Government & ESG

“He’s the Michael Jordan of Oil & Gas” emailed one trader who read yesterday’s note on Mike Wirth. Meetings in New York yesterday, closing out my “week of Wirth” were received, if not quite at that level, then certainly very warmly. Besides his low-key charisma, what gave Wirth this reputation? The transformation of Chevron, essentially one of capex control and free cashflow & returns generation over his tenure, first in his restructuring what was an …

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 […]

Well hello, We sent a note last evening on Coterra and Pioneer reserves/inventory reporting which email already has 1,060 opens in less than 24 hours. That is, in line with our best-read note of the past two months being “Ethane Rejection”. This is a very limited email blast list (paying subscribers only), so the readership is impressive. Please email if you wish to re-receive either. With that said, you are here for your Sunday Sankey […]

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 […]

With attention on a major oil announcement by President Biden today, widely leaked as a further Strategic Petroleum Reserve (SPR) release that amounts to stuffing a leaking dam with non-sustainable paper towels, we have been highly critical of the Biden Administration’s Energy policy. We have also slammed the European Union and UK, notably starting with our 2021 thematic note “Britain & Germany vs the USA” that foresaw a European gas crisis far before Russia ever […]

Yullo from London, Today a look back at the past week in London, tomorrow a short Sunday look forward: Best line of the week, from major energy transition fund in London. “Our client mandates are extremely ESG-conscious, like University superannuation funds, yet nowadays we are allowed to own oil & gas stocks… But we absolutely cannot lose money in them. We can be long First Solar and lose a ton, that is fine by the […]

Gossip from dinner with my London lawyer friend who is familiar with, let’s say, “emerging markets law”: Russia’s power rests between the Oligarchs who have the money, vs the military, that have the weapons. The single crossover oligarch, who controls the military, is Putin alone. Can the oligarch class form an ex-Putin alliance with the military? Difficult. Rational analysis of Nordstream pipeline explosions, which logically would conclude that Poland done it, with NATO deep state […]

Greetings from London, Noted, more buyback? Less capex? How about a stealth capex deal, Diamondback for “closely held private” Firebird. Diamondback’s addition of adjacent drilling locations in the Permian underlines that the US oil bonanza has turned from growth to productivity – world oil supply is structurally challenged, “even in the Permian”. The price looks reasonable, even in the context of Diamondback’s own stock price, the point being, where does this sit with their net […]

Greetings from London Town, The Giants and Packers fans were out in numbers around the West End – I can’t believe the Giants won! My daughter Honor is the expert – her line was that the Giants might be the best-coached team in football. She is deeply cynical about the team, so, powerful words. By the way her life ambition is to be a CEO, and a Giants Season ticket holder. Meanwhile in the pub […]

This evening! Premium Event! Steve Levine on Happy Hour tonight at 5pm ET re: batteries and electric vehicles, he is a world expert. Biography was emailed to you yesterday, impressive. Steve is now Editor of The Electric, a new, exclusive premium publication at The Information on batteries and EVs. Steve Levine 5pm Thursday 29th Sept: https://us02web.zoom.us/meeting/register/tZwtduuvrDMqEta4M3eKkusntGrE1nVV2HoK ~ Watching the NASDAQ below its 200 weekly moving average for the first time in 13 years “The West” […]

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 […]

“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, […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

“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 […]

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 […]

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 […]

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 […]

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 […]

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, […]

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 […]

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, […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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 […]

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: […]

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 […]

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 […]

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. […]

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 […]