EOG Resources, Inc. (EOG)

REMEMBER HOW THE BRILLIANT EUROPEANS WERE GOING ALL IN ON WIND AND SOLAR?
Gas Is So Scarce in Europe That Coal Is Making a Comeback

Vanessa Dezem, Jesper Starn and Isis Almeida: Tue, June 15, 2021, 2:00 AM
(Bloomberg) --

Europe is so short of natural gas that the continent -- usually seen as the poster child for the global fight against emissions -- is turning to coal to meet electricity demand that is now back to pre-pandemic levels.

Coal usage in the continent jumped 10% to 15% this year after a colder- and longer-than-usual winter left gas storage sites depleted, said Andy Sommer, team leader of fundamental analysis and modeling at Swiss trader Axpo Solutions AG. As economies reopen and people go back to the office, countries like Germany, the Netherlands and Poland turned to coal to keep the lights on.

Europe has long been at the forefront of the battle to reduce global warming. The continent has the world’s largest carbon market, charging the likes of utilities, steel producers and cement makers for polluting the environment. But even with record carbon prices this year, low gas reserves mean burning coal -- the dirties of fossil fuels -- has become more widespread again.

“Energy demand has been pretty strong in Europe and we have seen a recovery from the pandemic,” Sommer said in an interview. “Gas storage is so low now that Europe cannot afford to run extra power generation with the fuel.”

The return of coal is a setback for Europe ahead of the climate talks in Glasgow later this year. Leaders of the world’s biggest economies failed to set a firm date to end coal burning at the meeting of the Group of Seven at the weekend in Cornwall, U.K.

Europe faced freezing temperatures earlier this year, boosting demand for heating at a time liquefied natural gas cargoes were being sent to Asia instead. Russia sent less gas to the continent via Ukraine ahead of the start of the Nord Stream 2 link to Germany, expected later this year.

All of that mean that European storage is currently 25% below the five-year average and benchmark Dutch gas surged more than 50% this year. Futures are currently trading near their highest level for this time of the year since 2008.

“People thought Russia was going to book more capacity via Ukraine and that just hasn’t happened in a meaningful way,” said Trevor Sikorski, head of natural gas and energy transition at consultants Energy Aspects in London. “The market is super tight, it’s trying to get less gas into power.”

Electricity demand, which crashed as the coronavirus locked down cities from Frankfurt to London, is now back. Usage in countries including Germany, Spain and the Czech Republic are above the five-year average, while demand is flat in Italy and France, Morgan Stanley said in a report Monday.

With gas supplies already tight amid heavy maintenance cutting flows from Norway, utilities have turned to coal to keep the lights on. While the price of carbon is trading near a record, many have hedged it years in advance. That means burning coal could still be profitable.

Generators with “highly efficient” new plants can probably manage to produce power from coal until 2023, even with high carbon prices, Axpo’s Sommer said.

The G-7 recognized that coal is the single biggest cause of greenhouse gas emissions in its final communique. But the group promised only to “rapidly scale-up technologies and policies that further accelerate the transition away from unabated coal capacity.”

“It’s not a great a message to be sending,” said Ursula Tonkin, portfolio manager of the Whitehelm Capital Low Carbon Core Infrastructure Fund, the Australia-based company that has $4.4 billion of assets under management in all of its funds.

While it would be “fantastic” if politicians came to a deal, coal is likely to be phased out anyway by 2030, 2035, said Tonkin. “Politics are important, but you also have the economics of the transition really kicking in within that timeframe,” she said.
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Demand is coming back faster than supply and we're going to need more supply to meet that demand," said Phil Flynn, senior analyst at Price Futures Group in Chicago.

The International Energy Agency (IEA) said in its monthly report that the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, would need to boost output to meet demand set to recover to pre-pandemic levels by the end of 2022.

"OPEC+ needs to open the taps to keep the world oil markets adequately supplied," the Paris-based energy watchdog said.

$SU $CNQ $ENB $COP $BP $OXY $VET $XOM $TOT $CVX $MPC $EOG $CLR $EPD $E $KMI $PSX $HAL $PTR $SNP $WMB $BKR $EC $IMO $CQP $MMP $TRP $XOG

The thing is that oil companies across the globe have been doing a lot less drilling, even with the increase in price. Normally the price goes up, oil companies increase spending, drill more to meet the higher price and then the price comes down. For the first time, that hasn't happened. So it doesn't matter what the Saudis and anyone else want the price of oil to be at, or what effect it will have on the economy. Once the existing wells are at full capacity that's it until more wells are drilled. That takes time, not just money.
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Oil Extends Gain From 2018 High With Saudis Upbeat on Demand
Ben Sharples: Tue, June 1, 2021, 8:37 PM

(Bloomberg) -- Oil extended gains after closing at the highest since October 2018 as OPEC+ provided an upbeat assessment of the demand outlook and the prospect of a speedy return of Iranian barrels to the market waned.

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said demand “has shown clear signs of improvement” as the alliance ratified an output boost for July. His Russian counterpart also spoke of the “gradual economic recovery,” with the comments driving West Texas Intermediate up by 2.1% and pushing Brent above $70 a barrel at the close for the first time since 2019.

Adding further support to the market was an indication that talks to revive a 2015 nuclear accord with Iran has been delayed for now. An Iranian official said a deal is now expected to be finalized in August.

Oil is up around 40% this year as the recovery from the pandemic in the U.S., China and parts of Europe boosts the outlook for fuel consumption, despite a Covid-19 resurgence in countries such as India. Global demand may rebound to levels seen before the outbreak in a year, according to the International Energy Agency, signaling a quicker comeback than its previous estimates.

The prompt timespread for Brent was 41 cents in backwardation -- a bullish market structure where near-dated prices are more expensive than later-dated ones. That compares with 9 cents at the start of last week.

OPEC+ ministers agreed Tuesday to press ahead with an increase of 841,000 barrels a day in July, following hikes in May and June, although the group didn’t give any hints on future supply moves. There’s reason to be cautious about the second half of the year, with the outlook dependent on two hard-to-predict factors: the coronavirus and nuclear talks between Iran and the U.S.

Diplomats had hoped to fully restore the nuclear deal before Iran’s June 18 presidential elections, after which the presidency of Hassan Rouhani will wind down. An agreement is expected to result in a lifting of U.S. sanctions and an increase in Iranian oil exports, although there are varying estimate on how much crude could return to the market.
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Why Oil Keeps Rising Even as Other Commodities Pull Back
Avi Salzman: June 2, 2021 11:09 am ET

Prices of commodities like steel and corn have pulled back from the highs they hit last month, but oil has continued to climb, buoyed by signs of increasing travel around the world and new pressures on supply.

Brent crude futures, the global benchmark, were trading 0.4% higher, to $70.56 a barrel, on Wednesday. West Texas Intermediate futures were up 0.3%, to $67.94 a barrel.

Oil has risen for some of the same reasons as other commodities — the speed of the reopening and supply shortages in some areas.

But other factors are also at play that may prolong the oil rally even as some other commodity prices have begun to decline. Morgan Stanley analyst Devin McDermott wrote in a note published Wednesday that political dynamics were likely to cap the growth in oil supply even as demand continues to rise in the years ahead.

The International Energy Agency recently wrote that oil-and-gas companies would have to keep their capital expenditures at or below 2020 levels for the world to achieve net zero carbon emissions by 2050. McDermott expects public company shareholders will demand that companies adhere to this rule. Exxon Mobil (ticker: XOM), Chevron (CVX), and Royal Dutch Shell (RDS. A) all faced reckonings last week over their climate impacts, and the pressure will only grow.

Demand, however, may not drop as much as supply — though there is a robust debate going on about whether demand has already peaked or could keep rising for at least another decade.

Morgan Stanley oil strategist Martjin Rats expects demand will keep rising to 107 million barrels a day by 2033, from 100 million barrels at the start of 2020. To satisfy that increasing demand, Rats expects state-owned oil companies and private firms will have to ramp up production, and oil prices will need to rise to fund that expansion. Currently, public companies account for about half of oil supply. Prices might even have to rise to $80 a barrel to induce private companies and state-owned ones to cover the gap. Rats increased his long-term Brent price target to $60 from $50.

McDermott thinks that different stocks will outperform depending on oil prices. At $60 West Texas crude prices, APA, formerly Apache (APA), Diamondback Energy (FANG), Ovintiv (OVV), ConocoPhillips (COP), and Devon Energy (DVN) look attractive, he says.

At $70, those stocks still look good, as do companies with more financial or operating leverage like Murphy Oil (MUR), Occidental Petroleum (OXY), and Continental Resources (CLR).
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"Even if Iran is able to add to global supply, Goldman Sachs (NYSE:GS) still feels confident about the oil market."
"Even aggressively assuming a restart in July, we estimate that Brent prices would still reach $80 per barrel in fourth quarter 2021," the bank said in a note.

Goldman Sachs sees it now. $80 is in my opinion a conservative estimate.

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Brent nudges towards $70 on rosy U.S. data, oil demand outlook
Thu, May 27, 2021, 9:33 PM: By Florence Tan
SINGAPORE (Reuters) - Oil prices pushed higher on Friday, supported by firm U.S. economic data and expectations of a strong rebound in global fuel demand in the third quarter, while concerns eased about the impact of any return of Iranian supplies.

Brent crude futures for July gained 16 cents, 0.2%, to $69.62 a barrel by 0050 GMT while U.S. West Texas Intermediate crude for July was at $67.17 a barrel, up 32 cents, or 0.5%.

"Oil headed higher on robust U.S. economic data and growing sentiment that if the Iran nuclear deal is revived, it will not include an immediate removal of sanctions and that the oil market will not get quickly flooded with excess supplies," OANDA analyst Edward Moya said in a note.

Brent and WTI are both on track to post weekly gains of 5% to 6% as analysts expect global oil demand to rebound closer to 100 million barrels per day in the third quarter on summer travel in Europe and the United States following widespread COVID-19 vaccination programmes.

Robust economic data from the United States, the world's largest economy and oil consumer, also buoyed risk appetite. The number of Americans filing new claims for unemployment benefits fell to the lowest since mid-March 2020, beating estimates.
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Maybe OPEC and big oil across the globe are going to send a message to the Dem0crumbs and assorted 1ibera1s. You want to get rid of us so bad, we're just going to stop increasing production. Let's see how you do then. We'll be doing great when the price of oil hits $200 a barrel. It's possible that they all could get together when Dem0crumbs and assorted 1ibera1s are in fact trying to end the use of oil. Oil producers have to fight back or disappear.
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A green marubozu is the most bullish candlestick that there is...extreme bullishness! CPE is looking darn close. I bet that at least one oil stock has one today...solid green, no wick at all.
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Very well written analysis of CHK opportunities.

Chesapeake's Golden Opportunity: The Powder River Basin
Chesapeake's Golden Opportunity: The Powder River Basin https://seekingalpha.com/article/4201026?source=ansh $CHK, $EOG

There are 3 tankers from Saudi Arabia already in the gulf, 19 on the way. Reuters reports 40 million barrels. This oil is sold to American big oil. I get the ship sailed and the xom, mpc, cop, cvx of the world bought it, I just hope they paid spot.
Do we realize that this oil was slammed into our market and China intentionally. This whole Saudi/Russia was one big con......
https://finance.yahoo.com/news/saudi-arabia-may-route-tankers-140951915.html
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Sarepta number 3:
Contrarian Buy Rankings
$UBER ▪️ Uber Technologies Inc.
$EOG ▪️ EOG Resources Inc.
$SRPT ▪️ Sarepta Therapeutics Inc.
Rankings ➡️ http://wallstsolver.com/contrarian

$BNGO $EOG $JAGX

THIS WEEK IM GONNA BE RICH!