried by Delta Variant Extend Border Closures
Is the Delta wave over? Or has it not hit the Northeast?
Can we assume that economic activity and travel isn't going to go back down?
City in China restricts movement amid outbreak
City closures will impact gasoline and jet fuel in China
Oil prices in the low $70s put pressure on Chinese economy
Nearly 185,000 b/d of US Gulf oil production returns as Ida recovery continues
Still 50% of offshore production offline
Shell having particular difficulties getting things back online
Economic Costs Accumulate as Countries Worried by Delta Variant Extend Border Closures
European Power Situation
Analysis: Expensive winter ahead as Europe's power prices surge
Energy Prices in Europe Hit Records After Wind Stops Blowing
German Power, Carbon Rise to Record on Soaring Gas Prices
Russia is pumping a lot less natural gas to Europe all of a sudden — and it is not clear why
Charging points for electric cars will be preset to turn off for NINE HOURS a day amid fears they will cause blackouts if government hits target for phasing out petrol and diesel
- Is Gazprom deliberately putting the squeeze on the European Union to get Nord Stream II started up?
- Consumers don't have extra money to pay prices?
Episode 169 - Market sends mixed signals | Patrick De Haan with GasBuddy
Connect with our guest: https://twitter.com/GasBuddyGuy
Oil steadies as Hurricane Ida weakens, OPEC+ in focus
Louisiana refineries slammed by Hurricane Ida
Colonial Pipeline expects to resume service after assessing Ida’s impact
- As far as hurricanes go, not as much damage to oil infrastructure and refining as we have seen in the past
- Refining issues could persist due to power outages and lack of feedstock
- Unclear when any of that can restart given the fact that Louisiana is experiencing severe power outages and many refineries may have to contend with flooding conditions which can keep them offline for quite awhile and can cause damage.
- Gasoline prices are up 2% in anticipation, although the storm comes right as summer demand for gasoline is starting to wane.
- Some good news from ExxonMobil's Baton Rouge refinery - reported no significant damage from the hurricane. But they are still shutting down units and flaring gas. Once they have access to necessary feedstocks and support from third-party utilities they expect to return to normal production.
OPEC+ faces mixed market signals after US pressure to increase oil supplies
OPEC+ could reconsider output increase, says Kuwaiti oil minister
- Unlikely for OPEC to change its plans to increase oil production by 400,000 bpd
- Kuwait suggested this might be possible, but unlikely given that Brent is still above $70
Climate Change to Be Treated as Public-Health Issue
- plan to reduce GHG emissions from the healthcare system??
Interview with GasBuddyGuy Patrick DeHaan:
- tremendous recovery with gasoline demand this summer
- driving season remained resilient despite Delta variant
- demand starting to slip as driving season coming to an end
- EIA implied demand last week 9.7 million bpd, GasBuddy slightly lower 9.3 million bpd
- News about Covid cases surging hasn't impacted gasoline consumption distribution
- Power outages from Hurricane Ida are very extensive, refining down due to power outages and no RVP wavers given out by EPA. Would allow refiners to distribute fall gasoline early (before Sept 15).
- Bottlenecks due to Ida at various levels will persist for days or longer. Refineries need power, nitrogen, oxygen, etc....
Episode 168 - Oil jumps, for now | Is oil headed towards $80? | California needs oil and gas
Oil jumps 4% on weaker dollar after seven days of losses
Crude Oil Surges; Rebounding After Torrid Week
- Can oil really hit $80 by the end of the year?
- Last week's selloff was overdone, so oil is rebounding now.
- Plenty of reasons to see demand suffering due to coronavirus
- Sentiment is a real thing with the oil market. Perception of how coronavirus will impact demand has a real impact.
California's clean grid may lean on oil, gas to avoid summer blackouts
- Irony of building "temporary" natural gas plants to keep the lights on in California, which claims to have a "clean" grid
- could the governor recall impact
US nears proposal of biofuel targets for 2021-22
- biofuel mandates could be lowered for 2021 and 2022
- is the RFS really worthwhile at this point?
Hydrogen lobbyist quits, slams oil companies’ “false claims” about blue hydrogen
- Blue hydrogen is only less carbon intensive if carbon is captured at every step of the way, and that is unlikely.
- just because you don't see the pollution at the end result doesn't mean its not a carbon intensive process
Carbon taxes could hurt Russia more than sanctions, says oil tsar
- border adjustment taxes for carbon on aluminum, iron ore, pipes, electricity, cement could have major impact on Russian exports.
Nord Stream 2: Russia must not use gas pipeline as weapon, says Merkel
- Is the concern over Russia's threat to the EU overblown? Is Europe really afraid of Russia?
- Is it mostly a Ukrainian-Russian issue and western Europe isn't concerned?
- If the EU is confident about doing businesses with Russia to the extent that they are willing to rely on Russia for 40% of their natural gas, then why is the US afraid of Russia?
Episode 167 - China demand is down | India's $1.35 trln infrastructure plan | Dr. Dean Foreman API
Watch us on YouTube: https://www.youtube.com/c/WarRoomMedia
Listen to Inside the War Room: https://shor.by/insidethewarroom
Oil prices drop amid faltering demand outlook in China
- Is it Delta variant? Is is lockdowns? Is it crackdowns on independent refiners?
- Are there larger economic forces at play in Chinese demand?
- Can China put pressure on OPEC to provide what they want?
OPEC+ sees no need to speed up oil cuts easing despite U.S. calls
- Doesn't cost Biden any political capital to call for lower oil prices
- No surprise that OPEC said no
- OPEC is already increasing production
China Has Thousands of Hydropower Projects It Doesn't Want
- government planning is not as great as people make it out to be
- going to have to fix these dams
- China can pull off a lot of amazing projects but also does a lot of really idiotic stuff
Modi says India will soon unveil $1.35 trln infrastructure plan
- infrastructure spending plan will increase oil demand
- have to generate economic growth after killing medium and small businesses
Rosneft to chase production growth
- future is still oil for Russia
- Rosneft is expanding its oil production capacity
Dr. Dean Foreman on the Monthly Statistical Report
- Demand is back, and so is the economy! Summer travel and pent up demand for travel
- Comparing summer demand to November 2019 demand is still a little off, but If compare July 2021 to July 2019 only off a little bit.
- Gasoline demand is strong into August
- Lowest crude oil inventories since December 2019. Drawn down 16% year on year. A little under 7% of lowest point of last 5 years.
- Refinery utilization is very strong (91%). ONly 2019 did we average higher. Exports are down. Still a net exporter for refined products, though more crude oil imports.
- Distillate economic indicator - overheating economy and facing inflationary pressures. This is correlated with Univ Michigan consumer sentiment survey,
- Petrochemicals have been the strongest area of sustained growth for US oil. Continuing need for plastics. Record demand in July. 5.6 million bpd consumed.
- Creeping up of oil directed rigs this year. Have generally been range bound in production in US and only just broke out of that range for June and July - 11.3 million bpd. Good sign for where crude oil production might go, but will take awhile. Natural gas is another story. 6 month future prices are $4/million btu and would indicate more natural gas drilling activity. Why aren't we seeing this? Capital constraints and people constraints....
Episode 166 - Dakota Access Pipeline Expansion | Aramco has huge quarter | Infrastructure Bill a win for big oil?
Oil falls in biggest weekly decline in months on demand worries
- Is the $80 oil call under threat?
- Oil company stocks are holing pretty steady, despite good earnings and falling oil
- Is it Delta? What IS Delta, and why do we need to know?
Oil majors tread cautiously in Permian shale
- pioneer not expecting to do any major acquisitions
- How much is ESG, Covid, fear of OPEC, paying down debt, Biden admin fear, fear of uncertainty
Utilities Eye Mini Nuclear Reactors as Climate Concerns Grow
- 345 megawatt reactor will cost $1 billion, $50 to $60 range per megawatt-hour
Climate chief warns of ‘catastrophe’ and then backs oil and coal plans
Aramco posts nearly 300% leap in second-quarter profit on global demand recovery
More Oil Shipped as Dakota Access Pipeline Expansion Starts
- pipeline expansion is going through, rate of oil increasing
Infrastructure Bill Has Big Wins for Oil, Climate Advocates Say
- big oil wins $10 billion for carbon capture and LNG plant in Alaska wins loan guarantees, $8 billion for hydrogen but not necessarily green and blue
- $21.5 billion to create an Office of Clean Energy Demonstrations!
'This is no way to make policy': Cryptocurrency advocates express frustration with bipartisan infrastructure language
- Provision will expand number of cryptocurrency users who would have report filings to the IRS
Insightful commentary on weekly energy news.
One of the best
Great show, with great insights. Look forward to the show each week. Keep em’ coming.
Great industry Insight
Podcast has really great and smart industry insight but it hardly makes what’s-her-face an expert on COVID19 or anything outside of oil and gas. And her giggling cohost doesn’t make it better. Love the industry news, save the sophomoric complaining and wading into areas of self proclaimed expertise that no one downloaded this podcast to hear.