Notes From All Over -- The Early Evening Edition -- February 10, 2022

Spare capacity: there is no question that spare capacity is a myth. Link here. That's just one of many data points. The spare capacity myth has been pointed out for the past year or so.

But.

The myth of spare capacity has nothing to do with the price of gasoline. Up until recently it was pretty much divided between those who felt there is a lack of spare capacity with those who felt there is no lack of spare capacity. The consensus is that there is no space capacity. 

Backwardation. We now move to the next issue. Will there be a relative shortage of crude oil / gasoline this summer when airlines are back to full capacity and US driving season begins? The answer is here: backwardation. 

Cushing inventories: at their lowest seasonal level since 2009 and will need to rise to prevent a severe spike in physical pricing. Link here.  

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Other News

Oasis, from WAR52, Oasis transcript:

• capital return program of $280 million in buybacks; and, base dividend + variable dividend;
• 41 wells be be drilled in 2022 with two rigs
• includes nine 3-mile laterals
• OFS (oil field services) costs for 2022 expected to increase 15%
• OMP (Oasis Midstream Partners) simplification and cash receipt now completed
• company paid $139 million to modify swaps

Wind turbines: inflation is no friend. Link here. 

Wind turbines and solar panels: outlook for utility-scale renewables sours after record year. Link to Rystad Eenrgy at oilprice. 

ISO NE: finally the EIA is reporting this, something we've been pointing out for months. To keep the lights on in Boston, ISO NE needed to use oil-fired generators. Link here or go directly to the EIA.

8 + 6 = 14. Link to Julianne Geiger:

• six new-generation ERP2 reactors (European Pressurised Reactor)
• a study of eight additional reactors
• along with nuclear energy
• 50 offshore wind parks in France, which currently has none; and,
• double the onshore solar capacity