Recent Posts

Morning Sankey 12/3/20

Save the Date for the 11th Annual Sankey Research refiners conference January 4th & 5th 2021. We have all six major independent US refiners line up for a series of fireside chats with yours truly: Marathon Petroleum, Valero, Phillips 66, HollyFrontier, Delek and PBF, with a couple more to be added. All at C-Level. Contact me for details. Last evening rumours broke that OPEC has reached a deal to gradually increase production in a tapered […]

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9:11 AM

Morning Sankey 11/24/20

The oils continue to be lively driven by the surprising up-move in Brent & WTI crude prices, that has come at a point that looked by some measures to be max bearish. If you recall, over the last days of October, Brent fell from $43/bbl to $37/bbl and looked like it might have a run at $30/bbl, COVID resurging, Europe shutting down. Libya roaring back with 1mb/d incremental light-sweet supply. That bearish Atlantic Basin picture […]

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8:18 AM

Sunday Sankey 11/22/20

Good day from Brooklyn Heights, Enjoy life, look up and consider what to you is everything right now. Live in the present. I have a professional friend who was one of the dominant hedge fund managers in oil during the legendary 2003-2008 oil bull run. As the true legend goes, he ran $1bn levered in oil equities on his right hand, and $1bn levered in oil commodity on his left. So it was understood. They […]

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1:23 PM

Morning Friday 11/20/20

Breaking news: Germany is advising people to stock up on sausages and cheese. This is starting to look like the Wurst Käse scenario. I lost 200 pounds. That’s the last time I go to a British casino. Rudy Giuliani really risked his career on this. The dye is cast. Out of all the inventions in the past 100 years, which one was the most remarkable? The dry erase board. We had a refining CFO on […]

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8:38 AM

Morning Iran 11/17/20

Deciding what the rumour has priced into the market price, then watching the actual news hit, always tends to be a surprise, in that the market ripped yesterday on a second vaccine announcement from Moderna, even though it felt like vaccine news was all whispered all over the market just prior to the election, so prior to both announcements. As with these markets, you buy the rumour and buy the news, (you don’t fight the […]

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8:44 AM

Sunday Sankey 11/15/20

I’ve been at the computer working like a chickenhawk on Adderall this morning and it still got late in the Sunday. Patricia is having a lovely time in beautiful weather in Mexico at San Miguel de Allende – an absolutely fantastic place with my globally top five favourite hotel – the Rosewood – right there. It might be my favorite, that is how wonderful that place is. Another top five is the Imperial Palace Hotel […]

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2:46 PM

Friday Sankey 11/13/20

Friday jokes: I lost all my sense of taste, I think I have COVID! Oh no wait, this is Bud Lite. My son said he was quitting college to move to the Arctic Circle. I said “I don’t like your latitude.” A kid goes to a Halloween party. The host asks him what he is dressed as, kid says “A harp.” The host rudely says “Your costume is too small to be a harp.” The […]

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8:24 AM

Morning Ex-Wife?

In a moment of desperation this morning I texted Silvio, my former associate, for a question on which he can always help. He called back as always but was on the bus heading through the Lincoln tunnel. I told him I was having a major problem; but the call broke up. He texted me “Sorry to hear you are having a nightmare your ex-wife… couldn’t hear the rest, call me whenever you want, hope you […]

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9:36 AM

Morning Sankey 11/11/20

Well for sure my timing in the Sunday Sankey making the uber-bear call for oil was completely destroyed one day after I made it, on Monday, by Pfizer’s announcement of a 90% effective COVID vaccine. My old joke is that I am never wrong, it’s just sometimes my timing can be WAY off. And the question of this note, given oil dynamics next move is positive, is timing of entry. Clearly the market was coiled […]

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8:16 AM

Election-free Sankey

*** This note is election commentary-free. We got definitive results last night. From Pioneer $PXD, Marathon Oil $MRO, Apache $APA, Energy Transfer $ET, and Delek $DK, boom, boom! Really notable sell-off on solar stocks which came into the past month flaming hot, and have seen major corrections led by Sunrun $RUN – 31% past month, SolarEdge -22% which compounded $RUN’s weakness with a guidance warning this week, and First Solar $FSLR down -15% this past […]

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8:17 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

Sunday Sankey 10/25/20

The Sankey Research website was down this morning, and there is absolutely no truth in the rumour that this is somehow related to Hunter Biden. Rather, the website may have crashed on ANOTHER BIG OIL DEAL, this one a bit of a shock. Years ago, ConocoPhillips announced a massive deal to buy Burlington Resources, a $36bn deal that was announced on 13th December 2005, literally the day before US natgas prices hit their all-time record […]

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2:02 PM

Morning Sanknews 10/22/20

News: France quashes a major US LNG export contract on US methane emissions/fracking. Quite where this leaves Russia and Algeria has not been specified by the French. Story broke on Politico Pro. In 2016 a French minister had highlighted that US LNG contained fracked gas, so to speak, and that France bans fracking. We all remember Hess and the Paris Basin, seen to be one of the great fracking opportunities in the world, it will […]

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9:17 AM

Morning Sankey 10/21/20

I am thinking on a long refining short airlines trade. Not least because all my clients are complaining that you cannot make money in the E&P tape. I have a few who say they have been the right side of all four major deals year to date; and barely made money. While you get a 10% pop “this is not why you owned them.” In fact the latest disappointment was definitely Pioneer-Parsley, with an investment […]

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8:39 AM

Morning Bullish Sankey

Very interesting Happy Hour yesterday… and an overwhelming sense of bullishness swept over me! How can this be when the oil market is still struggling so badly? Well… a couple of things. But first, it’s Friday, and this is the Friday Sankey, so its JOKE TIME. What’s the biggest lie in American politics in 2020? You have 2 minutes uninterrupted.Please respond to your opponent’s total ignoring of the question. You have two minutes.A fly on […]

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8:27 AM

Friday Air Sankey

Well indeed, there are a lot of jokes out there this morning… you can say the news has gone viral. However, given our self-imposed standards of taste and decency, we will limit the news jokes to non-Presidential. If you’re driving a stolen Tesla… Would it be called an Edison? Mark Zuckerberg is in a car accident. Guy : “Let’s exchange personal details” Mark : “You are Scott Thomas, you have 237 friends out of which […]

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10:23 AM

Morning Titanic Sankey

Three analyst meetings in two weeks: BP, Apple, Tesla. Confirmed by Tesla Battery Day: the Big Oils need to pursue a strategy of “orderly liquidation” in line with our “Renaissance of US E&P” thesis. Cut capex, reduce growth, return cash to shareholders. Orderly liquidation. Shrink to grow value. We are advising a refiner to go private, we have been for years, arguably we have been for all refiners. No growth capex, buy back stock until […]

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9:17 AM

Synthetic XOM

A client pointed out that DOW stock has been on a bit of a tear recently, while XOM cannot catch a bid. This is a reasonable point, and the same could be said of Phillips 66 PSX, which has also been languishing, despite its chemicals exposure. That stock shrugged off a bad 2019 for chemicals margins, which then got truly abysmal with COVID. Subsequently controversy/risk around the Dakota Access Pipeline has ailed PSX, with the […]

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6:39 PM

Where is oil as Laura hits? Morning Sankey 8/27/20

Corporate newsflow remains quiet, with the market awaiting more details on the historic announcement from BP on its climate change plans, due September 14th-16th. Several major US oil investors consider this BP move a 100-year strategy shift for big oil. Notably the stunning -40% oil and gas production reduction, as a strategy pillar. US investors remain cynical, the most negative seeing the announcement as a smokescreen for the dividend cut. Elsewhere re-injection issues for ExxonMobil/Hess […]

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8:35 AM

Morning COVID Crimes 8/20/20

The demand recovery is flopping around. Our contention is that we modelled COVID really well, by using the Diamond Princess model (published still on my Linkedin in March and now clipping 14.000 views), but we should have realised that in an election year, the Democrats would be incentivised to make COVID run into the election, and by the same token Republicans would be furiously trying to deny COVID is a big deal. Yesterday in NYC […]

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7:35 AM

Morning Speedway

Huge deal from XOM on Friday, committing to no more debt and paying its dividend. The revelation that the company is 70% retail owned was an update to a number we have spoken about many times, that XOM was 50% retail held. Our number was stale! The imperative to pay dividend is clear, the commitment highly meaningful. Arguably XOM may now need to liquidate to pay dividend, which is actually what the market wants. We […]

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8:55 AM

Sunday Sankey 8/2/20

Our usual round up of the continuing power of growth stocks over value stocks, concerns about the US$, the fact that the oil market is weakening again, watching hurricane season into seasonal slowdown. We cover XOM, CVX, refining, markets, “The New 1950s” and much more besides within! Continue reading

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10:21 AM

Sunday Sankey 7/26/20

As you float behind your wraparound shades, tan-topping on your infinity pool with the Bose underwater speakers cramming Dr Dre’s The Chronic, Kamikaze in hand, I will hunched pale white indoors in Brooklyn watching the final day of the UK Premiership. See slide within. New season starts Sept 12th, what a mess this year has been. There is the resolution of the European Champion’s League to fit in, and we have postponed the Euro 2020 […]

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8:52 AM

Morning Sankey 7/10/20

The market seems toppy, if it sells off on a judge ruling on the long-running debate over President Trump’s tax returns, which is what happened yesterday. The ruling extends the to-and-fro and is seen as unlikely to result in a release before the election. Yet the S&P500 sold off… but the NASDAQ, as ever, rose regardless. Later in the day, a potentially more market-unfriendly series of headlines somehow had less negative effect: CNBC reports Presidential […]

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8:30 AM

Dakota Access Shock

PSXP stock is getting hit hard on today’s surprise Dakota Access shutdown ruling, alongside Energy Transfer (ET) and Bakken players such as Contintental, OAS, WPX, NOG and diverse names such as MRO. Winners: Canadian suppliers, Permian and other Basins than Bakken, and in refining “Valero wins by not losing.” Of course in the grand scheme of things, the most environmentally-friendly way to move oil is by new pipeline, less by rail, least by truck. But […]

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4:07 PM
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