Notes From All Over, Part 1 -- August 23, 2019

Wow, there is so much news out there, it's impossible to keep up. I used to blog between the hours of 5:00 a.m. and 11:00 p.m. but it now appears I need to add a third shift, 11:00 a.m. to 4:00 a.m.

The hour from 4:00 a.m. to 5:00 a.m. will be reserved for reading e-mail from readers.

First, this, a story that connects so many dots, I can't even begin. Here's the headline -- Shell enters Australia power industry with a $420 million bid for ERM Power. Link here. Data points and comments:

• this is RDS' first foray into Australia's highly competitive power sector
• a $420 million takeover offer for ERM Power Ltd, Australia's second largest energy retailer to businesses and industry
• the deal would instantly give Shell a power supplier with almost a quarter share of the commercial and industrial retail market in Australia, second only to Origin Energy in that space
• Shell will also get two gas-fired power stations
• it's all about green energy:

Shell, already one of Australia’s biggest gas producers, wants to use its global scale in oil and gas to build a power business, as the world rapidly shifts toward cleaner energy. It plans to boost annual spending on the strategy to between $2 billion and $3 billion by 2025.

I think the oilprice headline is even better: Shell takes step toward becoming world's largest power utility. 

Meanwhile, at the other end of the spectrum, now that Mexico has put a brilliant socialist in charge, Mexico is about ready to fall into a recession, if it's not already there. No link. Story everywhere.

Of course, the US recession is also "right around the corner."

Disclaimer: this is not an investment site. Do not make any investment, financial, job, career, relationship, or travel decisions based on what you read here or think you may have read here. 

Remember that story about the US to "drown the world" in oil, 2020 - 2029? After further thought, the writer of that story got it completely wrong -- got the thesis of the story or the conclusions she/he drew completely wrong. I'll get back to that later. But it's pretty obvious; I'm embarrassed I didn't realize that when I posted the story.

Global break-even prices for oil: much of this from oilprice and Bloomberg --

• Russia budget, 2019: Russia's budget is based on an average price of $40/bbl
• Saudi Arabia budget, 2019: needs $80 - $85/bbl to break even this year
• Russia won't let oil price rise that high ($80 - $85) -- that price would weaken demand for its own product which accounts for 40% of its national budget
• Putin feels current Brent Crude at $60 - $65, where it currently trades, as just about right
• Russia says its breakeven price for Urals Crude is $49.20, the lowest break-even price in over a decade; Urals Crude, Russia's key
• the US? as far as I'm concerned, $55 is at the low end of the sweet spot for price of WTI; I'm thinking $60 could be quite bullish -- the actual number is less important than the trend

Gasoline: will likely go below $2.00/gallon this autumn here in the south.

Going Back Home, Wilko Johnson, Roger Daltrey