Energy Week

China and Russia Are Partners—and Now Have a $55 Billion Pipeline to Prove It
https://www.wsj.com/articles/china-and-russia-are-partnersand-now-have-a-55-billion-pipeline-to-prove-it-11575225030?
- 1800 mile pipeline through Siberia
- Does this signify a new era of Russia influence over China? Hard to imagine given Russia’s GDP is lower than each of California’s, New York’s And Texas’s. Russia’s GDP per capital is a little higher than Mississippi’s.
- Does Russia’s deal with Huawei negate Russia’s potential influence over China in natural gas.
- Geopolitical partnerships are not 1+1=2 anymore. Tend flatten out these issues into relationships that are much more basic than we assume

Saudis Push for Longer-Lasting OPEC Cuts as Aramco IPO Approaches
https://www.wsj.com/articles/saudis-push-for-longer-lasting-opec-cuts-as-aramco-ipo-approaches-11575214071
- potential impacts are for post-IPO trading. Will Saudi Arabia try to push oil prices up before (or after the Aramco IPO) and can they even make an impact on oil prices through OPEC?

Booze May Be Hurdle to India’s Energy Independence
https://www.bloomberg.com/news/articles/2019-12-01/booze-may-be-hurdle-to-giant-oil-buyer-s-energy-independence
- Learn from the U.S. and don’t put food into your cars.
- building out infrastructure for EVs would be a better use of energy investment dollars.

Interview with Gene Epstein - TheSohoForum.org

- Yield curve was inverted a couple months ago but not anymore at this point
- Inverted yield curve is when short term interest rates (3 months) are higher than long term (10 months) interest rates. This is the opposite of what you would expect.
- Signals something disturbing that investment is not good for long term. Typically get a recessions later on. This is fairly good indicator of recessions.
- But now the 10 year is above the 3 year again but we should consider the possibility that there could be a recession in the next 12 months.
- Will have political impacts if it happens.
- Currently in the longest slow but steady expansion period. Better to grow for 10.5 years at slow pace than to grow quickly for 6 years.
- Prediction: pace of growth will continue into 2021
- Tariff/trade war influence - manufacturing in US has definitely felt this

- China/Russia relationship. One pipeline is not going to create an uber-polity that will take over the world.
- Russia is a non-entity in the world. Threat to their own backyard but not global influence.
- Russia’s GDP is on par with Italy. China’s GDP is on par with US but population is many times US so China will have to grow much more in order to really be on par with the U.S.
- Great relationship between the U.S. and China via Walmart in which Walmart imports Chinese made products and sells them to poor Americans.
- No worry about Russia being a threat, even to Western Europe.

Oil market outlook on TDAmeritrade Network
https://tdameritradenetwork.com/video/rB4AoW65HjqBbsc9-rAAxQ

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Aramco IPO update - its an all Saudi show now.
China update - IMO 2020? No one was interested in discussing it. Iranian oil sanctions? consider the US only sanctions illegitimate. “Democracy does not equal efficiency.”

Brookline bans natural gas, heating oil pipes for new buildings: ‘Gas is the past’
https://www.bostonherald.com/2019/11/21/brookline-bans-natural-gas-heating-oil-pipes-for-new-buildings-gas-is-the-past/
- after all the trouble the northeast had getting enough natural gas to to heat homes in the winter, now Brookline (as suburb of Boston) won’t allow new natural gas lines to new apartment buildings. This means all heating will have to be electric, which is less efficient.

Growth in global oil demand more than doubled in the third quarter, IEA reveals
https://www.cnbc.com/2019/11/15/iea-growth-in-global-oil-demand-more-than-doubled-in-the-third-quarter.html
- China largest contributor with demand increasing 640,000 bpd year on year
- OPEC crude production down. Probably due to Iran
- Chinese claim their middle class is 400 million people (larger than population of U.S.) 900 in poverty class.

Tesla reveals Cybertruck, but breaks its 'unbreakable' windows during unveiling
https://www.cnn.com/2019/11/22/cars/tesla-cybertruck-electric-pickup-truck/index.html
- Will any pickup driver actually buy this? Looks like a delorean?
- 500 miles is NOT nearly enough for pickup truck drivers
- cultural aspect as well - does Tesla understand the culture of truck drivers?

Lord Barker of Battle - former UK Climate Change Minister
- David Cameron created him a “life peer” not inherited. Just for life. Sits in upper house of British Parliament. Not a full time occupation. Much less partisan.
- Battle is an ancient town in the UK named after Battle of Hastings (from 1066).
- UK under both Labour and Conservative party has been at the forefront of fighting man made climate change. Climate Change Act committed UK to reducing carbon emissions by 80% from 1990s levels.
- Created Green Investment Bank. Massive strides in UK in deploying renewables. World’s largest offshore wind resource. Large onshore wind resource. A million people with solar panels on roofs. Wave and tidal energy. Phased out coal almost entirely now.
- As a result have dramatically reduced UK carbon emissions. Carbon emissions down 45%. Mostly due to phasing out coal and increasing use of natural gas as baseboard replacement for coal.
- He considers bans on fossil fuel cars as an important component of the switch.
- Partner of electric vehicle charging station company
- Heating is a big issue in England. Easier to insulate properties efficiently in cities but difficulties with rural areas.
- Prince Charles real visionary in climate change activism and also in advocating for innovations.
- North Sea - will continue to me an energy supplier to UK economy. Historically has meant oil and gas and there is still a significant amount of oil and gas there that they government is intent on extracting despite wanting to decarbonize by 2050. If don’t take it from North Sea it will come from Saudi Arabia or elsewhere. Better to take it from close to home. As extraction rate begins to decline, powering up offshore wind.
- Supports Chelsea. Find him on twitter @GregBarkerUK

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Iran discovers new oil field with over 50 billion barrels
https://apnews.com/a6adb7b30adb4449985a41b1b5aca4332
- lack of new discoveries recently, but can this 53 billion barrel discovery be verified?
- How much of this is actually recoverable?
- Interesting timing

Aramco IPO
The World’s Most Profitable Company Pays Surprisingly Little
https://www.bloomberg.com/news/articles/2019-11-01/the-world-s-most-profitable-company-pays-surprisingly-little
What to Know Before Buying Shares in Saudi Arabia’s Oil Company
https://www.nytimes.com/2019/11/06/opinion/saudi-aramco-public-offering-.html
Aramco IPO Local Push May Test Saudi ‘Vision’
https://www.bloomberg.com/opinion/articles/2019-10-29/aramco-ipo-s-local-sales-push-may-dim-saudi-vision

- Wild West in terms of financial regulations in Saudi ARabia
- Concern over limitations for outside investment - impact on distribution of income in Saudi Arabia. Outside money isn’t necessarily going to be invested.

Frackers Prepare to Pull Back, Exacerbating a Slowdown in U.S. Oil Growth
https://www.wsj.com/articles/frackers-prepare-to-pull-back-exacerbating-a-slowdown-in-u-s-oil-growth-11573478550
- With U.S. production at 12.6 million bpd, how far is fracking really going to fall off?
- DUCs are coming online and will be used up, rig count declining so unless there’s an economic collapse, won’t oil prices rise?
- Is someone going to scoop up the assets? ExxonMobil?
- What’s going to happen? There are too many variables to know.
- Break down Chesapeake assets. Where are they? (Below a dollar on Monday) could be delisted in 26 days. How much has Chesapeake drilled? Who might be interested in buying Chesapeake’s assets?

API Monthly Statistical Report
- New crude oil production record for the United States — 12.6 million bpd of production!
- This was a surprising, not just the number but also the jump - twice as much as previous increases.
- Pipelines are increasing Permian deliverability.
- Too much pipelines? Or will these pipelines get filled up sooner than we thought? The $4-$5 per barrel differential between WTI and Brent is still significant. If the clouds on trade could be cleared, the differential between WTI and Brent could decrease.
- More pipeline startups this Q will bring more barrels of pipeline capacity. Improved pipeline capacity coming out of the Permian should make it so crude coming out of places like Midland will be able to go directly to refiners and the coast will improve transportation costs.
- Why are Brent crude oil prices what they are? Brent benchmark is a blend of different Crudes. 40s component of this benchmark is setting the price. China is bidding up the light crude that its having trouble getting from Saudi Arabia.
- IMO 2020 - is there a stockpile of residual fuel oil that can’t find a home? So far, not yet. Need for heavier oil from Canada, Gulf of Mexico, Venezuela is still desirable.
- Fears of global recession not necessarily as bad as feared? Where is API’s economic indicator? Federal reserve rate cut is trying to stave this off. Some economies are technically in recession in right now. Flatlining.
- Import/Exports vs. inventory: what conclusions should we draw from this:
petroleum exports are above 8.1 million bpd (products+crude).
- Maya oil vs. Canadian heavy oil vs. Venezuelan heavy oil - starting to see some of the differences in value go towards their tail. Potential structural changes in the market. Also where refiners are drawing from.
- Refinery utilization - 85.5% This is a short-term exception. In Sept utilization rates were at the highest levels at 2019. Oct range is abysmally low for the 5 year range. Pipeline outages. Should come back online quickly.
- Oct jet fuel demand was up! Ellen and Ryan did their part to support the energy complex.
- Highest ever petroleum demand for the month of October! But we’re worried about recession? Naphtha, gas oil quietly continued to grow this year. From the US perspective shows underlying strength.
- We should remember that exporting US oil doesn’t make oil prices rise. We are exporting more than ever and oil prices are still low.

Statistical report here: https://www.api.org/products-and-services/statistics/api-monthly-statistical-report

Libertarian Purity Test
http://www.bcaplan.com/cgi-bin/purity.cgi

https://www.npr.org/2019/10/29/774507027/saudi-arabia-moving-forward-with-plans-to-sell-shares-of-aramco

https://www.npr.org/2019/11/03/775878235/saudi-aramco-worlds-most-profitable-company-will-make-first-public-offering

Vox Podcast
https://art19.com/shows/today-explained/episodes/9ef9d5c4-b83e-41f7-ab2a-c28c126efc3f

86 Questions about the Aramco IPO that Investors need to know: http://www.transversalconsulting.com/document-request/
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This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com

Oil Prices Set to Climb? Investors Aren’t Betting On It
https://www.wsj.com/articles/oil-prices-set-to-climb-investors-arent-betting-on-it-11571569200
Armageddon coming to oil and gas industry? There are other ways for producers to make money (spare capacity in pipelines, etc.) that perhaps the high up investors in banks aren’t looking at.
Wall Street incentivized producers to prioritize drilling expansion over profits. Now the incentives are flipped and producers are trying to comply.
Is there any forethought from investors on future price of oil? Does Wall Street think prices will soft at $55 for awhile and thats why they are presuming companies to make money? Or is it just a right now kind of strategy?

Tesla speeds toward unpleasant earnings turn, Boeing faces tough questions
https://www.marketwatch.com/story/tesla-speeds-toward-unpleasant-earnings-turn-boeing-faces-tough-questions-2019-10-20
Investors don’t seem to have very high hopes for Tesla’s reported earnings.

Saudi Arabia plans bumper Aramco IPO, relying on easy loans and rich locals
https://www.reuters.com/article/us-saudi-aramco-ipo/saudi-arabia-plans-bumper-aramco-ipo-relying-on-easy-loans-and-rich-locals-idUSKBN1WW1JB
IPO delay - shows that Saudi Arabia has confidence to get a higher valuation

Aramco IPO Delay Shows Saudi Confidence
https://www.forbes.com/sites/ellenrwald/2019/10/18/aramco-ipo-delay-shows-saudi-confidence/#184dfe294002

Russia says it missed oil-deal target due to rise in gas condensate output
https://www.reuters.com/article/us-oil-russia-output/russia-says-it-missed-oil-deal-target-due-to-rise-in-gas-condensate-output-idUSKBN1WZ07A

https://www.cnbc.com/video/2019/10/19/russia-can-withstand-a-sharp-drop-in-oil-prices-finance-minister-says.html?

Dr. Dean Foreman and the API Monthly Statistical Report
- total inventories increased year on year for the 11th consecutive month - not good for oil prices?
- record high in terms of demand, record exports yet inventories still built up so production still really strong
- rig counts down - DUCs are leaving the pond and flying south? Or are they? As rigs come off the market, what’s the production lag? When will production turn over? Timeline has changed and shorter deliverability has gotten shorter. Days to weeks not months.
- Excess pipeline capacity now - will that impact production as producers get more on the margin with transportation?
- Keep crude price differentials in mind. Brent to LA light crude differential is only about $2/barrel compared to Brent-WTI differential which is still $5-$6/barrel.
- As pipelines continue to come online (and there are still more to come!) the price differential between Brent and WTI will continue to decline.
- Jet fuel demand downturn - some pullback usually in September as summer travel season ends. This drop is exceptional. Largest drop since September 2001. Could be indicative of broader economic change.
- Perhaps high demand this summer was a result of airlines overbuying jet fuel because crude prices were lower and they thought they might go higher and were buying to store?
- Distillate Economic Indicator - what we saw in 2008 was seriously indicative of a recession. Not seeing that low a plunge here. Right now its anemic but moved sideways. The sky isn’t falling yet.
- Petroleum exports and imports: export record in crude+product exports. Indicates that global demand for crude oil isn’t tanking. US is supplying all of the growth in global demand.
- What really changed month/month is on import side. Drop of 1 million bpd in crude oil imports. Lowest crude oil imports in a long time. US is net exporter of total energy for first time in 60 years!

Our earlier episode on the Aramco IPO - https://www.spreaker.com/user/9550540/energy-week-77

API Monthly Statistical Report - https://www.api.org/products-and-services/statistics/api-monthly-statistical-report

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com

Iran decries 'cowardly attack' on oil tanker
https://www.reuters.com/article/us-mideast-iran-tanker/iran-decries-cowardly-attack-on-oil-tanker-idUSKBN1WR05D

Iran State Media Say Oil Tanker Is Hit but Offer Conflicting Accounts on Cause
https://www.nytimes.com/2019/10/11/world/middleeast/iran-tanker-explosion.html

- Oil jumped slightly after Iran announced that Saudi terrorists attacked an Iranian tanker in the Red Sea but then came back down immediately.
- No explosion noticed
- Despite seeing all of these incidents, thats really all there’s been given all of the “tension” in the Gulf
- Are we back to the pre-Saudi attack scenario where we need more than a one off attack on a tanker to push prices up.

Trump's 15-billion-gallon plan for ethanol is a mistake
https://thehill.com/opinion/energy-environment/465376-trumps-15-billion-gallon-plan-for-ethanol-is-a-mistake
- vague policy designed to satisfy farmers but its not even doing that
- government makes policy designed for present situation and assumes that present situation will continue for future and when it doesn’t, we end up with the current ethanol policy that isn’t good for the environment, isn’t good for consumers and isn’t good for oil. It’s just good for farmers and ethanol industry.

Tesla Needs Its Battery Maker. A Culture Clash Threatens Their Relationship.
https://www.wsj.com/articles/tesla-needs-its-battery-maker-a-culture-clash-threatens-their-relationship-11570550526
- Panasonic vs. Elon Musk. Japanese battery maker isn’t happy with Tesla, which it manufactures batteries for.

Do California’s Blackouts Signal What’s In Store For All Americans?
https://www.forbes.com/sites/ellenrwald/2019/10/10/do-californias-blackouts-signal-whats-in-store-for-all-americans/#d9f2f85162b0
- California utility cuts power to hundreds of thousands of people to try to prevent wild fires
- Could this become a new normal for Americans if we end all fossil fuel use?
- What about rooftop solar + battery storage? Possible but can only power some appliances
- What about micro-grids?
- Energy policy might be better developed locally instead of monolithically. Might be better to have micro-grids in certain areas instead of giant grids

Saudi Arabia puts domestic stock exchange at center of Aramco IPO
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/101419-saudi-arabia-puts-domestic-stock-exchange-at-center-of-aramco-ipo

UPDATE 1-Saudi oil output seen at 9.86 mln bpd in Oct, Nov -energy minister
https://af.reuters.com/article/energyOilNews/idAFL5N26Z2SL

86 Questions about the Aramco IPO that Investors need to know: http://www.transversalconsulting.com/document-request/
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This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com

As Trump shifts policy, U.S. troops withdraw from northern Syria; Turkey ready to move in
https://www.latimes.com/world-nation/story/2019-10-06/turkey-will-invade-syria-isis-fighters
- what’s the economic impact? Trump tweeted he would “obliterate the economy of Turkey” if Turkey does anything he doesn’t like.

Iran says Chinese state oil firm withdraws from $5B deal
https://www.apnews.com/b11873fcb1ed49cf9ad2d0bfdc38798c
- Total already withdrew from this deal back in 2018
- Win for the Trump administration?
- Sign that things are going badly for Iranian oil and gas industry
- China to remain Iran’s primary trading partner.

Energy Secretary Rick Perry eyeing exit in November
https://www.politico.com/news/2019/10/03/rick-perry-expected-to-resign-000189
- apparently Rick Perry refuted this and does not plan to leave his position.
- currently working on deal with Ukraine, Poland and Baltic states for LNG

Ecuador to quit OPEC in 2020 in search of bigger export revenue
https://www.reuters.com/article/us-ecuador-opec/ecuador-to-quit-opec-in-2020-in-search-of-bigger-export-revenue-idUSKBN1WG4KB

Ecuador protests: State of emergency declared as fuel subsidies end
https://www.bbc.com/news/world-latin-america-49929272
Will leaping OPEC help relations with South and North America?
- Constraining production has done nothing for Ecuador
- Look for Ecuador to move closer to Mexico

BP to make Bernard Looney CEO as climate challenge looms
https://www.reuters.com/article/us-bp-ceo/bp-names-bernard-looney-as-next-ceo-dudley-to-leave-in-2020-idUSKBN1WJ0JX
- will he bring changes to BP? Will strategy

Robin Goodman - Bush China Foundation
- Focus on national security, international relations issues, nuclear non-proliferation in light of legacy of George HW Bush
- CNCP pulling out of Iran natural gas deal - china’s goals are long-term stability and growth of country. Planning out things in long-term. Shortest term planning they tend to do is 5 years, but leadership is looking much farther.
- whenever a deal comes across, leadership are looking for long-term whereas we tend to plan for right now, base on current market conditions.
- China understands its history and civilization as one that goes through ups and downs and are players in a long story. Make decisions based on those timelines.
- How does this apply to CNPC’s recent decision to pull out of gas field development of Iranian field? Does China think that Iran is no longer a good long-term investment? Last 5 year plan contained directive to double natural gas consumption. Ultimate goal to get off of coal. China also has a great deal of natural gas resources. China is not just looking for energy independence in terms of domestic production, they are looking for a diversified supply of energy. Natural gas will be China’s largest area of growth. Thinking has shifted around Iran in terms of the overall mix Iran was providing to China.
- China and Venezuela: To Venezuela, China is a very different kind of partner.
- Upcoming conference on China-US relations. Energy included in conference looking at many issues (agriculture, etc.) First conference since passing of fmr President George HW Bush.
[email protected]
Www.BushChinaConference.org

Happy Birthday to Ryan’s daughter Scarlett and happy anniversary to Ryan and Haylee!

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Aramco’s Repairs Could Take Months Longer Than Company Anticipates, Contractors Say
https://www.wsj.com/articles/aramcos-repairs-could-take-months-longer-than-company-anticipates-contractors-say-11569180194?
- difference between supply, production, output and capacity
- hard to parse out what is relevant and what the narrative that’s being painted
- how exactly

Oil steadies on hopes of full Saudi output restart
https://www.reuters.com/article/us-global-oil/oil-edges-further-above-64-on-doubts-over-saudi-supply-idUSKBN1W8037
- Won’t see full impact of lost barrels until mid-Oct because of how exports work
- Will we see a big draw in a month and traders will trade up?
- Some argue the market isn’t taking this seriously enough, but the market doesn’t have a motive and if the market doesn’t think the threat to Saudi oil is serious, then it’s not.

Saudi Arabia tells Japan's biggest refiner about possible shipment change: Nikkei
https://www.reuters.com/article/us-saudi-aramco-oil-japan/saudi-arabia-tells-japans-biggest-refiner-about-possible-shipment-change-nikkei-iduskbn1w7020

Mitsubishi says Singapore-based oil trader lost $320 million in unauthorized trades
https://www.reuters.com/article/us-mitsubishi-crude-trading-results/mitsubishi-says-singapore-based-oil-trader-lost-320-million-in-unauthorized-trades-idUSKBN1W510H
- trader has been missing since August
- what were his trades? How did he manage to lose so much money?
- How does the market feel about this?
- But it may not even impact PDS earnings because the company made $5 billion between January and March

Interview with Devin Geoghegan Global Director of Petroleum Intelligence from Genscape

- Tell us about Genscape and what you guys do.
Worlds largest private network of infield monitors. Power, oil, natural gas, natural gas liquids, maritime data.

- The oil market is currently obsessed with whether Saudi Aramco is capable of meeting its ambitious repair targets for the damage incurred at Abqaiq and Khurais. What light can you shed on what you see happening on the ground in Saudi Arabia in terms of production?
Detected fields producing no less than about 50% of original capacity right after attacks happened.
Wednesday/Thursday about 60% returned and along the week seen a couple offshore fields begin to ramp up production through detected signals. So far what Aramco has reported, they have corroborated what Aramco has said is happened.
Use satellites to tell how much heat is coming off an oil field and historical production to create oil flaring ratio. Draw a GPS fence around a field and measure how much heat vs. oil.
Of the 5.7 million bpd from impacted areas (Abqaiq, Khurais, Shaybah) 65% already flowing
Good portion of remaining capacity at offshore fields beginning to ramp up
Different grade, offshore oil is heavier.
Misunderstanding about which fields are connected to Abqaiq and which weren’t. Khurais not constrained by Abqaiq - processed on site
Shaybah misunderstandings - that field is less constrained by Abqaiq than more suspected. No difference in production detected. Diagrams indicate that Shaybah goes through Abqaiq but crude there is partially stabilized in Shaybah before going to Abqaiq. Aramco built massive NGL facility at Shaybah so they are processing it there and no need for that oil to go through the spheroids at Abqaiq. Goes straight to desulfurization towers. Shaybah oil is naturally really low in sulfur. Believe it’s being taken to Abqaiq and blended with other oil from Beri.

- Any impact of explosion on satellite readings?
Definitely didn’t build algorithm for missile attacks but shift to a manual mode and take over from algorithm. Look at points of light and temperature manually and then account for other heat. Takes a little longer.
Flaring data going back to 2012. Gathering field data for 5+ years. Even when people say field data is unavailable you can find information in Arabic/Farsi other languages.
Most detections come from field detection itself. Occasionally look at refineries but usually look at GOSPs and flaring.
Geofence each field based on flare stacks.
Data is provided every day.

- How could or should traders put this type of information and data to work for them?
Most use cases for data outside of missile attacks are blended with other information, can see if countries are producing more or less than they claim.
In events like this or during Venezuela power outages, data can cut through noise or bias from sources.

- Where can listeners find you and your business?
Website https://www.genscape.com/ and twitter @globaloilSD

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Trump: US 'locked and loaded depending on verification' of attack on Saudi oil field
https://www.cnn.com/2019/09/15/politics/trump-us-saudi-arabia-attack-iran-iraq/index.html

Does this mean we’re going to war? Trump is showing US ability to strike, but strike no imminent. Trump is giving Saudi ARabia opportunity to deescalate the situation.

Iran is like raptors in Jurassic Park, testing the fence in a different place every time.
Saudi Arabia Aims to Restore a Third of Lost Oil Output Monday
https://www.wsj.com/articles/saudi-arabia-aims-to-restore-a-third-of-lost-oil-output-by-monday-11568568391

Can output be restored? All output taken offline because plant closed and evacuated. Undamaged parts will be turned back on, damaged parts will take longer
Saudi Oil Attack: This Is the Big One
https://www.wsj.com/amp/articles/saudi-oil-attack-this-is-the-big-one-11568480576
This was not a momentous event in the global economy and won’t change things that significantly.

API Quarterly Report
- Bringing emissions down in US
- US upstream sector is firing at all cylinders.
- Resurgence in refining sector. Despite fewer refineries, but refining capacity utilization was 90%!
- Using more domestic crude and importing less. China might not be able to be so picky about where it takes it crude from.
- IMO 2020 and impacts on market
- EIA says we are still on target for US to become net energy exporter by end of year on monthly basis
- States using more natural gas saw lower prices over 8 years. States using more wind and solar saw higher prices

API Monthly Report
- 1.5 million bpd in new capacity (Q4 2019 compared to Q4 2018)
- In May the Brent-WTI differential was $10. New infrastructure coming online has helped bring that differential down.
- IHS forecasts average natural gas price of $2 in 2020. Is this realistic? Natural gas market depends on weather. If its colder, then natural gas prices would trend higher. Also LNG projects are a big variable. If they grow then will be more outlet for natural gas sales.
- Will weekly data releases from API and EIA have a greater impact on the market in a market that is overly focused on geopolitical situation?
- Increased product inventory in United States.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com

Follow Dr. Sullivan on LinkedIn - https://www.linkedin.com/in/drsullivenergy/

Follow Dr. Sullivan on Twitter - https://twitter.com/DrPJSullivan

Link to Saudi, Inc. Paperback edition with new chapter!
https://www.amazon.com/Saudi-Inc-Arabian-Kingdoms-Pursuit/dp/1643132253

Saudi King Appoints a Son, Prince Abdulaziz, as Energy Minister
https://www.nytimes.com/2019/09/08/world/middleeast/saudi-arabia-abdulaziz-energy-minister.html
- Major change as Saudi ARabia has never had a royal as oil minister
- He is very qualified but not as forceful a personality as Falih and this could be an issue when dealing with Novak

Tesla battery researcher unveils new cell that could last 1 million miles in ‘robot taxis’
https://electrek.co/2019/09/07/tesla-battery-cell-last-1-million-miles-robot-taxis/amp/
- Testing done in lab indicates that new battery cell could power vehicle for 1 million miles
- this is under lab conditions, but it is intriguing and represents interesting and compelling technology for the future.

What Should Be Next for Saudi Aramco
https://www.bloomberg.com/opinion/articles/2019-09-04/saudi-aramco-s-new-chairman-al-rumayyan-isn-t-right-man-for-job?srnd=opinion
- not a choice that inspires confidence
- could have picked someone else from the company, a former oil exec from US or Europe or even Asia
- Not reassuring to potential investors.

Venezuela Oil Woes Deepen
https://www.rigzone.com/news/wire/venezuela_oil_woes_deepen-06-sep-2019-159733-article/
- Russia and China are two biggest backers of Venezuela
- Madura could lose all international backing if these parties pull out.
- according to Platts Venezuela is only producing 700,000 bpd. According to Mark Papa, US oil production is set to grow by this amount.

Interview with Dr. Paul Sullivan
- Middle East must be considered as a whole with regards to national security
- U.S. trying to negotiate with Taliban near 9/11 anniversary
- Taliban aren’t a nation-state. Will sign a document and will then disregard immediately.
- Can the Taliban affect the markets? If they go on the attack and get others to support them. Afghanistan isn’t a big market player - though there are about $4 trillion worth of minerals in the ground that could be utilized.
- Iraq is also a risk. Big oil producer with little political stability
- Is Iranian oil getting through Iraq? Not like it did when Iraq would send it over the mountains into Turkey.
- Why don’t natural security events impact market the same way they used to? China and US! China stores lots of oil and uses it whenever price rise. US is biggest producer, Saudi Arabia is the largest exporter. China is the largest importer of oil. Attempts to cut production from OPEC haven’t really worked.
- Says that if Saudi and OPEC cuts oil production and succeeds in raising oil prices would send world into recession and stagflation. This would be a bad time to do that.

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Electric-Vehicle Shift Will Keep a Lid on Oil Prices
https://www.wsj.com/articles/electric-vehicle-shift-will-keep-a-lid-on-oil-prices-11566734402
Report based on shift away from Diesel engines in Norway, which already has massive incentives.
IEA Aggressive model shows 930 million EVs on road by 2040 - half the global car fleet. Is this really realistic? No. Claim demand for oil for road transport would be more than 18 million barrels lower than it is today.

Bernie Sanders’ Green Energy Dystopian Fantasy
https://www.forbes.com/sites/ellenrwald/2019/08/25/bernie-sanders-green-energy-dystopian-fantasy/#2c4cb38363d1

Oil slips 0.6% as global growth fears, Fed comments weigh on crude
https://www.cnbc.com/2019/08/22/oil-markets-us-crude-stocks-global-economy-in-focus.html
Is the oil market really just tracking equities markets and equities markets are just nervous?

China tariffs on U.S. oil to pressure exports, Gulf Coast prices: traders
https://www.reuters.com/article/us-usa-trade-oil-gulf/china-tariffs-on-us-oil-to-pressure-exports-gulf-coast-prices-traders-idUSKCN1VD2B6
Would Canadian crude shipped out of the US be subject to China’s 5% tariff on US oil?

Climate change could rain on Saudi Aramco's IPO parade
https://www.reuters.com/article/us-aramco-ipo-esg-insight/climate-change-could-rain-on-saudi-aramcos-ipo-parade-idUSKCN1VA0ES
Climate change probably not the biggest risk factor for Aramco IPO - Saudi monarchy probably tops the list.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit energyweek.substack.com