Monday, April 17, 2017

The Market And Energy Page, T+86 -- April 17, 2017

Shale oil will not be able to keep up in the 2020s -- (consider the source) Data points:
  • 2020s: could be a "decade of disorder" (my gut feeling: 2020's will be the 1920's all over again)
  • demand will continue to grow, year after year, and shale will not be able to keep up
  • argues that shale, 2010 - 2014, brought a "lot of supply online. That subsequently, led to a price meltdown" (if I recall correctly, the price meltdown -- the $1 trillion mistake -- occurred shortly after October, 2014, when Saudi Arabia relaxed all quotas 
  • oil is volatile (yes, bust and boom cycles)
  • drastic cutback in CAPEX between 2000 and 2014: oil industry grew fivefold, from $160 billion to $780 billion
  • but, 2015 - 2016: CAPEX fell by over $300 billion (still significantly more than what was spent in 2007 -- and demand hasn't grown that much, in the big scheme of things)
  • supply shortfall could hit as soon as the 2020 - 2022 period -- (that's 3 - 5 years from now; a lot can happen in five years)
  • Barclays assumes a growth of 1 million bopd; IEA assumes a growth of slightly more than 1 million bopd
  • "all it's gonna take is a geopolitical crisis in some country, pick one -- Venezuela -- and a couple million bopd goes off the market (note: Venezuela is already history)(couple million bopd? Saudi Arabia can easily make up the difference; Bakken, Permian, Eagle Ford could easily make up the difference if we're only talking "a couple million bopd)
Haynesville: USGS releases new assessment of the Haynesville. Staggering.

WMB: Williams Partners to sell its interests in the Geismar Olefins facility, $2.1 billion in cash. Isn't that about how much Tesla burns through every quarter? Or is that every year? Whatever? WMB up in about a percent in pre-market trading.  Pays 4%.

Netflix: Netflix reports later today, I believe. Could be a bit of fireworks. [Update: incredibly good day. Up $4.33 or over 3%. Subscriber growth slowed, coming in under expectations, with 98.75 million total subscribers, up from 81.5 million a year ago. Analysts had expected 98.9% -- oh give me a break -- saying Netflix came up short - and then reporting 98.75 vs 98.5% -- really "inappropriate" headline. The company added 3.53 million international subscribers, missing its guidance of 3.7 million. Oh, give me a break. Profit easily beat forecast: 40 cents vs 37 cents forecast.]

Petrobras production: if I did the math correctly, it appears Petrobra produced about 85,000 boepd less in March than in February. It should be noted that "everyone" is going gaga over the fact that Saudi Arabia cut production around 100,000 bopd. Just saying. 

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