Recent Posts

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 […]

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7:35 PM

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 […]

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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 […]

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11:41 PM

What are you doing? Reading transcripts

The two weeks, mid-earnings, when we pull together company results transcript comments, are not a science, they are an impressionistic art; a colour to our themes. Basically these are comments that caught our eye over the past week. Like sellside analysts, the companies tend to all present the same more-or-less generic message, but occasionally, as we strive with Sankey Research, a comment stands out, is differentiated, or so wild that it is worthy of note. […]

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2:25 PM

Morning Homing Pigeons

Canada from the top rope with the 100bps interest rate rise. US with the 9.1% inflation print. Here’s US inflation since 1914. We argued that the 2020’s have nothing like the set up of the “Roaring 20’s”, in our note written in 2020 “The Cliché-Myth of the Roaring 2020s”. For one, the stock market to start the 1920s had been essentially in a bear market for 15 years, hammered by WWI and Spanish Flu. Not […]

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8:54 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 […]

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12:03 PM

Private vs Public, Cash vs Multiple

Libya down by 1mb/d, maybe President Biden should visit? APA (Apache Oil) duster in Suriname is unfortunate for the marginal mega-bull case BP – like Shell, the non-alcoholic beer of big oils – sells out of Canadian Oil Sands but increases exposure to Western Canada offshore OKLAHOMA CITY, June 14, 2022 /PRNewswire/ — Continental Resources, Inc. (NYSE: CLR) today announced that its board of directors (the “Board”) has received a non-binding proposal letter, dated June […]

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8:34 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 […]

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2:58 PM

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 […]

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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 […]

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9:26 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 […]

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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 […]

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3:56 PM

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

May Day Sunday Sankey 5/1/22

Happy May Day Sunday, Today in partnership with Greg Bordelon of Isentropic Capital, we publish a note on natural gas markets by way of thesis overview to a theme that we will continue to pursue. The note is long graphics, and particularly interesting on US markets. If you only want to read half, read the second US half. It is as noted graphic intense. European gas markets are fundamentally far more un-analysable than US right […]

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2:48 PM

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 […]

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5:46 PM

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 […]

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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 […]

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8:14 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

$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 […]

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8:42 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

Sunday Overtime

Extremely busy this weekend, juggling Patricia wanting to go spring-time walking dogs and window shopping in (packed) SoHo, and me wanting to solidly sit in front of the TV watching March Madness while making bets online. Somehow she does not see the appeal of watching seven games of college basketball back-to-back over seven hours. Of course, she wins. I did snag North Carolina to win it all at 50-1 BEFORE they beat #1 seed and […]

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2:35 PM

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

You are the champion, Pasha

Tonight Strategy Session with Jan Stuart, Cornerstone Macro global energy economist, on oil markets. Zoom call, 5pm. Kathleen Kelley is busy, unfortunately for us, happy for her, she is hosting a St Patrick’s Day party. God Bless Ireland! My paternal grandmother was from Cork, Ivy Sankey (nee Jefford). We have an oil trader joining to ask questions. A real live, oil trader. In the early 1990s, Jan was my first colleague at the IEA in […]

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8:41 AM

Nickel Back, Not

Up bright and early this morning, I will miss “the clocks going forward” now that, as the world ponders World War III, the US Congress has addressed the urgent issue of daylight savings time. The big picture remains that the Democrats are headed for a shelacking in the November 2022 mid-terms and the legislative potential for a major offset victory for the Biden Administration before then is getting very tight. Kudos to Biden for the […]

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9:18 AM

Silver Linings

Emailed question from DC this morning: I’m so confused – why is Brent now below $100??? I thought it would just keep rising and rising! Sankey: Shenzen shutdown is the big one. Also deeply discounted Russian oil coming to market. Also emergency stockpile releases. Also seasonally weak time for demand. In other news, the scale of Devon’s airdrop yesterday relative to a weak sector gives rise to chatter that an M&A deal is coming (and […]

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8:55 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

Trade: Buy Tech Short Oil & Pray for Peace

There have been massively structural changes as a result of Vladimir Putin’s disastrous invasion of Ukraine. In the short term we believe that negotiations for peace are more advanced than seemed to be the case yesterday morning. We also received intelligence that the loss of a disproporionate number Russian commanders, starting, it was said, with the Chechen death squad sent to assassinate Ukrainian President Zelensky, who were apparently “neutralised”, indicates that elements of the Russian […]

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8:43 AM

The Big Shot

Big Shot, Big Short moment. Nickel suspended at $100,000 per tonne on the London Metal Exchange. That means that today a Nickel (5c coin) is worth 12.5c, given it is 5g in weight and 25% nickel. The other 75% of a Nickel is copper, by the way. It’s being reported that Chinese entrepreneur Xiang Guangda – known as “Big Shot” – had a large short position on the LME through his company, Tsingshan Holding, the […]

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8:42 AM

Context: Most Extreme Prices

The following chart shows the spot price this morning of key commodities, vs their average price 2010-2019. That is, where is the greatest shock. Most extreme of course, to an extraordinary extent, is European gas. As a fixed asset market with certain major structural limitations, notably Germany’s total lack of LNG terminals, this will take years to fix, although restarting German nuclear would reduce gas use in power generation. Biggest recent suprise and enormously out […]

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7:53 AM

Sunday CPC

In the drama of the week, we never got to publish the dreaded and yet celebrated “Sankey Porcupine” charts that reveal the key message from two analyst meetings last week, Chevron and ExxonMobil, in four charts: capex and volume targets. We do that in this note, and cover Chevron risk in Kazakhstan. Do NOT try to pick the top in this oil & oil equity market; there could be a long way further up to […]

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2:32 PM

Deep Thought

After a very enjoyable Strategy Session with the impressive Kimmeridge Team yesterday, I had a one hour debrief with a Senior US Government Official with long energy experience yesterday evening: Notes from deep Washington source. Watch out for oil exports from Chevron’s Tengiz, reports that 3 cargoes (of 3 tendered) were unsold yesterday. The oil is transported from Kazakhstan across the CPC pipeline in Russia and mixed with Russian crude before loading at a Russian […]

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8:54 AM

Morning Strategy 3/3/22

Strategy Session Tonight, Mark Viviano & Megan Hays of activist Kimmeridge. A former Portfolio Manager at mega-player Wellington Management, Mark leads the first public/private active funds at Kimmeridge, one of the top activist managers in the oil space. Megan Hays has joined Kimmeridge after 15 years of IR experience including Concho and Cimarex, and even allowing for that length of experience, still recently rated as one of Hart Energy’s “40 under 40.” Please click this […]

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9:00 AM

Vlad the Impaled

Extraordinary times: In the great energy regression that has massively further regressed with the Russian invasion of Ukraine, it was somewhat surreal to watch Chevron’s Colin Parfitt (VP Midstream) conclude at the company’s analyst meeting yesterday at the NYSE, that we need more export capacity in the US, particularly for natural gas, and for the company then to confirm $10bn of spending on New Energy Ventures over the next decade, on hydrogen, carbon capture, and […]

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8:37 AM

Sunday Kharkiv

Well, this bloody mess was why we could not believe Russia would launch a full Ukraine Invasion. Reports that Ukraine has fought back and held Kharkiv are somewhat incredible – Ukraine’s second largest city is to the east and very close to Russia. The idea that Russia could not take control here, is a massive problem for Putin. Military experts are expressing surprise that Russia has not obtained air control, and is suffering logistics issues. […]

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12:22 PM

Yikes

Huge shock. Particularly to major European clients that had stated their house view: no invasion. Their view was weeks of noise, no invasion. What will happen to this extraordinary chart? We see demand destruction at $120/bbl, and think oil prices will continue to go to that level of demand destruction if US demand remains as strong as it currently is. Lagging US economic strength and upcoming summer speak to ongoing demand strength, even if it […]

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8:18 AM

Sunday Silence

A correspondent asked if I would be writing this Sunday about what to do if Russia invades Ukraine. “I wrote about it in early January,” I sourly texted “I am more likely to write about Venezuela,” I added snootily. “But you’ve been saying Russia won’t invade.” He pressed. “I had to take a week off because I didn’t know. No point in chasing the puck.” Not wanting to chase the “will they/won’t they” puck, I […]

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1:36 PM

Flock of Seagulls: Iran

Strategy Session tonight, Doomberg. New guest date to-be-confirmed, Florian Thaler CEO of oil analytics company Oilx. We spoke to him yesterday on the subject of… The potential impact of Iran on oil markets in 2022. It is very different from 2015. In this note we briefly explain why. Iraq production falls 160kb/d in January – covered in this note. Accusations of cross-border shelling in Eastern Ukraine. No further comment in the note, but you can […]

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8:52 AM

Sunday Sankey 1/30/22

Before we argue that Big Cap tech can stabilise the market here, on a fast & personal take of last week’s and next week’s earnings, in recognition that we need to focus on mega-themes, the latest population data from China is extremely important. NYT January 17th, 2022: China announced on Monday that its birthrate plummeted for a fifth straight year in 2021, moving the world’s most populous country closer to the potentially seismic moment when […]

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4:41 PM

Sunday Sankey 1/23/22

In the war of the market, we have reached a crucial battleground: the 200-day moving average on the S&P500. Do we hold, do we bounce, do we break? That is pretty simple; we broke the 200 last week. Re-gaining it will be a battle. And by the way, we broke the 200-day on the Nasdaq like throwing a crystal decanter against a brick wall. The market went through the NASDAQ 200 like a falling chain […]

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2:52 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

Masters’ Class

Mike Masters was the first American to score a goal at Wembley. But we had a different Mike Masters on Happy Hour last night, the hugely successful hedge fund manager who had a swimming scholarship to Tennessee, and started Masters Capital in 1994. He became highly prominent in 2008, testifying to Congress on oil speculation. Mike Masters: the market is obsessed with post-COVID recovery, but is not thinking enough about the decade prior to COVID […]

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9:16 AM

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

Sunday Houston? Problem.

Heading to the World Petroleum Congress in Houston today, a couple of players have cancelled participation. My understanding is that Qatari Minister is out, so is BP CEO Bernard Looney. Omicron. We shall see the final count, but I look forward to seeing a raft of CEOs over the coming four days before heading to Midland to write a focus on Diamondback, $FANG, one of the best players in the Permian, known for its outstanding […]

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12:48 PM

Saturday Warning: Crypto/Bitcoin

Warning: this note is about Bitcoin/cryptocurrency thematically. Because you opened the email and may not wish to continue, here is a bonus non-crypto chart. Again, sick of crypto this weekend? Stop reading now. Bitcoin will not be considered again for a while; we covered it bullishly a little last year, then got bearish as noted below around Q1 this year. I’m off to Houston, hope to get you a Sunday Sankey before leaving. If not, […]

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4:36 PM

Morning Iran

The two top topics besides Jerome Powell being re-appointed yesterday, many are saying, including a major client yesterday, that it all feels so 1999, and the NASDAQ was down -1% on higher interest rates by day end, with many story tech stocks at crazed valuations now in the -50%+ correction territory, see list at end). Strategic Petroleum Reserves co-ordinated release (China, India, Japan, South Korea) expected today, just announced. Response? “The Fed can’t print more […]

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9:08 AM

Sunday Sankey 11/14/21

Good day, Pretty mixed, at best, Q4 so far for oil & gas and “old energy”; but thrilled to see our new energy plays,  Li-Cycle and Embark trucks, catching a bid. Oil & Gas are clinging on to our 2021 market leadership. More of that in the attached presentation. Also in the ppt, I ran a whole load of valuation tables, and performance tables. Beautiful day here, although darkness has fallen as I am late […]

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5:25 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

Sunday Sankey 10/24/21

Huge week for earnings on deck this week, just about 50% of the market cap of the S&P500 reports,  and to celebrate, the traditional Sunday Sankey is back with a full presentation attached. Sample slide: Bloomberg lists Kuwait’s oil production capacity as 3.08mb/d. In the slide shown in the Sunday Sankey presentation today from the authoritative MEES, Kuwait’s production capacity has dropped by more than 500,000 b/d over the past three years to just 2.63mn […]

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2:29 PM

Sunday Sankey 8/8/21

The US has negative unemployment, by one measure. The confirmation of that on Friday led to an interesting market reaction. The data point on negative unemployment released before the market was that there are 8.6 million people considered out of work in the US and nearly 10 million job openings. This could be a moot point in the EU where movement of labour is much more challenged by language and culture, but in the US, […]

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11:47 AM
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