Recent Posts

Morning Quantquake

“This job is easy, all you have to do is forecast the oil price right.” In this note we argue that the most expensive group among the oils will run here, based on the recent market “Quantquake” that we outline in this note. What was the Quantquake? Last week saw an extraordinary move in markets. And from this we derive a trading recommendation into year end. There is more to short- and medium-term investing than […]

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8:26 AM

Sunday Garden

The mood on Wall Street is suddenly, that the market will have a traditional post-Midterm bull run into Christmas. Buy them all. There might be some threat from the major turn in the Chinese market, sucking money back into China, and of course the FTX Crypto collapse is widely reported to involve a $30bn personal net worth loss for the now-notorious Sam Bankman Fried, and an $8bn black hole. Will that negatively affect markets? Well […]

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11:07 AM

Morning Dry Ice, Dry Eyes & Wet Gas

There was a collision yesterday in Tribeca between your experience-bitten, long-since cynical energy (oil) analyst, and the Schlumberger’s analyst meeting. Big oil clients have seen oily friends fired, exit Wall Street forever, been asked to cover extra sectors, been bullish when they should have been bearish, watched great companies humbled, seen clients lost to 1,000 yard stares. Schlumberger is a huge part of the arc of oil history, not least on Wall Street. We, the […]

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7:56 AM

Evening, No 3-letter “F” Words

Tomorrow Happy Hour: Jon Rigby, IR ENI Thursday Nov 3, 2022 5:00 PM ET  Please click this link to register Rigby is the recently-appointed (April 2022) head of investor relations and strategy planning at Eni, the $50bn market cap Italian energy giant. Previously he was a well-known London-based sellside Lead Oil & Gas analyst, covering global major stocks, for UBS, as managing director. He joined UBS in 2004 from Commerzbank and holds Chartered Financial Analyst […]

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5:11 PM

Morning Succinct

Great guest tomorrow, especially as everyone is asking about natgas. Robert Raymond, private equity wizard, the man who gave us our Antero bull stance which he had when the stock was a toddler in 2020. Mr. Raymond is the founding member of RR Advisors LLC/ RCH Energy. He joined Crow Family Holdings in 1994 and subsequently built and managed their energy investment program from 1997-2004. Mr. Raymond oversees all aspects of RCH Energy investment platforms […]

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8:45 AM

Saturday Sunday Sankey

Your correspondent is flying tomorrow at 7am La Guardia to Houston for Steve Chazen’s Memorial at 2pm assuming flights co-operate, and so this week’s Sunday is here on a Saturday; a brief highlight reel, or should that be “bloopers” “fails”, and “cringe” in this tape. From the UK pound, to Japanese Yen, to Credit Suisse credit default swaps (CDS) this is a market at war with itself, quite literally. The incredible sabotage to the Nordstream […]

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7:58 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

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

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

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

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 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

Sunday Sancerre

Glad tidings, A long weekend in the US, a four day weekend in the UK for the Queen’s platinum jubilee, seventy years as Monarch. Quite the rein. Go easy on your temperamental French executive chef today as he crashes around in a fury having to stoop to make your requested Memorial weekend hot dogs and chicken nuggets. The fact that you intend to slug super-chilled Napa Screaming Eagle Sauvignon blanc is only upsetting him more.  […]

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3:59 PM

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

Morning Joe

Good looking results beat from Valero setting up the “$5 in Q2” call we made over the past week – CEO is Joe Gorder Valero may turn oils performance that was undermined by oil service results last week, Halliburton leading the oil tape lower; we have had a brutal week since my “Mega-bear call: Oils to 10% of S&P500 note”. Sorry about that. ARCH coal announces an $8 dividend up from 25c. Watch Peabody and […]

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8:30 AM

Happy Anniversary

The only good number in oil is the oil price The only good demand number in oil is refining margins The only barrier of entry to being an oil analyst is units You are only as good as your last call CNBC want me on this afternoon – unusually they booked me two weeks ago – for the second anniversary of oil prices going negative. Let me go to the grave saying I called for […]

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9:43 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

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

Aramco’s Tax Windfall

Aramco’s full year 2021 results released Sunday (3/20/22) were more historic than perhaps the market appreciated. First, an announcement of a major increase in capex did not yield a major boost in oil supply, from a global perspective. Saudi capacity will rise just 1.5mb/d, exports 2.5mb/d by 2027. Second, an extraordinary statement from Saudi’s foreign ministry should give any observer of global markets pause for thought: Saudi Arabia said on Monday it would not bear […]

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9:02 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 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

Then Su me

Strategy Session last night with William Su of Blackrock, a tenured oil analyst & investor. My first question was whether we would see a positive gamma squeeze in oil given the rapid increase in open call interest. The charts below show: 1) the price of a 3-year at-the-money (ATM) WTI call, going up and up and up, and alongside it to the right 2) the scale of open interest in $100/bbl call options for June […]

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11:47 AM

Masters’ Class

Mike Masters was the first American to score a goal at Wembley. But we had a different Mike Masters on Happy Hour last night, the hugely successful hedge fund manager who had a swimming scholarship to Tennessee, and started Masters Capital in 1994. He became highly prominent in 2008, testifying to Congress on oil speculation. Mike Masters: the market is obsessed with post-COVID recovery, but is not thinking enough about the decade prior to COVID […]

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9:16 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

Sunday Bets

Presentation today, and commentary below: Thursday evening annoucement: major sellside meeting by ExxonMobil: “updates to their company plan” on Wednesday December 1st. Sellside invited. Virtual. Big deal for ExxonMobil. We had pondered how ExxonMobil would manage their annual capex announcement, due in December, vs their traditional strategy update due next March. We pondered if plans would be ready in time for a December update, given the scale of board and management change that has occurred […]

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3:55 PM

Morning Be My Date 11/17/21

Big upcoming events for us: Happy Hour this week with former FERC Chairman Neal Chatterjee, along with Aaron Cutler, both now partners at major DC law firm Hogan Lovells. Aaron at 5pm, Neal at 5:30pm. Both have deep multi-decade Washington energy experience at the highest level – Neal was former Chief of Staff for Senator McConnell, Senate Republican Leader. It is obviously vital to understand the shifting energy landscape in Washington. These are the experts […]

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8:33 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

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

Sunday Sankey 7/4/21

Happy July 4th Here’s to democracy and freedom. Usually, I make some dumb joke about being British and not celebrating any Independence on July 4th, but this weekend marks the first anniversary of Sankey Research. My first note, quoting Public Enemy as a statement on freedom of speech, was sent out the Friday of July 4th weekend 2020, and for long as it may continue, the anniversary of Sankey Research will be Independence Day weekend. […]

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12:30 PM

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 Methane Limits

DC chat today, it’s Friday! Travelling to Atlanta via Washington and Durham today with son Max. I accidentally sprayed my son’s deodorant into my mouth this morning. Now when I talk I have this weird Axe scent. If you lose one of your senses, your other senses are heightened. That’s why people with no sense of humour have a heightened sense of self-importance. I told my wife I was making a bicycle out of spaghetti. […]

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7:12 AM

Sunday Sankey 1/17/21

Trying to get up this morning, I was pondering whether the US military could split and part go renegade. However we continue to believe the US constitution will prevail. Rather a negative start to the day, but I moved on to put together the Sunday Sankey for you, with energy, be it alternative, or regular oil and gas, starting the year very well. We continue to be obsessive about the US$ impact on oil prices, […]

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12:06 PM

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

Halliburton beats expectations with a $1.7bn loss

Halliburton’s CEO Jeffrey Miller guided this year to be not a “V” nor “W” but an “L”. While there are “green shoots” of recovery, these are not “meaningful”, and full year guidance is below the eye-watering sequential declines seen Q1 to Q2, with full year revenues expected to be 50% down for 2020 over 2019 in North America. International decline expectations are mid-teens, with the year ending with “usual seasonal deceleration”. Given we expect another […]

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10:03 PM
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