Recent Posts

Sunday Calm Before

We mourn the passing of Steve Chazen on 23rd September, he will be remembered as a legend. It was a privilege to have known him. Rest in Peace. We wrote the History of Oxy in December 2021, which includes the almost 30 year impact of Steven Chazen (joined in 1994, died as Chairman 2022). ~ Bill Bishop at Sinocism: For those who have not heard the rumors, Xi [Jinping, China President] has been supposedly removed […]

Read More »
5:54 PM

Morning Mo Money Mo Problems

“I, Russia” Putin desperation rising Oil markets: would you rather have weak China demand with low oil product exports, or post lockdown China with high product exports? Yet another inventory release threat: China An inventory release threat, Iran, was highlighted by us as likely to go into instability given reports of the serious illness of the aging Supreme Leader. Say her name: “Mahsa Amini”. Protests raging, rightly. “Morality Police” murdering women. As the Fed raises, […]

Read More »
8:45 AM

Morning Tape Bombs

Refining getting worse LNG export developer Tellurian whacked as it struggles to finance “by mid-2022”. It’s Q3 2022. As the share price falls, financing from the at the money issuance facility becomes even more problematic. Macro influencer Luke Gromen on Happy Hour Fedex profit warning Fiscal 2Q23 guide $2.75 vs cons $5.46 (!!!) Xi-Putin As we feared refining is getting worse. China export quotas as we highlighted yesterday have further pressured weak Asian margins that […]

Read More »
8:41 AM

Morning Rails

PREMIUM EVENT TONIGHT Luke Gromen, high profile strategist, is on Happy Hour this week, Thursday 5pm. Big guest, big views, big themes, Main Event Gromen vs Sankey HH 53. Tonight Sep 15, 2022 05:00 PM ET Register in advance for this meeting: https://us02web.zoom.us/meeting/register/tZMkcemrqDIvHtyqA85Av3APXBad-aTjuSBR Another great call from our Washington DC guru and Happy Hour regular Frank Kelly, who weeks ago said that he did not believe that a rail strike would be tolerable to the […]

Read More »
9:04 AM

Morning Mr Gromen

Dollar vs oil correlation has moved back to inverted very recently. Right now, the oil price is winning, US$ weakening. For the first time in well over a year, media is stating the oil price is rising on a weakening US$. That’s a bit like saying the NY Giants are dominating the NFL – after winning their first  game of the season. WITH THAT SAID Luke Gromen, high profile strategist, is on Happy Hour this […]

Read More »
8:15 AM

Sunday Grey

It was a week that started with the Queen accepting a new British Prime Minister, and ended a new King Charles III and the always-somber 9-11. It is a miserable late summer day in New York, drizzle from a windless grey sky. With due respect, there is not a lot in those events directly relevant to oil/energy, and no doubt the last thing you need is more coverage from me. Rather, there is lots of […]

Read More »
4:48 PM

Morning between a Hard Rock and a palace

Rest in Peace, Queen Elizabeth II. Long live the King! The rainbows were just amazing. One US media outlet described the Queen as the last human link to Great Britain, the Britain of Empire, such as it was when she became Queen in the 1950s. This resonated with me, the Queen with Churchill in photos, for example. Her passing bought back memories of my father, another link to Empire, who left this mortal coil last […]

Read More »
8:12 AM

Sunday Life Guard

Labor Day outlook for oil and energy markets into year end; there is plenty more research to be done. You could make a big call on oil today for the next four months, and be wrong by Tuesday this week, with OPEC+ meeting Monday. If they cut and crank oil prices, you could make a bear call today, reverse your view on Tuesday and be wrong by Thursday when the ECB may be pushed towards […]

Read More »
8:32 PM

Morning IRA… the IRS Inflation Act

Observations on the “Inflation Reduction Act”: We read all 730 pages, with 198 being on healthcare, and conclude that, rather than calculate an “Excel told me” analysis, but rather, because of the surprise announcement of the Bill, the stock market provides an early indicator of the Bill’s likely impact: we show you key stock price performance since the Bill was shock-announced by Senators Manchin & Schumer on June 27th: We temper this market reaction. We […]

Read More »
8:36 AM

Sunday Salads

So we made it to the Wall Street’s vacation week, the last week in August. What’s the first rule of Wall Street? Keep your seat. We got through another year. Congratulations. Three observations about what the market might be missing: Is Putin’s EU squeeze a pre-cursor to him suing for peace/settlement in Ukraine? European energy prices are insane, but the futures strip is self-defeating Drought in China is epic – the scale may be under-appreciated […]

Read More »
5:31 PM

Morning Nizuc

One of the many lessons of Wall Street, is “don’t expect any sympathy”. This is more sharply put: “If you want a friend, buy a f#^@*# dog.” I’ve got two dogs. As I have been proclaiming, this is a long summer. We don’t have Labor Day until September 5th, and with me stewing nicely in Brooklyn with the dogs, thinking of what fun the run is from Labor Day to Christmas, to be in NYC […]

Read More »
7:35 PM

Morning War in Europe

We like the long oil trade here, explained Europe is at war. Russian/EU gas expert Jim Henderson was stark on our call: Russia is waging full scale economic war on Europe. Winter is coming. Darling! I never knew you cared Bull trade in oils is back on, in our view. First, we contend that oil equities often predict the next move in oil, the commodity. As shown below, over the past five days E&Ps (and […]

Read More »
9:25 AM

Morning Pain Trade

Delighted to say that Dr James Henderson is on Happy Hour Strategy Session tonight, A PREMIUM EVENT. Jim is currently Senior Research Fellow at the Oxford Institute for Energy Studies, alongside his consultancy work and professorships. When: this evening, Aug 11, 2022 05:00 PM ET, Zoom, Register in advance: https://us02web.zoom.us/meeting/register/tZ0sd-CtpjsrGdVM0p-MsG1P4WU0dr3hBWq3 ~ One of my favourite concepts on Wall St (or should I say hated?), is the “pain trade.” I first heard of it 20 years ago and […]

Read More »
10:09 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 […]

Read More »
11:41 PM

Morning Miss

Tonight Happy Hour: Kathleen Kelley on OPEC. Frank Kelly (invited) on Washington DC – lots of action there. View share on results on what happens next. Today Thursday 4th August 5pm Eastern. Register for this meeting: https://us02web.zoom.us/meeting/register/tZUkc-qvqjgrH9NWL5mVuMMR2AyR3q1cZrtm I was on Bloomberg TV bright and early this morning and… I used the “B” word. Just to note, we are long natgas over oil into the coming economic slowdown, and playing for winter. The announcement that Freeport […]

Read More »
8:30 AM

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 […]

Read More »
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 […]

Read More »
8:07 AM

Morning China dis-inflation (to inflation)

Rampant inflation globally, underlined by today’s US CPI print has an extraordinary backdrop – China has been dis-inflationary. In certain key markets, notably crude oil and above all LNG, China demand has been negative at the margin in terms of demand growth, with significant roll-overs from previous rampant import growth. Assuming China works through its COVID issues and pursues its 2022 GDP growth plan, a re-acceleration in demand for key commodities seems certain, particularly in […]

Read More »
12:03 PM

Sunday Cedric

Good Day! You only get so many summers in life – a beautiful Sunday in mid-July, we should be at the beach or pondering the Wimbledon final. Hopefully you are on a yacht or at a swim-up bar as you read this. Here in Brooklyn Heights/Brooklyn Bridge Park they have recreated The Hill at Wimbledon with a big screen to watch tennis. Packed today. Tourists are returning en masse to New York. Week past: the […]

Read More »
12:43 PM

Big Oil Week Next Week

“Happy” Hour yesterday evening, an oil investor self-help group Big week for oils next week with Nordstream 1 and CPC shutdown decisions coming; Biden visits MBS Buffett buying yet more Oxy – he might go… all… the… way Warren Buffett’s Berkshire Hathaway filed notice of acquisition of 12m shares Occidental costing about $698m this week, giving it an 18.7% stake. Buffett had also purchased 9.9m OXY shares last week. Total stake is 175.4m shares worth […]

Read More »
9:06 AM

Thematic Update: EU Gas Crisis

Last year, Europe rose to a 30 bcfd natural gas deficit between production and consumption (>60% import dependent); with variable power dependence (wind, solar) as the shaky offset, two major swing winter suppliers, namely the massive Gronigen gas field in Holland, and the UK’s dominant gas storage facility, Rough, shut down. The situation is far more extreme in terms of winter shortages, than even the annual deficit shows. In energy security terms, certainly as regards […]

Read More »
8:11 AM

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 […]

Read More »
1:30 PM

Morning Wimbledon

Good to see the oils stabilising and bouncing this week, with Brent crude prices holding the bottom of our $110-$150/bbl range for summer. It is clear that to get past the $130/bbl peak Ukraine fear price we hit in early March 2022, will more likely be a squeezing grind higher on strong demand and weak supply, than another spike shock, although these are always possible in oil. With that said, let’s face it, just about […]

Read More »
6:59 AM

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 […]

Read More »
11:47 AM

Morning Chefchaouen

Action items: Every house in Morocco has a flat roof – but there all-but no visible solar. The projects here are mega; centralised. In Mexico you see a lot of panels. Our overall thought/dream has been that almost everything that uses energy should have a booster solar panel on it, attached to a battery. A “US Solar Buyer Consortium” is open-bidding $6bn for 7GW of US-built panels. Stalking horse to justify solar panel imports? Sure, […]

Read More »
6:52 AM

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 […]

Read More »
10:06 AM

Burning Victory (for the Gold Cup)

Off to Royal Ascot today, thoughts before we take the train, suited, booted, and in Patricia’s case, hatted. We are with the plebians for a variety of reasons. So, I do not need to dress as a penguin/full morning suit and topper (Royal Enclosure dress requirement; there are tiers of “enclosures” descending from Royal, down to Windsor, based on social class, or in America, you would say money (debt will do)). A suit, plain shirt, […]

Read More »
6:56 AM

The Texas Power Parasite: Bitcoin

We have postulated, for example in our note on Dr Copper (Sweet Chile & Mines, Jan 2022), that China’s total dominance of global primary commodity processing, would eventually force the US and Europe to re-domicile supply chains and manufacturing industry. Having massively and excessively out-sourced energy and commodity-intense industry to China over the past 15 years, the world, not least the US & EU governments, are now recognizing the need to re-domicile core production, back […]

Read More »
2:58 PM

Fortunes lost, and won

January 6th 2021, my personal story, or how the best call of my career cost me a lifetime fortune. DINO, how HollyFrontier won a lifetime fortune Starting with DINO, we had “me old mucker” Rich Voliva, CFO on Strategy Session last evening. He has always been impressive, and we had to laugh about him writing a searing indictment of US ethanol policy, as part of our sellside refining team at Deutsche Bank, when it was […]

Read More »
9:50 AM

Early June Sunday

June, A beautiful day here in Brooklyn Heights, I wish you a wonderful Sunday. I always maintain that if you ignored the media, you would think it’s a wonderful world. And it is! That said, I am enjoying the mass media coverage of the Jubilee. BREAKING NEWS: QUEEN WAVES FROM BALCONY. Headline on my screen here. And we are kicking ourselves for not being in London, given my mother lives right on Hyde Park, in […]

Read More »
3:05 PM

The Only Hawkish Central Bank: Saudi

Concerns that Russia may go ex-OPEC+ quota system, system such as it is, have seen oil prices fall hard this week… from $120/bbl to $113/bbl Brent. The chart continues to look extremely powerful, and I was pondering this morning what happened to all the “Peak Oil” community – which was huge in the 2000s, arguing that we were out of oil supply. Of course, US unconventional oil production growth humiliated them, none of whom forecast […]

Read More »
9:26 AM

Rose Tonight: Tourmaline

Tonight, in conversation, the CEO of Tourmaline, Mike Rose, carrying an extremely high reputation. Also CFO Brian Robinson, and Scott Kirker Chief Legal Officer. We also really like IR Jamie Heard, who clearly gets it. 5/26, 5PM EST – Sankey Strategy Session: Tourmaline Oil (TOU) CEO, CFO, CLO, IR Register in advance for this meeting: https://us02web.zoom.us/meeting/register/tZAtd-qgrTgiGt1U3rdbkLIZZZRt5VcpfcKR 6/2, 5PM EST – Sankey Strategy Session Bob McNally, President, Rapidan Group Register in advance for this meeting: https://us02web.zoom.us/meeting/register/tZUud-iopzIjHtwxZSBacic_3OqJmo5vAzQj […]

Read More »
11:33 AM

Sunday Gündoğan

A couple of weeks ago, we highlighted that week ahead as being packed with high multiple growth stocks that could airdrop. And airdrop they did, led by the notorious Upstart, made viral by the analyst live on CNBC who pretended to have an audio problem when pitching the company bullishly, then being asked what Upstart actually did. “I’m sorry… sorry… you’re breaking up…” hilarious. He then compounded the error by furiously posting a video on […]

Read More »
4:30 PM

Good times in the right places

Happy Sunday in May, Never a bad thing. Fog this morning has lifted. Aramco results this morning rounded out a week when it became the largest stock in the world by market capitalization, surpassing Apple (not by free float, the Saudi government owns 94%). It  generated an enormous profit in a quarter when Brent averaged just about $100/bbl (actually $99.53/bbl Q1 average).   Refining earnings, as well as continued huge upstream earnings, will be even […]

Read More »
3:56 PM

It’s a Marathon and a Print

We had Kathryn Kelley and Bob Jonke on the Strategy Session yesterday. The story of how I managed to steal a major client’s wallet after we watched the Real Madrid vs Man City game with Kathryn was not repeated. It was an accident! Bob is worried about demand destruction and not super-bullish crude here. By contrast, Kathryn sees a 3mb/d shortage of oil in 2H which simply cannot be drawn from inventory, so something has […]

Read More »
8:47 AM

Arch Comments

Client feedback on yesterday’s Long ADM short Tyson note. “If you love ADM and think it’s attractively valued, you must not be able to contain yourself over Bunge 😊” Long Valero and Refiners – Valero streching for $7 EPS in Q2 and $150 price target Long Arch Coal and/or Peabody – huge free cashflow and implied cash return, like Archer Daniels, like refiners, everything is going their way. Don’t fight it, embrace reality. ~ CNBC: […]

Read More »
8:01 AM

Sunday Sankey

Quick read today as you got a longer note yesterday on LNG, and I am running late. Just pictures today, and Betsey asked to be on the cover of the Sunday Sankey so it’s a presentation. All the fun favourite charts. Key slides: next week’s earnings highlights starting with Valero. Relative performance, oils performance, high free cashflow yields, and a cash return chart that will be updated on a rolling basis through earnings. Earnings calendar […]

Read More »
5:46 PM

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 […]

Read More »
9:43 AM

Iraq and a Hard Place

This note starts with some near term Iraq production and export analysis, and works backwards through the short term political history, and long term political history, of the country, in the context of oil. Bottom line, Iraqi political instability continues, but oil production has steadily risen over the past 15 years to around 4.3mb/d – an all-time historic high for Iraq – and can likely rise a few more 100kb/ds, certainly in the medium term. […]

Read More »
8:52 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 […]

Read More »
12:48 PM

Life and taxes

Strategy Session Tonight 5pm ET Alex Epstein “The Moral Case for Fossil Fuels”. Next Thursday 5pm Gordon Shearer, Poten & Partners, on Global LNG, save the date. Investment themes: long refining, long US oily E&P; rushing to do more work on US natgas but have loved Antero as our play; Tourmaline interesting, Energy Transfer interesting. Worried about oilfield service earnings upcoming, but clients want to buy them on operating leverage and global oil & gas […]

Read More »
8:14 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 […]

Read More »
8:48 AM

$COP a load of this

Tomorrow Thursday 7th April, Strategy Session with PBF Senior Management 5pm – RSVP Today DC hearing, House Energy and Commerce “Gouged at the Gas Station: Big Oil and America’s Pain at the Pump.” ExxonMobil 8k indicates $2bn increase in upstream earnings, beermat (see below) suggests $2.50 EPS Cocktails with ConocoPhillips management yesterday evening Starting with ExxonMobil 8K on earnings guidance released yesterday evening, I am chatting to them today. The company gives you what they […]

Read More »
10:00 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 […]

Read More »
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 […]

Read More »
11:52 AM

Uzi said then done

We have the perfect guest on Strategy Session tonight at 5pm – Delek CEO Uzi Yemin, a refiner who actively buys oil from the Strategic Petroleum Reserve. One interesting line from regular guest Kathleen Kelley – the expected 1mb/d SPR release announcement strongly implies no Iran deal. Houthi attacks on Saudi – who squarely blame the Iranians for Houthi support – have further reduced the likelihood of a deal. She also states that the move […]

Read More »
9:26 AM

Coterra & US E&P: Keep Your Discipline

The attached note started as a focus on Coterra, the $22bn market cap combination of two US E&Ps, Cimarex and Cabot, one oily, the other gassy, that merged and just started trading as $CTRA in late 2021. In the note you will find the rank data: the value destruction for shareholders of the US oil exploration and production (E&P) industry in their giant shale oil science experiment 2010-2019. Line from the note: “from 2006-2019, the […]

Read More »
7:58 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). […]

Read More »
3:22 PM

$200/bbl by next Friday (disty)

Key messages from Strategy Session with Kathleen Kelley: Oil supply crisis – you ain’t seen nothing yet. The oil market is trading very physically right now, making price discovery more volatile. Watch for distillate markets, which are pricing like crazy, with particular volatility (upside) likely next Friday on expiry – we can see (Sankey says) $200/bbl on expiry of the April contract 31st March, the same day as OPEC is expected to disappoint. Kathleen boldly […]

Read More »
8:42 AM
View All Reports