Miscellaneous
Natural-Gas Prices Surge, and Winter Is Still Months Awayhttps://www.wsj.com/articles/natural-gas-prices-surge-and-winter-is-still-months-away-11631986861- historically speaking crude oil prices actually do warrant new drilling but companies aren't.- Why aren't companies drilling more? Lack of money? Why isn't the money interested?Oil falls as storm-hit U.S. supply trickles back into markethttps://www.reuters.com/business/energy/oil-steady-us-storm-hit-supply-returns-slowly-2021-09-17/- Will Europe be forced to turn to burning fuel oil this winter for electricity when natural gas and coal are too expensive and will that push oil prices up?- Change in policy could dampen sentiment for movement.Equinor to pump up gas supply for tight European markethttps://www.offshore-energy.biz/equinor-to-pump-up-gas-supply-for-tight-european-market/- Can Norway save the day for Europe? Perhaps.Trade group wants restrictions on U.S. natural gas exportshttps://www.reuters.com/business/energy/trade-group-wants-restrictions-us-natural-gas-exports-2021-09-17/- Will restricting LNG exports help curb US natural gas prices?- IECA says US natural gas prices would need to double from where they are now to spur more drilling. Chemicals, Food, Materials could become more expensive or face shortages.- Government intervention in terms of promoting natural gas drilling.Oil giant Shell sets sights on sustainable aviation fuel take-offhttps://www.reuters.com/business/sustainable-business/oil-giant-shell-sets-sights-sustainable-aviation-fuel-take-off-2021-09-19/- How big of a "thing" is this? Crops could be used to feed people - industrial agriculture is NOT sustainable.China faces a potential Lehman moment. Wall Street is unfazedhttps://www.cnn.com/2021/09/16/business/wall-street-evergrande-china/index.htmlChina’s Evergrande Moment Is Looking More LTCM Than Minskyhttps://www.bloomberg.com/opinion/articles/2021-09-20/china-s-evergrande-moment-is-looking-more-ltcm-than-minskyWhat is China going to do? Ryan's Read: China will do whatever it has to. Can't seperate this story from Taiwan.Dr. Dean Foreman and API Monthly Statistical ReportGlobal natural gas issues:- For this time of year we have never had higher prices- Reflects Russian gas inventories are historically low, wind is underperforming & gas needed to prevent brownouts and LNG shipments being snapped up like crazy- Global natural gas market? Not yet because still so much less being trading internationally than oil- Rush to get cargoes available.Domestic natural gas:- Baker Hughes rig counts have actually gone down despite higher prices- Should be able to drill all day and make money- Producers in Gulf Coast have access to premium markets and should be able to export to internationally markets- Producers in PA, etc. don't have access to global value chainAre exports to blame for US prices?- actually exports motivate production. Haynesville is good example. On the margin there is some and it is creating pressure. Seek to place blame, consumer anger.- We have rolled back prices to before the shale revolution.- Should be able to drill profitably in every major basin so what's the problem? EIA modelled a healthy drilling response and we haven't seen that. Supply chain issues, risk tolerance issues, workforce issues, policy environment, debt taken on my companies- Pipeline capacity isn't really an issue. There are some isolated areas that have bottlenecks and there is flaring, but mostly not.Summer oil demand:- 23 million bpd of oil demand - higher than 2019. - Fuels may be switched around (more gasoline and distillate than jet fuel)- Other oils: intermediate oils naphtha and propylene, etc. historically have been 1/4 of demand, now it's over 30%. In August just under 28%.- Drilling responsiveness isn't there. What are the odds that we will get 1.8 million bpd of production growth in US between now and end of year? Note likely, especially with how rig counts haven't been growing.- Some price issues should recede as supply chain issues resolve but with oil and gas, it's a different issue. If the economy remains on track, we will see serious pressure on oil and gas in next year. Lack of investment, long lead time for projects outside the US.- EIA says global projected highs for oil demand are higher than 2019. IEA has a more bearish view on fossil fuels.- If supply can't keep up with economic growth then it could push prices up which will stifle demand.- Numbers economically are scorching hot - so much stimulus and it has had an impact. Even if price inflation overshoots, we will still see a lot of growth.- Global capital investment has significantly declined. Drilling activity has been muted.