Recent Posts

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

Morning Chefchaouen

Action items: Every house in Morocco has a flat roof – but there all-but no visible solar. The projects here are mega; centralised. In Mexico you see a lot of panels. Our overall thought/dream has been that almost everything that uses energy should have a booster solar panel on it, attached to a battery. A “US Solar Buyer Consortium” is open-bidding $6bn for 7GW of US-built panels. Stalking horse to justify solar panel imports? Sure, […]

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6:52 AM

Sunday Marrakesh

Greetings from La Villa des Orangers, Medina (Old Town), Marrakesh, Today – are the big E&Ps cheap? Antero LNG exports – 70mmcfd or 1bcf/d? Postcard from Morocco They say if you want a question answered on the internet, don’t ask the question, but rather post a bold false statement, and you will be flooded with corrections. It is an interesting point on human psychology. Earlier this week we said that Antero was exporting 1bcf/d of […]

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10:06 AM

Private vs Public, Cash vs Multiple

Libya down by 1mb/d, maybe President Biden should visit? APA (Apache Oil) duster in Suriname is unfortunate for the marginal mega-bull case BP – like Shell, the non-alcoholic beer of big oils – sells out of Canadian Oil Sands but increases exposure to Western Canada offshore OKLAHOMA CITY, June 14, 2022 /PRNewswire/ — Continental Resources, Inc. (NYSE: CLR) today announced that its board of directors (the “Board”) has received a non-binding proposal letter, dated June […]

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8:34 AM

Terribly sorry, but what is the speed limit?

Tomorrow Zoom Strategy Session: Rich Voliva, CFO HollyFrontier. Thursday Jun 9, 2022 05:00 PM ET Register in advance for this meeting: https://us02web.zoom.us/meeting/register/tZ0kduyprj4uHNTcVO53YRKHbhYSRWHUiIX1 Tonight, quick meeting with Uzi, and Blake, CEO and IR of Delek. I had texted about the story in Tradewinds that they were getting into Jones Act shipping. Apparently they bought a couple of barges that are “not material, especially not in the context of today’s margins”. Lucked into a quick catch up […]

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8:55 AM

(Not) Rolex Oil

Wednesday already! Tomorrow we have the legendary Mr Bob McNally on Strategy Session. Author of Crude Volatility, a terrific history of global oil prices, Bob is one of the most experienced, thoughtful, connected, entertaining, and outspoken oil analysts of the past 20 years that we have known him. Register in advance for this Premium Event, tomorrow, Thursday, 5pm ET 6/2/22: https://us02web.zoom.us/meeting/register/tZUud-iopzIjHtwxZSBacic_3OqJmo5vAzQj ~ The news that Tullow and Capricorn (formerly Cairn) are to merge brings together […]

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8:57 AM

Chesapeake: On a Mission from God

The concept of this note is “putting the band back together” in the theme of the Blues Brothers, as we see the potential for Chesapeake to merge with Southwestern. The Blues Brothers (1980): Jake: We’re putting the band back together. Mr. Fabulous: Forget it. No way. Elwood: We’re on a mission from God. We could get into a long and tearful reminiscence about US natgas legend and Chesapeake founder Aubrey McClendon (there is a tribute […]

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8:21 AM

Sit Chat Get Banged

Strategy Session was back to the round table stock discussion. It was sufficiently enjoyable that we will now have a monthly round table on stock ideas. Next week we have Tourmaline, week after Bob McNally. In between, Memorial Day is a week Monday, check the whites in your wardrobe and start yelling at the pool guy’s voicemail. Companies mentioned last night: Long Inventory E&P’s. We discussed oil volatility and beta skew as oil holds over […]

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10:47 AM

Good times in the right places

Happy Sunday in May, Never a bad thing. Fog this morning has lifted. Aramco results this morning rounded out a week when it became the largest stock in the world by market capitalization, surpassing Apple (not by free float, the Saudi government owns 94%). It  generated an enormous profit in a quarter when Brent averaged just about $100/bbl (actually $99.53/bbl Q1 average).   Refining earnings, as well as continued huge upstream earnings, will be even […]

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3:56 PM

$FANG-TASTIC VOYAGE: CFO Kaes

We hosted Kaes Van’t Hof on Thursday’s Strategy Session. He is President and CFO of Diamondback Energy, a $24bn market cap/$30bn enterprise value pure play Permian US oil & gas exploration & production (E&P) company headquartered in Midland, Texas. Kaes is impressive; client feedback on his chat was strong. A young man, 36 years old, a former tennis pro out of California/USC with Dutch heritage (he and his father Robert became the first father and […]

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11:44 AM

For Love & Money: Chazen Time

Recommending BUYBACK PLAYS in this tape. We love the Diamondback approach of buybacks when the stock is cheap, specials when the stock is expensive. PREMIUM EVENT Sankey Strategy Session: Kaes Van’t Hof – President and CFO, Diamondback Energy This Thursday May 12, 2022 05:00 AM US Eastern Time. Register Here: https://us02web.zoom.us/meeting/register/tZ0rcuyorD8rEtFYFdOdB79bWBSDY7MFzYzP ~ Legendary oil executive Steve Chazen on yesterday’s Magnolia $MGY conference call; “I think that the re-evaluation of the industry from 4% of the […]

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8:52 AM

Portfolio Manager Special: Sunday Calls

Few, As they say on the internet. Today we have a PORTFOLIO MANAGER SPECIAL in the presentation, which includes a full glorious ppt on the largest stocks in the market, and for bonus, a Sankey Recommendation on each stock. The oils look great on these charts. The recommendations on names like Google (BUY) or Disney (SELL) are purely quanatitive interpretation of charts, we do not cover non-energy related stocks fundamentally. So this is quantitative analysis, […]

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12:55 PM

It’s a Marathon and a Print

We had Kathryn Kelley and Bob Jonke on the Strategy Session yesterday. The story of how I managed to steal a major client’s wallet after we watched the Real Madrid vs Man City game with Kathryn was not repeated. It was an accident! Bob is worried about demand destruction and not super-bullish crude here. By contrast, Kathryn sees a 3mb/d shortage of oil in 2H which simply cannot be drawn from inventory, so something has […]

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8:47 AM

Fear of Market Collapse (FOMC) Day

Sankey Strategy Session tomorrow evening: Bob Jonke, Oil trader for Engelhart CTP and Kathleen Kelley, Oil Market Expert aka “the OPEC Whisperer”. When: May 5, 2022 05:00 PM ET, Register in advance for this meeting: https://us02web.zoom.us/meeting/register/tZcofuqprzMuHd0CDoGbkzN6CiapFAdCg6k2 The Strategy Session this week will be in the context of what will be an extremely low-key OPEC meeting tomorrow with no press conference. Why no press conference? No comment on Russia. Simple as that. Bloomberg 5/4/22 The European […]

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8:14 AM

Morning E&P Cash Return

As anticipated, we saw strong results and cash return promises from several E&Ps reporting last evening, with capital discipline still a strong feature, alongside re-iterated volume targets (modest growth) and cost control. Impressive stuff. Several names now offer in excess of 10% cash return to shareholders. We believe this is sustainable, in most cases, with some concerns over inventory at Devon, Marathon Oil, and Coterra. Given we do not see any need to grow, but […]

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8:54 AM

May Day Sunday Sankey 5/1/22

Happy May Day Sunday, Today in partnership with Greg Bordelon of Isentropic Capital, we publish a note on natural gas markets by way of thesis overview to a theme that we will continue to pursue. The note is long graphics, and particularly interesting on US markets. If you only want to read half, read the second US half. It is as noted graphic intense. European gas markets are fundamentally far more un-analysable than US right […]

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2:48 PM

You said that; Hess, Antero, Suncor

First quarter reporting season is always a crazy flurry, and this one is no different. To add to the excitement, just as I sat back yesterday having published on Antero, news broke that Elliott Associates had gone activist on Suncor. We had Hess IR Jay Wilson on Strategy Session. Hess could be worth $200/share on a five year view, at $100/bbl oil. For sure, Guyana is just about the only major global oil supply growth. […]

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9:03 AM

Sunday Sankey

Quick read today as you got a longer note yesterday on LNG, and I am running late. Just pictures today, and Betsey asked to be on the cover of the Sunday Sankey so it’s a presentation. All the fun favourite charts. Key slides: next week’s earnings highlights starting with Valero. Relative performance, oils performance, high free cashflow yields, and a cash return chart that will be updated on a rolling basis through earnings. Earnings calendar […]

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5:46 PM

LNG: Gordon & Gorgon

This LNG round up with Gordon Shearer (Poten & Partners guru) from Thursday night took longer to write and I got tangled in the SLB results, which came in okay – readers will know I am not pushing service companies but love oils… “to 10% of S&P500!” Chatting to a client with Midstream expertise before Gordon Shearer, LNG expert, came on Strategy Session Thursday evening, the view was that Kinder Morgan results were decent owing […]

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5:43 PM

Mega-Bear Call: Oil to 10% of SPX

Yesterday on CNBC I repeated the call that oil could get to 10% of the S&P500 based on the current dynamics in global energy. In the segment (link below), which was in the context of Netflix stock collapsing 35% yesterday (down hard further in the pre-market today), I gave a hack explanation of how a growth stock valuation can collapse. Basically, if the market is anticipating huge growth in a zero interest rate environment, the […]

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9:42 AM

Sunday Philosophies

Greetings from Maryland, With limited computing power at my disposal, and having been in thought since watching Elon on Thursday give a TED interview, followed by self-identified philosopher Alex Epstein on our Thursday Strategy Session, a couple of days off, a stroll in Annapolis, this is note is more ideas in 1,000 words, to make a picture, than pictures worth 1,000 words. No demand destruction because there is nowhere to go to substitute Therefore self-compounding […]

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12:48 PM

Life and taxes

Strategy Session Tonight 5pm ET Alex Epstein “The Moral Case for Fossil Fuels”. Next Thursday 5pm Gordon Shearer, Poten & Partners, on Global LNG, save the date. Investment themes: long refining, long US oily E&P; rushing to do more work on US natgas but have loved Antero as our play; Tourmaline interesting, Energy Transfer interesting. Worried about oilfield service earnings upcoming, but clients want to buy them on operating leverage and global oil & gas […]

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8:14 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

Oil’s share of the SPX

Ripper chart, most bullish I have seen in 30 years following US E&P – quant analysis. Any chart available on request, any stock in the market… Share of S&P500 market cap vs share of S&P500 earnings. Black line is sellside. Blue line is buyside (share of market cap). Buyside is smarter than sellside, read the charts. Mi amigo US E&P, chart most bullish in history; Oxy, PXD, COP, FANG, APA, Hes.. Unprecedented bullish chart, buy […]

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5:05 PM

Nets, Knicks, Refiners

Tonight PBF management on Strategy Session, 5pm for a tight hour. RSVP. I was at the Knicks vs Nets game last night with a global oil executive; combined with conversations with ConocoPhillips management Tuesday, some brief points. First, Shell profit warning this morning. Break it up. We would like to see a global LNG & gas and power trading powerhouse, a downstream “high carbon” operation with refining, chemicals and retail, a deepwater company. We don’t […]

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8:48 AM

$COP a load of this

Tomorrow Thursday 7th April, Strategy Session with PBF Senior Management 5pm – RSVP Today DC hearing, House Energy and Commerce “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.” ExxonMobil 8k indicates $2bn increase in upstream earnings, beermat (see below) suggests $2.50 EPS Cocktails with ConocoPhillips management yesterday evening Starting with ExxonMobil 8K on earnings guidance released yesterday evening, I am chatting to them today. The company gives you what they […]

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10:00 AM

Zen and the art of refining maintenance

This Thursday 7th April, Strategy Session with PBF Senior Management 5pm – RSVP Tonight – ConocoPhillips senior management in town for informal sellside drinks Tomorrow, DC hearing, House Energy and Commerce “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.” In oil, the excitement this morning is New York jet fuel prices going off the scale, part of the theme we talked about over the past couple of weeks, especially after […]

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9:20 AM

Tilting at Windmills

Well, that was quite the Q1 2022! But we got it in the books. I think the low point of Q1 for me was the evening of Thursday 3rd March, shortly after the 24th February Russia-Ukraine invasion, when the largest nuclear plant in Europe, Zaporizhzhia, appeared to be under direct attack and burning, right as I had a one-hour briefing with the State Dept, and my contact told me that surviving a nuclear attack is […]

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11:52 AM

Uzi said then done

We have the perfect guest on Strategy Session tonight at 5pm – Delek CEO Uzi Yemin, a refiner who actively buys oil from the Strategic Petroleum Reserve. One interesting line from regular guest Kathleen Kelley – the expected 1mb/d SPR release announcement strongly implies no Iran deal. Houthi attacks on Saudi – who squarely blame the Iranians for Houthi support – have further reduced the likelihood of a deal. She also states that the move […]

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9:26 AM

Coterra & US E&P: Keep Your Discipline

The attached note started as a focus on Coterra, the $22bn market cap combination of two US E&Ps, Cimarex and Cabot, one oily, the other gassy, that merged and just started trading as $CTRA in late 2021. In the note you will find the rank data: the value destruction for shareholders of the US oil exploration and production (E&P) industry in their giant shale oil science experiment 2010-2019. Line from the note: “from 2006-2019, the […]

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7:58 AM

Sunday Targets

This week, a three page thematic overview, followed by supporting charts. First the text, then the charts. ~ Noted refinery explosion last evening, no deaths reported, at ExxonMobil’s small (“only” 60kb/d) Billings Montana niche refinery that is important for local balances. Would drive margins higher for Midcon players such as HollyFrontier, Coffeyville, Delek, and West Coast PBF, and might accelerate ExxonMobil’s long standing attempts to sell the plant (price always said to be too high). […]

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3:22 PM

$200/bbl by next Friday (disty)

Key messages from Strategy Session with Kathleen Kelley: Oil supply crisis – you ain’t seen nothing yet. The oil market is trading very physically right now, making price discovery more volatile. Watch for distillate markets, which are pricing like crazy, with particular volatility (upside) likely next Friday on expiry – we can see (Sankey says) $200/bbl on expiry of the April contract 31st March, the same day as OPEC is expected to disappoint. Kathleen boldly […]

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8:42 AM

Kazak Whisperer

Kathleen Kelley, “OPEC Whisperer” tonight on Happy Hour. Additionally in the following weeks we have two major refining CEOs ready to talk about oil markets. 3/24, 5:00PM EST – Kathleen Kelley 3/31, 5:00PM EST – Delek CEO | Uzi Yemin 4/7, 5:00PM EST – PBF CEO & CFO | Tom Nimbley and Erik Young You can participate on application, but if you don’t pay Sankey Research, why would you ask? If you want a charity, […]

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8:57 AM

Sunday Overtime

Extremely busy this weekend, juggling Patricia wanting to go spring-time walking dogs and window shopping in (packed) SoHo, and me wanting to solidly sit in front of the TV watching March Madness while making bets online. Somehow she does not see the appeal of watching seven games of college basketball back-to-back over seven hours. Of course, she wins. I did snag North Carolina to win it all at 50-1 BEFORE they beat #1 seed and […]

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2:35 PM

PBF is the new Oxy

Friday joke in serious times: yesterday a “Stop Oil” pitch invader interrupted the Everton-Newcastle (Saudi-owned) Premier League soccer game by attaching himself to a goalpost mid-game. An additional 17 minutes of extra time played. The joke? What does he think the zip tie that he used to attach himself with, is made of? Yep, he used an oil product. While wearing plastic glasses. He should have used rope? So much more inconvenient. Client question of […]

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8:16 AM

You are the champion, Pasha

Tonight Strategy Session with Jan Stuart, Cornerstone Macro global energy economist, on oil markets. Zoom call, 5pm. Kathleen Kelley is busy, unfortunately for us, happy for her, she is hosting a St Patrick’s Day party. God Bless Ireland! My paternal grandmother was from Cork, Ivy Sankey (nee Jefford). We have an oil trader joining to ask questions. A real live, oil trader. In the early 1990s, Jan was my first colleague at the IEA in […]

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8:41 AM

Nickel Back, Not

Up bright and early this morning, I will miss “the clocks going forward” now that, as the world ponders World War III, the US Congress has addressed the urgent issue of daylight savings time. The big picture remains that the Democrats are headed for a shelacking in the November 2022 mid-terms and the legislative potential for a major offset victory for the Biden Administration before then is getting very tight. Kudos to Biden for the […]

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9:18 AM

Silver Linings

Emailed question from DC this morning: I’m so confused – why is Brent now below $100??? I thought it would just keep rising and rising! Sankey: Shenzen shutdown is the big one. Also deeply discounted Russian oil coming to market. Also emergency stockpile releases. Also seasonally weak time for demand. In other news, the scale of Devon’s airdrop yesterday relative to a weak sector gives rise to chatter that an M&A deal is coming (and […]

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8:55 AM

TINA Turner

“Only the dead have seen the end of war” – Plato (Attributed). The Quote is writ large at the entrance of the Imperial War Museum in London, one of London’s great museums, if lesser known. Recommended. Thoughts & prayers with the suffering in Ukraine. Peace in Brooklyn, the weather our worst direct concern. The hard yards, I always say from my First World Wall St perch, are January 1st through to March Madness. And today, […]

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4:17 PM

Trade: Buy Tech Short Oil & Pray for Peace

There have been massively structural changes as a result of Vladimir Putin’s disastrous invasion of Ukraine. In the short term we believe that negotiations for peace are more advanced than seemed to be the case yesterday morning. We also received intelligence that the loss of a disproporionate number Russian commanders, starting, it was said, with the Chechen death squad sent to assassinate Ukrainian President Zelensky, who were apparently “neutralised”, indicates that elements of the Russian […]

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8:43 AM

The Big Shot

Big Shot, Big Short moment. Nickel suspended at $100,000 per tonne on the London Metal Exchange. That means that today a Nickel (5c coin) is worth 12.5c, given it is 5g in weight and 25% nickel. The other 75% of a Nickel is copper, by the way. It’s being reported that Chinese entrepreneur Xiang Guangda – known as “Big Shot” – had a large short position on the LME through his company, Tsingshan Holding, the […]

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8:42 AM

Sunday CPC

In the drama of the week, we never got to publish the dreaded and yet celebrated “Sankey Porcupine” charts that reveal the key message from two analyst meetings last week, Chevron and ExxonMobil, in four charts: capex and volume targets. We do that in this note, and cover Chevron risk in Kazakhstan. Do NOT try to pick the top in this oil & oil equity market; there could be a long way further up to […]

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2:32 PM

Deep Thought

After a very enjoyable Strategy Session with the impressive Kimmeridge Team yesterday, I had a one hour debrief with a Senior US Government Official with long energy experience yesterday evening: Notes from deep Washington source. Watch out for oil exports from Chevron’s Tengiz, reports that 3 cargoes (of 3 tendered) were unsold yesterday. The oil is transported from Kazakhstan across the CPC pipeline in Russia and mixed with Russian crude before loading at a Russian […]

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8:54 AM

Morning Strategy 3/3/22

Strategy Session Tonight, Mark Viviano & Megan Hays of activist Kimmeridge. A former Portfolio Manager at mega-player Wellington Management, Mark leads the first public/private active funds at Kimmeridge, one of the top activist managers in the oil space. Megan Hays has joined Kimmeridge after 15 years of IR experience including Concho and Cimarex, and even allowing for that length of experience, still recently rated as one of Hart Energy’s “40 under 40.” Please click this […]

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9:00 AM

Vlad the Impaled

Extraordinary times: In the great energy regression that has massively further regressed with the Russian invasion of Ukraine, it was somewhat surreal to watch Chevron’s Colin Parfitt (VP Midstream) conclude at the company’s analyst meeting yesterday at the NYSE, that we need more export capacity in the US, particularly for natural gas, and for the company then to confirm $10bn of spending on New Energy Ventures over the next decade, on hydrogen, carbon capture, and […]

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8:37 AM

Sunday Kharkiv

Well, this bloody mess was why we could not believe Russia would launch a full Ukraine Invasion. Reports that Ukraine has fought back and held Kharkiv are somewhat incredible – Ukraine’s second largest city is to the east and very close to Russia. The idea that Russia could not take control here, is a massive problem for Putin. Military experts are expressing surprise that Russia has not obtained air control, and is suffering logistics issues. […]

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12:22 PM

Friday Disease

Calls: pushing $MRO. 15% cash return to shareholders this year at least. Thematic note available. Yesterday was a puff move from solar, wind, but E&Ps fell, makes no sense. We like the thematic theory that you buy wind on Russia invading Ukraine, but we think this was a short covering move/macro move (the market rip yesterday led by solar). Short term trade, short oil into coming Iran deal, then buy the weakness (commodity, stay long […]

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9:21 AM

Yikes

Huge shock. Particularly to major European clients that had stated their house view: no invasion. Their view was weeks of noise, no invasion. What will happen to this extraordinary chart? We see demand destruction at $120/bbl, and think oil prices will continue to go to that level of demand destruction if US demand remains as strong as it currently is. Lagging US economic strength and upcoming summer speak to ongoing demand strength, even if it […]

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8:18 AM
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