Recent Posts

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

Give them an inch

Thanks to those of you – Chuck Yates; and the classiest guy on Wall St, Mr Sully at Goldman – who called me regarding the Brooklyn subway incident/terrorism/whatever this morning; Patricia takes the subway all the time. She’s flying back from London right now, so totally safe. Very classy to call, thanks. Hope you too are all safe. Of course needless to say, my breezy offer to run any stock in the S&P500 earnings share […]

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12:30 PM

The rage of the Intelligent Investor

What’s going on the market? The Intelligent Investor is back from extended sabbatical and he/she/they is furious. Key current trading ideas: Long Shell into results tomorrow. Long Suncor into results tonight. Stock has lagged CNQ badly, one month, three months, six months, one year. We had strong downstream chat from Suncor’s EVP of downstream Kris Smith on our refining conference, which continues tomorrow with Joe Gorder’s Valero, RSVP. SU has key differentiation from CNQ in […]

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9:33 AM

Sunday Sankey 1/23/22

In the war of the market, we have reached a crucial battleground: the 200-day moving average on the S&P500. Do we hold, do we bounce, do we break? That is pretty simple; we broke the 200 last week. Re-gaining it will be a battle. And by the way, we broke the 200-day on the Nasdaq like throwing a crystal decanter against a brick wall. The market went through the NASDAQ 200 like a falling chain […]

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2:52 PM

We like them all

Make a good call, they always play out really fast and leave you wondering what’s next. We left last year predicting a bad January but a good year for markets, and a good year for oils. Markets have been quite the ride, notably yesterday the NASDAQ was crazy, while the oils have been good. In our cross plot of performance shown below, it is clear that some 2021 laggards are ripping this year, notably refining. […]

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9:38 AM

Sunday Catch-up

It was a long trip to Texas, and it is good to be back in Brooklyn; this note is a short reminder to myself where markets are, having been running around. For example my time on Wall Street this past week, was Wall Street, Midland. What a comeback for oil last week, since the brutal air drop after Thanksgiving. We need to establish a level here, most would consider that the oil equity group is […]

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5:04 PM

Letter from the Front Line 11/28

Very tricky to call, indeed! OPEC/Saudi surely will act if markets don’t bounce – my Middle East Intelligence says Saudi is worried about the price but wants to see the market follow through Monday. Fascinating real-time week coming up, we think there might be a unilateral cut by Saudi if the market continues to collapse. But for OPEC to do a cut, is extremely complicated. The easy out, given they have to do something unless […]

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4:36 PM

Morning EOGtism

Heading to a group meeting with new EOG CEO Ezra Yacob this afternoon, this note takes a look back at the history of the company from my perspective. As the oil age continues, and as global oil supply gets visibly tight against the remarkable 100mb/d of demand globally (>1,000 barrels per second of global oil consumption), we think the market will begin to pay more attention to inventory levels and reserves replacement rates. There was […]

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9:22 AM

Sunday Sankey 11/7/21

Quick note today as I have two events. One of my favourite parties, this morning an NY Marathon party in Carroll Gardens adjacent to the running route, which starts at 9am. It is the only party I know of that starts at 9am on a Sunday. And then to the NY Giants game playing the Raiders at Meadowlands 1pm. You can get there easily, getting out involves multiple trains. It is a family tradition to […]

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11:12 AM

Morning Sankey 11/2/21

There was a funny Tweet about Joe Biden’s shut-eye at COP26 yesterday: “It’s not nodding off if you say “Amen” when you open your eyes again”. Two major developments caught our attention yesterday. First, Canadian PM Trudeau promises to reduce emissions from the oil & gas sector to net-zero by 2050. Second, with major implications for the US E&P industry, the WSJ reports that the EPA is greatly increasing its methane limits, a move which […]

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9:22 AM

US E&P Q3: The Power to Set Oil Prices

Key points: Clients are focused on OPEC spare capacity and demand growth, but also, rightly, North American supply growth, which is the most price elastic component of global oil supply. Halliburton results yesterday naturally raise questions over US production growth; the company stated that it sees 20% rise next year in North American revenues, which includes “solid pricing gains”. This would imply Halliburton expects US E&P capex to be ~10% higher next year; not a […]

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3:07 PM

Morning Sankey 10/5/21

The headlines from yesterday’s OPEC meeting were “oil jumps to its highest level since 2014”. We finally made it back, and goodness me, it was a long road. Of course, the WTI price we have attained today with a super-bullish backdrop is completely different from what we faced in October/November 2014. At the time, we had peaked at $107/bbl in mid-2014, after a sustained period 2010-2014 when oil traded in a range with $80/bbl as […]

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8:09 AM

Rouge Deluxe

August is upon us, with results effectively over, I am back in Brooklyn having dropped Harry for pre-season college soccer in Boston, trip review from a gasoline perspective closes this note. Speaking on sons and August, yesterday Max, who is yet to go back to college in Atlanta, was on CNBC. That is him ludicrously stationed in shot in the background of my Fast Money segment, pretending to work. You can see the clip here. […]

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10:43 AM

Sunday Sankey 8/8/21

The US has negative unemployment, by one measure. The confirmation of that on Friday led to an interesting market reaction. The data point on negative unemployment released before the market was that there are 8.6 million people considered out of work in the US and nearly 10 million job openings. This could be a moot point in the EU where movement of labour is much more challenged by language and culture, but in the US, […]

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11:47 AM

Where did it all go wrong?

With EOG rounding out oils’ earning season after the market yesterday, we had the final disappointment as oil prices test downside support levels breaking $70/bbl (Brent, WTI already broke into the upper $60s.) Expectations of an excess cash return special or splashy buyback announcement by EOG were dashed. Nothing. Just good free cashflow in a $70/bbl+ tape and the promise to pay down more debt by 2023. This is not the first disappointing Q2 earnings, […]

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8:52 AM

Sunday Sankey 8/1/21

We found ourselves standing on the North Slope, Alaska, above the Arctic Circle, surveying the endless flat tundra. There there is no sunlight from October to early March; total darkness over half the year. For the rest of the year, the sun does not go down – no darkness. That place, my friend, is Far North. The nearest city is Anchorage, 1,000 miles south, itself as distant as Perth Australia; palpably remote; strange and distant […]

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1:25 PM

Sunday Sankey 7/25/21

Greetings, It is all about the presentation this week; please click on the attached file for a look at what is in store for the week ahead – earnings; OPEC chat; what to buy when US natgas prices hit $4/mmbtu, which they did this past week; factor performance disconnection; and our only solution since we wrote The Renaissance Thesis of US E&P in 2017, namely hard cash return to shareholders. These oils have to bribe […]

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12:39 PM

Morning Sankey 6/23/21

Tomorrow June 24th on Happy Hour we have Charif Souki, Chairman and co-founder of Tellurian, the integrated Haynesville gas-to Driftwood LNG export project play. Should be a great chat! Souki is one of the select legendary executives to be featured in The Frackers, an entertaining book about the key characters in the US unconventional revolution.  Register here Charif Souki on Sankey Happy Hour Next week, on July 1st, please attend the Sankey Research 1st anniversary […]

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9:03 AM

Friday Sankey 6/18/21

Fun fact: Australia’s biggest export is boomerangs. It’s also their biggest import. What actor could never play Quasimodo? Humpfree Bogart Doctor: Your body ran out of magnesium. Me: 0mg. The urge to sing The Lion Sleeps Tonight is just a whim away. A client writes: Paul! One day doesn’t make a market, but your next letter can’t come soon enough. Is the run in oil done? Dear clients, Key bear triggers were twofold yesterday. First, […]

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8:42 AM

Sunday Sankey 6/6/21

Welcome to summer, hope you are enjoying breaking out your white pants after Memorial Day. Time to drop $250 on new sunglasses. Get in quick before they are $400.   There is no presentation today as I am working on an oil company Board Presentation for Tuesday in Texas. Ramp spending by increasing debt… might actually be the call, or at least the outside-the-box option, notably to make an acquisition. This week I learned what […]

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1:35 PM

Memorial Monday Sankey 5/31/21

OIL RISK HIGH. We have an OPEC meeting tomorrow, and the word is that Iran is pumping into storage on anticipation of successful negotiations with the Biden administration, which, for reasons I do not fully understand, is very keen to make a nuclear deal. This will allow Iran back into global oil markets. We understand that OPEC is warning Iran not to flood the market, and Iran is saying “we are going to flood the […]

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1:34 PM

Sunday Sankey 5/23/21

Watching Iran, but 1mb/d of oil exports are already in the market. Huge week ahead for ExxonMobil, with the Shareholder Meeting and board vote on Wednesday this week. We wrote about it on Thursday, see the note on www.sankeyresearch.com or emailed. Noted that Halliburton shareholders rejected the company’s pay proposal last week, which is encouraging. The pay of oil executives relative to shareholder returns has been an abomination for years. Executives should try a few […]

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12:19 PM

Morning Sankey 5/19/21

Quick note to highlight that Delek CEO Uzi Yemin will be on Happy Hour this week, Thursday at 5pm ET. SAVE THE DATE: Sankey Research 1st Anniversary Party for July 4th Weekend celebrating independence. July 1st in Dumbo, Brooklyn, 6pm. Please RSVP – this is a great area of New York, terrific place to visit to refresh your New York experience, right under the Brooklyn Bridge in the stunning park from which many Sankey Research […]

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8:23 AM

Morning Sankey 4/23/21

Well, it’s feedback Friday! The age-old client meeting line gets used again: Client Q: “Paul, what is the most common question that clients are asking right now?” Paul A: “What is the most common question that clients are asking you right now?” True joke, but being Friday, we are not done – here they are: Newsflash: US customs have intercepted $2m of lumber being smuggled in shipments of cocaine What do you call an anti-vax […]

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9:12 AM

Morning Sankey 2/17/21

The current energy crisis is much bigger than most people realize. This is a global crisis. The largest energy outage in US history. In the middle of a brutal winter, globally. Stay tuned, this crisis is just starting. An outage of this scale in Texas is world scale. The entire US and Atlantic Basin energy market is based on a core of Texas/US Gulf Coast. A lot of the debate currently is, as so often […]

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8:37 AM

Sunday Sankey 2/7/21

Snowing again here in Brooklyn Heights. One thing that is very striking in this week’s charts is the 6-10 Day weather forecast for North America. It is freeeeezing. Bluest map I can remember publishing, and we publish it just about every week in mid-winter and high summer. As noted our Happy Hour this past week was very bullish oil, basically the call is that oil just went up 15% in a month and is rising […]

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11:32 AM

Friday Sankey 1/29/21

Yep! It’s Friday! I called the RobinHood helpline about Gamestop and they said “Please Hold”. Got it. I want to put my life savings into the stock – its called Gamespot Total Landscaping right? The Biden team is monitoring the Gamestop situation and will let the American people know when it is time to buy a Legend of Zelda chess set in a dented box. AMC is issuing a ton of stock, but Gamestop is […]

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8:50 AM

Morning CAD 1/19/21

A scoop by the Canadian Broadcasting Corporation (CBC) over the long weekend regarding the Biden Administration’s plan to rescind the Keystone XL pipeline permit got everyone excited… except me, who groaned. The issue is symptomatic of the worst of US energy policy. New pipelines are environmentally friendly. They serve to replace old pipelines and/or train transport that is less efficient and environmentally damaging. While opposing specific pipelines has become the heroic battle of the environmentalist, […]

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9:00 AM

Morning Saudi Did What?

Sankey raising Brent oil price forecast to $54/bbl for 2021 (from $45) and $58/bbl for 2022 (from $56). Sankey raising WTI oil price forecast to $52/bbl for 2021 (from $42) and $55/bbl for 2022 (unch). It’s difficult to unpack what just happened to oil markets in terms of Saudi Arabia’s shock move to unilaterally “gift” cut production by 1mb/d for February and March; right down to 8.1mb/d, the very low of their historic production levels. […]

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8:41 AM

Sunday Sankey 12/20/20

Special Sunday Sankey featuring the legendary oil’s share of the S&P500 vs oil’s share of the S&P500 earnings charts! Sadly, it was not worth running them all year, given the horrendous earnings of the sector in what will be the worst year in the history of oil relative to expectations. Now, as we look directly into 2021, the charts are beginning to make sense. More inside this note but a couple of starters for you, […]

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11:09 AM

Friday Saturday Sankey

Yesterday was tricky to publish a worthy note, until conference calls were complete. So this is the Friday Sankey on a Saturday. Happy Halloween! If life gives you melons you may be dyslexic What’s Sherlock Holmes’ favourite tree? A lemon tree Daddy, do all fairy tales start with “Once upon a time”? “No kid, there’s a whole series of fairly tales that start with “If elected, I promise…”” There were two key takeaways from ExxonMobil’s […]

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2:51 PM
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