Recent Posts

Morning Sankey 5/11/21

Noted: private equity selling down $PXD, and Antero $AR issuing. No sooner had we highlighted the Goldilocks oil market, with strong refining margins implying good demand, the potential for further upside in demand from COVID recovery especially in global jet fuel, and the “Saudi Put” back in effect since January, than a bunch of Russian hackers show up and spoil the fun. The issue is that major negative volatility events like this are negative – […]

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9:02 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 […]

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12:25 PM

Sunny Saturday Sankey 5/1/21

Winner winner chicken dinner: Hess this past week. ExxonMobil, we think won of the mega-oils. Hess is the “last great oil NAV play” on Guyana, the stock is worth $100/share+ if you believe $80/bbl is coming down the strip; Goldman clearly does, we get there too, with a weak US$ and not dissimilar balances – a demand boom is coming. Wildcards vs GS are Iran and India, alongside the potential for rising US interest rates […]

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3:11 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 […]

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1:52 PM

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 […]

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1:36 PM

Morning PSJeff 4/9/21

What’s Sisyphus’ least favorite band? The Rolling Stones We visited Japan for two weeks and did not see a single ninja. It was really impressive. “Officer, you can’t give me a ticket. I have to go run the marathon tomorrow.” Cop: “That’s not how you play the race card.” The Ketchup shortage this year was so predictable. Heinz sight is 2020. Happy Hour yesterday evening, we had a player whose firm had done a deep […]

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8:28 AM

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 […]

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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 […]

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9:10 AM

Morning Mood Swing 3/30/21

Get ready for a dump of April Fool’s Day OPEC jokes as the Organisation meets formally this week, culminating on Thursday April 1st. Rollover is seen as the most likely outcome, which would be for April, Saudi extending its market control, with recent volatility in oil prices – ie downside moves – seen as the key concern. It’s a never-ending wonder trying to forecast oil markets, and now to be in new era. Here, we […]

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8:26 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 […]

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1:20 PM

Morning Sankey 3/26/21

My wife and I were sitting in the living room enjoying a bottle of wine. Out of the blue she said, “I love you. ” Surprised, I asked, “Is that you or the wine talking?” “It’s me,” she said, “talking to the wine.” What do you call a rich Centipede? A Dollarpede A mushroom walks into a bar and the bartender welcomes him. He’s a fun guy. A Freudian slip is where you say one […]

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9:05 AM

Morning Sankey 3/25/21

As of writing about the Suez Canal yesterday, we were very early to show how the bulbous nose of the giant ship was buried in the shoreline. That went viral, along with the shape the ship drew on satnav maps before entering the canal. The former, the buried nose of massively heavy vessel wedged in the sand, seems to be a major problem, and there was feedback on my comment that “two dudes in hi-viz […]

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8:59 AM

Morning Suez 3/24/21

Covering global oil markets, you can be sailing along peacefully and from nowhere, a new major event leaves you scrambling. And so a vast container ship blocks the Suez canal. Around 10% of world oil trade and 8% of world LNG trade move through the canal. Quite how the captain managed to hit the side of the canal and wedge the ship remains an open question, but we do know that the Suez is a […]

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8:38 AM

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 […]

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12:36 PM

Morning Sankey 3/19/21

What is the highest rank in the popcorn army? Kernel. Where do you find the Andes? At the end of your Armies. Few people know that Bruce Lee had a vegan brother, Brocco. Where do DJs do their research? Wiki-wiki Wikipedia. It’s Friday! Why did oil airdrop? Probably because it was walking on air. Spot “flat” Brent prices fell 7.5% yesterday. A trading house sent this comment: “Vitol offered Brent aggressively, driving Dated lower. Shell […]

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8:41 AM

Morning Sankey 3/18/21

Yesterday’s DOE data was brutal for US refiners and particularly PBF. We had been hoping for a much more bullish picture – we got increases in crude AND product inventories. Imports surged particularly into New York Harbor – hence the PBF reference – as European refiners, desperate for market, scramble to attack the surge in gasoline prices caused by the Texas Crisis. This should be a brutal month for refiners, as the quarter ends and […]

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8:49 AM

Morning Sankey 3/17/21

Noted: $PLUG – has said it will restate financials within a couple of months of a major stock offering of 28m shares at $65 per share around January 29, 2021. Not good, unless you are a lawyer. Stock is half that level in the pre-market after yesterday’s shock announcement. The IEA has produced a double whammy today of the Monthly Oil Market Report and their Oil 2021 outlook for global oil markets to 2026. As […]

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8:26 AM

Morning Sankey 3/12/21

Not sure about the Dad jokes this morning. But I will try a couple for sighs. I accidentally sprayed deodorant in my mouth this morning. Now I talk with this weird Axe scent. I got my friend a fridge for his birthday. I can’t wait to see his face light up when he opens it. How do you walk a dog with no legs? Hit him with the first pitch. We had our uber bull […]

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8:49 AM

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, […]

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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” […]

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8:55 AM

Morning Sankey 3/3/21

NOTE KATHLEEN KELLEY OPEC EXPERT ON HAPPY HOUR THIS WEEK THURSDAY 5PM A year ago, March 6th 2020, I walked into the ExxonMobil analyst meeting day 2 – the deep dive sessions between senior company management and sellside analysts – and by way of introduction to the small group that had gathered drinking coffee before sitting down at the conference table, said what I had just heard from Vienna: “Russia are not going to cut.” […]

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8:51 AM

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 […]

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10:39 AM

Morning QuantumScape 2/18/21

Field trip. Speaking to Devon yesterday after their results, I asked to visit the company in Oklahoma, which seemed somewhat ludicrous in the circumstances. There is an energy emergency in Texas and Oklahoma, in case you have been asleep all week. However a visit is okay to go, so if any clients wish to join me on a Oklahoma/Texas run in the week of March 15th, the plan will be to get through next week’s […]

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8:26 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 […]

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8:37 AM

Sunday LNG

Hi, We had legendary global gas expert Gordon Shearer on our Happy Hour – every Thursday at 5pm – this week. Writing up the notes for Friday sent me down a couple of rabbit holes, and so I put together a note with graphics on LNG, which is attached. Selected nuggets, there are more within: Natural gas as the key energy transition fuel is logical and imperative. Those that bucket natural gas, oil and coal […]

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11:54 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 […]

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11:32 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 […]

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11:55 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 […]

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8:45 AM

Morning Egregious 1/26/21

Quote of the day: “Will the SEC step in to protect Wall St from aggressive Mom & Pop traders?” – Joe Weisenthal A client who was long a lot of Concho stock for many years, bitterly opposed the company selling itself. In the context of the decision by Concho management to sell at the bottom, completely against my client/Concho shareholder’s view of best shareholder interests, the payment by ConocoPhillips of around $10m to three top […]

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8:31 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. […]

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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, […]

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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. […]

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12:40 PM

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. […]

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8:41 AM

Morning Elon Ma

Refining conference today! Not to late to register on www.sankeyresearch.com Strong delivery numbers from Chinese automakers over the weekend followed on from Tesla’s dash to the line for 2020 which fell just short – within the margin of error – for its 500,000 annual target for 2020, which is indeed a very impressive achievement. There were reports of Tesla asking existing customers for help in delivering vehicles. One mystery to us is how the company […]

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8:45 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 […]

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12:18 PM

Morning Refining Series II

Invitation to our all-C-Level conference below. 4th January. In this note we continue our series on refining, which we started yesterday. Two key detail points that are very important, that we will cover during this series: Super bullish: Net operating losses (NOLs) for refiners from 2020 will mean they pay effectively no taxes through 2021 and beyond. On the bear side, renewable identification number (RIN) prices that prove that refiners have met their blending requirements […]

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9:01 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 […]

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12:40 PM

Friday Sankey 12/4/20

What is the most dangerous part of a car? The nut holding the steering wheel. Who is this Pavlov guy? I cannot place him. But his name rings a bell. Using a cinnamon stick to stir your Christmas party drink is not a religious act. It’s egg nog stick. They call it the Labrador market – delighted with everything it bounds after. NASDAQ yay! Bitcoin yay! Copper yay! And thus, as we said in our […]

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8:50 AM

Morning Sankey 12/3/20

Save the Date for the 11th Annual Sankey Research refiners conference January 4th & 5th 2021. We have all six major independent US refiners line up for a series of fireside chats with yours truly: Marathon Petroleum, Valero, Phillips 66, HollyFrontier, Delek and PBF, with a couple more to be added. All at C-Level. Contact me for details. Last evening rumours broke that OPEC has reached a deal to gradually increase production in a tapered […]

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9:11 AM

Morning Game Theory

“We are not going to have an easy meeting. Some members oppose extending the previous production cut. And this makes it difficult.” – Iranian oil minister Zanganeh comments this morning as the meeting kicks off in Vienna. The OPEC meeting started virtually at 8am NY time. There is no more classic modern day example of Game Theory, and more specifically the Prisoner’s Dilemma, than an OPEC meeting. Cortez burned his conquistador boats in front of […]

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9:20 AM

OPEC Special

Please find attached our OPEC Thanksgiving 2020 note. Have a great Sunday. Best regards, Paul

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10:43 AM

Morning X-Ys Club

Last week we published a chart showing the x-y plot of trailing year-to-date free cashflow vs volume growth for the big oil group. This if you remember, prompted Silvio’s legendary joke when I called him to tell him I was having a nightmare with x-y charts, which he misheard to be “having a nightmare with ex-wife chat”. Anyway, a major Long Only investor replied immediately to the note last week pointing out that the chart […]

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8:47 AM

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 […]

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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 […]

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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 […]

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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) […]

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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 […]

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8:44 AM

Friday Sankey 11/13/20

Friday jokes: I lost all my sense of taste, I think I have COVID! Oh no wait, this is Bud Lite. My son said he was quitting college to move to the Arctic Circle. I said “I don’t like your latitude.” A kid goes to a Halloween party. The host asks him what he is dressed as, kid says “A harp.” The host rudely says “Your costume is too small to be a harp.” The […]

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8:24 AM

Morning Sankey 11/11/20

Well for sure my timing in the Sunday Sankey making the uber-bear call for oil was completely destroyed one day after I made it, on Monday, by Pfizer’s announcement of a 90% effective COVID vaccine. My old joke is that I am never wrong, it’s just sometimes my timing can be WAY off. And the question of this note, given oil dynamics next move is positive, is timing of entry. Clearly the market was coiled […]

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8:16 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 […]

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2:02 PM
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