Are We on the Cusp of an Energy Price Supercycle?

Daily Standup Top Stories

Stuart Turley: [00:00:12] Energy transition stalls as oil supercycle risks return. Michael, this is absolutely imperative. This is a fantastic article from Irina Slav at oilprice.com. She’s got some fantastic points. And I’ll tell you what, this is what investors are calling me up and saying, what are we going to look for? Rystad just warned that global oil supply could struggle to meet rising demand. It also says reserve replacement from new projects is expected to cover less than 30% of production in the next five years. Holy smokes, Batman. The slow, costly energy Transition and under-investment and exploration have led to big oil and NOCs. Refocus on oil and gas analysts or warning another oil super cycle may be needed after 2030. Michael, you’ve heard me say I’m in a long-term oil bowl. Well, guess what? In a world filled with flat or growing demand after 2030, another oil Supercycle would be needed. Artrium Avernoff, deputy head of analyst at Ristad Energy said, he’s cool cat. I’ve followed him for a long time. [00:01:30][78.0]

Michael Tanner: [00:01:31] No, he’s very good. I love the stuff that Rice stats put out. I mean, I don’t want to just jump out and say, oh, wow, they’ve hit the nail on the head here. I think they have, but I think everybody in the oil and gas business has known about this. I mean when you talk about declining oil and gas wells, if you don’t continue to drill, you don t continue to add production. And we know that demand increases year over year. It just is what it is. The more countries become moved from second world to first world, the more that we desire things, there’s always going to be an increased demand for energy. So to think that we can just not drill more, not, you know, put more production onto the market. It ends up being a, you end up getting in this interesting scenario and it’s why we talk about the cyclical nature of the oil and gas business as prices fall, so does new drilling. When new drilling falls, eventually production rolls over and the whole cycle comes around. So I think you put this out perfectly. What does this mean for investors? We’ve got to understand what cycle you’re in and invest accordingly, understand where you are in the cycle and invest accordingly. [00:02:30][59.6]

Stuart Turley: [00:02:31] Absolutely. And Armin Nasser says from Saudi Arabica’s president and CEO, reality has revealed the transition plan that has been oversold and under delivered for large parts of the world, especially Asia. And guess who’s buying a lot of LNG to electricity import facilities. [00:02:51][19.7]

Michael Tanner: [00:02:53] Alright, what’s next here? [00:02:54][0.9]

Stuart Turley: [00:02:54] Let’s go to the next story here. What should investors look for in nuclear and critical minerals in the balance of 2025? Michael, I wrote this story, and as I was putting this together, the nuclear energy sector is just absolutely on fire and driven by global efforts to achieve net zero emissions. But we also need a lot of power for base load that wind and solar don’t provide the DOE fast track micro reactors. And I’ve got a list of the projects that they’ve got. They’ve got Alto, Altera’s Atomic Alchemy. Deep fission at different reactors with natural resources, Oklo and Terestra. But I also took the time, Michael, to put in here companies to benefit from funding in uranium and nuclear equipment manufacturing. Because I’m going to be doing a deeper dive on investing on what’s parts of the different nuclear sector, as well as the grid sector. And in this one, Uranium sector beneficiaries. You have Centris, which is a L E U on the stock market. And then you are dash energy or erg. URG is their sticker symbol, Camaro. But on the nuclear, you know, the old standard, nuclear equipment is Westinghouse. And then I also picked out five top stock performers and out of a group Q1 and Q2 of this year. And I’ve got those listed in there, Centris, Boss Energy, NextGen Energy, and New Scale. So there’s some pretty nice ones in here to take a look at. [00:04:31][97.5]

Michael Tanner: [00:04:32] No, there is. And I think if, you know, going back to what we just talked about in the first segment, investing into cycles, understanding where you are in a cycle is critical. So the question is, where are we in this nuclear cycle? And I think that the answer is we’re at the precipice of there’s going to be a lot of investment coming into it, you’re going to see it being pushed heavy by the Department of Energy. Chris Wright, Secretary of Energy is already heavily, heavily pushing nuclear. So the question is, okay, if I’m looking to then allocate capital into the energy space, it probably makes sense to have a little bit of my portfolio allocated towards nuclear because you can probably get some of these stocks at cheap values relative to where they’ll be that in five years. Again, people always think about where a stock has went. Well, that’s helpful. If you’re looking at Microsoft, if you’re looking at a company that’s been public for 50 years, but if you look at a relatively new company, and I wouldn’t say new company but a relatively new public company, one that is sort of on the precipice that has been held down by regulations, the question is, where do these companies project without these regulations? I don’t think you get the nail on the head. I think it looks really, really good and it’s going to be very interesting. Our boys over at nano nuclear are going to do real well. [00:05:35][63.7]

Stuart Turley: [00:05:36] Oh, absolutely. I’ve been tracking them like a hawk. Hey, let’s go to China. China takes advantage of Russian peace talks amid US pressures on India. This story is pretty interesting. Michael, we did a summary on the Friday peace talks with President Trump in Alaska. And then you take a look at what happened on Monday when President Trump had the European Union folks. He had the Prime Minister of India and Vladimir Zelensky even had a pretend suit on that looks like he got it out of a child’s locker room. But in the midst of ongoing peace negotiations, it’s amazing how much China has absolutely started picking up. China capitalized on this, absorbing the discounted Russian oil that India is relinquishing. And I do not understand why President Trump is beating up on India. You and I had that that YouTube video that went off as I was saying, I don’t think we should be picking on India on this. And now China has picked up all of the extra barrels per day of 40,000 to 50,000 barrels per day that is just kind of finding its way to China. But what we’re seeing is for India, the tariffs strain US ties and could raise domestic fuel costs if alternative suppliers prove more expensive. I still don’t have all my answers on this one, but I’m watching it like a hawk. [00:07:00][84.6]

Michael Tanner: [00:07:00] Yeah, I’m with you. I don’t necessarily know if I have a good answer with you, I do think that if the closer we can get to a perceived deal with Russia, as it pertains to Ukraine is going to make it less likely that these sanctions on China and India take point. Now, I think going back to another video that we had go off was the fact that I think Trump is making a mistake in targeting India and we, we should be trying to work with India, considering their economy, their population base, the amount of demand they have for energy. We should be really good partners with India and I think what we’re trying to do is be sophisticated about how we go after Russia when at some point we have to figure that we either have to go, we’re going to go at Russia via all these other countries, let’s just go at Russia. And I think part of what they’re trying do to steel man the other side is let’s cut Russia off at its funding source. If we’re able to stop the funding, Maybe then we’re able to stop this war. The problem is China and India don’t care. They’re going to buy Russian oil. We’ve had sanctions on Russian oil for years now and they haven’t worked. They’ve continued to, it’s actually helped them because they’ve been able to buy it at these cheaper prices. So if you, if we’re all concerned about that, I think we need to sort of go straight to the source. It was good to see Zelensky in a suit. I think the all black suit is a weird look. It’s a little bit of a grim Reaper look, I. [00:08:18][77.5]

Stuart Turley: [00:08:18] Well, the one good thing is, is that our tax dollars have paid for a designer group for Zelensky, and I’m glad that they can save money, save the United States taxpayers money by using the children’s Let’s go to the next story. How effective is lawfare on the left against energy and how much does it cost consumers? Michael, I did not have this on my bingo card, but when I sat here and kind of looking at lawfare, what is going on and how does it cause? A recent LinkedIn post by Doug Sheridan highlights this shift, noting how environmental organizations are ramping up legal actions such as Greenpeace, And I hope this takes out the Greenpeace group, staggering $670 million verdict on them, but Sheridan views an overreach obstructs the energy sector and implies hidden costs, and let’s go through some of those. Environmental law fair has grown expense just totally off the chart, Michael, with 226 new climate-related cases filed globally in 2024, bringing the total to, ready, 3,000 across 60 countries. In the U.S., which accounts for half of these, 164 of them were filed in 2024. This is the cost to consumer. Michael, are you ready? Billions in hidden taxes. Just go figure that out. Okay. So, lawfare, you’re good and tried and true buddies. I wonder how much of the USAID money actually went into there. But if you take a look, there’s 17% gasoline prices by 62 cents a gallon could be a 17% increase based on 2024 average, adding hundreds to annual to people’s bill every time they fill up. So think about this. 17% based off of your usage, go hug a climate activist next time you see him and realize that you’re paying hundreds of dollars out of your pocket for him to lay down in the road. [00:10:29][131.0]

Michael Tanner: [00:10:29] No, absolutely. Go, go hug a tree, go, hug a climate activist and say, thank you for, for making things the way we are. I don’t have much to add on this. I think it’s, it’s really interesting. And anytime lawyers get involved, we know the prices go up. So let’s move on to this last one here. I love oil slick, Gavin Newsom himself. [00:10:46][16.8]

Stuart Turley: [00:10:47] Oh, you speaking of oil slick. Hey, Gavin Newsom warms up to big oil on climate reversal, but can you trust him? And I put a byline in there in a word, Michael. No, there’s no way in the world I would absolutely trouble even waste my time trying to believe him in a stunning pivot that left environmental reeling and industry insiders cautiously optimistic. California Governor Newsom is negotiating a compromise with big oil to ramp up drilling in Kern County, and I’m going to hold my breath because it’s not going to happen. This move is averting a potential gasoline price spike. Michael, when I had Doomburg and when I have Mike Umbro and I had David Blackmon on the podcast, Mike Umbreau was saying, it’s going to start at $8 gas and most likely go to $10 gasoline and $10 diesel when the two refineries, which is 20% of California’s refinery capacity shuts down next year. And now, now… Governor Newsom is sitting there going, Oh, excuse me, but I’m going to start issuing permits, Michael, they used to do 3000 permits in the Kern County. They’ve now had 24 this year. There’s no way you can drill a well in California. [00:12:04][77.4]

Michael Tanner: [00:12:05] No, absolutely. And what I find interesting is this little quote that he says, we are all beneficiaries of oil and gas. No one’s naive about that. I mean, well, yeah, considering the amount of hair gel that you’re using, my dude, it’s you’re going to need to increase it because with the decline curve coming on some of these wells, he’s worried about his kids supply. And I only make that joke because I mean what is crazy to me is this screams Gavin Newsom just getting ready to run for president. I mean I don’t think he has any desire to actually do this in California. I think what he’s doing is he’s licking his finger a little bit, putting it up and seeing where the wind blows and says, if I’m going to eventually run for president, I should probably try to be more pragmatic when it comes to energy, because all they’re going to do is put on campaign ads, $8 gas,$ 8 gas, $8, $9 gas, no middle-class people can afford to live in California. It’s only the rich and elite. So I think that’s part of what we’re doing now on the counter side. Hey, this actually might be a great opportunity to, you take the opportunities you’re given, you play the hand that you’re dealt if you’re California. So I think putting some words in maybe Mike Umbro’s mouth, but I’m sure he recognized this. However, whatever it takes to get Gavin Newsom to come to the negotiating table, it is what it is. That’s the hand you’re dealt. Great. If he wants to run for president, that’s perfect. Cause now it gives us an opportunity to negotiate. Yes. It’s, it’s not the best deal, but it’s a deal nonetheless. And it could at least increase the minutes. [00:13:21][75.6]

Stuart Turley: [00:13:21] But in the permits is where it’s at. Take the Palisades fire. They haven’t built any houses yet. So why should you trust him when he says, oh, I’m going to let you drill until I see rigs in the air, why would you want to invest, you know, in this? Yes, that’s where it all up. They’re still importing 60 between 65 and 70% of their oil that they use. This impacts the United States. This is not just a California. [00:13:50][28.7]

Michael Tanner: [00:13:51] Issue. No, it does. We’ll cover the Palisades fire permitting conspiracy on some other podcasts, guys. Don’t worry. We won’t bore you here, guys, but all right, Stu. Let’s jump over and touch a little oil and gas finance. Before we do that, guys let’s go ahead and let us pay the bills. As always, thank you for checking us out here on the world’s greatest website, www.energynewsbeat.com. Stu and the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and the gas business. Go ahead and hit the description below for all links to the timestamps, links to the articles. You can also check out the link to our Substack, theenergynewsbeat.substack.com a great, great place to support the show guys, you know, we, we. We send out a two to three articles per week covering everything that’s going on in the energy business. Stu does a great job. This last article we talked about with Gavin Newsom, if you were a sub snack subscriber, you saw this in your inbox yesterday. So if you want to stay up to speed, we also would would encourage you to sign up for a paid subscription. We give a lot of subscriber only content away and do monthly and are kicking off and send you quarterly state of the energy unions, which you’re getting ready to record at the beginning here in September. So stay tuned for that guys. That’s TheEnergyNewsbeat.substack.com. We’d also like to shout out friends of the show, Reese Energy Consulting guys, if… You touch the midstream space at all. AKA, if you’re an upstream company, you need help with your first purchaser or your gas marketing contracts. If you’re a midstream company and just need a little help taking on a project that you don’t have quite the staff for, Reese Energy Consulting is your go-to team. Guys, they’ve been at this business and have experienced. In every major region, in every major country, and they have experience working with two people in a garage all the way up to the largest publicly traded companies. So if you’re wondering, are you a fit for them? The answer is yes. Finally, guys, investinoil.energynewsbeat.com tax season is upon us, guys. So please fill out our tax analysis at investinoil.energy newsbeat. Com to see where your tax burden might be. Go ahead and then fill out the portfolio survey. Depending on if you qualify or not, we will send you a bunch of information on what it looks like and means to invest in oil and gas. We’ve got a great ebook that you can talk about. And then if you qualified, we may or may not point you in the right direction. Once again, guys, investinoil.energynewsbeat.com. It is never too early to start thinking about your 2025 tax burden. [00:16:09][138.7]

Michael Tanner: [00:16:10] And it’s a tough day for the market, Stu. S&P 500 is down about 6 tenths of a percentage point. NASDAQ stumbled about 1.5 percentage points. Two and 10 year yields down about half a percentage points and 7 tenths a percentage respectively. Dollar index actually jumped a little bit by about a tenth of a percentage point. We did see Bitcoin fall to about $113,000. It’s down about 2.39 percentage points. Crude oil did not have a good day down about 1.3 percentage points down to about 61.99 or about 75 cents off that index. Brent oil basically stayed flat 6603 so that a WTI Brent spread increased a little bit. Natural gas didn’t have a great day down at about 4.3. Percentage points still down $2.76. So natural gas kind of enters really bearish terror and enters, in my opinion, really uneconomic territory relative to where it is. So it’s going to be interesting to see how it plays out. XOP, which is our EMP securities contract, down about three-tenths of a percentage point. OYH, which are oil field services contract, is down about 3 quarters of a percentage point. I mean, really, the reason for the drop in oil was a little bit of the fact that it seems like we’re getting closer to a Russia-Ukraine war ending, which would theoretically ease the sanctions, which would allow even more oil back into the markets. Part of the reason why we saw. Prices tank a little bit, but other than that, it was pretty quiet on the Western front relative to some of the other stuff we did see. We did see some increases of Chinese demand. They purchased 15 tankers in the month of August it looks like excuse me 15 cargos for Russian oil, but that’s due in October and November Which is slightly above what they’re normally doing so it’s it’s they’re gonna continue to continue to increase I mean, that’s really all I saw Stu There was no real other oil in gas news earnings have kind of wrapped up. You’ve got a little you’ve got A little finger wave. What are we missing? [00:17:53][103.5]

Stuart Turley: [00:17:53] Well, one of the things that is really important right now to think of in that is Rosen fit and some of the other Russian oil and gas companies have not been able to increase product. So even if sanctions are lifted, I do not believe that unless the American companies can help Russia, we are not going to see a flood if sanctions are lifted it’s actually going to increase prices. Interesting. So you’re taking counterintuitive pricing based on this war. Interesting. So people are not talking about this and I’m the only one out there with a crayon from Oklahoma State University going The mathen ain’t mathen, man [00:18:35][41.4]

Michael Tanner: [00:18:35] It’s dangerous. Math ain’t math, and if there’s anything you learned, guys, you’re sitting in the Midland Petroleum Club right now? [00:18:41][5.5]

Stuart Turley: [00:18:41] I am. I’m sitting here in the Midland Petroleum Company club here and it’s a beautiful day and we’re having some fun. Got some meetings going on and life is good. [00:18:49][7.8]

Michael Tanner: [00:18:50] You’re it’s weird to see you out in public. So guys, if you see him, give him a hug for me, make sure you annoy him a little bit, but that’s awesome guys. Well, with that, we’re going to let you get out of here, get back to work, start your week, guys. Thank you for checking us out. World’s greatest podcast. We will be back in the chair on Saturday for our weekly recap and then be back in your ear Monday for all the latest guys for Stuart Turley and Michael Tanner. [00:18:50][0.0][1113.3]