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NATTY2.77+0.06+2.214%

Quote of the day: By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens. – John Maynard Keynes

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Paul Sankey

Ten Companies, Ten Charts, Ten Recommendations

Market backdrop: our argument that low US refining utilisation this month (Feb 2024) would tend to pressure crude prices, tighten product inventories, and raise product prices, is not working at all, leading us to demand concerns. Refiners have been weak accordingly, even if background GDP data and better than expected China numbers suggest a good year for refiners. It’s not all bad news: crude oil prices are acting well. Generally with seasonality, tough January weather

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Paul Sankey

Morning Chevron-Hess Ruh ROFR

Never a dull day in oil. Last evening the Chevron 10-K caused panic among merger-arb clients who saw the Hess deal premium blow out on news that ExxonMobil was claiming the right of first refusal over the key Stabroek block in Guyana, the very heart of Chevron’s deal for Hess. Source: CNBC Source for both: Bloomberg, Sankey ResearchText from Proxy: “The Stabroek JOA contains a right of first refusal (the Stabroek ROFR) provision that, if

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Paul Sankey

Sunday Shaggy and the Pool Tan

Greetings, There is an embarrassing feeling about current equity markets, for us writing this note, a bit like hosting family lunch on the patio at the country club, while trying to ignore the spectacular naked celebrity gloriously sunbathing by the pool. To be less… conceptual: we got our answer to the question we posed last Sunday on NVDA earnings. ~ It’s hard to avoid staring but we pretend to focus on the slightly dry turkey

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Paul Sankey

Corporate EOG: Never got the “Cut Capex” memo

EOG never got the “cut capex” memo. It looks worse next to Coterra reporting after the market like EOG last night, but cutting capex, especially as EOG raises natgas volumes; whereas Coterra is claiming it will now deliver just oil growth. Just like that. And Chord have fully subscribed to our “Heavyweight Thesis of US E&P” leaving Devon as the bridesmaid yet again. ~ EOG Q4 results yesterday were a groaner: light on oil for

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Paul Sankey

Morning Natural Gas: Cut Rigs Reap Rewards

Good news: Chesapeake is cutting activity in US natgas. In the “long cuts/short active” gas drillers pairs, we like propane-rich Antero long vs Short EQT who continue to keep activity high. EQT is supported by its hedging, which makes no sense to us: these financial instruments can be used to maintain cashflow, with no need to maintain activity. Generally, we do not like dry gas plays in 2024, but would favour Chesapeake with capex discipline,

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Paul Sankey

Sunday Suddenly Presidents’ Day

Suddenly we are all bullish oils. Last week went well. Certainly it went well by oil’s atrocious recent standards vs the wider market. In fact, last week might just be a very bullish set up for the oils. But that statement depends a lot on NVDA results ahead. NVDA reports this week 21st February Wednesday after the market, going head-to-head with oil laggard APA, formerly Apache. We do not expect APA results to change the

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