Energy Week

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Oil prices rise on back of COVID vaccine news
https://www.reuters.com/article/us-global-oil/oil-prices-rise-on-back-of-covid-vaccine-news-idUSKBN283021?il=0
- WTI is up to $43 and Brent $45 on vaccine news
- demand still down, travel low, is the market actually looking at the numbers year-on-year or compared to 2 weeks ago.
- market sentiment is detached from “gloomy fundamentals”

China set to eclipse America as world’s biggest oil refiner
https://economictimes.indiatimes.com/markets/commodities/news/china-set-to-eclipse-america-as-worlds-biggest-oil-refiner/articleshow/79348148.cms
- Is there enough ill will in DC towards China to keep Biden from going to China with open arms.
- Now that China has started storing so much oil, its a natural step for China to build its refining and petrochemicals capacity
- Meanwhile, plants in the U.S. are closing.
- Could there be a time when the U.S. or Europe are dependent on China for source of refined products/petrochemicals

Modi says India set to double oil refining capacity in five years, earlier than expected
https://www.reuters.com/article/us-india-energy-modi/modi-says-india-set-to-double-oil-refining-capacity-in-5-years-earlier-than-expected-idUSKBN2810FN
- Long term oil market very bullish
- India has a lot of taxes on its oil, perhaps will use domestically refined fuels to lower taxes on individuals

Abu Dhabi boosts reserves with unconventional oil
https://www.argusmedia.com/en/news/2162302-abu-dhabi-boosts-reserves-with-unconventional-oil
- Does it really matter whether its conventional or unconventional oil when it comes to cost?
- approved $122 billion in capex over next 5 years! Huge investment especially compared what others are spending.

Israel’s Netanyahu, Saudi Crown Prince Hold First Known Meeting
https://www.wsj.com/articles/israels-netanyahu-meets-saudi-crown-prince-hebrew-media-says-11606120497

Israeli Reports Say Netanyahu Met Saudi Crown Prince, but Saudis Deny It
https://www.nytimes.com/2020/11/23/world/middleeast/netanyahu-mohammed-bin-salman.html

- Could be discussing how to screw over Iran more or it could portend a peace deal?
- Will the Saudi people accept a deal with Israel or not?

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China economy continues strong growth trajectory in October, but imbalances remain
https://www.scmp.com/economy/china-economy/article/3109967/china-economy-continues-strong-growth-trajectory-october
- Retail sales continued to lag industrial output, with consumers remaining cautious in their spending in the world’s most populous nation, will the US suffer similar retail issues?
- China isn’t all back economically. Just because industry looks strong, consumer economy hasn’t recovered.
- Will U.S. and Beijing renegotiate the phase 1 trade deal.

https://www.api.org/products-and-services/statistics/apis-economic-industry-outlook

Oil jumps 4% on latest COVID-19 vaccine progress
https://www.reuters.com/article/global-oil-int/oil-moves-higher-on-latest-covid-19-vaccine-progress-idUSKBN27W0DQ
- Oil prices are higher, have they broken out of the $40 range?
- Ryan on the record says WTI will fall to below $35 before January 1
- Rig count is rising but is it enough to maintain US oil production? 25% of the rigs are needed to maintain production.

OPEC+ meeting ends with broad support for extension to oil cuts -sources
https://uk.reuters.com/article/oil-opec/opec-meeting-ends-with-broad-support-for-extension-to-oil-cuts-sources-idUKL9N2D0017
- JTC meeting on Monday, JMMC meeting on Tuesday
- What about Libya?

Oil Prices Rise On Vaccine Fantasy But Fundamental Reality Less Stable
https://www.investing.com/analysis/oil-prices-vs-reality-200544399

Mounting piracy off Gulf of Guinea unsettles tanker owners
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/111620-mounting-piracy-off-gulf-of-guinea-unsettles-tanker-owners
- Piracy has increased 40% in 2020 on key oil transit routes
- focused on refined products more than crude oil
- siphoning oil and selling it on the black market.
- piracy stories mostly came from east side of Africa, now on West side.

Interview with Dr. Dean Foreman on API monthly statistical report
- 18.8 million bpd demand in October
- last week, was over 20 million bpd
- In the past it was 80% motor gasoline, but now seeing 10% pick up in jet fuel and also increases in diesel
- 1/4 gasoline demand in US is petrochemical. Performed strongly for October
- As inventories are drawing down there is a demand for products
- Supply side - we have a very low rig count in both oil and natural gas. US crude oil production basically hold steady, natural gas liquids high and natural gas production high.
- It’s not going to take 1000 rigs to maintain this production. Productivity is really good.
- We are in good shape to participate in economic recovery, when it comes.
- Lowest crude oil imports since 1990 last month!
- Numbers indicate a continuing recovery in place.
- lower drilling activity will eventually catch up despite higher productively. Not all of the productivity gains will stick, given what we’ve seen before.
- China has been so far behind in compliance with trade deal. LNG likely would have happened anyway regardless of deal.
- demand from an external source doesn’t necessarily drive domestic natural gas prices up
- How much can we export before it impacts domestic prices? Appears we aren’t close to it. EIA thinks we’ll go up above $3 for natural gas but its still impacted by seasonality.
- As long as the international market for natural gas is healthy, that net back margin is there to be able to export North American natural gas at $3.
- Growing market that is continuing to grow.

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Numbers Rule Your World: The Hidden Influence of Probabilities and Statistics on Everything You Do - https://amzn.to/3eNf3sP

Novak in charge of Moscow's OPEC ties despite promotion
https://www.reuters.com/article/oil-russia-novak/novak-in-charge-of-moscows-opec-ties-despite-promotion-sources-idUSL8N2HV2RL
- Vladimir Putin, does he have Parkinson’s? Is he really retiring?
- Novak is going to stay involved in OPEC, comes across as a stable presence, new energy minister
- Where is OPEC going on with this?

IEA sees new European lockdowns denting oil demand outlook
 https://uk.reuters.com/article/us-iea-oil-demand/iea-sees-new-european-lockdowns-denting-oil-demand-outlook-idUSKBN27P0KI
- Demand will be dented, not just outlook

Asia-Pacific stocks jump as investors react to Biden's presidential election win; oil prices surge
https://www.cnbc.com/2020/11/09/asia-markets-us-elections-china-trade-data-currencies-and-oil.html
- prices were up in early trading and then jumped even more and WTI made it to over $40/barrel

Oil operators get DUCs in a row, adding fracking crews to boost output
https://uk.reuters.com/article/us-usa-drilling/oil-operators-get-ducs-in-a-row-adding-fracking-crews-to-boost-output-idUKKBN27M0MG
- According to Enervus, burning through DUCs at a rate of 200/month, though others say it may be closer to 300/month
- According to EIA 3500 DUCs in Permian
- As price comes back up, when these producers want to put oil on market they will go to DUCs first, though not always the case if there’s a lease they want to hold

Biden win may curb U.S. oil drilling, supercharge renewables
https://www.latimes.com/business/story/2020-11-08/biden-energy-renewables
- What will the oil and gas industry see for this?
- There are really only 2 years for Biden to enact radical energy/climate policies.
- Will the focus be on gov stimulus and spending and grants to clean energy companies? How will that impact clean energy investing?
- Role of Chinese made batteries/solar panels, etc?

70,000 Louisiana jobs are riding on Biden’s plan for oil, gas
https://www.nbc12.com/2020/11/08/louisiana-jobs-are-riding-bidens-plan-oil-gas/

A Warning From The United Kingdom: Renewable Energy May Not Suffice
https://www.forbes.com/sites/ellenrwald/2020/11/05/a-warning-from-the-united-kingdom-renewable-energy-may-not-suffice/?sh=1d69a36e5aca
- Calm weather brings a possible gap in energy needed
- Coal fired plants asked to get ready

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Libya up to 800,000 bpd heading to 1.2 million bpd by 2021

New energy vehicles to make up 20% of China's new car sales by 2025
https://www.reuters.com/article/us-china-autos-electric/china-expects-sales-of-nev-to-make-up-20-of-total-new-sales-by-2025-idINKBN27I0W9
- mandate/quota system not a forecast
- Tesla is facing demand problem in China
- How will China stimulate demand?
- Exporting excess Model 3 Teslas made for China to Europe

Russia mulls position on Opec+
https://www.argusmedia.com/en/news/2155878-russia-mulls-position-on-opec
- Russia has overproduced by 50,000-100,000 bpd since the current OPEC+ deal went into place in May
- Will Russian oil companies agree not to increase production as is currently planned?
- New lockdowns in Europe indicate this is likely.

Pipeline attack halts exports from Iraq's Kurdish region
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/103020-pipeline-attack-halts-exports-from-iraqs-kurdish-region
- 450,000 bpd is exported from Kurdistan Region through Turkey. Apparently a pipeline suffered a “Terrorist attack” that has halted exports

Top Oil Trader Vitol Says Europe Lockdowns Mere ‘Speed Bump’
https://finance.yahoo.com/news/top-trader-vitol-says-europe-114830331.html
- we need to see mobility data for week 1 before we can say that these European lockdowns are just a speed bump.

Indian oil demand revival boosted by robust auto sales, IOC chairman says
https://www.hellenicshippingnews.com/indian-oil-demand-revival-boosted-by-robust-auto-sales-ioc-chairman-says/
- India has a lot of tax on gasoline so people buying cars means they are willing to pay high gasoline prices
- People are apparently buying cars.

Wyoming Is Using Dark Money To Help Keep Coal Plants In Other States Open
https://www.npr.org/2020/10/28/926625599/wyoming-is-using-dark-money-to-help-keep-coal-plants-in-other-states-open
-

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Oil drops on rising virus cases, increasing Libyan output
https://www.reuters.com/article/global-oil/oil-drops-on-rising-virus-cases-increasing-libyan-output-idUSKBN27B03E
- many people think more lockdowns are coming and that will mean more demand destruction
- Midwest is ghost town
- no one is going out and about
- are masks hindering economic activity or helping it?

The Truth About Biden’s Fracking Claims Is That He’s Consistently Inconsistent
https://www.forbes.com/sites/ellenrwald/2020/10/26/the-truth-about-bidens-fracking-claims-is-that-hes-consistently-inconsistent/#6e571dc5223c

- Biden has been wildly inconsistent about his energy policies and oil companies are suffering with the lack of clarity and inconsistency

Interview with Dr. Greenwald On Fusion Power
- project on Fusion energy.
- Fusion = combining light atoms into heavier ones which releases huge amounts of energy. Natural process in universe. Desire to harness it to produce energy on earth. Working on it for 60 years.
- Advantages: unlimited fuel. Would come from water and lithium. Use deuterium, an isotope of water. Lithium used as well. Output would be helium. But fuel has to be raised to 200 million degrees.
- They know how to raise the temperature. Have it isolate and insulate from ordinary matter. Electrons are stripped off the atoms, creating plasma. The stronger the magnetic field the better insulation.
- breakthrough in technology in magnetic fields used in fusion. Superconducting magnets need to be used to make fusion work. But these superconductors didn’t operate in high magnetic fields. Little black crystals were great for experiments in lab but couldn’t use them in practice. Finally, high quality high temperature superconductors are not so expensive.
- trying to build machine based on new magnet technology. First to create and confine a plasma that makes net power. But still not a power plant.
- Construction could start next spring
- Powerplants on scale of 100-500 Megawatts. Advantage of the tech is that it allows you to go smaller. Matches current electric grid.
- Fusion plant is just a source of heat. Makes water hot, makes steam that drive turbines.
- Fits really well within the existing electrical grid. Unlike renewables.
- Quantity of fuel needed is “astonishingly small” especially compared to fossil fuels plants.
- 4/10s of a gram of lithium and deuterium could produce enough energy for a US household for a year.
- cost and complexity are all in the plant and capital investment not in the fuel.
- Another type of fusion - ITER built in south France. Tens of billions of dollars.
- Cooling isn’t an issue because its not a chain reaction. More like an engine.
- Fusion doesn’t produce same kind of wastes as nuclear fission.
- Energy needed to get the plasma hot. Steady input of heating power but much larger output of heat. 20 to 30 times more. Start up power disappears in balance - if it works. Haven’t gotten to the stage where more power is produced than is needed as input.
- 2025/2026 aimed for experiment to be successful. Next stage is to build a pilot plant that would put electricity on the grid - could do that by 2030. To impact world’s energy output, would need 10,000 of these plants.
- Commonwealth Fusion Systems https://cfs.energy/
- https://www.cambridge.org/core/journals/journal-of-plasma-physics/collections/status-of-the-sparc-physics-basis
- https://www.psfc.mit.edu/files/psfc/imce/research/topics/sparc/MITSPARCbrochure.pdf

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Link to Shale Round Table
https://youtu.be/JubBfpWYUMs

With Fewer Covid-19 Restrictions, South’s Economy Outperforms Nation
 https://www.wsj.com/articles/with-fewer-covid-restrictions-souths-economy-outperforms-nation-11602927000
- But were they really measuring the south in terms of the economy?
- College football open in the south

OPEC+ Faces Growing Pressure to Change Course as Ministers Meet
https://ca.finance.yahoo.com/news/opec-faces-growing-pressure-change-230100119.html

Exclusive: OPEC+ fears second virus wave could lead to oil surplus in 2021
https://www.reuters.com/article/global-oil-opec/exclusive-opec-fears-second-virus-wave-could-lead-to-oil-surplus-in-2021-idUSKBN27124E

- concerned about the fact that 2 million bpd more about to come onto the market in January
- Libya also increasing production - 500,000 bpd on the market already
- Novak’s messaging very different this time than it was in late-February and early-March

China warns it will take Americans hostage if DOJ doesn’t drop charges against researchers
https://nypost.com/2020/10/18/china-warns-it-will-take-americans-hostage-if-charges-arent-dropped/

Oil prices decline after China economic data disappoints
https://www.cnbc.com/2020/10/19/oil-markets-coronavirus-china-economy.html

- Tensions rising between China and US but no sign that China won’t be buying US oil or soybeans

Europe's COVID-19 outbreak is cascading out of control, and nations are slamming vast regions into lockdown again
https://www.businessinsider.com/europe-coronavirus-outbreak-smashes-records-new-restrictions-covid-19-2020-10
- oil prices have been relatively stables

IMF reveals 2021 forecasts for oil prices and the Middle East economy
https://www.cnbc.com/2020/10/19/imf-reveals-2021-forecasts-for-oil-prices-and-the-middle-east-economy.html
- Middle East and Central Asia may see a 4.1% contraction this year
- Could India get a bump in economy if US moves supply chains towards India away from China

OPEC Should Take The Win On Oil Price Stability
https://www.forbes.com/sites/ellenrwald/2020/10/19/opec-should-take-the-win-on-oil-price-stability/#54e41fb74de2

Link to Shale Round Table
https://youtu.be/JubBfpWYUMs

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US shale roundtable - https://gumroad.com/l/kFXTF

US-China roundtable - https://gumroad.com/l/zzpMP

20% off yearly War Room Newsletter - https://warroommedia.substack.com/20percentoff

Oil prices fall as supply concerns ease
https://uk.reuters.com/article/uk-global-oil/oil-prices-fall-as-supply-concerns-ease-idUKKBN26X02D
- Norwegian workers strike a deal to return to work and Norway’s oil comes back online
- WTI reflects this, trading at around $39
- Rig counts have bottomed out and are starting to come up, but is this the start of the hill going back up or is rig count in the US plateauing. DUCs still sitting out there. Rigs count should help slow the price climb.

Saudis Consider Canceling OPEC Plans to Boost Output
https://www.wsj.com/articles/saudis-consider-canceling-opec-plans-to-boost-output-11602174829
- Saudis considering walking back the OPEC+ planned 2 million bpd increase set for January
- Libyan oil coming back on the market complicates this
- If Biden wins the election assumption that Iranian oil will come back on the market, barrels visible on the market and new barrels added

Colonial Pipeline's Line 2 shut after Hurricane Delta
https://uk.reuters.com/article/us-storm-delta-colonial-pipeline/colonial-pipelines-line-2-shut-after-hurricane-delta-company-idUKKBN26X011

Why Big Oil Should Vote for Joe Biden
https://news.yahoo.com/why-big-oil-vote-joe-110003063.html
- Big Oil loves regulation because it keeps the little producers from getting into the market
- What does Biden really believe?
- Would a Biden presidency advance climate lawsuits against big oil that could be a risk to these companies.

API Monthly Statistical Review
- Jet fuel roughly cut in half from last years levels
- regional gasoline consumption diverging. Deliveries to rural areas basically the same from august, no drop off. Consumption in urban areas decreased 7%
- Jet fuel - can it be converted to low sulfur ship fuel?
- September saw the smallest post-driving season drop off in petroleum deliveries since 2014. What’s different? People were driving less in 2014 because oil was $100/barrel.
- Post Gulf Coast Hurricane review: flooding in Lake Charles impacted Henry Hub and supply chain. Exports held up really well even though on some days ships didn’t move at all. China picked up its imports from the US. Capacity utilization - would have been better if hadn’t seen disruptions. Hard to get good read on Refining efficiency with the weather disruptions. But export capacity held up, which is positive internationally.
- Inventory dynamics - natural gas: futures market has said natural gas prices would rise. Natural gas prices has still been volatile despite futures market. Lower oil production assumption that less associated gas will mean higher natural gas prices.
= Inventory dynamics - crude oil: continue to back off from record levels. But total inventories set record highs. How do you get crude oil down? Products have to be up. Jet fuel is up, but diesel fuel also came down during the month. Behind the scenes is that 25% of petroleum demand is naphtha and other intermediate products being used in petrochemicals.
- Industry continues to see petrochemicals as an enduring source of growth.
- LNG prices around the world are starting to bounce back.

https://www.forbes.com/sites/ellenrwald/2020/10/08/on-fracking-senator-harris-wants-to-have-it-both-ways/#42e6ca7e2c4b

https://thehill.com/opinion/finance/519959-managing-retirement-funds-means-prioritizing-their-growth-not-social-activism

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Oil rebounds on Trump health update, Norway shutdowns
https://www.cnbc.com/2020/10/05/oil-markets-donald-trump-coronavirus.html
- probably related more to stability/instability than Trump being diagnosed with a virus that the vast, vast majority of people survive
- Oil is mirroring the stock market
- Libya and Norway oil cancel each other out
- Libyan oil will impact OPEC’s overall numbers

Exxon’s Plan for Surging Carbon Emissions Revealed in Leaked Documents
https://finance.yahoo.com/news/exxon-plan-surging-carbon-emissions-090019610.html
- Exxon isn’t actually planning to increase emissions in a nefarious way, its documents just show that the company forecasts that its emissions will rise as it expands it business.
- Basically, Exxon is continuing to expand its business but BP and Shell are abandoning the fossil fuel business wholesale

Exxon to cut 1,600 jobs across Europe as oil rout weighs
https://uk.reuters.com/article/uk-exxon-mobil-layoffs/exxon-to-cut-1600-jobs-across-europe-as-oil-rout-weighs-idUKKBN26Q276

Equinor shuts in four North Sea fields on strike action
https://www.argusmedia.com/en/news/2147112-equinor-shuts-in-four-north-sea-fields-on-strike-action
- strike because workers want more pay
- If this was West Texas, It would be easy to replace them

Column: Hedge funds resume oil sales
https://www.reuters.com/article/oil-global-kemp/column-hedge-funds-resume-oil-sales-kemp-idUKL8N2GW30U
- Hedge funds more bearish now

Asia's jet fuel margins hit 2-month highs on warmer demand for kerosene before winter
www.reuters.com/article/asia-oil-jetfuel/refile-asias-jet-fuel-margins-hit-2-month-highs-on-warmer-demand-for-kerosene-before-winter-idUSL4N2GW15H

Saudi Arabia’s budget based on $50 oil, Goldman Sachs estimates
https://www.worldoil.com/news/2020/10/5/saudi-arabia-s-budget-based-on-50-oil-goldman-sachs-estimates
- Analysis is that oil will $50/barrel
- Is that at all likely?

https://www.forbes.com/sites/ellenrwald/2020/10/02/oil-prices-are-waiting-to-rise-but-stimulus-will-not-be-the-cure/

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Jet Fuel So Cheap, Now Being Blended For Use By Ships
https://www.bloomberg.com/news/articles/2020-09-20/jet-fuel-is-now-so-cheap-it-s-being-blended-for-use-by-ships
- possibility that this will help eliminate jet fuel overhang in the market
- Dr. Foreman from API discussed this back in August
- but be careful, too much straight kerosene can lower temperature at which fuel can catch fire

Oil refiners worldwide struggle with weak demand, inventory glut
https://www.reuters.com/article/global-oil-refineries/oil-refiners-worldwide-struggle-with-weak-demand-inventory-glut-idUSL1N2GC1PI
- Chinese refining utilization is down
- But this could be due to temporary reasons

Exclusive: Shell launches major cost-cutting drive to prepare for energy transition
https://www.reuters.com/article/us-shell-costs-exclusive-idUSKCN26C0GI
- slash budget For upstream by 30-40%
- want to cut expenses from service stations which are very profitable.
- want to cut LNG production
- but can Shell actually make a profit going into the power sector and renewables? Margins are pretty low there.

Libya NOC lifts force majeure from ‘safe’ fields, ports
https://www.argusmedia.com/en/news/2142926-libya-noc-lifts-force-majeure-from-safe-fields-ports
- more oil is not what the oil market needs right now
- would OPEC+ players try to re-start conflict just to keep oil off the market?

Saudi Royal Family Divides Over Potential Embrace of Israel
https://www.wsj.com/articles/saudi-royal-family-split-relations-israel-uae-bahrain-mbs-prince-king-11600446560
- UAE/Bahrain deal with Israel is mostly economics - Israel is a big market for them
- WIll Saudi Arabia join? Saudi Arabia is a different place, larger population and King Salman really hates Israel.

U.S. Sending More Troops to Syria to Counter the Russians
https://www.nytimes.com/2020/09/18/us/politics/us-troops-syria-russia.amp.html
- Is this turning into a little proxy war between the US and Russia?
- Runs contrary to Trump’s campaign promise to withdraw troops.

Nikola’s Troubles Raise Questions For Tesla And Elon Musk On Battery Day
https://www.forbes.com/sites/ellenrwald/2020/09/21/nikolas-troubles-raise-questions-for-tesla-and-elon-musk-on-battery-day/#4352bd9b32dd

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