Energy Week

https://www.cnbc.com/2018/12/03/qatar-to-withdraw-from-opec-as-of-january-2019.html

Could Qatar's decision signal more discontent among smaller oil producers towards the dominance of Saudi Arabia and its new partner, Russia? See:

https://www.forbes.com/sites/ellenrwald/2018/12/03/is-qatars-opec-exodus-a-blow-to-saudi-arabias-dominance/#67a0372d7ca6

Could an all out production war be on the horizon again? Shale producers aren't in the same position, Saudi Arabia isn't in the same position either.

Is is possible for oil to hit $70 by the end of the year?

https://www.bloomberg.com/amp/news/articles/2018-12-01/putin-says-russia-and-saudi-arabia-to-extend-opec-oil-pact

Why is Trump advocating for lower oil prices when it hurts the U.S. oil industry? This is a huge issue for shale oil producers, especially considering

https://edition.cnn.com/2018/12/02/europe/france-fuel-protests-violence-intl/index.html

CNN attributes this to rising wholesale oil prices but oil prices are actually going down. In fact it's fuel taxes.

https://mobile.reuters.com/article/amp/idUSKBN1O203A

Alberta has 35 million barrels of oil in storage
Discount on Western Canada Select (WCS) heavy blend hit a record at $52.50 below the West Texas Intermediate (WTI) benchmark last month.
Hopefully this won't make it more difficult to build a pipeline

https://www.spglobal.com/platts/en/market-insights/latest-news/oil/120218-oman-sees-consensus-forming-on-opec-crude-output-cut-minister

Oman - the champions of cutting. Emerging as voice of reason within the OPEC+ group

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

https://www2.argusmedia.com/en/news/1790487-opec-jmmc-committee-mulls-cuts-on-demand-concerns?backToResults=true

https://www.wsj.com/amp/articles/opec-edges-closer-to-production-cut-as-saudis-russia-signal-intent-1541956957

https://www.reuters.com/article/us-oil-opec-russia-supply/russias-novak-oil-oversupply-in-next-few-months-seasonally-driven-idUSKCN1NG0J3

https://www.reuters.com/article/us-oil-opec-oman/oman-oil-minister-says-majority-of-opec-and-its-allies-support-cut-idUSKCN1NG07S

What will OPEC do? Will they cut production?

Novak does not see over production, he says this is a seasonal surplus.

Saudi Arabia is talking about taking 500,000 bpd out of exports, not necessarily from production. They could put that oil into storage, which has been depleted.

President Trump tweeted that he hopes OPEC and Russia don't cut oil production because prices should be lower. Interesting, because oil prices are lower and even lower prices could hurt the U.S. oil industry.

Dean Foreman, chief economist from API
Findings and highlights:
New records for month of October for gasoline demand and in liquid feedstocks for petrochemicals.

Refineries and petrochemicals producing at record level for month of October.

"U.S. petroleum demand in October of 20.8 million barrels per day (mb/d) was the strongest for the month since 2006 and a continued reflection of solid economic activity." - This is in contrast too many of the forecasts we are seeing that show declining demand growth for oil. Much of that is attributed to an expected slowdown in global economic activity. Is the U.S. an exception? Or is October 2018 an anomaly?

September data showed softness on demand side but October data shows a rebound in exports and in demand. This isn't to say that all the economic news will continue to hit on all cylinders, and GDP growth has been growing a lot. We could see slowing growth in the future.

The EIA has shifted to its forecast to show a global surplus in oil market.

Gasoline and oil - Oil is the top factor going into oil prices but it doesn't always correlate week to week. In fact, gasoline prices remained steady even when oil prices went up. Can't predict where this will go but because production numbers for gasoline and oil are so strong, US consumers will continue to be cushioned.

Jet fuel - jet fuel delivers up 3.7% in October from August. Solid demand growth and seasonal patterns. Very solid. Year to year things are still up. Jet fuel demand is a good indicator of global economic activity. Not just travel but also shipping and consumer confidence. Financial market volatility could impact the real economy and consumption.

How crucial is it for refineries to continue running at full levels? Definitely highest throughput in October that we've seen. As long as demand is strong we need to see throughput high. Much more efficient in terms of the supply chain than importing products. Fewer total refineries but high capacity from refineries that we have. Fewer outages. Investments and improvements in monitoring have prevented outages from occurring.

Six refineries have actually closed but total capacity has actually increased.

Investments in distillation capacity to be able to use more light crude. This is happening not just in smaller refineries near shale patch but also in bigger refineries, like ExxonMobil's refinery in Baytown.

Keystone XL Pipeline: commitment from the administration but for every step forward another step back. More delays but hopefully it won't kill the project because it will really help the US and Canadian markets. There is a need for it in the market, especially for integration between the US and Canadian industries.

"We've got a really good market share fight between the US and global producers."

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Trump The Art of the Iran Deal
https://www.bloomberg.com/opinion/articles/2018-11-02/trump-s-iran-sanctions-won-t-squeeze-oil-markets-too-much
What is Trump's strategy when it comes to issuing exemptions for importing Iranian oil? He's not abandoning his hard stance on Iran, but probably had this strategy from the start.

Iran Reportedly Turns Off Oil Tanker Tracking Systems as US Sanctions Loom
https://sputniknews.com/middleeast/201811041069490916-iran-oil-tanker-tracking-sanctions/
Trackers may be exhausted, but they're keeping track of Iran's tanker fleet and how much oil is still on the market.
Send them some coffee!

Iraqi Kurds say upgrade raises oil pipeline capacity to 1 million bpd
https://www.reuters.com/article/us-iraq-oil/iraqi-kurds-say-upgrade-raises-oil-pipeline-capacity-to-1-million-bpd-idUSKCN1N90MX

Iraq halts Kirkuk oil to Iran for domestic reasons, won’t use KRG pipeline
http://www.rudaw.net/english/business/041120181
Iraqi oil could be key to keep oil prices from surging in 2019, but will the KRG and the Iraqi government reach an agreement on Kirkuk?


In Florida, Voters Must Decide Whether To Ban Offshore Drilling And E-Cigs
https://www.forbes.com/sites/ellenrwald/2018/11/04/in-florida-voters-must-decide-whether-to-ban-offshore-drilling-and-e-cigs/#3a3b7d8f42fc
If you like offshore drilling then you must also like vaping in the workplace. At least in Florida.

Commentary: Hedge funds turn negative on oil
https://www.reuters.com/article/uk-oil-prices-kemp/commentary-hedge-funds-turn-negative-on-oil-idUSKCN1NA1K7
Is this just part of hedge funds overall investment strategy or are they actually reacting to Iran sanctions news? Explains a lot of about why oil has dropped for 5 weeks, but if it goes low enough will their long positions pick back up and send prices higher in 2019?

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Port of Corpus Christi and US oil exports
https://m.chron.com/business/article/Port-of-Corpus-Christi-and-Carlyle-to-partner-on-13344698.php?utm_campaign=twitter-desktop&utm_source=CMS%20Sharing%20Button&utm_medium=social&utm_campaign=twitter-desktop&utm_source=CMS%20Sharing%20Button&utm_medium=social

Iran’s Ghost tankers
https://uk.mobile.reuters.com/article/amp/idUKKCN1N31Q1?__twitter_impression=true

Iraq halts Kirkuk oil deal with Iran
http://www.rudaw.net/mobile/english/kurdistan/291020181

Russia says oil production will stay high
https://www.cnbc.com/2018/10/29/reuters-america-update-10-oil-dips-as-russia-signals-output-will-stay-high.html

Libyan oil production to surge
http://businessweekme.com/libya-oil-production-set-to-surge/

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Download the report from the API: https://www.api.org/products-and-services/statistics/apis-economic-industry-outlook


Russia and oil
https://www.wsj.com/articles/u-s-sanctions-give-russian-economy-an-unintended-boost-1539682201
Ruble is devalued but oil is selling at higher prices - combining to give Russia an extra financial boost

Marine fuel regulations shift global refining
https://www.argusmedia.com/en/news/1773132-marine-fuel-limits-to-renew-quality-premiums-par?backToResults=true
Who will enforce these rules? Will we see shift to compressed natural gas as fuel regulations make traditional fuel more expensive

What is happening in the Permian?
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/101518-permian-oil-output-to-average-355-million-bd-in-nov-up-53000-bd-from-oct-eia
From an oil perspective, the Permian is almost a new Iran. But with more pipeline capacity, how much more could be produced? EPIC LNG to be converted to crude until the crude pipeline is in place. Could be online by Oct 2019.

Dean Foreman
API Monthly Statistical Report
Good news: production sets new record for US - 11 million barrels per day in oil production. exceeding world oil demand growth
Bad news: normal slowing, more pronounced demand slow down this year

Crude inventories are up, refinery runs slowed.

Jet fuel demand - brightest of bright spots for US in terms of production and demand. Along with diesel fuel is a good indicator of how economy is going. Economic activity is good! A little stronger than GDP, but this is the relations expect to see with economy.

U.S. petroleum exports - last month saw decrease in US petroleum exports. China bought no crude oil from the US in August. Buying patterns are shifting. Largest increase in exports this month following largest decrease month before. Willingness of global customers to buy US oil, especially considering WTI discount compared to Brent.

Bottlenecks in US infrastructure - there are other ways to bring oil to market. With price differential increasing demand, the market will find ways to work.

Upstream productive potential continuing to produce economic value. U.S. is gaining advantage where it can compete in global energy markets. Relatively speaking US is isolated from that. price differential is a good sign that U.S. oil market is.

Oil market disruptions - how long would it take for the market to reorient itself? Within two months the market could redirect barrels as long as the barrels are on the market.
"US industry's near term deliverability is as best as its ever been."

US is producing record amounts on only half the rigs that were in use in 2014.

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India wants sanctions waiver:
https://www.reuters.com/article/us-india-oil/india-wants-us-sanctions-waiver-after-cutting-iran-oil-imports-officials-idUSKCN1MI1GA
Does India really deserve a waiver considering how much oil from Iran its still importing?

Saudi Arabia Tells Trump No More Oil (by yours truly)
https://www.forbes.com/sites/ellenrwald/2018/10/05/saudi-arabia-tells-trump-no-more-oil/#6a0cbb26dfc0
Saudi Arabia isn't moved by Trump's strong words and isn't going to flood the market with oil.

Explosion at Canadian oil refinery
https://www.wsj.com/articles/canadas-largest-oil-refinery-reports-major-incident-1539012161
Despite an outage at a refineries that supplies the northeast US, we shouldn't see gasoline prices rise because there's a record amount of gasoline in storage for this time of year.

E-15 announcement likely from Trump
https://www.spglobal.com/platts/en/market-insights/latest-news/agriculture/100818-trumps-expected-e15-announcement-not-likely-to-clear-rfs-reform-stalemate
Don't put E15 in your car if you don't want to void the warranty and don't worry, most of your gasoline will stay the same.

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Saudi Solar project on the rocks
https://www.wsj.com/articles/saudi-arabia-shelves-work-on-softbanks-200-billion-solar-project-1538328820
- problem with execution in Saudi government
- will Saudi Arabia EVER really go green?

Tesla. full stop.
https://www.nytimes.com/2018/09/30/business/elon-musk-tesla-whats-next.html
- slap on the wrist from the SEC
- Elon Musk will remain CEO
- Tesla stock jumped 17% after the announcement

Trump Saudi oil pressure
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/100118-trump-ramps-up-saudi-opec-criticism-to-little-effect-so-far?
- Trump is clearly upset because he believes that Saudi Arabia should be pushing the price down in light of the looming Iran sanctions

Hedge funds and Saudi oil
https://www.reuters.com/article/us-oil-prices-kemp/hedge-funds-doubt-saudi-arabia-will-replace-iranian-oil-kemp-idUSKCN1MB2DI
- Hedge fund managers are betting Saudi Arabia and company can't or won't increase oil production enough to make up for Iranian crude that comes off the market due to sanctions
- Many believe that Saudi Arabia isn't capable of producing more, but do they really know? Does anyone (other than Aramco) really know how much they can and should produce?

Venezuela oil workers protest
https://www.bloomberg.com/news/articles/2018-10-01/pdvsa-and-international-jv-oil-workers-protest-pay-in-venezuela
- Why does Venezuela even have a currency with 111,000 percent inflation?
- Venezuela's oil production was at 1.22 million bpd in Sept but is continuing to fall. When will Venezuelan production go below 1 million bpd.

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India will continue to buy Iranian oil in Rupees
https://in.reuters.com/article/india-iran-payments/india-set-to-pay-for-iranian-oil-using-rupees-from-november-sources-idINKCN1M01IL

What will Iran do with these Rupees? To what extent can that help the Iranian economy? Is India now reversing course, since Indian refineries are now saying that they aren't ordering more Iranian oil from November

OPEC meets in Algeria, fires back at Trump
https://www.forbes.com/sites/ellenrwald/2018/09/23/saudi-arabia-and-russia-fire-back-at-trump-on-oil-prices/#688eb3672c29

Is Trump really afraid of higher oil prices or is this just "marketing"

Saudi Arabia plans to increase oil production
https://www.spglobal.com/platts/en/market-insights/latest-news/oil/092318-saudi-arabia-plans-q4-output-boost-to-meet-mounting-demand-oil-minister

"We have seen higher demand in October," Falih said." right after he said in the OPEC press conference that OPEC did not see a need to increase production at this time.

Major Traders Are Talking About $100 Oil Again
https://www.bloomberg.com/news/articles/2018-09-24/major-traders-see-return-of-100-oil-due-to-u-s-iran-sanctions

But...all of that depends on whether $2 million barrels per day of oil disappears from the market

President Trump on OPEC at the UN General Assembly
https://www.vox.com/2018/9/25/17901082/trump-un-2018-speech-full-text

Is Trump pushing back too hard on OPEC? Could it backfire?

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https://www.cnbc.com/2018/09/17/chances-of-economy-falling-into-a-recession-within-3-years-historically-lowgoldman.html?

Does this mean Goldman Sachs sees oil demand continue in to rise? No threats to oil demand? Will they be making investments along these lines?

https://www.reuters.com/article/us-opec-report/opec-sees-slower-2019-oil-demand-growth-warns-on-economy-idUSKCN1LS1QI

How much oil is in supply at the moment? How accurate are our measurements of supply? Lots of fudging going on. Companies cut budgets for exploration. Will we see that playing out in 2025?

Perry-Novak-Al-Falih
https://www.reuters.com/article/russia-usa-novak-perry-meeting/update-1-perry-encourages-saudi-opec-russia-to-work-against-oil-price-spike-idUSL5N1VZ64H

Perry wants to see Russia and Saudi Arabia increase production to keep a lid on prices, especially before the election. However, Saudi Arabia just said that they are ok with seeing oil prices rise above $80 in the near term.

News: oil prices unchanged on monday
https://www.reuters.com/article/us-global-oil/oil-steady-as-iran-sanction-fears-face-u-s-china-trade-tensions-idUSKCN1LX01V

Oil prices seems to have already baked in trade fears.

https://www.forbes.com/sites/ellenrwald/2018/09/18/did-saudi-arabia-just-troll-elon-musks-tesla/

Saudi Arabia invests $1 billion in EV start up Lucid just 1 month after Elon Musk claimed that he had secured funding for taking Tesla private from the Saudis.

Interview with Dr. Foreman - Chief Economist API

www.api.org

How do you try to get a grasp of demand? Indicators?
Look at outside sources. What we are seeing globally are projections from outside sources that suggest global demand for all oil liquids has exceeded 100 million barrels per day. US domestic data corroborates this.

OPEC revised down its global demand figures for 2019 - this is a reflection of a more tame environmental. Indicative of higher prices. EIA sees continued growth. Consensus for economy is slower growth and with it slower growth in oil demand.

US petroleum exports - observed setbacks in Q3
Up until June huge progress in bringing down net imports of petroleum in US. Over last two months saw backsliding - both in crude oil and in products. Bigger change in August. Exports down 1.3 million barrels per day. Imports up as well.
Likely due to souring trade relations but that’s not definitive. Need to see data on where oil is going. WTI/Brent spread widening may be a result of shifting crude trade due to Iran sanctions.

If cause of WTI/Brent spread is buying patterns then it will normalize over time. But if widening is due mostly to decrease in WTI (which is due to infrastructure bottlenecks) then the differential will not resolve nearly as quickly.

Where is natural gas right now? The market needs more markets!

Impact of coal in emerging markets? China and India have tremendous coal resources domestically. Electrification of vehicle fleet is based on their ability to generate electricity from coal. Coal then becomes the key to the viability of their transportation system.

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https://www.wsj.com/articles/u-s-crudes-discount-to-global-prices-opens-taps-to-exports-1536701798

WTI and Brent differential is almost $10, Shale oil producers have to offer oil at discount because of lack of pipeline capacity

https://www.reuters.com/article/us-usa-energy-saudi/us-and-saudi-energy-ministers-meet-in-washington-doe-idUSKCN1LQ1SU

Khalid al Falih and Rick Perry meet in DC (after attending a Texas A&M football game on Saturday night with Exxon CEO Darren Woods) to discuss nuclear technology for Saudi Arabia
Possible leverage for US over Russia when it comes to nuclear tech

https://www.reuters.com/article/us-venezuela-oil-exclusive/exclusive-venezuela-signs-oil-deals-similar-to-ones-rolled-back-under-chavez-document-idUSKCN1LQ2FQ

According to a document obtained by Reuters, Venezuela wants to bring in small companies to help its oil industry. What kind of companies will be interested in coming in? Is there any chance the companies will take the risk of working with the Maduro government?

https://www.reuters.com/article/us-oil-prices-kemp/traders-bet-iran-sanctions-will-leave-market-short-of-crude-kemp-idUSKCN1LR1V8

Perception of lack of oil by traders is pushing up prices now
Will rising gasoline prices impact the election? Some think it will impact people at under $4/gallon some think it won't impact consumers until it hits $4/gallon

https://twitter.com/plattsoil/status/1039607935809273857?s=21

Colonial and Plantation pipelines go through South Carolina and North Carolina. Could be flooding or power outages from Hurricane Florence which could impact gasoline availability in North East. Jones Act will make it difficult to bring oil by ship to North East ports unless it is suspended.

https://www.forbes.com/sites/ellenrwald/2018/09/07/tesla-is-elon-musk-for-better-or-for-worse/#3a49fd201f79

Elon Musk is what drives Tesla's share price.
Musk says he spends most of his time on engineering problems. Perhaps that's not the best use of his time as CEO.

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