Recent Posts

Afternoon Theories

This evening! Premium Event! Steve Levine on Happy Hour tonight at 5pm ET re: batteries and electric vehicles, he is a world expert. Biography was emailed to you yesterday, impressive. Steve is now Editor of The Electric, a new, exclusive premium publication at The Information on batteries and EVs. Steve Levine 5pm Thursday 29th Sept: https://us02web.zoom.us/meeting/register/tZwtduuvrDMqEta4M3eKkusntGrE1nVV2HoK ~ Watching the NASDAQ below its 200 weekly moving average for the first time in 13 years “The West” […]

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3:20 PM

Morning Negative Revisions

With markets in flames like something out of a Naked Gun movie, Central Bankers the inept cops, rioting traders burning and looting, we continue our post Labor Day theme of advising on fire prevention and avoiding arrest. So: it is sadly time for another negative earnings revision cycle.  We rolled up over 60 US-based energy companies covering upstream, midstream, downstream, integrateds, and oilfield service to see get the booking mugshot for the group. After chasing […]

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8:37 AM

Morning Complex and Simple

Trading call: all the world is expecting a market bounce today, quite possibly violent this week, as the Fear/Greed index gets into “Extreme Fear” Territory. We see this as a short term bounce, and are waiting until we are nearer towards full winter before looking for the big bull call on oils into 2023. Weather in Brooklyn: chilling in line with winter starting December 5th, our traditional date for first snow in NYC; key question […]

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8:59 AM

Sunday Calm Before

We mourn the passing of Steve Chazen on 23rd September, he will be remembered as a legend. It was a privilege to have known him. Rest in Peace. We wrote the History of Oxy in December 2021, which includes the almost 30 year impact of Steven Chazen (joined in 1994, died as Chairman 2022). ~ Bill Bishop at Sinocism: For those who have not heard the rumors, Xi [Jinping, China President] has been supposedly removed […]

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5:54 PM

Morning Scope 4

Brooklyn Cop at 844th Precinct accuses innocent Sankey of being “weird-looking” “They” got caught speeding yesterday: fast unwind of long natgas / short refining trade Terrific Happy Hour with Jay Saunders and a couple of other hitters last night; introducing Scope 4 Jennison portfolio manager (PM) Jay Saunders is very popular in the market, you can tell that by the players that dialled in to participate in his call yesterday. He co-runs the Jennison Natural […]

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9:30 AM

Morning Mo Money Mo Problems

“I, Russia” Putin desperation rising Oil markets: would you rather have weak China demand with low oil product exports, or post lockdown China with high product exports? Yet another inventory release threat: China An inventory release threat, Iran, was highlighted by us as likely to go into instability given reports of the serious illness of the aging Supreme Leader. Say her name: “Mahsa Amini”. Protests raging, rightly. “Morality Police” murdering women. As the Fed raises, […]

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8:45 AM

Evening Ethane Rejection

Hate to keep going with our infuriating “bearish short term, bullish long term” call (eg refining. We had a conversation with Battery Guru Steve Levine today about how badly future electric vehicle sales are going to fail to meet expectations over the coming years, and he is confirmed on Happy Hour for next week, 29th September, 5pm ET save the date. This week: Jay Saunders, Senior Co-Portfolio Manager, Jennison (Natural Resources). Jay has been running […]

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7:53 PM

Sunday Gold Delivery

Fed decision this week. TINA is dead. Nothing big in earnings this week, Fedex reporting Friday has warned, in case you totally missed last week; if you did, you missed the largest stock market move on an economic data point, in history Rules of Wall St series: Always short the new CEO of a highly rated stock. Not in the news: Iran’s Supreme Leader said to be gravely ill – watch for upheaval ~ Fed […]

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6:19 PM

Morning Tape Bombs

Refining getting worse LNG export developer Tellurian whacked as it struggles to finance “by mid-2022”. It’s Q3 2022. As the share price falls, financing from the at the money issuance facility becomes even more problematic. Macro influencer Luke Gromen on Happy Hour Fedex profit warning Fiscal 2Q23 guide $2.75 vs cons $5.46 (!!!) Xi-Putin As we feared refining is getting worse. China export quotas as we highlighted yesterday have further pressured weak Asian margins that […]

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8:41 AM

Morning Rails

PREMIUM EVENT TONIGHT Luke Gromen, high profile strategist, is on Happy Hour this week, Thursday 5pm. Big guest, big views, big themes, Main Event Gromen vs Sankey HH 53. Tonight Sep 15, 2022 05:00 PM ET Register in advance for this meeting: https://us02web.zoom.us/meeting/register/tZMkcemrqDIvHtyqA85Av3APXBad-aTjuSBR Another great call from our Washington DC guru and Happy Hour regular Frank Kelly, who weeks ago said that he did not believe that a rail strike would be tolerable to the […]

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9:04 AM

Morning Mr Gromen

Dollar vs oil correlation has moved back to inverted very recently. Right now, the oil price is winning, US$ weakening. For the first time in well over a year, media is stating the oil price is rising on a weakening US$. That’s a bit like saying the NY Giants are dominating the NFL – after winning their first  game of the season. WITH THAT SAID Luke Gromen, high profile strategist, is on Happy Hour this […]

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8:15 AM

Sunday Grey

It was a week that started with the Queen accepting a new British Prime Minister, and ended a new King Charles III and the always-somber 9-11. It is a miserable late summer day in New York, drizzle from a windless grey sky. With due respect, there is not a lot in those events directly relevant to oil/energy, and no doubt the last thing you need is more coverage from me. Rather, there is lots of […]

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4:48 PM

Morning between a Hard Rock and a palace

Rest in Peace, Queen Elizabeth II. Long live the King! The rainbows were just amazing. One US media outlet described the Queen as the last human link to Great Britain, the Britain of Empire, such as it was when she became Queen in the 1950s. This resonated with me, the Queen with Churchill in photos, for example. Her passing bought back memories of my father, another link to Empire, who left this mortal coil last […]

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8:12 AM

Our Bob’s Gasoline

Last call for the Sankey Research Party at the Hard Rock Penthouse tonight. If you are in NYC and around Times Square, we have a glittering panoply of oil market experts, CEOs, investors, and some hangers on, all welcome. Kathleen Kelley “OPEC whisperer” will comment on the symbolic cut, and we are highlighting the new CEO of refiner Delek USA Avigal Soreq. RSVP if you want to join, there is plenty of space and we […]

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1:13 PM

Sunday Life Guard

Labor Day outlook for oil and energy markets into year end; there is plenty more research to be done. You could make a big call on oil today for the next four months, and be wrong by Tuesday this week, with OPEC+ meeting Monday. If they cut and crank oil prices, you could make a bear call today, reverse your view on Tuesday and be wrong by Thursday when the ECB may be pushed towards […]

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8:32 PM

Morning IRA… the IRS Inflation Act

Observations on the “Inflation Reduction Act”: We read all 730 pages, with 198 being on healthcare, and conclude that, rather than calculate an “Excel told me” analysis, but rather, because of the surprise announcement of the Bill, the stock market provides an early indicator of the Bill’s likely impact: we show you key stock price performance since the Bill was shock-announced by Senators Manchin & Schumer on June 27th: We temper this market reaction. We […]

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8:36 AM

Evening Alimentation

One of our favoured, relatively unmined seams of research, pertains to gas station companies, oil retail, helped by their eccentric reporting schedule. Under its frankly weird fiscal calendar, Alimentation Couche-Tard ($ATD) reported earnings at the close yesterday for fiscal 1Q23, a period ending July 12, 2022.  In a world of energy ignorance, it is widely perceived that high gasoline pump prices are prima facie evidence of gouging by gas station companies, which politicians somehow think […]

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3:59 PM

What to expect when you are expecting

Expecting a recession. Most market participants worry about a recession. No less than Goldman Sachs is clearly concerned: Bloomberg 8/29/22 Goldman Says Buy Commodities, ‘Worry About Recession Later’ •             Slowdown risks outside Europe seen ‘relatively low,’ bank says •             Equities could suffer as raw materials gain, analysts forecast We are all aware of the obvious mega-problems, that Putin is pushing Europe into a depression, China is straight-up missing in action, and the rapid expansion of […]

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8:49 AM

Sunday Salads

So we made it to the Wall Street’s vacation week, the last week in August. What’s the first rule of Wall Street? Keep your seat. We got through another year. Congratulations. Three observations about what the market might be missing: Is Putin’s EU squeeze a pre-cursor to him suing for peace/settlement in Ukraine? European energy prices are insane, but the futures strip is self-defeating Drought in China is epic – the scale may be under-appreciated […]

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5:31 PM

Morning Refining Fire

We have spoken about the structural shortage of US refining capacity repeatedly. We have warned that the US refining system has been running very hard, but has been unable to keep inventories from all time lows relative to demand, particularly for distillate. And we have underlined that distillate (think diesel for my newbie readers) is the default “convenience premium” fuel when natgas and coal get short. It is easier to transport, and generally directly substitutable. […]

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9:31 AM

Morning DOE Boom!

It’s a time of year when the Wednesday 10:30am US government Department of Energy, Energy Information Administration (DOE EIA) weekly oil data matters. We normally disdain trying to jerk our knee faster than the army of commodity analysts who jerk their knees as fast as possible to DOE print, some who go so far to send out the entire tables verbatim (thanks!) but this week, for fun, we are competing for the fast note reaction […]

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11:28 AM

Morning Saudi Put… Iranian Call

“The Saudi Put is back” wrote a client yesterday Could well be related to softening in Iran negotiations Certainly, it implies that Saudi wants, enjoys, needs, $100/bbl+ Brent Part of their calculus is a belief in strong demand despite $100/bbl+ this summer, with winter coming That is, the Saudis optimal price is as high as demand can take, and not so high as to cause demand destruction. This summer’s demand strength strongly suggests that range […]

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9:54 AM

Sunday Mega E&P – and Fred

So I am back in Brooklyn after vacation (Nizuc Resort, Cancun), needless to say muttering and grumbling to myself. We left some calls hanging before the week away, updated in this note. It was a week this past week where performance reverted to year-to-date performance (see first chart);  we are still bullish US natgas, led by AR, bullish Oxy led by Warren Buffett, bullish the US oil sector on the structural improvement in the companies […]

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4:02 PM

Morning Nizuc

One of the many lessons of Wall Street, is “don’t expect any sympathy”. This is more sharply put: “If you want a friend, buy a f#^@*# dog.” I’ve got two dogs. As I have been proclaiming, this is a long summer. We don’t have Labor Day until September 5th, and with me stewing nicely in Brooklyn with the dogs, thinking of what fun the run is from Labor Day to Christmas, to be in NYC […]

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7:35 PM

Morning War in Europe

We like the long oil trade here, explained Europe is at war. Russian/EU gas expert Jim Henderson was stark on our call: Russia is waging full scale economic war on Europe. Winter is coming. Darling! I never knew you cared Bull trade in oils is back on, in our view. First, we contend that oil equities often predict the next move in oil, the commodity. As shown below, over the past five days E&Ps (and […]

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9:25 AM

Morning Pain Trade

Delighted to say that Dr James Henderson is on Happy Hour Strategy Session tonight, A PREMIUM EVENT. Jim is currently Senior Research Fellow at the Oxford Institute for Energy Studies, alongside his consultancy work and professorships. When: this evening, Aug 11, 2022 05:00 PM ET, Zoom, Register in advance: https://us02web.zoom.us/meeting/register/tZ0sd-CtpjsrGdVM0p-MsG1P4WU0dr3hBWq3 ~ One of my favourite concepts on Wall St (or should I say hated?), is the “pain trade.” I first heard of it 20 years ago and […]

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10:09 AM

Exciting Events, Tourmaline

Delighted to say that Dr James Henderson is on Happy Hour Strategy Session this week A PREMIUM EVENT. Henderson is an expert in Russia. He started at Amerada Hess, then joined Wood Mackenzie in Edinburgh, where to my eternal gratitude, he was directly responsible for hiring me to join Wood Mac. Great times, Wood Mac and Edinburgh, where my 3 kids were born. Jim moved on from Wood Mac to Russia, heading research at Renaissance […]

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5:34 PM

Morning Data Centers

We are looking for a big fat gasoline demand bounceback number this week in the DOE data, seeing as this morning my Deli guy told me the DOE gasoline numbers are understated. Thanking him, I noted that DINO management (HollyFrontier) confirmed on their results call yesterday that gasoline demand is at worst around 5% below 2019 (not 2020, as appears in the DOE) levels, and in some of their markets – and they have a […]

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9:12 AM

Sunday CRC

I asked a major activist investor if I should zip over to Denver this week for the Enercom conference, (starts tomorrow). It’s a staple of the August energy conference diet, which is not a rich diet. Enercom, you pay to attend and a plethora of smaller oil & gas exploration and production companies make presentations with meet & greet. I’ve been once and a client told me as I headed there, the first time he […]

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11:41 PM

What are you doing? Reading transcripts

The two weeks, mid-earnings, when we pull together company results transcript comments, are not a science, they are an impressionistic art; a colour to our themes. Basically these are comments that caught our eye over the past week. Like sellside analysts, the companies tend to all present the same more-or-less generic message, but occasionally, as we strive with Sankey Research, a comment stands out, is differentiated, or so wild that it is worthy of note. […]

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2:25 PM

Morning Miss

Tonight Happy Hour: Kathleen Kelley on OPEC. Frank Kelly (invited) on Washington DC – lots of action there. View share on results on what happens next. Today Thursday 4th August 5pm Eastern. Register for this meeting: https://us02web.zoom.us/meeting/register/tZUkc-qvqjgrH9NWL5mVuMMR2AyR3q1cZrtm I was on Bloomberg TV bright and early this morning and… I used the “B” word. Just to note, we are long natgas over oil into the coming economic slowdown, and playing for winter. The announcement that Freeport […]

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8:30 AM

Morning Take a Sad Song

Tomorrow KelleyKelly Hour: Kathleen Kelley on OPEC. Frank Kelly on Washington DC – lots of action there. View share from clients on results and what they expect next. Tomorrow Thursday 4th August 5pm Eastern. Register for this meeting: https://us02web.zoom.us/meeting/register/tZUkc-qvqjgrH9NWL5mVuMMR2AyR3q1cZrtm We increasingly think that we will favour buyback-heavy oils going into the second half, with our year starting, as always, day after Labor Day. What happens next? The Big Oils are all singing from the same […]

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9:23 AM

Morning Go Pelosi

Signature stock: Diamondback strong results, high cash return Signature stock: Devon strong results, high cash return Pelosi to Taiwan: the Administration has strong foreign policy and is pushing China I spoke to a senior government official with knowledge of Foreign Policy yesterday. We first agreed, that we are suffering “lingering COVID” where our recovery from a bout in the past weeks has persisted with non-debilitating symptoms, fatigue, etc – I had a similar conversation with […]

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8:07 AM

Sunday Carnasie

Big week for what should be terrific oil earnings this week. Watching Iraq Highlight charts – market rebounding, oils catching a bid ~ Week ahead: It’s good to see that oil earnings have worked back onto generalist earnings calendars, as shown from “Earnings Whispers” below. Devon aftermarket Monday sure, BP, Marathon Petroleum and Oxy Tuesday, etc, but believe me, a year ago Berry and Callon did not make these lists (see Wednesday below). Marathon Oil […]

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4:11 PM

Say what? Not there yet… Q2 2022 so far

This note outlines the mega-themes that are emerging mid-way through oils’ reporting season. We listened to a lot of calls, read A LOT of transcripts, and distill it here, for your Saturday afternoon reading by the pool on your yacht. Last evening I reflected that this weekend I was as likely to bit hit by a massive piece of falling Chinese space debris, as to win the mega-millions and get my own yacht with pool. […]

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2:52 PM

Hone on the Range $RRC

Hess came in on the money, for EPS this quarter, with some noise, but the long term value of Guyana just keeps getting bigger, and this is a remarkable play on the oil age pressing through 2030. Call today. The way things are shaping up in Europe, oil & gas resource in the Americas is severely under-valued. Guyana value is staggering, we have talked about Hess as a $200 stock long term. Besides the chronic […]

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8:22 AM

Sunday Michelada

Sometimes I get depressed. It’s not just what I have messed up, it’s the theme of recognising I lived since 1967 through an epic era of human expansion, in terms of post World War II peace, juiced by the collapse of Communism, and then the massive expansion of government spending for tomorrow. And I feel like tomorrow came.  The key question, when I came to Wall St in 2004, and everyone wanted 2% GDP growth […]

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8:30 PM

Evening Guanajuato

Sincere thanks to research partner Greg Bordelon, who has been firing company reports at me while I stumble across Mexico in the quest to Morelia. Sorry for the invconvience, but if you would just request the company-specific notes, that would save me doing a ton of cut-and-paste into what would be a monster drone of a note. So email me and I will forward, on these companies: Key points: will we get restructuring at Baker […]

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9:30 AM

Evening $HAL Holbox

Regular readers may wonder: surely not Brooklyn Heights Promenade view of Manhattan above. Correct! I’m in Holbox, Yucatan, Mexico, where we nipped in for a look at “Tulum but with a great beach”. Getting to Cancun is a cinch from New York, three hours to pounding beach music and margarita bars at the hotel. We bypassed and got a car here. At Holbox, a sand spit/island (no rock base) that is also a nature preserve, […]

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8:31 PM

Sunday In Space

Greetings fellow earthlings, (Dow Jones WSJ 7/17/22) — Investors hoping a strong start to earnings season would jolt the stock market from its slump haven’t gotten much satisfaction. Early reports from U.S. companies have refocused attention on some of the biggest challenges facing businesses, from the threat of an economic slowdown to the pressure that rising costs are putting on corporate profits. JPMorgan Chase, Delta Air Lines and industrial supplier Fastenal are among those last […]

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3:43 PM

Morning Homing Pigeons

Canada from the top rope with the 100bps interest rate rise. US with the 9.1% inflation print. Here’s US inflation since 1914. We argued that the 2020’s have nothing like the set up of the “Roaring 20’s”, in our note written in 2020 “The Cliché-Myth of the Roaring 2020s”. For one, the stock market to start the 1920s had been essentially in a bear market for 15 years, hammered by WWI and Spanish Flu. Not […]

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8:54 AM

Sunday Cedric

Good Day! You only get so many summers in life – a beautiful Sunday in mid-July, we should be at the beach or pondering the Wimbledon final. Hopefully you are on a yacht or at a swim-up bar as you read this. Here in Brooklyn Heights/Brooklyn Bridge Park they have recreated The Hill at Wimbledon with a big screen to watch tennis. Packed today. Tourists are returning en masse to New York. Week past: the […]

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12:43 PM

Big Oil Week Next Week

“Happy” Hour yesterday evening, an oil investor self-help group Big week for oils next week with Nordstream 1 and CPC shutdown decisions coming; Biden visits MBS Buffett buying yet more Oxy – he might go… all… the… way Warren Buffett’s Berkshire Hathaway filed notice of acquisition of 12m shares Occidental costing about $698m this week, giving it an 18.7% stake. Buffett had also purchased 9.9m OXY shares last week. Total stake is 175.4m shares worth […]

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9:06 AM

Thematic Update: EU Gas Crisis

Last year, Europe rose to a 30 bcfd natural gas deficit between production and consumption (>60% import dependent); with variable power dependence (wind, solar) as the shaky offset, two major swing winter suppliers, namely the massive Gronigen gas field in Holland, and the UK’s dominant gas storage facility, Rough, shut down. The situation is far more extreme in terms of winter shortages, than even the annual deficit shows. In energy security terms, certainly as regards […]

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8:11 AM

Morning SPR

Good to see oil holding, we have broken the bottom of our $110/bbl-$150/bbl range for Brent this summer, but news out of China is positive both in terms of higher oil demand and re-iterated low oil product export quotas. These product export quotas are some 40% below last year levels and underline that Beijing is moving away from energy-intense processing and exports, prioritizing its own air quality and environmental issues. Quotas are cut from 37Mt […]

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9:24 AM

Sunday Brooklyn Heights

Back in Brooklyn, Happy July 4th weekend, insert my annual joke about my not recognising US independence, or Make America Great Britain Again. Harry and Meghan’s second kid is eligible to be a female US President, being born in California. Based on the recent candidates, not just the winning ones but the primaries, just about anybody will do better than the current political class. Enough, let’s take a quick look at the first half. As […]

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1:30 PM

Morning Mr Jones

Briefly noted: Gazprom shares plummet -25% as shareholders reject record dividend plan Uniper, largest German buyer of Russian gas, shares plummet -18% as it says it is receiving just 40% of volumes ordered from Gazprom After two weeks in the dark, with no weekly oil data published, the US Department of Energy released the backlog yesterday. The DOE was keen to stress the “systems outage” was not a hack. Better not be, DOE manages emergency […]

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8:08 AM

Morning Wimbledon

Good to see the oils stabilising and bouncing this week, with Brent crude prices holding the bottom of our $110-$150/bbl range for summer. It is clear that to get past the $130/bbl peak Ukraine fear price we hit in early March 2022, will more likely be a squeezing grind higher on strong demand and weak supply, than another spike shock, although these are always possible in oil. With that said, let’s face it, just about […]

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6:59 AM

Morning Hyde Park

Greetings from Hyde Park, We are back in London, Paris was controversial; Patricia considers it the greatest most wonderful place on earth, I get into arguments with Parisians, Selloff dynamics Hess reminder Phillips 66 Comments Morocco? Algeria It’s only rock ‘n’ and I’m 80 On the selloff: To me, the charts are not broken, but we nibbled 5% of the S&P500, then collapsed back to just over 4.1%. It is actually barely visible on the […]

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11:47 AM

Morning St Germain des Pres

How did we get murdered? Murdered? CHK took out 3.5% of their share count in just over a month.  Why am I in Paris, writing from St Germain des Pres? Where did it all go wrong? George Best used to tell the story of winning in a casino, while dating Miss World, and lying in a hotel room with her, empty champagne bottles spread across the room. The service guy entered, looked at the scene, […]

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8:45 AM
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