To trade the daily moves in the market is to be an armchair strategist. JPMorgan estimates the crude oil market reflects a 17% probability of a worst-case supply disruption out of the Middle East. Presumably an oil spike would hasten the war’s conclusion via US pressure on Israel. So Israel’s attacks on energy infrastructure are […]
When conflict occurs that might disrupt global oil supplies, portfolios that include an allocation to midstream energy infrastructure usually enjoy some modest protection. Crude traded up 14% on Thursday night as the Israeli attack unfolded. Some opportunistic hedging by producers trimmed those gains during the day. Energy stocks as usual responded positively. The effect on […]
All over the world plastics are manufactured using derivatives of crude oil. Along with cement, steel and fertilizer these are what Vaclav Smil refers to as the four pillars of civilization. Modern life couldn’t exist without them. Renewables are largely irrelevant to their production. Anybody who studies how we use hydrocarbons must conclude, as we […]
Venture Global (VG) continued its post-IPO recovery last week. Back in January price talk was above $50 which would have valued the company at double market leader Cheniere. Pushback from institutional investors reduced the IPO price to $25, but it quickly sank below this (see Nothing Ventured, Nothing Gained). VG has earned a reputation for […]
Macro issues are driving the market even more than usual. Pipeline earnings came with barely a ripple as companies once again generally hit or modestly exceeded guidance. Crude oil rose on Monday on news that OPEC+ was planning a smaller than expected increase in output. This coincided with Ukraine’s spectacular attack on four Russian air […]
In conversations with investors the Shale Revolution is acknowledged as driving US hydrocarbon production up. What is less appreciated is how much this has been a US phenomenon, with no equal anywhere else in the world. The technologies of hydraulic fracturing (“fracking”) and horizontal drilling were developed sufficiently that they allowed access to enormous reserves […]
The mood was reportedly upbeat at the 22nd Annual Energy Infrastructure CEO & Investor Conference (known as the EIC) in Aventura, FL last week. Performance has been good. The American Energy Independence Index, which reflects the overall industry, has a five year trailing return of 27% pa, easily beating the S&P500’s 16%. Management teams provided […]
My partner Henry Hoffman attended the 22nd Annual Energy Infrastructure CEO & Investor Conference in Aventura, FL last week. Below are Henry’s notes from presentations and meetings. The mood at this year’s conference was upbeat, with natural gas demand driven by data center power requirements and the next wave of LNG projects taking center stage. […]
In early April JPMorgan reacted to Liberation Day by forecasting a recession in the second half of the year. They assumed the tariffs would cause a drop in business investment. They also raised their inflation forecast. They didn’t reckon on the President’s tariff flexibility, and so dropped their recession call following the 90 day moratorium […]
New Jersey, where your blogger resides when temperatures allow, had a good story to tell on energy until recently. Power generation relies heavily on natural gas and nuclear (38% and 56% respectively in February). Residential electricity prices are 19.7 cents per Kilowatt Hour (KwH), above the US average of 16.4 cents but well below neighboring […]
