Energy Week

OPEC+ announces surprise oil output cuts

https://www.reuters.com/business/energy/sarabia-other-opec-producers-announce-voluntary-oil-output-cuts-2023-04-02/

- Does OPEC think that China's oil demand isn't coming back strong?

- Russia retaliating against price cap from West

- Want to defend $80 or higher oil

- Could it be about speculation? Speculators LOVE big price jumps.

- Reaction to lack of price support from demand side (US SPR buys that didn't happen when WTI went beflow $70)

https://www.woodmac.com/horizons/china-reopening-means-for-global-energy-markets/

- global implications if China's economy getting red hot and sucking up all the oil

- Could Saudi Arabia and OPEC be trying to cool off the Chinese economy by raising prices?

- LNG imports in China fell by 22% in 2022, only expected to recover 9% in 2023

Goldman Sachs raises Brent oil price forecasts after OPEC+ output cuts

https://www.reuters.com/business/energy/goldman-sachs-raises-brent-oil-price-forecasts-after-opecs-surprise-output-cuts-2023-04-02/

Special Guest - James Hill MCF Energy

https://www.mcfenergy.com/corporate

- publicly traded company on Canadian exchange exploring for oil and gas in Europe

- Europe sees natural gas as transition fuel

- Europe has been drunk on Russian gas for decades now, allowed themselves to ignore resources within their own borders.

- Russian gas was cheap so they didn't have to drill

- Drilled well within 6 months in Austria. Regulatory environment is still strict but permitting process has been much streamlined

- Pipeline infrastructure is actually very close to wells that are drilling now or considering drilling.

- Not fracking wells, proven wells. Ability to flow without much stimulation.

- engaging with the local community to engage concerns, haven't found much negative  sentiment from local communities.

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

Saudi Arabia and U.A.E. Clash Over Oil, Yemen as Rift Grows

https://www.wsj.com/articles/saudi-arabia-and-u-a-e-clash-over-oil-yemen-as-rift-grows-ff286ff9

- "Once close friends, the two biggest Arab economies are increasingly competing for money and power"

- Will the UAE leave OPEC? 

- Doubtful because UAE benefits more by staying in OPEC

- They like people to think that they are talking about leaving

- UAE has spare capacity

Forget Peak Oil Demand: A Thirst for Barrels Puts $100 in View

https://finance.yahoo.com/news/forget-peak-oil-demand-thirst-110000334.html

- Will China's demand push oil to $100?

- Amin Nasser of Aramco says demand will outstrip supply soon-ish (maybe H2)?

- Recession in the West and not in the East?

- Is a recession really coming? Mixed indicators.

- It isn't in OPEC's interest to have a recession or runaway oil prices.

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

Russia to cut oil output by 500,000 bpd in March

https://www.reuters.com/business/energy/russia-cut-oil-output-by-500000-bpd-march-2023-02-10/

-"As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the 'price cap'," Novak said

- Are they cutting to see who will pay above $60 and who will adhere to price cap?

- Oil isn't up that much

- Could be also to push customers to use all Russian services

Oil prices rise over 2% on Russian plan to cut output

https://finance.yahoo.com/news/oil-dips-heads-weekly-gain-015302054.html

- Goldman cut its oil forecast by $6/barrel

- Waiting for Chinese demand to surge in order for crude oil to "break out"

- What about rising tensions with China? Shouldn't that increase oil prices?

Natural Gas: Fasten Your Seat Belts

https://www.wsj.com/articles/natural-gas-fasten-your-seat-belts-5c0fcdf4

- volatility is much more extreme in 2022 than in any other year

- How much of that is due to Russia and the fact that we are WAY more dependent on natural gas than ever before?

- We should be concerned about 2023/2024 winter

Special Guest Ademiju Allen from Rystad to discuss the North American natural gas production and infrastructure.

- Gas markets analysts on North American gas team with Rystad

- Gas constraints in North AMerica. Appalachia largest resource in America, maybe in world? But not enough takeaway capacity. Atlantic Coast Pipeline cancellation was supposed to help but it was cancelled. Mountain Valley Pipeline also a problem

- If gas can't get to where it needs to go, you will have a problem if temperatures are lower than average

- Fortunately for weather in Northeast, seasonally mild winter and haven't seen structural impacts to gas consumption in region 

- Production has remained flat

- Is next winter a concern? Storage is seasonally high, comparatively. Broken down regionally it's higher in south-central.

- Lack of production wasn't just lack of takeaway but also supply chain issues.

- May through September is the period we have to go through and see how much gas is going into storage to see how prices will react to milder or aggressive temperatures. Really hard to say what will happen next winter.

- Natural gas prices on a basis. Situation in California is the opposite - they were elevated this winter for different reasons than northeast. 

- Cold snap over Christmas: utilities/independent system operators always SAY they are well prepared but every storm/event is different. PGM experienced issues with how freezing temps impacted equipment.

- The Permian has two things going for it that Appalachia doesn't: proximity to export facilities and that it is mostly associated gas.

- Minimal growth coming out of Appalachia year on year basis. Permian and Haynesville has potential for huge growth.

- Permian will grow at pace that oil production economics and takeaway capacity allows them to grow.

- Permian is producing record levels of gas, but takeaway for gas needs to be able to keep up and right now it's tight.

- Is lack of takeaway capacity for gas impacting oil production growth due to regulations that prevent flaring? No evidence for that. Flaring mandates are being following by public operators but not private operators.

- Private operators just pay the penalty on flaring.

For more visit

https://www.rystadenergy.com/

North America Natural Gas Solution

Global Gas & LNG Solution

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No OPEC ministerial meeting, but the Saudi oil minister gets his 2-cents in

Saudi energy minister cautious on oil production, warns on investment outlook and geopoliticshttps://www.spglobal.com/commodityinsights/en/market-insights/latest-news/oil/020423-saudi-energy-minister-cautious-on-oil-production-warns-on-investment-outlook-and-geopolitics- ABS says: "With all due respect, forecasters are good forecasters. They do their best but not necessarily what they forecast happens as a reality. So, if people can adapt it to my other mode, which is, 'I will believe it when I see it, and then take action' -- it's a much more profound, self-assuring, cautious approach,"- OPEC no longer meeting monthly- According to AbS, the market should trust the OPEC+ alliance's stewardship of the market- AbS: "All of these so-called sanctions, embargoes, lack of investments…will all convolute into one thing and one thing only -- lack of energy supplies of all kinds when it is most needed. That is my worry, and that is something I don't want to be responsible for." - He may not want to be blamed for it, but you can be sure that he will be.Saudi Arabia unexpectedly raises oil prices for Marchhttps://financialpost.com/commodities/energy/oil-gas/saudi-arabia-raises-oil-prices-marchRough start to the week for global oil suppliesNorway's Sverdrup oil production suffers outagehttps://www.reuters.com/business/energy/norways-sverdrup-oil-production-suffers-outage-2023-02-06- The outage is expected to last for 2-3 days, with a preliminary restart set for mid-day on Feb. 8Turkey halts oil exports after earthquakes: https://www.argusmedia.com/en/news/2416752-turkey-halts-oil-exports-after-earthquakes-update- about 1 million bpd is exported from Ceyhan port which is now offline.- don't know how long it will take to come back online. Will Northern Iraqi oil go south or will they hold off?Special Guest Prof. James Coleman @EnergyLawProfPresentation here:https://www.energylawprof.com/wp-content/uploads/2022/09/StrategicEnergyReserve.pdf- For the first time in 50 years our SPR is half empty. We are less prepared for an oil disruption than any time in the past- Basically we are trying to move our entire economy and civilization to dependence on source of energy were we have NO strategic reserve whatsoever.- We basically have 30 minutes of electricity storage- Argument: if we want to move to more dependence on these sources we need to ramp up our ability to provide strategic reserves of it. e.g. reserves of natural gas to make sure that our power plants can always have a source of electricity. - much easier to store natgas- bulk of our storage is hydro- can do gravity storage basically by pushing rocks up a mountain.- companies won't be incentivized to put in storage and transportation for natural gas stores needed because financially it doesn't make sense for them to invest in decades of infrastructure for a return that will only come when/if there's a big storm maybe every 5 years. - heat pumps work to save electricity when temperatures are moderate but when temps drop below 40F its not effective and you end up getting getting heat that uses twice as much energy to produce- in some places it's easier to have the hydro storageNote: Ellen will be speaking at the Atlantic Council event "Improving  sanctions enforcement against Russia: The challenge of 2023"Register here: https://www.atlanticcouncil.org/event/improving-sanctions-enforcement-against-russia/

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Worst London air pollution in six years as home fires burnhttps://www.theguardian.com/environment/2023/jan/27/worst-london-air-pollution-in-six-years-as-home-fires-burn

- wood is a really dirty burning fuel

- its expensive to pay for heating, people turning to fires, but this is actually a really high emission fuel

Natural Gas Shortages Hit China as Temperatures Plungehttps://www.nytimes.com/2023/01/25/business/china-natural-gas-shortages.html

- gas shortages mean that people only get a few hours of heat a day because the utilities just turn it off

- this happens in the US too! People don't realize that don't have a guarantee of service despite paying their bills

- propane tank/generators can be a backup

Why gas prices are surging this monthhttps://www.cnn.com/2023/01/27/business/gas-prices-increase-inflation/index.html

-  "Colorado’s sole refinery, the Suncor refinery outside of Denver, was disrupted by freezing temperatures. When the refinery tried to restart, it suffered a fire and equipment got damaged."

- Only having 1 refirey is a problem

- no longer receiving massive injections of emergency oil from the Strategic Petroleum Reserve.

- inventories for winter are low

- EU doesn't have good inventories and this will hurt Northeast because they usually get a lot of products from Europe.

- $4 gasoline could come by March instead of May.

- Will consumers continue to spend or will they pull back with gasoline prices high?

- but how much would demand actually be impacted by recession?

New York Gasoline Shortage Brews on Fallout From EU’s Russia Banhttps://www.bnnbloomberg.ca/new-york-gasoline-shortage-brews-on-fallout-from-eu-s-russia-ban-1.1876743German industry to pay 40% more for energy than pre-crisis - study sayshttps://www.reuters.com/business/energy/german-industry-pay-40-more-energy-than-pre-crisis-study-says-2023-01-30/- "German industry is set to pay about 40% more for energy in 2023 than in 2021, before the energy crisis triggered by Russia's invasion of Ukraine, a study by Allianz Trade"- The price increases will hit corporate profits across Europe by 1-1.5% and lead to lower investment- who is suffering more due to the Russia/Ukraine war - average consumer-wise. Are consumers in Russia or in the US suffering more inflationary impacts from the war?Analysis: India's rapid take-up of electric vehicles prompts rethink about long-term fuel needshttps://www.reuters.com/world/india/indias-ev-dawn-fans-expectations-fuel-demand-may-peak-early-2023-01-27/- question whether a rapid uptake in EVs initially is going to persist and going to translate to lower petroleum demand- also, the petroleum products tax - where will India get that revenue is everyone converts to EVs? will they transition it to power? how will they satisfy the demand for electricity.

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

Russian oil trade remains in ship-shape as the EU price cap has failed to stem Moscow's freight and insurance income, analyst sayshttps://markets.businessinsider.com/news/commodities/russian-oil-india-china-not-cheap-shipping-fees-kpler-analyst-2023-1

- "Debunking number one, no one really knows the price of Russian oil"

- Urals blend may be priced at $38/barrel (less than half price of Brent) but now Russia is selling all these other services to go along with it like insurance, shipping, etc. so they could be making $60+/barrel with all the other services rolled in.

Yellen says setting price caps on Russian refined oil products 'complicated'https://www.reuters.com/business/energy/yellen-says-setting-price-caps-russian-refined-oil-products-complicated-2023-01-21/- "Western countries are working to structure price caps on Russian refined petroleum products to ensure continued flow of Russian diesel, but the markets are complicated and there is a chance things do not go to plan" - Multiple different products make it harder to implement a price cap, apparently- European Union diesel ban comes into effect Feb 5- Yellen thinks crude oil price cap is successful so far because price for Russian crude oil dropped and Russia says its revenue is down -- but is it really?- There are so many ways to get around the price cap.U.S. energy head warns Republicans oil bill would lift pump prices

https://www.reuters.com/world/us/us-energy-chief-warns-republicans-that-oil-bill-would-raise-pump-prices-2023-01-18/

- Is this bill even a threat? This is posturing. Biden will just veto the bill and Republicans don't have veto-proof majority to override it.

- Doesn't make sense to put SPR releases under purview of Congress. Congress would be a terrible body to have approval authority over SPR releases.

- President should have authority to make these decisions

White House Aims to Reflect the Environment in Economic Data

https://www.nytimes.com/2023/01/20/business/economy/economic-statistics-climate-nature.html

- Idea put forth at the WEF by John Kerry, so it's unlikely to go anywhere

Dr. Dean Foreman from API: Monthly Statistical Report AND Quarterly Industry Report

- US consumed 25 million bpd of petroleum

- Part going into materials and petrochemicals was up

- EIA growth estimate up to 1 million bpd but IEA now estimating 1.9 million bpd of demand growth: different expectations for China's growth. Europeans anticipating shortage of natural gas and expectation they will replace this with diesel

- EIA estimates growth from US primarily. But API says growth flatlining. No tailwind coming from DUCs. How will we get 1million bpd growth? ANd where is growth from other non-OPEC countries? Less clear when this oil will come online.

- Less international drilling, more investment but costs are up. Despite weaker economic forecasts, oil demand is still strong

- API data focused on why production has been held back. Comparison with natural gas. Nat gas production is at all time high, exceeding pre-pandemic levels. Why? Gas has been led by Louisnana and Texas, which are conducive to gas drilling. Oil has more headwinds. Colorado stifling, New Mexico, Wyoming, North Dakota - drilling is all weak compared to pre-pandemic. Federal moratorium is a big issue for NM, WY, ND. Inability to build intrastate pipelines is hitting oil production.

- Appalachia should be the largest source of natgas in US but can't get Mountain Valley pipeline online even though it's mostly built! Finishing the pipeline would totally.

- Marcellus area natgas is prices nearly a dollar less than Henry Hub for next year. Why? This is big discount and is impacting the economics of natgas development.

- DUC issue is indicative of workforce limitations. limited completion crews so people making decision to keep completion crews on rigs that are operating because they might lose it?

- DUCs are theoretically the cheapest way to get product to market. News from Permian - changing how they are drilling, reshuffling. Is it economic?

- Distillate stocks increased for 3rd straight month. Are we in the clear? Concerns aren't totally alleviated but we are 33 days of supply as a nation (was 25 in October). Real question is how to get distillate to Northeast. Relatively warm winter has helped because more time to get diesel by rain and truck from midwest to northeast. Especially since imports from Europe are down.

- US net exports (crude oil and refined products) record for December 

- EIA projections for exports think that US will have surplus in Q1 2023 despite huge exports every month in 2022. How does this work?

- Fundamentally, the market is tight. US products are in demand, let's make sure we are supporting US production in ways that are consistent with the promises we've made to our allies.

https://www.api.org/

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China’s corn-based ethanol fuel threatens food security while crowding the market, state commentary warns

https://www.scmp.com/economy/china-economy/article/3207013/chinas-corn-based-ethanol-fuel-threatens-food-security-while-crowding-market-state-commentary-warns#Echobox=1673879264

- China can't feed its own people, and they are using corn for fuel

- The US puts ethanol in gasoline to replace MBTE (found to cause cancer) but now puts more in its gasoline to replace petroleum - policy started during Bush Admin

- What is going on in China? Why don't they just reduce the amount of ethanol in their gasoline?

On gas stoves:

- see

for a good explanation 

- for a quick run down: 

Biden agenda, lithium mine, tribes, greens collide in Nevadahttps://www.nbc4i.com/news/politics/ap-politics/ap-bidens-agenda-lithium-mine-tribes-greens-collide-in-reno/- What's really green or not?- $700 million loan guarantee offered by Biden admin for this mine even though permits are being challenged in judicial system

Special Guest Kunal Patel from the Dallas Fed on the Q4 2022 Energy Survey

Ellen's Investing.com Column

https://www.dallasfed.org/research/surveys/des/2022/2204#tab-report

~ 200 oil and gas firms in 11th district (152 responses to survey)

Main takeaways: 

- expansion of activity solid

- costs continued to increase but some moderation in increases

- supply chain delays continue to persist

- employment demand in the field

- uncertainty up amongst executives

- Most executives think price of oil at end of 2023 will be in the $80 range (average $84/barrel)

Capital expenditures: 2022 vs. 2023

- firms are looking to increase capital expenditures

- BUT there's also cost inflation, so much of the capital expenditure increases could just be due to cost inflation

- expect small increase in activity, nothing too significant, but spending will go up.

https://www.dallasfed.org/research/surveys/des/2022/2204#tab-questions

- Will cost inflation be higher than last year? thinking is that is won't be as much of an increase.

- How does this fit with the EIA forecast? Activity will increase. More firms are saying they are increasing production not declining but the increase is declining. Slower growth is the key word here.

- EIA says 12.6 million bpd by end of 2023. Can the Permian hit that? On an annual basis we will produce more, but on a month to month basis we won't hit as high production levels (13 million bpd in 2019).

- "Slowing growth" is the word for 2023?

- But maybe slower growth isn't a bad thing? Activity will be higher in 2023 than in 2022. How long will our resources last? 

- Cost inflation makes it hard for firms to know how much they are going to spend this year. Supply chain disruptions are still having a major impact. Even if firms wanted to increase activity they couldn't because they don't have the parts.

- Maturing asset base is listed as number 2 reason why growth isn't happening as fast. Are US assets closer to end of life cycle?

- price volatility mentioned in comments "The volatility in commodity prices is creating bid–ask spreads to blow out on transactions. Fewer deals are to be had in this style of environment."

- regulatory environment listed less this quarter

- could there be a recession? this came up a lot

- CEOs prediction for the price of oil at the end of the year is most impacted by what the price of oil was at the time they were asked for the prediction.

- What price are you using for your budget question gets a much more conservative answer though CEOs are moving up the underlying price for their budgets.

- "Leasing has increased and new drilling has increased."

Q1 2023 Survey will be out at the end of March!

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 rises on demand optimism as China borders reopen

https://www.reuters.com/business/energy/oil-nudges-higher-after-china-opens-borders-lifts-fuel-demand-outlook-2023-01-09/

- we are seeing back and forth with whether CHina's demand is going to surge or not

- Saudi Arabia cuts its OSP to Asia - indicates they think that demand in China is soft

- China issued a second batch of 2023 crude import quotas, Reuters says this makes the total for this year by 20% from the same time last year.

- Likely to see a slow climb upwards in demand

Saudi Arabia cuts oil prices for main market as demand slowshttps://gulfbusiness.com/saudi-arabia-cuts-oil-prices-for-main-market-as-demand-slows/

Taliban and China firm agree Afghanistan oil extraction deal

https://www.bbc.com/news/business-64183083

- Amu Darya basin apparently has 87 million barrels. CHinese company will invest $150 million a year to extract it

- Could be a tit for tat situation in which China develops oil for Taliban and then Taliban lets Chinese companies mine their rare earths which are actually more valuable

EOG eyes flat Permian activity, tighter global oil supply in 2023

https://www.reuters.com/business/energy/eog-resources-eyes-flat-permian-activity-2023-tighter-global-oil-supply-2023-01-06/

- EOG CEO says that global oil supply will likely tighten this year

- flat production, prices difficult to predict

- Sheffield says that Saudi won't let Brent stay at $75 and they will cut to get prices higher. 

Oil prices: Predictions for 2023

https://finance.yahoo.com/news/oil-prices-predictions-for-2023-164454199.html

Citi: Brent $80, WTI $75

JPMorgan: Brent $90

OPIS: Brent $95-96, WTI $90

Infrastructure Capital Advisors: $80-$100/barrel

Pioneer NR (Sheffiel) - base around $90 for Brent with highs up to $150Natural Gas Prices Are Coming Down. What to Expect for Energy Stocks. https://www.barrons.com/articles/natural-gas-prices-energy-stocks-51673027117- “The warmer-than-expected winter pulled forward the expected decline in natural gas price. Stocks could fall an additional 20% to 30% until they find a bottom,” Matt Portillo, head of research at Tudor, Pickering, Holt, told Barron’s

Using Up America’s Oil Reserve Was Easy. Refilling It Won’t Be.https://www.wsj.com/articles/using-up-americas-oil-reserve-was-easy-refilling-it-wont-be-11673220972

- DOE wants to wait until WTI is below $70/barrel on a "consistent basis"

- "A good buying window might be approaching if the administration wants to take it: WTI crude is trading around $74 a barrel today. Waiting around to sign future delivery contracts at the $70-a-barrel range could prove trickier."

-"A DOE spokeswoman confirmed that the agency won’t be buying for the February delivery window."

- "The idea is to use the fixed-price contracts as a carrot for U.S. oil producers to invest in production." -- is this incentive for any producer?

- If a CEO agreed to this now, Ellen thinks it would be grounds to remove them.

Tune in next week for Special Guest Kunal Patel from the Dallas Fed to discuss the latest Energy Survey

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WTI higher or lower than $73, Brent higher or lower than $77?

Ellen-Higher

Ryan-says Lower (but really thinks higher)

Biden adviser calls investor refusal to ramp up shale drilling ‘un-American’

https://thehill.com/policy/energy-environment/3771025-biden-adviser-calls-investor-refusal-to-ramp-up-shale-drilling-un-american/

“I think that the idea that financiers would tell companies in the United States not to increase production and to buy back shares and increase dividends when the profits are at all-time highs is outrageous,” Hochstein told the British newspaper.“It is not only un-American, it is so unfair to the American public,” he added. “You want to pay dividends, pay dividends. You want to pay shareholders, pay shareholders. You want to get bonuses, do that, too. You could do all of that and still invest more. We are asking you to increase production and seize the moment.” 

Real issues shale drillers face are higher costs for materials, products, labor, etc. unavailability of necessary things like steel parts. Is inflation un-American?

Biden admin beating up on Exxon, Trump admin also beat up on oil companies. Depend on public ignorance. 

Saudi energy minister sees no clear results yet from Russia price caphttps://www.reuters.com/business/energy/saudi-energy-min-all-opec-members-participate-decision-making-2022-12-11/- curious timing between Russian oil sanctions and end of Zero-Covid policies in China. Is there a correlation between more Russian oil becoming available and demand rising in China- is is a national security issue for China to buy too much Russian oil? Probably not. National security is protecting CCP- Saudi oil minister is looking with caution at global economy following implementation of sanctions and price cap policy.- Also, "The impact on China's economy from easing Covid restrictions still "needs time",Federal data: Kansas oil spill biggest in Keystone historyhttps://apnews.com/article/oil-spills-business-texas-kansas-us-environmental-protection-agency-eda391fc0924b34a08ff840615a7bc58Rush to electric vehicles may be an expensive mistake, say climate strategistshttps://www.cbc.ca/news/business/ev-transition-column-don-pittis-1.6667698Special Guest Patrick DeHaan, aka @GasBuddyGuy, Head of Petroleum Analysis at GasBuddyWhat's going on with diesel prices? - Has been the laggard this year. - Myriad of challenges this year combined with Russia/Ukraine challenges have made it problematic- Diesel prices soared in October when inventories were low, finally under $5/gallon now.- Diesel prices have eclipsed drop in gasoline prices per gallon- Both on the supply side and the demand side- Refineries had extensive turnaround this autumn. Mid-Sept through Mid-Nov when refineries do maintenance.- Coincided with Europe trying to build diesel storage, made for a tight situation though not as bad as the media played it.- Refinery utilization has been very high - unseasonably high numbers.- 25 days of distillate has jumped to 31 days meaning now we have $4.89/gallon- Cold spell coming up in US. CPC predicting colder than normal weather - pressure on heating oil. As a result of anticipated cold weather, wholesale price of diesel is going up. That will justify refiners keeping utilization high. Will help keep gasoline production up.- Refineries will continue to have above normal utilization but only in low 90s, probably- Europe has lost 6% of its refining capacity due to Covid. US only lost 5%. Market for U.S. products in Europe is good. - "The door is wide open for US refiners to fill that void."- Northeast has a population 10 times that of the Rockies but has the same refining capacity as the Rockies.- This why US needs more refining capacity. There is a huge need for refining capacity. - Closure of Philadelphia refinery was huge. It produced 1/3 of a million barrels a day. - Governments trying to incentivize bio-diesel. Tremendous incentives from government to convert but capacity is lower than traditional petroleum products. Conversions are happening at a bad time. Refining hasn't been lucrative until this year.Check out https://open.substack.com/pub/gasbuddyguy/p/gas-price-decline-hits-five-weeks?

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Oil prices rose as much as 2% on hopes of China’s reopening and as OPEC+ maintains output cut targetshttps://www.cnbc.com/2022/12/05/oil-prices-rise-as-much-as-2percent-on-signs-of-china-covid-easing.html

- OPEC decided production quotas from Oct 5 continued through end of 2023, next meeting June 4, 2023

- Meetings of JMMC only 2 months

- OPEC might feel like oil market is more stable? Or that it will take at least 2 months for market to figure out how its going to work post-Russia oil sanctions

- Does Saudi Arabia have an idea of what's to come in China for next several months, Covid-wise? Perhaps they have a band of oil consumption that they are relying on with upper and lower limits.- https://www.opec.org/opec_web/en/press_room/7060.htmChina set to ease COVID curbs further as markets cheer change of tackhttps://www.reuters.com/world/china/covid-confusion-china-authorities-row-back-curbs-2022-12-05/- The West isn't used to be able to protests in China. They are actually far more frequent than we realize. It's really more like a negotiation between local labor "union" and CCP. This happens a lot and the protests we see might not really be about Covid lockdowns and this could be a front.- according to some sources, "a new set of nationwide rules is due to be announced soon."

- how will this impact oil demand? OPEC doesn't seem think so, or its happy to just let Russia fill that demand?India to continue buying Russian oil, ministry source sayshttps://www.reuters.com/business/energy/india-continue-buying-russian-oil-ministry-source-says-2022-12-02/- "There is a lot of opacity in term of what the rules of the game are... There are always options to buy Russian oil,"- India used to not buy ANY Russian oil. Now it is a huge customer. India loves the discounts.Ghana paying for oil in Gold because then its not impacted by exchange rateshttps://www.reuters.com/markets/commodities/ghana-working-plan-buy-oil-with-gold-rather-than-usd-vp-2022-11-24/G7 price cap on Russian oil kicks in, Russia will only sell at market pricehttps://www.reuters.com/business/energy/g7-price-cap-russian-oil-kicks-russia-will-only-sell-market-price-2022-12-05/- sales to Europe going down, but that oil will go elsewhere

- Russian might not make as money but it will 

Russia’s European Crude Sales Collapse Ahead of Sanctionshttps://www.bnnbloomberg.ca/russia-s-european-crude-sales-collapse-ahead-of-sanctions-1.1855011Venezuela and Chevron sign oil contract in Caracashttps://www.cnn.com/2022/12/02/americas/venezuela-chevron-oil-intl-latam/index.html- 6 month lease for Chevron to export Venezuelan oil to the US to recoup its profits

- this signing was just an official allowing of Chevron to come back to Venezuela - doesn't signify more investment

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