Friday, July 14, 2017

The Energy Page, Part I, T+175 -- July 14, 2017

Glut: I don't know how others feel about this, but I am somewhat amazed. I would have thought US natural gas production would have set another record this year; it will not (apparently). US natural gas output is forecast to be up in 2017, but still below 2015 record. [See first comment: I will add these links to the "Data Links" page:
IPO: just yesterday I posted my thoughts that the Saudi Aramco IPO might not be launched. The tea leaves suggest I am wrong. London is considering relaxing its "IPO rules" to attract the IPO be launched on the London exchange.

Re-balancing. I won't provide the links (see tag, instead) but I have been blogging fairly consistently that re-balancing is not likely to occur any time soon. Now the IEA is saying the say thing. Bloomberg reports that the IEA is "less confident" on oil rebalancing as OPEC supply rises. When is a "cut" not a "cut"? When OPEC announces one. John Kemp has led the chorus on US shale operators "digging their own hole" by not cutting production. I haven't seen much from him regarding same issue dogging the cartel. Just saying.

On the other hand. Reuters is reporting "robust Chinese demand" seen helping drain glut.  On this, everyone agrees: it's no longer a supply issue, it's a demand issue. Well, almost everyone agrees. I've seen an occasional contrarian say otherwise. The WSJ reported the same thing earlier in the month (this may be a re-post: I can't remember if I have linked this before): US oil producers find a surprise new market: China. China, a large oil importer, is buying nearly 100,000 bopd from the US.

Going green. This is probably the biggest non-energy business story of the week. The Cannabist reports that monthly marijuana sales of $100 million is the "new norm" in Colorado. State politicians across the country cannot ignore this huge new revenue base. More states are going to legalize marijuana and tax it heavily.

Connecting dots: if I'm in the mood later this weekend, I will blog a stand-along post on this very interesting phenomenon.

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