On Friday both the Wall Street Journal and the Financial Times ran stories about planned capex on data centers by the big US tech companies. The DeepSeek news of two weeks ago hasn’t resulted in any discernible change. The case for increased power generation remains intact. On Wednesday Williams Companies will report their quarterly earnings. […]

Although the US is energy independent and a net exporter of petroleum products, we still import certain blends of crude. Canadian tar sands oil is the heavy type for which American refineries are configured as is Mexican oil. Shale oil is lighter. So we buy what we are set up to handle and sell what […]

Following Monday’s “sputnik moment” for AI the market has had a few days to consider the ramifications of DeepSeek’s apparent breakthrough. Mark Zuckerberg reaffirmed Meta’s plans to spend $60-65BN on data centers. They have embraced an open-source approach to AI, believing that sharing code freely will drive penetration. Since DeepSeek also published their code any […]

Venture capitalist Marc Andreessen called it, ”AI’s sputnik moment.” The news that Chinese start-up Deepseek may have leapt ahead of the US in AI caused an unpleasant start to the week. In 1957 Sputnik’s orbit led to the creation of NASA and fears that Russian satellites could attack the US from space. While Americans have […]

One source of recent volatility in midstream has come from a stock that wasn’t even listed – Venture Global (VG), the LNG exporter whose IPO priced on Thursday. The fundamentals could not be more positive. Trump has reversed the LNG export pause, wants US energy dominance and asked our trading partners to buy more American […]

I was chatting with an investor the other day, and he remarked that there are three powerful legs to the midstream story. They are demand growth for natural gas; attractive valuation; the incoming administration’s support for traditional energy. He felt that there’s too little appreciation of the underlying support from these three elements. Last year […]

Last week the Energy Information Administration (EIA) released their Short Term Energy Outlook (STEO). People are often surprised to learn that US power demand has remained the same for the past couple of decades – at around 4,000 Terrawatt Hours (TwHs). The economy and population keep growing but offsetting this is improving energy efficiency. Electricity […]

It’s now less than a week until Donald Trump takes over in the White House. The past couple of months have caused many to wonder why there’s such a long gap between the election and the inauguration. It’s a holdover from the eighteenth century when the time was required to allow messengers to travel to […]

Wells Fargo has recently suggested that the market may start paying more attention to the P/E ratios of midstream stocks. The sector has historically been valued using Free Cash Flow or Distributable Cash Flow (DCF), which is FCF less the maintenance capex necessary to preserve the value of existing assets. P/E hasn’t been used much […]

Data center demand for natural gas was the big energy story last year.  Wells Fargo referred to “a momentous year for midstream” with this as the biggest driver. It’s been consistently cited by JPMorgan and Morgan Stanley. Wells Fargo calculated that C-corps outperformed MLPs by 23%. This was a substantial difference and means that the […]