Recent Posts

Refining Conference ’23 PBF: Wisdom for Crowds

Listen and Learn No company sits more at the bleeding edge of US refining than PBF, a pure play merchant refiner with some 1m/bd of capacity across all geographies: East Coast, MidCon, Gulf Coast, California. The company has a long history of buying into refining, and specifically individual major refineries, at ostensibly rock-bottom prices. Certainly, buying Toledo from Sunoco in 2010 was described at a 4x EBITDA deal… revised in the “Diamond Age of Refining” …

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1:10 PM

Morning Rodeo

Tonight on Happy Hour, Ira Joseph, Senior Research Scholar, Center on Energy Policy, Columbia University. Former Head of Global Generating Fuels & Electric Power Pricing and Research at S&P Global Platts. Former Head of Global Gas and Power PIRA Energy Group. Former Editor in Chief Energy Intelligence. The man has 30 years form in energy expertise. Ira was recommended by Sankey Research friend Jay Saunders, long term natural resource Portfolio Manager at Jennison, and connoisseur […]

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10:09 AM

Sunday History

Yo, Noted, French refining strike seems to be drawing to a close, with ExxonMobil’s Fos returning to normal. Continued issues with the most extreme of the unions, the CGT, for TotalEnergies. Around 30% of French gas stations reported short of product. We perceive the refining workers strike in Iran to be a domestic issue – for now. History of the Iranian Revolution was driven by strikes by Iranian oil workers. The 1979 Iran revolution directly […]

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3:20 PM

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

Our Bob’s Gasoline

Last call for the Sankey Research Party at the Hard Rock Penthouse tonight. If you are in NYC and around Times Square, we have a glittering panoply of oil market experts, CEOs, investors, and some hangers on, all welcome. Kathleen Kelley “OPEC whisperer” will comment on the symbolic cut, and we are highlighting the new CEO of refiner Delek USA Avigal Soreq. RSVP if you want to join, there is plenty of space and we […]

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1:13 PM

Morning Refining Fire

We have spoken about the structural shortage of US refining capacity repeatedly. We have warned that the US refining system has been running very hard, but has been unable to keep inventories from all time lows relative to demand, particularly for distillate. And we have underlined that distillate (think diesel for my newbie readers) is the default “convenience premium” fuel when natgas and coal get short. It is easier to transport, and generally directly substitutable. […]

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9:31 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

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

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

Morning SPR

Good to see oil holding, we have broken the bottom of our $110/bbl-$150/bbl range for Brent this summer, but news out of China is positive both in terms of higher oil demand and re-iterated low oil product export quotas. These product export quotas are some 40% below last year levels and underline that Beijing is moving away from energy-intense processing and exports, prioritizing its own air quality and environmental issues. Quotas are cut from 37Mt […]

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9:24 AM

Morning Mr Jones

Briefly noted: Gazprom shares plummet -25% as shareholders reject record dividend plan Uniper, largest German buyer of Russian gas, shares plummet -18% as it says it is receiving just 40% of volumes ordered from Gazprom After two weeks in the dark, with no weekly oil data published, the US Department of Energy released the backlog yesterday. The DOE was keen to stress the “systems outage” was not a hack. Better not be, DOE manages emergency […]

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8:08 AM

The Value in Scarcity: US Refining

Re-iterate Price Target: Valero $150/share by June 30th. Re-iterate Overweight all US refiners. Illustrating Valero $190/share argument. This is a time of year when the weekly Department of Energy US oil data is crucial: it will be released at 10:30am today. We see an emerging crisis in US oil product markets, depending on how much of that crisis we export to Atlantic Basin markets. It will be a battle of demand destruction: who blinks first […]

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8:37 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

Is it time to sell Valero? No

With the company reporting tomorrow, a client asked if it was time to sell Valero with the stock over $100/share. Our first target was $120 prior to the Ukraine invasion. We now think that $150/share is a stretch target. For your consideration: Using VLO’s reported indicators as a starting point, we see momentum established in late 1Q has carried through to 2Q so far.  These are straight off the VLO website: We’re in uncharted territory […]

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8:58 AM

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

PBF & PBS Strategy Session

China rant PBF – Q1 likely half messy, but finishes running strong into incredible margins as Q2 starts Sankey Recommends: Liverpool vs Man City Premiership decider tomorrow – two of the best club football teams ever to play, at their peak. PBF CEO Tom Nimbley, President Matt Lucey, CFO Erik Young, and IR Colin Murray were on good form on Strategy Session yesterday evening. Nimbley started his career in refining in the 1973 oil price […]

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8:53 AM

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

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

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

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

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

Renewable Diesel Rules

Executive Summary With decades of experience covering oil & gas, from a US and global perspective, the authors have sufferedtwenty years of government renewables fuels “strategy” as brutally as any analysts in the market. In this notewe conclude there is a major problem with the current hottest theme in global oil & gas investment:renewable diesel. We walk you through from “what is it?” to “what is the problem?” The answer is:feedstock. This note is the […]

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7:56 PM

Brassy Sunday Sankey

We have a big Renewable Diesel note coming later today, so in recognition of your Sunday time, just a couple of points on next week. Valero management are in New York City Monday/Tuesday. See what we are doing here? Our Renewable Diesel note is not published tonight by happy accident, it is a cunning plan. One Valero event is a Mark Mills presentation, presumably he of the Manhattan Institute and steely-eyed critic of the energy […]

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4:16 PM

Sunday Sankey 1/16/22

Well, I’m in one of those mindsets where every headline I read my reaction is “Bullish oil.” Iraq Oil report carries a much higher oil production number for Iraq than other sources. My reaction: “Bullish.” Libya struggles, my reaction: “Bullish.” These two elements are theoretically in opposition, but on the one hand, variable Libya performance is ongoing, on the other, the lack of spare capacity in oil markets is clearly driving prices and if Iraq […]

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2:07 PM

Wildcards and Certs

Wildcard 2022 year starter: Kazakhstan declares state of emergency amid unrest. A member of OPEC+ that has failed to meet its quota increases, at times in 2020. Yesterday’s OPEC meeting was a rubber stamp. The question is when they meet in person to re-set quotas more sensibly. June is the best guess. Kazkahstan is a major concern for Chevron, although their massive Kazakh operations are totally remote in what is the lowest population density country […]

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8:42 AM

Morning Refining Conference PBF

Our refining conference opened yesterday with an entertaining and informative conversation with the senior management of PBF: Tom Nimbley, Chairman and CEO, Matt Lucey, President, and Erik Young, CFO, and Colin Murray, IR. Noted in passing: OPEC meeting today, huge bull story over the past week was Russia’s December production numbers that once again failed to meet quota and remained flat with November at 10.93mb/d. Russian gas flows are also again very low to Europe […]

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8:37 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

Renewables, RFS, RVOs, RINs & Refiners

Of the many fine analysts I have had the privilege to know over the years, Greg Bordelon is clearly in the pantheon. A true oil guy, son of a Mobil Oil man, he graduated in 2000 from Tulane, cut his teeth at Exxon, and moved on to finance at FBR Capital Markets and Millennium, and before spending many years as an oil long-short portfolio manager for Citadel, subsequently running his own firm. I extend deep […]

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1:13 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

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 9/30/21

Key points: CHK new CEO EQT issues stock & hedging status Enbridge Line 3 starts tomorrow delivering oil, good for Canadian oils Emissions intensity of global oil producers Quote of the day: “I just know the the more control there is, the less growth there is. The great lesson of the twentieth century is that central planning doesn’t work” – Rick Warren (Drucker-Warren Dialogue, 2003) after @buckquivas on Twitter Chesapeake raises Domenic “Nick” Dell’Osso Jr […]

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8:30 AM

Where’s Sankey?

Good morning from London Great week last week for all our favourite sectors, the Oils, Metals & Mining, Refining, as well as recovery play JETS (exchange traded fund ETF performance is shown below for past week/year to date). Last week firmly re-establishes oils – almost even including MLPs – into the position of market leadership this year. Other leading sectors year to date, but not the past week, are Retail, Homebuilders and Communication Services.  See […]

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9:10 AM

About as American as it gets*

Good day! Happy Hour tonight if you fancy a chat. No special guest, but I am in an extremely good mood as tomorrow I head back to Mexico to go fishing offshore Ixtapa on the Pacific Coast. I hope you are getting some time in August, and the market gods give us quiet volumes and a gentle drift higher. Happy hour registration Link: https://us02web.zoom.us/meeting/register/tZIocuuprTooG9SqNZxj9rgUjl9KZxTOEHAJ The Vix looks more and more tempting, but making money from […]

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2:39 PM

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

Morning StEVe LEVine 6/17/21

Tonight Happy Hour 5pm we are delighted to host Steve LeVine, world battery expert and author of “Powerhouse, America, China and the Great Battery War”, editor at large, Medium, “covering the turbulence all around us, electric vehicles, batteries, social trends”. He writes for The Mobilist, and is ex-Axios, Quartz, WSJ, NYT. 5pm ET tonight, https://us02web.zoom.us/meeting/register/tZEtc-2vqz8jGtxwSq3R416BOuVoJD9v1vnE Steve and the debate that follows will allow me to finish my thematic “Electric Vehicles, not so fast”. The fact […]

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9:22 AM

Sunday Sankey 6/13/21

The note today is delayed by England vs Croatia, thankfully the currently ongoing Austria vs North Macedonia game is not imperative for me to watch.  There are some great slides in today’s presentation. For example on how solar projects do not deliver their IRR, on worrying Indian oil demand, on the global petchem balance by company, and our new mega-theme, of new young CEOs following through on our “Renaissance” theme of US E&Ps. This new […]

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2:22 PM

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 PSJeff 4/9/21

What’s Sisyphus’ least favorite band? The Rolling Stones We visited Japan for two weeks and did not see a single ninja. It was really impressive. “Officer, you can’t give me a ticket. I have to go run the marathon tomorrow.” Cop: “That’s not how you play the race card.” The Ketchup shortage this year was so predictable. Heinz sight is 2020. Happy Hour yesterday evening, we had a player whose firm had done a deep […]

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8:28 AM

Morning Suez 3/24/21

Covering global oil markets, you can be sailing along peacefully and from nowhere, a new major event leaves you scrambling. And so a vast container ship blocks the Suez canal. Around 10% of world oil trade and 8% of world LNG trade move through the canal. Quite how the captain managed to hit the side of the canal and wedge the ship remains an open question, but we do know that the Suez is a […]

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8:38 AM

Morning Sankey 3/18/21

Yesterday’s DOE data was brutal for US refiners and particularly PBF. We had been hoping for a much more bullish picture – we got increases in crude AND product inventories. Imports surged particularly into New York Harbor – hence the PBF reference – as European refiners, desperate for market, scramble to attack the surge in gasoline prices caused by the Texas Crisis. This should be a brutal month for refiners, as the quarter ends and […]

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8:49 AM

Sunday Sankey 2/21/21

Enjoyed making the slides today, take a look. Slide 1: John Hopkins Professor expects US herd immunity by April. Remember how quickly SARS disappeared? Fingers crossed. This past week we have highlighted QuantumScape $QS the solid state battery play, and did so again Thursday, and we “found the short” as they say. The heated email from a client arrived in response with 10 minutes. “It’s a joke.” He was referring to valuation. But in this […]

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10:39 AM

Sunday Sankey 1/3/21

Well Happy New Year! This week in the Sunday Sankey we run through slides with attention on our refining conference starting tomorrow. It is not too late to register, dear clients… welcome to the slimmed down distribution list that like me, will be on a strict diet. At the same time, tomorrow OPEC meets, believe or not, as they shift to a monthly meeting. JMMC is meeting today, word is Russia is keen to increase […]

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12:02 PM

Morning Valero Darling

We continue to focus on refiners as we move towards our Monday January 4th refining conference. Register interest above. Before moving on to the subject of Valero and renewable diesel, it is worth noting that while the Dakota Access Pipeline situation is a known negative for PSX, as covered yesterday, the company is clearly, alongside Valero, the premium US refiner. In both cases, highly capable and credible managements led by well-established CEOs – Greg Garland […]

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8:35 AM

Morning Sankey 12/28/20

Good morning! Back from a week in Springs, out in the Hamptons. In retrospect I should have not only logged off, as I did,  but also deleted Twitter, where the tag of the week was “ATH” All-Time High, and an upsetting drivel of “I told you so” posting on Bitcoin and Tesla, among others. Most interesting Twitter post came from Lightshed, a fellow AnalystHub platform (which hosts Sankey Research for compliance etc) covering media, with […]

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9:00 AM

Morning DC

Gyms should be allowed to stay open during COVID. The constitution guarantees freedom of the press. Who is Irish and stays out all night? Patty O’Furniture What is Beethoven’s favorite fruit? Ba-na-na-naaaa Further to our bullish refining commentary yesterday on net operating losses (NOLs) carry-forward for refiners, and E&Ps for that matter, meaning that companies will pay little or no income tax through 2021 and beyond, a client notes that “the CARES Act allow refiners […]

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8:42 AM

Morning Refining Conference

It is a delight to confirm that our 11th annual refining conference is on this year, as tradition dictates, on the first working day of the year, January 4th. Thanks indeed to the loyal CEOs of a heavily consolidated sector who find time at a difficult time of year – board meetings, strategy planning etc – to find time to join us. We will be running six fireside chats, back-to-back, with US independent refiner CEOs […]

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8:27 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

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
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