WTI Trending Toward $80 -- April 18, 2024

Locator: 47032B.

BP: without question, this is the biggest energy story of the day -- 

• if folks recall, BP changed it's name to "Beyond Petroleum" about a decade ago.  Now, today, not so much. In fact, not only is BP's renewable energy boss stepping down, the whole division is being folded into other operations -- never to be heard from again
• boss says she wants to spend more time with her family
  
• E&P industry to take note

Mexico: see RBN Energy below, but look how bad this is for Pemex -- new Dos Bocas refinery --

• won't reach consistent levels of meaningful fuel output until at least 2026;
• won't see full ramp-up earlier than 2028;
• throughput will more likely plateau at no more than 60% of the nameplate capacity 
• actual throughput likely to be around 200 Mb/d of crude oil on a calendar-day basis

Global warming: 

• UAE rainstorms; country in third day of flooding
  
• record-breaking storm this week brought much of the country to a standstill
• operations at the Dubai airport remain disrupted after Tuesday's storm flooded the runway, resulting in flight diversions, delays and cancellations

Israel:

• Israel forcing Europe to put more sanctions on Iran
• brilliant
• if US, Europe want to see Israeli restraint, Israel needs to see more sanctions on Iran
• pause? Israel re-loading

Politics:

• Trump ties up in court for at least two weeks:
• the longer the trial goes, the less time he's on the campaign trail
• fund-raising disrupted

TSM:

• posted a 9% rise in first-quarter net profit
• beat market expectations
• rides a wave of demand for semiconductors
• world's largest contract chipmaker has benefited from a surge towards AI

China: numbers don't make sense; renewable energy numbers confuse analysts; this is nothing new; not sure what business writers don't understand. From Bloomberg today:

The boom in renewable energy in China is exacerbating a problem measuring electricity data in the world’s second-largest economy.

The gap between power consumption and production grew to 46.5 billion kilowatt-hours in March.

That means 6.2% of generation was missing from monthly output statistics that investors and policymakers use to assess important economic growth factors like gross domestic product.

Going out on a limb here:

• LinkedIn: huge; much bigger than most folks realize; I don't use it; have an account but not in that universe any more
• Reddit: this might be worth a look; most recently had a really, really good explanation of global chips

Today, later:

• EVs, Europe
• Trucks, California ports

***************************
Back to the Bakken

WTI: trending toward $80. Not on my bingo card.

Friday, April 19, 2024: 42 for the month; 42 for the quarter, 241 for the year
40151, conf, Armstrong Operating, Harkness 2,
37517, conf, BR, Mazama 1D MBH,

Thursday, April 18, 2024: 40 for the month; 40 for the quarter, 239 for the year
40141, conf, CLR, Veigel 8-9H,
39881, conf, Whiting, Van Buren Federal 5103 42-36 2B,
36086, conf, Hess, BB-Federal A-LS-151-95-0915H-7,

RBN Energy: Pemex's Dos Bocas refinery still facing the startup blues.

One of the most anticipated and potentially impactful refinery startups in North America in years is the Dos Bocas project (officially the Olmeca Refinery), a 340 Mb/d plant under development by Mexico’s state-owned Petroleos Mexicanos (Pemex) in the southeastern state of Tabasco. The project was seen as the cornerstone of Pemex’s plans to reduce Mexico’s dependence on the U.S. for refined fuels. Construction began in 2019 with startup originally scheduled for 2022, but that timeline was never really feasible, and the Mexican government has issued multiple public statements since mid-2023 proclaiming that construction was complete and startup was imminent. However, almost a year has passed and there is no indication that any meaningful operations have occurred. So how close is Dos Bocas to startup and, more importantly, full (or close to full) production? In today’s RBN blog, we’ll provide our views on those vitally important questions. 

RBN’s downstream consulting group doesn’t see Dos Bocas reaching consistent levels of meaningful fuel output until at least 2026. It also expects full ramp-up no earlier than 2028 , with throughput more likely plateauing at no more than 60% of the nameplate capacity (implying actual throughput of around 200 Mb/d of crude oil on a calendar-day basis).  While that sounds quite pessimistic, we believe it to be realistic, taking into account the number of operating challenges which the project still has to overcome and the many years of performance issues Mexico’s refining sector has experienced.