Recent Posts

Sunday Fall Sankey

Good Day The Sunday Sankey is macro heavy but starts with the micro oil story of the past week and quite possibly next week: Conoco-Concho. The rumored (Bloomberg) takeover was covered in three consecutive notes last week, and is now rumoured (Bloomberg) to be imminent. We shall see. That starts, but there is a ton of macro stuff in the Sunday Sankey ppt. Take a look. As the market closed Friday, $EOG spiked, and the […]

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11:57 AM

WEO Woah Woe Sankey

One of the cool things about experience in energy that goes back 30 years now, is that long term energy forecasts have come, and gone. Fifteen years ago, I obtained ExxonMobil’s 1980 energy outlook (to 2010), which was fascinating. It correctly predicted $100/bbl oil prices, but unfortunately missed the first move to $10/bbl (1986). CEO Lee Raymond swore never to use an oil price forecast again. At the IEA in the early 1990s, I worked […]

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8:47 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

Mega-Theme: Standard Oil vs Big Tech

Client email: Paul, a question to you as a student of history. My recollection is that Rockefeller got even richer when US government broke up his monopoly? Copying my tech colleague who may be pondering what happens if US government attempts to break up their monopolies… Sankey: From recollection the quick answer is yes, the sum of the parts was greater than the whole. I’ll check now but it certainly happened at a time of […]

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8:48 AM

Sunday Sankey 10/4/20

Obviously, the week ahead will be dominated by the twin horsemen of COVID and bailout. We are making history. In this note, XOM is now worth less than Jeff Bezos, even after his divorce. Nextera has become the largest energy stock in the US. We also show XOM compared to Big Tobacco, to show this is not all ESG. The oil market looks rough, as we had warned all summer, it would be post Labor […]

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11:24 AM

EU sure about that?

With so many long term forecasts being thrown around over the past month on energy demand and emissions, this analyst has been deeply cynical after 30 years of following long term energy modelling. The worst long term forecasts are already wrong when they are made. That is close to being the case currently as companies use a 2018 or 2019 base year, skipping the little matter of 2020, which has seen, for example, an enormous […]

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8:29 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

Sunday Sankey 9/20/20

Good day! A chill September wind is blowing across Brooklyn Heights, as summer officially ends and fall very much starts. The market is feeling chills too, with COVID continuing to present a major challenge to policy-makers globally. We remain extremely frustrated by the excessive lock down requirements in New York despite effectively zero COVID. With massive testing, less than 1% positives are being found, and essentially no deaths (statistically speaking). This past week we quoted […]

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11:37 AM

Morning Sankey Wainscott

The US government Bureau of Ocean Energy Management (BOEM) has projected that some 2,000 offshore wind turbines will generate 22GW of power by 2030 for the US. Its hardly surprising that BP has bought into this spectacular growth, which fits right into their low carbon shift in the 2030 timeframe. Reminder, in a September 10th press release, BP announced it would pay $1.1bn for a 50% stake in Equinor’s 2 GW Empire Wind, located off […]

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8:25 AM

Morning WKHS Sankey

Spoke to a top Portfolio Manager yesterday who summed it up, “Why buy a company with a dubious track record, in transition, and that could be Shell as much as BP? Service is dead – have you seen BP and Shell’s deepwater plans? They cancelled. E&P looks bad with the current oil market, look at EOG re-valuing to be in line with the group; we only get strong oil balances by end 2021. Refining margins […]

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9:19 AM

Morning Sankey 9/14/20

Start your engines, or rather, share your computers as part of our future, for the longest analyst meeting in history starting this morning at 8:30am Eastern Time, as BP commences “BP Week.” We have five hours today, followed by three hours each on Tuesday and Wednesday. To kick things off, BP has released its World Energy Outlook. One of these outcomes fits our world view for energy to 2050. Can you guess which one it […]

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7:54 AM

Morning Saudi US$ Sankey

There is a glaring omission from McKinsey’s Vision 2030 for Saudi Arabia. It does not mention the Saudi Riyal – Dollar peg, other than in a footnote to indicate that the modelling in the outlook assumes the long-standing $3.75 peg is maintained. We are just wondering if a Biden Presidency would engage Iran, and if Saudi retaliation could take the form of dropping the Riyal-Dollar peg. Our understanding is that while the Saudi Arabian Monetary […]

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9:14 AM

Sunday Sankey 9/6/20

G’day and happy holiday weekend, Middle son Max is studying at Atlanta’s famous college Emory from home, which is deeply unfortunate. I am hoping to have him intern at Sankey Research once I get more organized about office space. Youngest son Harry headed to college at Northeastern in Boston for the first time yesterday, naturally excited, with NY news reporting that 11 Northeastern students had been sent home for having a party in a local […]

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9:50 AM

India vs China; Silk, Opium, and Internet Access

This note started in an effort for the Morning Sankey to explain the current military skirmishes between India and China in the Himalayas. I went down a rabbit hole. It took me on a journey back some 8,000 years, across Empires, continents, religious histories, syncretic philosophies, and to my personal favourite, Bangladesh’s submarine base. Why did it take so long and get to 30 pages? There is a mega-theme behind the confusion of headlines pertaining […]

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7:32 PM

Oil Guns and God Morning Sankey 8/25/20

My head is spinning this morning from reading the transcript of Donald Trump’s speech last night to the Republican National Convention. It didn’t take too long to realise he was speaking off-the-cuff, there was an opening that went straight to mail-in ballots, and the stream of consciousness continued from there. He looked very tanned and relaxed, a bit hoarse to start. And was referring to notes. But the content was pure stream-of-Donald-consciousness. But first, the […]

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8:48 AM

The new peak oil: Government as God

Two highlights from the Sunday Sankey today. 1) The concept of EU carbon trading as “super-charged OPEC” has been raised in the FT over the weekend, and we highlighted the article in yesterday’s Sunday Sankey. The FT article provocatively titles the EU CO2 market as a “one-way bet for hedge funds” which is sure clickbait. The article almost inadvertently highlights the crazy world of energy we are about to enter, which is “the new peak […]

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8:55 AM

Sunday Sankey 8/23/20

This week we can hardly avoid the elevated market levels, the all-time record of growth over value, and the general unease on Wall Street at the nature of current markets. I had the privilege and pleasure of chatting to a favourite client and senior world-famous investor yesterday, quarantined as he is in the Hamptons, and he said in his long career he has never seen anything like this, but that you have to assume that […]

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12:14 PM

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

Sunday Sankey 8/16/20

With several “suburban stocks” reporting next week, Home Depot, Walmart, Lowes, Target, this week our “New 1950s” theme gets a run, with additional slides on derivatives such as lumber and copper. Notably lumber prices are skyrocketing, and we once again highlight that wood produces more electricity than wind in the US, and that wood with biomass is the largest part of of US “renewable” electricty generation (see slides within). Continue reading

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9:57 AM

Friday Sankey 8/14/20

I asked my Doctor when we could anticipate an end to the COVID epidemic. He said “I don’t know, I’m not really into politics.” A man has been charged with over-using commas. The judge told him to expect a really long sentence. Everyone says hippos are very dangerous, but in reality humans kill far more people every year. They are just being hippocritical. The Kamala Chameleon note got good response yesterday. I started writing the […]

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8:15 AM

Kamala Chameleon

Background of Vice Presidents and Energy Policy Al Gore @algore tweets: “@JoeBiden has selected an extraordinary running mate in @kamalaharris! Kamala has made climate and environmental justice a top priority in her career in public service, and I know she will continue to be a strong advocate in the White House. #BidenHarris2020” It is quite clear that one key rationale for Joe Biden to pick Kamala Harris as Vice President (VP) is for her perceived […]

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2:20 PM

Friday Sankey

Friday jokes! What do you call a magician who has lost his magic? Ian. My Dad is a bitcoin trader, I asked him to lend me $20. He replied “$18.23? Why do you need $21.42?” What is the difference between a cooked sweet potato and a flying pig? One is a heated yam, the other is a yeeted ham. Say what you will about Secretary of State Mike Pompeo, he has an impressive resume. Top […]

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8:40 AM

Morning Sankey Biden Time

Washington Brief: the latest Biden energy plan announced yesterday is essentially roll up of the AOC/Bernie Sanders Green New Deal and Nancy Pelosi’s recent HEROES Act, not passed by the Senate, which represent huge – multi-trillion – US$ government spending. Intelligence from Washington: if the Democrats sweep in November, it’s happening. Intelligence from Washington: will the Democrats sweep in November? Yes. These are opinions based on public facts, but informed and respected opinions. Meanwhile, also […]

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8:50 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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