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 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

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

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

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

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

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

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

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

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

Friday Highlights

Having featured a fellow independent researcher on Strategy Session last night – Doomberg – today’s note is a highlight reel of other people’s research. But of course first, Friday you demand jokes, and we are not here to disappoint clients. I used to play the triangle in a band, but it’s just one ting after another. I swallowed a dictionary, and now I have thesaurus throat. My boss arrived at work in a new Lambourghini, […]

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8:41 AM

Devon & the Wall of Fear

Strategy Session this week: Doomberg 2/17, 4:30PM EST –  Click Here to register A bull market climbs a wall of fear, a bear market descends a slope of hope. With oil prices in the $90s, for oil investors traumatized by a decade of descending a slope of hope, are now climbing a wall of fear. The thinking goes like this: “Brent is at $90/bbl on a Ukraine invasion story that is de-escalating, sell quick, lock […]

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8:27 AM

I just dropped in…

Hi I am just checking in to assure you I survived the Houston NAPE conference, landmen and all, but am still on the road, headed to New Orleans. This week has been discombobulated – my initial flight on Tuesday was cancelled by United, I rushed to Newark, made the 2pm, just made dinner in Houston, made the NAPE conference yesterday, made dinner with a Nebraska CEO, went to the after party rave and here I […]

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10:50 AM

Sunday 2022

Happy New Year! Dan Loeb was complaining on Twitter that we hardly got any time off here: “Even prize fighters get 6 months off between fights, NFL players a week. Only 2 days off between years makes me want to join a union”. He was also welcoming New York’s new mayor; I am completely with Dan on both these matters. By the same token it feels as if neither of us will be joining Gettr.com […]

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8:48 PM

Sunday Sankey-Laffer

Not talking about COVID, just to say I am feeling 100% fine. This Omicron will hopefully be the largest and fast mass vaccination programme in history, whether by God or Government. Nice chart this morning from Greg Wachsteter, who kindly said I could publish. No more comment on COVID, I think the conclusion here is pretty obvious; this chart is therefore bullish S&P Energy. Sankey-Laffer curves. The presentation attached today, made me think what a […]

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3:52 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

Saturday Chevron

Saturday: there’s an unrelenting element to being a stock analyst. “You are only as good as your last note.” The need to constantly publish is relentless. With that in mind, it has been my intention to write an oil book. Something that can sit on a shelf. One of my favourite oil books is Anthony Sampson’s “The Seven Sisters”, which provides a brilliant, and concise, history of the seven major oil companies that formed the […]

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8:07 PM

Friday Sankey 11/5/21

Ezra’s first quarter as EOG CEO and he lofts it out of the park – massive increase in regular dividend, big special, buyback, he is in NYC next week, take a victory lap Pioneer wanes yesterday after weak buyback guidance Apache on fire We like Denbury on CO2 negative oil, and encourage Oxy carbon ventures Sunrun – we expected either a crashing miss or wild beat and massive stock reaction; we got neutral Delek beats; […]

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8:35 AM

Morning Sankey 11/4/21

OPEC Meeting live debating: who is Brandon? Continental shareholders overwhelmingly love the $3.3bn deal for marginal acreage in a new basin Meanwhile at seller Pioneer $1bn more than the asking price for non-core acreage; $3.02 special Final natgas injection number of the week (withdrawls start next week for winter)? The Biden Administration does not seem to understand oil, and more particularly how much spare capacity there is in OPEC. Here’s a quick lesson in global […]

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10:24 AM

Morning Sankey 11/3/21

Mega-theme, ESG backlash: progressive Dem agenda whacked by Virginia governor Republican backlash Mega-theme, short wind, long coal: second 2021 profit warning from Vestas Mega-theme, global energy crisis: European gas prices bouncing on Russia natgas supply outages Mega-theme, Renaissance of US E&P: Devon with great results, COP is about as good, Pioneer after market tonight ESG backlash: the general disarray in the current US administration has been exacerbated by the major swing of Virginia voters to […]

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8:54 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

Friday Sankey 10/8/21

The class system in the USA is: never been to Disney; been to Disney once; goes to Disney annually. Why did Chewbacca crash the Millennium Falcon when he first piloted it? He made a Wookiee mistake. Besides watermelon, there should be windmelon, firemelon, and earthmelon: the four elemelons We had Kathleen Kelley on Happy Hour last night; formerly senior oil market advisor to Saudi Oil Minister Khalid Al-Falih. He is now Minister for Investment of […]

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9:08 AM

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

Homeless Sankey 9/23/21

Certain cities, like New York, London, and Paris, are an experience, like being in a movie, so strong is their identity. The same goes for San Francisco, the very name a romantic invocation of California and the Pacific, Gold Rush. The beauty of the Bay, the Golden Gate Bridge. Beautiful physically, and host to massive tech companies such as Uber and Twitter, with huge property prices, there are some major problems, the greatest of which, […]

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5:48 PM

Germany & Britain vs the USA

Greetings from London, You live in the UK and have avoided death by COVID? FT: In the UK, 4m households were unable to afford to adequately heat their homes even before the latest energy price crisis. Some 10,000 deaths a year are linked to living in a cold home, according to the charity National Energy Action. If that represents around 100 deaths per day over the average of four winter months, high energy prices are […]

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10:10 AM

Sunday Siesta 8/15/21

Welcome to mid-August, I am taking it easy for a couple of weeks. Good week ahead for fishing offshore Ixtapa on the Pacific. Really nothing on the calendar next week for oil analysts unless we stretch to retail such as Walmart, Home Depot, and Target, all reporting. Roblox is an interesting company. A call last week from the White House for OPEC+ to produce more oil and for the FTC to investigate high pump prices […]

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7:23 PM

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

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

Rocket Science & Rocket Surgery 8/4/21

In this note: the analyst who simply thanked Pioneer, with Devon, Oxy, and ConocoPhillips all cheering battered oil investors, and really strong macro news for Big Integrated Oils (ExxonMobil etc) with their lagging exposure to soaring global natgas prices that are pushing up refining margins. Global demand strength is also bullish for the oils, regardless of the market’s deep reluctance to capitalize OPEC market management. First, Tellurian offers shares: 35,000,000 shares of its common stock […]

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9:35 AM

You’re busy let’s keep this brief

Just as your correspondent was pondering the upside surprises in capital discipline and cash return to shareholders from “4P” premium Permian pure-plays Pioneer ($PXD) and Diamondback ($FANG) announced yesterday evening, and waiting for a similar positive result from ConocoPhillips, than my friends at HollyFrontier announce a $1.8bn deal to marry perennial bridesmaid Sinclair Oil, the MidCon refiner that started life in 1916 and has been private since 1976. HollyFrontier is on a roll, completely counter-cyclically […]

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8:38 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

Viernes Sankey 7/9/21

It was the optimum Happy Hour last night, with two expert witnesses, Kathleen Kelley and Jan Stuart, both highly tenured oil market experts, and a mix of long-only and long-short investors, mutual fund and hedge fund. We were also spread across the globe from Amsterdam to Mexico, with Kathleen struggling in a New York flash flood situation that resulted in a viral video of a lady wading into waist deep water to the NYC Subway. […]

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12:03 PM

Manana Sankey 7/6/21

Reading back on my Sunday note, I did a horrible job of highlighting the link to the “Oils share of the S&P500 earnings vs oil’s share of the S&P500” presentation that was attached. One key highlight was to buy Pioneer and EOG and to be negative on Oxy. The non-consensus call was bullish Apache. We were also cautious refiners. Here is the note which is a short presentation of all the charts. This is a […]

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9:57 AM

Morning Sankey 6/15/21

At the last in-person Shell analyst meeting at the NYSE, I raced the head of upstream in a life-sized side-by-side Pennzoil NASCAR simulator and then moved on to talk to CEO Ben van Buerden. One key message: sell the Permian. My argument was that Shell would never be recognized as a Permian player, would never get credit, even if they out-performed the industry, and valuations were riding high. Shell should be a mega-project player in […]

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8:46 AM

Morning Sankey 6/2/21

The ostrich school of analysis would suggest that I resolutely defend my short term bear call on oil and oil stocks made only at lunchtime on Monday, but the fact is that no sooner had I hit send on the email to clients and website post, than the short term thesis caught fire and sank like Iran’s biggest warship just did: June 2, 2021, Associated Press: “The largest warship in the Iranian navy caught fire […]

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8:44 AM

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

Morning Sankey 5/12/21

*INVITATION * Today * 10am ET * – Happy Coffee with Li-Cycle CEO Ajay Kochhar. Ajay is extremely strong on all things to do with his business, of re-cycling lithium-ion batteries. By extension, he is extremely strong on batteries, EVs, and particularly Li-Ion factories. He is absolutely at ease with battery market dynamics. Join a conversation with Sankey + a few clients. Yesterday the company announced an agreement with Ultium Cells, a joint venture of […]

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9:01 AM

Sunday Sankey 5/9/21

Happy Mother’s Day! $AMTX – this small-cap generated way more response than my more-or-less throwaway comment on Friday ever intended, highlighting of a Twitter post. It was about related party transactions and we said it read poorly. Because it did. Apologies if your Friday was adversely affected, there is certainly hedge fund interest here. We have some strong bulls on the stock, who have done way more work than I have. The CEO is controversial, […]

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12:18 PM

Morning Sankey 5/7/21

A salesman knocks on a door, answered by a 12-year-old boy wearing slippers, an oversized silk dressing gown, smoking a fat cigar in one hand, a huge snifter of brandy in the other. Stunned, the salesman asks “Are your parents in?”  The boy replies “What the fk do you think?” Americans love T shirts. They have the constitutional right to bare arms. Wife: “You need to do more chores around the house.” Husband: “Can we […]

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8:44 AM

Morning Sankey 5/4/21

As we hoped, oils’ results are going great. The sector is powering higher, with the overall steady outperformance grind that has resumed in value over growth. The oil price for Q2 is tracking well ahead of these results, further boosting the EPS upgrade cycle. Huge result from Suncor; great commentary on cash return from COP, a surprise beat from Marathon Petroleum with major disposal and buyback coming… good results from head-to-head rivals Diamondback and Aramco, […]

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8:41 AM

Morning Sankey 4/22/21

Comparative advantage in ideas. Under the fundamental trade principle of comparative advantage (Ricardo, 1817), if you have two goods, and I have two services, we trade; to have one good and service each, more efficiently produced for each. Under a theory of trade of ideas, If we have two ideas each, and we trade; we each have four ideas. THAT’S RIGHT FOLKS, HAPPY HOUR IS BACK, TONIGHT AT 5PM. Muttering to myself about the latest […]

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8:25 AM

Morning Sankey 4/20/21

Staring at the blinking red and green Bloomberg ticks, alone in a home office, bombarded with Bitcoin headlines, Gamestop headlines, etc etc, it had become very difficult to make out the wood from the trees regarding the oil and energy call. I went on a road trip. I’m back. As suspected, the oils and energy have been tricky – notably solar has been ugly for the past month and year to date, albeit off a […]

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8:42 AM

Morning Sankey 4/13/21

It seems pretty blatantly obvious that Putin is going to invade east Ukraine and join Russian rebel-held territory (see map in Sunday Sankey). He did it with Crimea. Not really a lot you can do, shall we ask Ukraine expert Hunter Biden for his take? There will be a domino effect, because the next question becomes what do you do if China invades Taiwan, given troop build-ups are as big in naval terms in the […]

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9:05 AM

Morning Mood Swing 3/30/21

Get ready for a dump of April Fool’s Day OPEC jokes as the Organisation meets formally this week, culminating on Thursday April 1st. Rollover is seen as the most likely outcome, which would be for April, Saudi extending its market control, with recent volatility in oil prices – ie downside moves – seen as the key concern. It’s a never-ending wonder trying to forecast oil markets, and now to be in new era. Here, we […]

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8:26 AM

Morning Sankey 3/26/21

My wife and I were sitting in the living room enjoying a bottle of wine. Out of the blue she said, “I love you. ” Surprised, I asked, “Is that you or the wine talking?” “It’s me,” she said, “talking to the wine.” What do you call a rich Centipede? A Dollarpede A mushroom walks into a bar and the bartender welcomes him. He’s a fun guy. A Freudian slip is where you say one […]

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9:05 AM

Morning QuantumScape 2/18/21

Field trip. Speaking to Devon yesterday after their results, I asked to visit the company in Oklahoma, which seemed somewhat ludicrous in the circumstances. There is an energy emergency in Texas and Oklahoma, in case you have been asleep all week. However a visit is okay to go, so if any clients wish to join me on a Oklahoma/Texas run in the week of March 15th, the plan will be to get through next week’s […]

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8:26 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
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