Recent Posts

Sunday Sankey 6/20/21

Happy Father’s Day, Markets are roiling on Fed comments, and how we get off the heroin of money printing to stimulate the economy. It will be very hard, and markets clearly will not like it. We hosted Steve Levine on Happy Hour this past week, he’s excellent. He does not support my argument made on Thursday last week in the morning note, that EV adoption by consumers will be slow. He asserts that EVs will […]

Read More »
3:03 PM

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 […]

Read More »
2:22 PM

Morning Sankey 6/10/21

Well, I made it to and from Texas Tuesday/Wednesday, getting back yesterday evening, which was a Board speech and dinner at a famous country club. But the flights were pretty hellish, be warned. My outbound was cancelled, which bounced me to economy, Those tiny first class cabins are 4x over-booked. Newark TSA was typically crammed, it turns out my Global Entry is expired, putting me in the line of people wearing lace-up boots and multiple […]

Read More »
9:05 AM

Memorial Monday Sankey 5/31/21

OIL RISK HIGH. We have an OPEC meeting tomorrow, and the word is that Iran is pumping into storage on anticipation of successful negotiations with the Biden administration, which, for reasons I do not fully understand, is very keen to make a nuclear deal. This will allow Iran back into global oil markets. We understand that OPEC is warning Iran not to flood the market, and Iran is saying “we are going to flood the […]

Read More »
1:34 PM

Sunday Sankey 5/23/21

Watching Iran, but 1mb/d of oil exports are already in the market. Huge week ahead for ExxonMobil, with the Shareholder Meeting and board vote on Wednesday this week. We wrote about it on Thursday, see the note on www.sankeyresearch.com or emailed. Noted that Halliburton shareholders rejected the company’s pay proposal last week, which is encouraging. The pay of oil executives relative to shareholder returns has been an abomination for years. Executives should try a few […]

Read More »
12:19 PM

Sunday Sankey 5/16/21

Good day, The week ended with the guided announcement from Marathon Petroleum that its deal with Seven & i to sell the massive Speedway gasoline retail network had closed for $21bn cash, and upside guidance from Marathon Petroleum on an imminent Dutch Auction for $4bn of stock, within a $10bn open buyback authorization. It was uncertain how much debt would be paid down, but that was announced light at $2.5bn. MPLX, the 63% MPC-owned MLP, […]

Read More »
12:59 PM

Friday Sankey 5/14/21

“Darling I think the new clothes drier is shrinking my clothes.” “No honey, that is caused by the fridge.” On the other side: “Does this outfit make me look fat?” “No your fat makes you look fat.” Don’t spell part backwards. It’s a trap. Our tortoise was falling in love, but now he’s only falling apart. There’s nothing I can do, it’s a turtle eclipse of the heart. Yesterday it felt like the market confirmed […]

Read More »
8:28 AM

Sunday Sankey 5/2/21

All presentation today, see attached link, after the Sunny Saturday Sankey published yesterday and emailed to you, outlined the past week. The week ahead is extremely busy with results – you can see my diary in the attached presentation. The monster week of earnings is behind us, with impressive results from FMAGA – Facebook, Microsoft, Amazon, Google, Alphabet. Week ahead also has Secretary of State Blinken travelling to Ukraine. “I can’t tell you that we […]

Read More »
12:25 PM

Sunday Sankey 4/25/21

Monster week of earnings ahead, a clash in the titanic battle of growth vs value. The forces of growth over-ran us values, but we started a fightback that saw several battles won since the terrible relative lows of August 2020. In Q1 this year, value began to rampage against growth. April has seen a growth fightback, with the US$ holding and US interest rates even rallying. I asked a market player if he was bullish […]

Read More »
1:52 PM

Morning Sankey 4/20/21

Staring at the blinking red and green Bloomberg ticks, alone in a home office, bombarded with Bitcoin headlines, Gamestop headlines, etc etc, it had become very difficult to make out the wood from the trees regarding the oil and energy call. I went on a road trip. I’m back. As suspected, the oils and energy have been tricky – notably solar has been ugly for the past month and year to date, albeit off a […]

Read More »
8:42 AM

Sunday Sankey 4/11/21

This week I am heading to Oklahoma to meet Devon CEO Rick Muncrief and then Houston to bid farewell to outgoing ConocoPhillips COO Matt Fox. Opposite ends of the spectrum for me – never met Rick, have hung out many times over the years with Mr. Fox. The lowlight in professional terms with Matt was doing the first marketing trip for COP in NYC after the dividend cut in 2016. The highlight was Matt making […]

Read More »
1:36 PM

Sunday Sankey 4/4/21

Greetings on Easter Sunday, The oil market got excited at the end of the week with the OPEC decision, basically because the “Saudi Put” remains in place, with the tapering of OPEC and particularly Saudi cuts extended through July. While surprised at the scale of the bullish reaction, given that the market had anticipated a rollover of cuts, it has been notable that oil prices have held the $60/bbl range pretty firmly with a bouncing […]

Read More »
12:26 PM

The cliché-myth of the Roaring 2020s

History does not repeat, but it rhymes. Consideration of the Roaring 1920s makes it clear that the major technological, economic, and social advancements of the era were remarkable. There was an incredible convergence of technological development combined with an economic boom into an upsurge of social liberalism. Equally, the Roaring 1920s came after the great 1918 influenza (H1N1) avian-origin flu pandemic of 1918-1919. There is a synchronous argument that says the global economy recovering from […]

Read More »
9:10 AM

Sunday Sankey 3/28/21

Hello Happy Sunday, Calling oil has become very tricky in the short term. Never mind the wider market, where the steadily winning value-over-growth trade has found a new level and turned into a daily battleground. Recently growth has taken a stand, but we think it is doomed. Basically, every time you see 40x EBITDA+ multiples, it’s just a question of how long you can stay solvent vs market irrationality. There are maybe five stocks every […]

Read More »
1:20 PM

Sunday Sankey 3/21/21

Morning! Iran and China. Mr. Biden has his hands full with Putin asking for a live debate further to Biden being asked “is Putin a killer?”, that caused Russia to immediately withdraw its US ambassador. Big week for global geopolitics. There is no question that China is becoming ever-more diplomatically, geopolitically, aggressive on a sustained rising basis, and buying oil from Iran through smuggling is clearly at the top of the defiant self-interest list. Official […]

Read More »
12:36 PM

Sunday Sankey 3/7/21

This past week saw the worst market for US crude since modern records begin in 1990. We saw the lowest US domestic crude oil demand in thirty years or more. Who would have known it from the oil price action and oil market mood? Right when the scale of the Texas crisis hit, in terms of lost power, I was writing to you and on Bloomberg TV saying that this is a full-scale national crisis, […]

Read More »
12:19 PM

Morning Sankey 3/5/21

It’s Friday. What do you call an overweight kidney doctor who also predicts the weather? A meaty urologist. My thoughts on Mongolian poetry: It has its prose and its Khans. Why do astronauts use Linux? Because you can’t open Windows in space. Noted: Ovintiv results this morning, former rival big oil analyst, and buddy, Kate Minyard has been appointed to the board at the behest of activist Kimmeridge’s Mark Viviano. Viviano/Kimmeridge publish excellent “white papers” […]

Read More »
8:55 AM

Sunday Sankey 2/28/21

One great business for sure is going to be lubricants for windmills. Guess who dominates the specialty oil lubes for windmills market? ExxonMobil. Guess who has their annual analyst day this week? ExxonMobil. March 3rd 9am Eastern, we get the latest iteration of The Big Unit’s story. Will they, like $EOG, get attracted like a moth to the flame of promising growth? We suspect ExxonMobil will, not that we have a problem with their Guyana […]

Read More »
12:01 PM

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 […]

Read More »
10:39 AM

Morning Sankey 2/17/21

The current energy crisis is much bigger than most people realize. This is a global crisis. The largest energy outage in US history. In the middle of a brutal winter, globally. Stay tuned, this crisis is just starting. An outage of this scale in Texas is world scale. The entire US and Atlantic Basin energy market is based on a core of Texas/US Gulf Coast. A lot of the debate currently is, as so often […]

Read More »
8:37 AM

Sunday Sankey 2/7/21

Snowing again here in Brooklyn Heights. One thing that is very striking in this week’s charts is the 6-10 Day weather forecast for North America. It is freeeeezing. Bluest map I can remember publishing, and we publish it just about every week in mid-winter and high summer. As noted our Happy Hour this past week was very bullish oil, basically the call is that oil just went up 15% in a month and is rising […]

Read More »
11:32 AM

Morning Sankey 2/4/21

Shell results, meh. We argue that to out-perform, Big Euro Oils need major US fund managers buying at the margin. For ever, Euro oils have looked cheap relative to US. It never changes. See chart below, the same at the most extreme applies to Russian oils. Right now, Big US buyers are either not buying any oil, buying oil leverage, or buying ExxonMobil. The Supermajor Euro oils are not attractive, ex TOTAL. The track record […]

Read More »
9:11 AM

Sunday Sankey 1/31/21

The feeling is that oil price action this past week was very bullish given that it is traditionally-weak January and it held up vs US$ up and market down moves. Major clients are highlighting SPACs. We see the SPAC route as a major outlet to address the market imbalance between investment $ seeking renewable energy opportunities, and lack of renewable energy market cap plays. In today’s Sunday Sankey we replicate several slides published by Houston […]

Read More »
11:55 AM

Friday Sankey 1/29/21

Yep! It’s Friday! I called the RobinHood helpline about Gamestop and they said “Please Hold”. Got it. I want to put my life savings into the stock – its called Gamespot Total Landscaping right? The Biden team is monitoring the Gamestop situation and will let the American people know when it is time to buy a Legend of Zelda chess set in a dented box. AMC is issuing a ton of stock, but Gamestop is […]

Read More »
8:50 AM

Morning Sankey 1/28/21

Quote of the day: SINGAPORE, Jan 28 (Reuters) – Shares in small Australian nickel and cobalt explorer GME Resources GME.AX jumped as much as 53% on Thursday, apparently driven by the similarity of its stock ticker code to U.S. retail investor darling GameStop GME.N. Looking forward to Happy Hour tonight! This should be a good one. As always 5pm – please register interest. Just ping me an email to join, it is a great client-only […]

Read More »
8:45 AM

Morning Methane Limits

DC chat today, it’s Friday! Travelling to Atlanta via Washington and Durham today with son Max. I accidentally sprayed my son’s deodorant into my mouth this morning. Now when I talk I have this weird Axe scent. If you lose one of your senses, your other senses are heightened. That’s why people with no sense of humour have a heightened sense of self-importance. I told my wife I was making a bicycle out of spaghetti. […]

Read More »
7:12 AM

Sunday Sankey 1/17/21

Trying to get up this morning, I was pondering whether the US military could split and part go renegade. However we continue to believe the US constitution will prevail. Rather a negative start to the day, but I moved on to put together the Sunday Sankey for you, with energy, be it alternative, or regular oil and gas, starting the year very well. We continue to be obsessive about the US$ impact on oil prices, […]

Read More »
12:06 PM

Sunday Sankey 1/10/21

Good morning, The first working week in January is always a crazy week for this analyst, and by Monday afternoon, having run five 1×1 fireside chats with five refining CEOs, I was already joking that I was ready for my year end vacation. Then, from nowhere, Saudi unilaterally cut production on Tuesday 5th January at the now-monthly OPEC+ meeting, the afternoon as we rounded out the conference with a 1×1 with Valero management that morning. […]

Read More »
12:40 PM

Morning Sankey 1/7/21

We always thought that Donald Trump would be massively disruptive, but that the genius US government system would survive the test, and boy did we get that in spades! The “Duck Dynasty Coup” was very reminiscent of the “They will Bomb Iran!” counter-question, which was “What will they do on Day 2?” It was always a brilliant counterpoint to a syndrome that horribly played out in Iraq. While George W Bush declared “Mission Accomplished”, there […]

Read More »
8:23 AM

Morning Saudi Did What?

Sankey raising Brent oil price forecast to $54/bbl for 2021 (from $45) and $58/bbl for 2022 (from $56). Sankey raising WTI oil price forecast to $52/bbl for 2021 (from $42) and $55/bbl for 2022 (unch). It’s difficult to unpack what just happened to oil markets in terms of Saudi Arabia’s shock move to unilaterally “gift” cut production by 1mb/d for February and March; right down to 8.1mb/d, the very low of their historic production levels. […]

Read More »
8:41 AM

Friday before Xmas Sankey

Call to start 2021: our refining conference features all six independent refiners at CEO level. Sankey fireside chats back to back. Please join, you will start 2021 with a great understanding of markets, notable oil and and renewable diesel, but much more besides. I’ve got a case of Corona and I am not going to work today. I’m not sick, I’m just taking the day off to drink the whole case. Customer at a farmer’s […]

Read More »
8:28 AM

Mornin’ Changin’

Washington DC vs Wall St. Renewables stocks are ripping on word of early progress on both energy and infrastructure bills in Washington DC. Clients are talking Sunrun and all solar, $TAN the solar ETF. Daqo New Energy the Chinese silicon/solar play is almost off the chart in the past 5 days – +35%. (see below) There has been a huge move in Enphase Energy $ENPH past week, as well as $SPWR, $NOVA, $SEDG and Canadian […]

Read More »
9:02 AM

Sunday Sankey 12/13/20

Last week we highlighted the difference between speculation and investment. We continue that theme with six Big Oil investment picks for 2021, and six speculative picks. We defer on refining until our January 4th refining conference. NOTE we have verbal confirmation from Greg Goff, that he will join the conference for a fireside chat. See inside for details, and register on the website www.sankeyresearch.com Greg and I have to discuss what we discuss, as there […]

Read More »
12:18 PM

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 […]

Read More »
8:42 AM

Sunday Sankey 12/6/20

New mega-theme: Big Doctor is watching you. See below. Note also that for all the words in this letter, the attached presentation is all pictures. We know you are busy and need the key ideas fast. Thanks for reading. Sankey Research subsists entirely by taking Excel, Word, Powerpoint, a Bloomberg Terminal, leading journal subscriptions, and the internet, and writing research from scratch, for sharing ideas. Please support me, aka PAY. Otherwise you are stealing my […]

Read More »
12:40 PM

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 […]

Read More »
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 […]

Read More »
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 […]

Read More »
8:38 AM

Morning Sankey 11/18/20

There are lots of interesting stories out there to consider, hoping to publish on Iran later this week, a sort of primer. Also in this note: UK Energy Policy, Bitcoin, Non-OPEC Guyana & Norway. As tweeted yesterday on my Sankey Research Twitter @crudegusher it only takes a 10% rotation OUT of Tesla into oils, to generate $36bn of buying pressure on this emasculated S&P Energy sector with a $694bn market cap. Energy (S&P ex utilities) […]

Read More »
9:02 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 […]

Read More »
8:44 AM

Waving or Drowning Sankey

With the first debate in late September followed by President Trump contracting COVID shortly after in early October, the market dynamic this year, in our view, has been 1) to rip off the March lows on Fed US$ printing, 2) then falter on election uncertainty and COVID resilience, then 3) resume ripping on more Fed printing, and then 4) finally, for October and Q4, increasingly price a “Blue Wave” as of October/Q4. Essentially the dynamic […]

Read More »
9:19 AM

Morning Sankey 11/3/20

Thoughts and sympathy for the victims of terrorism in historic and noble Vienna yesterday. A city close to the heart of anyone involved in global oil. We are many; terrorists are few. Rest in Peace. A momentous day, and I am not referring to the fact that November 3rd is National Sandwich Day. Yesterday on Twitter Arjun Murti, former Goldman Sachs legendary lead oil analyst, now Warburg Pincus adviser and ConocoPhillips board member, pointed out […]

Read More »
8:49 AM

Sunday Sankey 11/1/20

Good day, A quick note today, there are slides highlighting yesterday’s note on XOM that got a lot of traction. There was criticism for not specifically calling out Rex Tillerson, and skepticism on my bull call for refining in summer 2021. Let’s be honest, I made the call for summer 2020, and that worked great when we made the call in April. But turned out to be a disaster by May. We were a year […]

Read More »
2:02 PM

Morning Iran

Iran – clients are asking, naturally worried that 1mb/d+ of oil exports will be added to glutted markets in the case of a Biden win. Comments on Foreign Policy under Biden below. Noted Enterprise posts good results. $EPD has been one of our few recommendations these past months. We have particularly highlighted the units to investors questioning ExxonMobil’s 10% yield, that $EPD offers a higher yield, with a more focused, secular-bull business model (see our […]

Read More »
9:26 AM

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 […]

Read More »
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 […]

Read More »
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 […]

Read More »
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 […]

Read More »
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 […]

Read More »
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 […]

Read More »
8:29 AM
View All Reports