214 episodes

Ellen Wald and Ryan Ray discuss the week's events in energy, and what it all means to you.

Energy Week Ryan Ray

    • News
    • 4.1 • 35 Ratings

Ellen Wald and Ryan Ray discuss the week's events in energy, and what it all means to you.

    201 - Why did gasoline demand drop? | Shale drillers focus on returns | Goldman cuts near-term oil forecasts

    201 - Why did gasoline demand drop? | Shale drillers focus on returns | Goldman cuts near-term oil forecasts

    Gasoline Demand Dip That Spooked Market Sparks Furor Over US Data
    https://finance.yahoo.com/news/gasoline-demand-dip-spooked-market-205412111.html
    - issues with the data made it look like gasoline demand was below summer 2020 levels
    - difference between wholesale gasoline supplied and retail demand.
    - check out Rory Johnston's report on this (https://www.commoditycontext.com/p/qc-us-gasoline-demand-data)

    Shale drillers double down on returns over output
    https://www.argusmedia.com/en/news/2358967-shale-drillers-double-down-on-returns-over-output
    - Shale drillers are spending more on drilling, not to drill more or grow production but to pay more for services and goods
    - OXY, Pioneer aren't growing but XOM plans to grow drilling

    Column: European gas oil futures anticipate recession
    https://www.reuters.com/business/energy/european-gas-oil-futures-anticipate-recession-kemp-2022-08-08/
    - European Hedge fund and money managers are selling off oil futures and US ones are buying them
    - European economic outlook is worse than in US

    Goldman Sachs cuts near-term oil forecasts but remains bullish
    https://www.theedgemarkets.com/article/goldman-sachs-cuts-nearterm-oil-forecasts-remains-bullish
    - Forecast Q3 Brent $110 and Q4 $125 but Brent is at $97 now

    Spain Limits Air-Conditioning to Save Energy
    https://www.nytimes.com/2022/08/05/world/europe/spain-air-conditioning-limits.html
    - public buildings air conditioning set to 81, heating set to 66
    - lights to be turned off

    BlackRock Opening South Florida ‘Snowbird’ Office for Dozens of Employees
    https://www.wsj.com/articles/blackrock-opening-south-florida-snowbird-office-for-dozens-of-employees-11659906957
    - ESG? climate change? do they really believe that Florida is going to be underwater if they are moving there?

    • 32 min
    200 - Biden's visit to Saudi Arabia | Would a Russian price cap work?

    200 - Biden's visit to Saudi Arabia | Would a Russian price cap work?

    Ellen's thoughts on Biden's visit to Saudi Arabia:
    Whether this message is understood by the Biden administration is unclear given the fact that Amos Hochstein's statement after the summit was that he was confident that "there will be a few more steps in the coming weeks from OPEC in terms of oil supplies." The only thing the market should expect from OPEC is that after it meets on August 3, it will unwind the last of its cuts from 2020. Quotas will increase, but this may only result in 200,000 or fewer barrels per day coming on the market because most countries haven't been increasing production very much and are producing well below their quotas. Saudi Arabia will be allowed to produce at 11 million bpd but likely won't. If it hits 10.8 million bpd I would be surprised.

    Biden fails to secure major security, oil commitments at Arab summit
    https://www.reuters.com/world/middle-east/biden-hopes-more-oil-israeli-integration-arab-summit-saudi-2022-07-16/

    Oil market reformer says Russian price cap would fail
     https://www.reuters.com/business/energy/oil-market-reformer-says-russian-price-cap-would-fail-2022-07-18/
    - Will just make prices higher
    - How will they convince Russia to accept less money from India and China for their oil?

    California went big on rooftop solar. Now that’s a problem for landfills
    https://www.latimes.com/business/story/2022-07-14/california-rooftop-solar-pv-panels-recycling-danger
    - “The industry is supposed to be green,” Vanderhoof said. “But in reality, it’s all about the money.”
    - 80% of the panels are recyclable but they often don't end up being recycled.
    - No one talks about back end trade off with renewables

    U.S. crosses the electric-car tipping point for mass adoption
    https://driving.ca/auto-news/industry/u-s-crosses-the-electric-car-tipping-point-for-mass-adoption
    - How can you compare the US to the United States which is very different, much larger, etc. and say that you know this is the tipping point?

    Europe Must Slash Gas Demand Now Before 'Hard' Winter, IEA Warns
    https://financialpost.com/pmn/business-pmn/europe-must-slash-gas-demand-now-before-hard-winter-iea-warns/wcm/a7b11d21-07ff-4ef2-b8ad-5ef031c362bf/amp/
    - burn coal and oil!
    - Why not buy out some fracking companies and funnel them supplies, investment, etc.?

    • 32 min
    199 - Biden heads to Middle East | Kunal Patel with the Dallas Fed

    199 - Biden heads to Middle East | Kunal Patel with the Dallas Fed

    Biden’s Middle East Trip Is a High-Risk Bid to Reset Saudi Relations
    https://www.wsj.com/articles/bidens-middle-east-trip-is-a-high-risk-bid-to-reset-saudi-relations-11657481150
    - will he ask for more oil? no indication more Saudi oil would even bring down prices

    Oil From U.S. Reserves Sent Overseas as Gasoline Prices Stay High
    https://www.reuters.com/business/energy/oil-us-reserves-head-overseas-gasoline-prices-stay-high-2022-07-05/
    - this isn't a BAD thing but politicians who think it is could do damage by trying to curb oil exports from US.

    Gas Station Owners, Blamed When Prices Rose, Face Risks as Prices Fall
    https://www.wsj.com/articles/gas-station-owners-blamed-when-prices-rose-face-risks-as-prices-fall-11657540801

    Special Guest Kunal Patel from Dallas Federal Reserve Oil and Gas Survey
    https://www.dallasfed.org/research/surveys/des/2022/2202.aspx#tab-questions

    What stood out to you in the Q2 survey results? Anything surprising?
    - 200 upstream firms signed up in district - 137 responded.
    - diffusion indices, give direction of where indicator is going.
    - Challenges around cost increases and supply chain issues. Pace of increases is very strong. strongest it's ever been. Firms are dealing with significant cost increases and time lags.

    Supply chain issues - 47% rated them as "significantly negative" and 47% rated them as "slightly negative." What supply issues rated amongst the most difficult to procure for firms? How do you see this as impacting production?
    - steel tubular rated as good with most significant shortage
    - sand also needed for completions. Firms that want to increase activity above plan don't know where they will be able to get steel, labor or sand
    - tariff exemption on Ukrainian steel is helpful but Ukrainian steel mills aren't able to produce. Executive said, get rid of steel tariffs from other countries
    - Sand could be trucked in but also shortage of truck drivers.
    - Will take 7-8 months to get a new well drilled and producing.

    A number of analysts expect U.S. crude oil production to grow by nearly 1 million barrels per day (mb/d) from December 2021 to December 2022. By how much do you expect U.S. oil production to grow?
    37% said they expect oil production to increase by between 800,000bpd and 1 million bpd but almost as many (34%) said they expect production to grow by less than or equal to 800,000 bpd. Are analysts being too optimistic with their growth forecasts, especially given how executives feel supply chain issues are impacting them?
    - hard to say whether analysts are being too optimistic.
    - higher prices provide incentive to grow. But cost inflation is major. Most people thought costs would increase 10%, but its likely much more than that (maybe 25%). Dallas Fed thinks it will be less than 1million bpd growth

    Government regulations are still a significant factor driving uncertainty for firms but supply chain issues, inflation and labor shortages have eclipsed that - is this a change from earlier surveys?
    - generally higher oil prices mean more money and less uncertainty. Now, prices increased but uncertainty also increased.
    - Lots of comments saying government regulation is important.
    - Kansas Fed asked same question and firms said that government regulations were cause of most uncertainty, not supply chain,...

    • 46 min
    198 - G7 will stand with Ukraine | Will an export ban help or hurt? | Chet Thompson, CEO of AFPM

    198 - G7 will stand with Ukraine | Will an export ban help or hurt? | Chet Thompson, CEO of AFPM

    Pledging new sanctions, G7 to stand with Ukraine 'for as long as it takes'
    https://www.reuters.com/business/energy/g7-hike-sanctions-russia-close-oil-price-cap-deal-us-official-2022-06-27/
    - What can G7 nations do to Russia at this point?
    - Recession could send prices down and that might hurt Russia
    - How can the plan to put a price cap on Russian be implemented?

    Output from OPEC+ to go down in 2023 as sanctions take their toll on Russian volumes
    https://www.offshore-energy.biz/output-from-opec-to-go-down-in-2023-as-sanctions-take-their-toll-on-russian-volumes/

    Oil prices could slump to $75 a barrel in a recession — or jump to $150 if European sanctions slam Russian supplies, BofA says
    https://markets.businessinsider.com/news/commodities/oil-prices-brent-crude-recession-outlook-europe-russia-sanctions-bofa-2022-6
    - a recession could hurt Russian revenue

    US Export Ban Likely to Backfire, Market Players Say
    https://www.energyintel.com/00000181-732e-d443-a9db-f7aee6290000

    Interview with Chet Thompson, CEO of AFPM
    - Represent US refining industry
    - 7 of the refiners they represent got letters from President about the price of gasoline and diesel suggesting that prices are high because they are sitting on refining capacity.
    - Refiners don't love where gasoline and diesel prices are today either
    - Had been engaging with Biden admin for weeks about how to help with supply/demand imbalances so tone and rhetoric or letter caught off guard.
    - Public should appreciate that refiners aren't holding back capacity.
    - Industry is running at 94% capacity, which is basically full out
    - President Biden's policies are participating to situation. Anti-fuel producer rhetoric is high
    - Thursday meeting was constructive, hopefully some good outcomes
    - Regulatory uncertainty - what keeps industry up at night? Regulatory uncertainty was the number one answer.
    - How is an industry supposed to prepare and comply with regulations when they are habitually late or unclear?
    - Tailpipe emissions standards basically mean 17% EVs
    - California wants to ban ICE by 2035!
    - Crude is to refining industry, what flour is to a baker.
    - Refining has much smaller margins historically - they are NOT big oil
    - Refining industry doesn't like crude oil prices where they are now.
    - Crude oil has no value without refining.
    - Educating public on role of refining in gasoline. Without refining there is no energy security. pressing folks to understand that for a long time.
    - 60% of gasoline price is crude oil. Refining is a little higher component of gasoline price than it has been. 25% range, according to EIA. The rest is marketing.
    - Of the 150,000 gasoline stations, 95% are independently operated, not the company that is the brand name on the station.
    - How to make the message stick? Historically people have taken it for granted that gasoline is less than a bottle of water and that you can take kids to school, heat houses for granted. Now people are taking notice.
    - Loss of refining capacity in US. Why? regulatory policies. 40% of all shutdowns, RFS contributing to shutdowns. People are more open to having these conversations now that gasoline is so expensive.
    - We take responsibility to provide energy very seriously
    - Producing and refining...

    • 47 min
    197 - We need more production | Dr. Dean Foreman API

    197 - We need more production | Dr. Dean Foreman API

    Drilling vs returns. U.S. oil producers' tradeoff as windfall tax threatens
    https://www.reuters.com/business/energy/drilling-vs-returns-us-oil-producers-tradeoff-windfall-tax-threatens-2022-06-13/?taid=62a72ca5802cad0001f87694
    - will the US pass a windfall tax?
    - lockdowns have helped created this situation
    - market responds to incentives. interference in market has gotten us to this spot. why take it out on oil and gas companies.
    - if we were to windfall tax these companies, is there any indication that this money will be used to anything beneficial to consumers

    High Oil and Gas Prices Test Drive a Global Carbon Tax
    https://www.wsj.com/articles/high-oil-and-gas-prices-test-drive-a-global-carbon-tax-11654956001

    Biden looking to address oil refinery capacity, White House adviser says
    https://www.reuters.com/markets/commodities/biden-looking-address-oil-refinery-capacity-white-house-adviser-says-2022-06-10/
    - "He is looking for what he can do administratively, whether that's working with oil companies and refineries asking them, 'We recognize your back capacity challenges - what can we do to help you maintain your refining capacity and bring more oil online?'"

    US set to resume onshore leasing next week
    https://www.argusmedia.com/en/news/2340345-us-set-to-resume-onshore-leasing-next-week
    -will there be interest in these leases? is the acreage of interest to drillers?

    Saudi cuts crude supply to some Chinese refiners in July, sources say
    https://www.reuters.com/markets/commodities/saudi-cuts-crude-supply-some-asian-refiners-july-sources-2022-06-10/
    - where will oil that isn't going to China refineries end up? Europe?

    Interview with Dr. Foreman and the Monthly Statistical Report
    - Continuation of same from April
    - energy demand depends on overall level of economic activity. We are still historically above average (3% growth)
    - Prediction of 2 million bpd of global oil demand growth. before Russia/Ukraine demand was outstripping production
    - Slight increase in oil production. Is it enough to move the needle?
    - Refining products is at or above 5 year range. But without as much upstream production the refiners are drawing down inventories.
    - As a result of Russia/Ukraine sudden record pull for US oil and products out of US. 9.6 million bpd of US gross petroleum exports. Means we are critical to global supply.
    - Have to look at, especially on coastal areas of US, stocks are below 5 year average.
    - API quarterly a year ago was showing that supply gap was coming. Starts with investment and then goes to drilling. Weekly data showed that a supply gap was coming. EIA methodology relies on older data, so leads to some inaccuracies.
    - 3 months ago the world deficit of supply was quantified at 3 million bpd. May outlook now is 4.2 million bpd.
    - Big disagreement between EIA and IEA about how much oil from Russia is off the market.
    - Lots of uncertainty about how much supply is there -- this is impacting price setting. Russian oil production is more likely to be more resilient than expected but can they ship the oil?
    - Policies attacking industry are culpable.
    -...

    • 52 min
    196 - China looks to reopen | Lululemon raises prices | Biden uses defense act

    196 - China looks to reopen | Lululemon raises prices | Biden uses defense act

    U.S. to let Eni, Repsol ship Venezuela oil to Europe for debt
    https://www.reuters.com/business/energy/exclusive-us-let-eni-repsol-ship-venezuela-oil-europe-debt-sources-2022-06-05/
    - will this even help Europe that much because VZ doesn't make that much oil?
    - is this a prelude to more relaxing of sanctions?

    Biden invokes Defense Production Act to boost solar panel manufacturing
    https://www.nbcnews.com/politics/white-house/biden-invokes-defense-production-act-boost-solar-panel-manufacturing-rcna32120
    - How is this going to help anyone? Is there a shortage of US solar panels?

    Inflation: Lululemon is raising prices as petroleum costs bite
    https://finance.yahoo.com/news/inflation-lululemon-is-jacking-up-prices-by-10-103801531.html

    COLUMN-Oil bulls emboldened by EU sanctions and China easing lockdowns: Kemp
    https://www.reuters.com/article/oil-global-kemp-idAFL1N2XT0R8
    - What is the reason behind China's relaxing on restrictions? economy? elections?

    Biden Has ‘Only Bad Options’ for Bringing Down Oil Prices
    https://www.nytimes.com/2022/06/05/business/biden-oil-saudi-arabia.html

    • 39 min

Customer Reviews

4.1 out of 5
35 Ratings

35 Ratings

Alexndr Stevens ,

Great show

Insightful commentary on weekly energy news.

Seminary guy ,

One of the best

Great show, with great insights. Look forward to the show each week. Keep em’ coming.

bmbush11 ,

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.

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