Musings from the Oil Patch August 21st 2018
Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB. Here is a section:
David Fuller and Eoin Treacy's Comment of the Day
Category - Energy
Uranium: Time "U" move?
Thanks to a subscriber for this report from Canaccord Genuity which may be of interest. Here is a section:
Musings From the Oil Patch August 7th 2018
Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB which may on this occasion focuses on the impending IMO 2020 regulations for ship emissions. Here is a section:
Musings from the Oil Patch July 24th 2018
Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB. This week it contains some interesting commentary on natural gas. Here is an excerpt:
Natural Gas: The Forgotten Fuel’s Future Needs LNG Exports
One can be forgiven if he/she believes only crude oil news is important to the energy sector. The volatility of crude oil prices, coupled with the OPEC meeting drama and President Donald J. Trump’s twitter campaign against high oil prices, provides opportunities for shocking headlines and non-stop commentary by the media. On the other hand, if your business is tied to natural gas, you can be excused for believing it’s pretty boring since no one is talking about gas.
Long-term themes review July 17th 2018
Trump Says U.S. to Compete With Russia for Europe Gas Market
This article from Bloomberg news may be of interest to subscribers. Here is a section:
But Europe may have difficulty attracting gas cargoes from overseas, given higher prices in Asia. The WGI spot LNG assessment for Northeast Asia was $10.30 per million British thermal units on July 9, while U.K.’s National Balancing Point gas futures traded at $7.50 on Monday.
Longer term, gas export project developers in the lower 48 states may face delays as they wait for regulatory approval. Sefcovic called the U.S. approval process “redundant” and said it needed to be revamped.
Gazprom is Europe’s largest gas supplier and provides more than a third of the region’s needs in the fuel. Its chief executive officer, Alexey Miller, confirmed in June its plan to start laying the pipes in the next couple of months and to open the Nord Stream 2 link by late-2019. The project would cut Russia’s dependence on Ukraine and help meet additional demand for the fuel in the EU in next two decades as local production falls.
Meanwhile, Russia is unperturbed by the prospect of American LNG supplies to Europe. They “will never catch up with and will never surpass” Russian gas exports to the region, Miller said in June.
Long-term themes review June 22nd 2018
Global Crude Oil Supply-demand
Thanks to a subscriber for this report from Nomura which may be of interest. Here is a section:
The IEA forecasts that US crude oil production will increase 1,720,000bbl/day in 2018 and 1,190,000bbl/day in 2019. In the Permian region, which has been driving growth in output, the lack of pipeline capacity is likely to persist until 2019. Because of this, Midland oil prices are some USD14/bbl lower than the WTI price. With issues including rising production costs and a lack of engineers, too, we think US shale oil output is unlikely to substantially exceed current forecasts even if tightening supply-demand causes oil prices to rise. See our 11 July 2018 Global research report US crude oil output - Sharp slowdown in pace of increase in 2019. We estimate that US production forecasts are predicated on WTI price assumptions of USD55-60/bbl for 2018 and USD60-65/bbl for 2019. We estimate WTI of around USD70-75/bbl were the aforementioned short supply to be made up with increased output in the US.
Musings from the Oil Patch July 10th 2018
Thanks to a subscriber for this edition of Allen Brooks’ ever interesting report for PPHB. This week it contains some interesting commentary on estimates of sea level rises but here is a section on electric vehicle demand:
There are many reasons why EVs are popular in California. Continuing to lead national social trends, the large population of wealthy entertainment and technology people love to show off their social awareness credentials, while taking advantage of lucrative financial and other driving benefits by purchasing EVs. Those benefits are being reduced as EV car manufacturers reach the limits at which federal tax subsidies for EVs are eliminated. The state has recently decided to double down and boost spending to subsidize EV sales. What is interesting, however, has been the elimination of the right to drive EVs in High Occupancy Vehicle (HOV) lanes in Southern California with one person, as too many vehicles have slowed lane speed and increased accident risk when EVs are entering and exiting HOV lanes. When the Toyota Prius lost use of HOV lanes, sales fell the following year. Prepare for similar shocks.
Crude Crumbles Under Trade War That Imperils Economic Growth
This article by Jessica Summers for Bloomberg may be of interest to subscribers. Here is a section:
“There’s no doubt that that uncertainty continues to weigh, not only on the crude oil markets, but really all markets,” said Brian Kessens, who helps manage $16 billion in energy assets at Tortoise. As for the storage report, “there was a little bit of noise in the data. It just depends when the ships actually hit the docks.”
Oil topped $75 a barrel last week amid actual and anticipated supply disruptions from Canada to the Persian Gulf.
Saudi Arabia has promised to ramp up output to help cover shortfalls from other major suppliers, though some observers questioned the kingdom’s capacity to do so.
In the U.S. Gulf Coast region that includes refining centers in Texas and Louisiana, oil imports plunged by 1.13 million barrels last week, the steepest decline since September 2012, according to the EIA.
“There’s a sense that Saudi Arabia’s going to increase their exports to the U.S.,” Kessens said. “There’s a lingering sense in the back of people’s minds that we’ll see that a little bit later this summer.”