Daily Energy Standup Episode #265 – Crude Exports, Geopolitical Tensions, and the Winds of Change

Daily Standup Top Stories

America’s Energy Boom: US Crude Exports Soar To Record High

December 6, 2023 Mariel Alumit

Brits should stock up on torches and candles to prepare for power cuts, Oliver Dowden says

December 6, 2023 Mariel Alumit

---

Follow Stuart On LinkedIn and Twitter

Follow Michael On LinkedIn and Twitter

ENB Top News

ENB

Energy Dashboard

ENB Podcast

ENB Substack

– Get in Contact With The Show –

Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

---

Michael Tanner: [00:00:14] What is going on, everybody? Welcome to another edition of the Daily Energy News Beat Stand up here on this gorgeous Thursday, December 7th, 2023. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show, the purveyor of the show, and the director of publisher of the world’s greatest website, EnergyNewsBeat.com, Stuart Turley. My man, how we doing? [00:00:37][22.5]

Stuart Turley: [00:00:37] Today is a beautiful day in the neighborhood up here in air country. [00:00:40][3.1]

Michael Tanner: [00:00:41] Absolutely. As we talked all week on the show, you literally are at bear country. It’s it’s kind of crazy, absolute. Nonetheless, though, nobody ate our homework today, guys. Absolutely packed menu. First up on that said menu, America’s energy boom U.S. Crude Exports Soar to Record High. Next up, Texas commissioner slams Biden’s onerous methane rules that increase oil and gas prices will fly over to Britain, where Brits should stock up on torches and candles to prepare for our power cuts. It’s according to Oliver Dowden. So we we love her. We love a good torches and candles to prepare ourselves. Yikes. And then we’re going to go flop over to the EU. Transitioning to insolvency. Europe’s largest wind farm is facing bankruptcy. Finally, we’ll move over to China. Plans for a nuclear power. 24,000 EU container ship unveiled in China. Holy smokes. Embracing that net zero future still. Then toss it over to me. I’ll cover I mean really that the interesting fundamentals that happen today here in the oil and gas markets we saw crude oil dip below $70 for the first time in an absolute minutes. So we will kind of break down what happened there. Exxon also does some interesting forecast. So we’ll cover all that and the bag of chips, guys, before we do all that, remember the news and analysis you are about to hear is all brought to you by the world’s greatest website. www.EnergyNewsBeat.com The best place for all your energy news. Stu in the team do a great job of curating that website, making sure it stays up to speed with everything you need to know to be the tip of the spear. When it comes to the energy business, you can hit the description below. Check out all the time stamps and links to the articles, Email the show, questions@energynewsbeat.com Check us out. Dashboard.EnergyNewsBeat.com A new data news combo product. I’m going to Brett those two. Where do you want to begin? [00:02:30][109.5]

Stuart Turley: [00:02:31] Okay, let’s start with our buddies over here in the U.S. America’s energy boom. The U.S. crude export soared a record high. Michael, this is really, really pretty cool. And there are some underlying threads in this article. It has been those who are confused why the U.S. has spent tens of billions to keep the Russian Ukraine war going. I thought this was an interesting article. Why do you think we spent so much money? [00:03:02][31.2]

Michael Tanner: [00:03:03] I mean, we could talk for hours about this. I think we just we just we I mean, I think we spend a lot of money to attempt to topple. What we see is a, you know, regime in Russia that we don’t like know. [00:03:14][11.0]

Stuart Turley: [00:03:14] And I agree. Seaborne crude exports up 19% versus 2022. This is just incredible. Yeah. And you take a look at the the map, Michael, if our producer can fly this in the map showing look at all the tankers. There’s all the red dot in the Gulf coming out of the port of Corpus Christi and 2 or 3 other ports. And they go all the way around the Cape Horn. These are going out. Our exports are we all exports are going out on what’s called vlcc, very large crude carriers. And I mean, these think the Suez, Max, 1 million, the very large go around the Cape because they won’t go through Panama or the other. The reason that the are there’s a rumor going around there and this guy alludes to it is that we went to war so we’d sell more oil. But I’m going to call on that theory. Why is Biden you know, why is Biden putting war on the U.S.? I don’t think he’s that smart. [00:04:27][72.2]

Michael Tanner: [00:04:27] I don’t think this war has anything to do with energy. [00:04:29][2.1]

Stuart Turley: [00:04:30] Why don’t you. [00:04:30][0.5]

Michael Tanner: [00:04:30] Hit some very interesting things? I mean, I mean, crude’s under $70. So if you think going to war with Ukraine or getting more involved with with the Israel-Hamas conflict, you think that’s going to raise oil prices. You’re under a rock, baby. We’re at 69. 69. [00:04:44][13.9]

Stuart Turley: [00:04:45] Yes. And I, I agree. I thought the allusion to this was not as was not very good. That’s why I’m calling Hugo on the illusion. [00:04:53][8.0]

Michael Tanner: [00:04:54] Love it. What’s next? Okay. [00:04:55][1.3]

Stuart Turley: [00:04:56] See, I don’t believe everything that’s a random guy out on Substack. Let’s go to the next one. Texas Commissioner slams Biden’s onerous Methane rules that Increase Oil and Gas. Railroad Commissioner Wade. Christian, I’m going to reach out to him and get him on here. Issued a statement regarding the methane rules, those methane rules we covered in this week already. And that was based off of the Clean Air Act. And they are onerous and I’m the presently horrible. Know the listen to this While the costs for hardworking Americans are up $11,000 this year from the gas pump to the grocery store. His Biden solution to inflation is increased regulations that will make it even more expensive, says Christian Petroleum, helps make more than 96% of everyday consumer items. Oh. [00:05:56][60.2]

Michael Tanner: [00:05:57] I. Once again, with every rule. Chevron and Exxon would never admit this, but they love when the EPA does stuff like this because it makes it drives all of their competitors out of business because they are one of the few companies that have the scale to be able to handle owners regulations. Big business loves regulation. Don’t remember that when they do this, they’re. [00:06:19][21.8]

Stuart Turley: [00:06:19] Only hurting the small producer. That’s 50% of the oil produced in the U.S. is with the small producers, though. [00:06:27][7.8]

Michael Tanner: [00:06:28] Hey, that’s my point. So they’re there. They’re going they’re doing the kill shot. Exxon’s going to be fine. We’ll cover them later. They’re going to be fine. You got to spend a little bit more on Matthew. Maybe they’ll be fine. You know who won’t be fine? Like you said, the other 50%. So it’s clear this the second order effects as we talk about they’re not thinking about. [00:06:45][17.7]

Stuart Turley: [00:06:46] No. So anyway, that one kind of got me a little worked up, too. I’m with Christian. [00:06:51][4.5]

Michael Tanner: [00:06:51] Good for Wayne Christianson. I, you know, am I, you know, do I think he’s the you know, I I’ve heard some stuff on him specifically that he he too may be in bed to close with big business. So, you know, I’ll ask me we’ll ask him we’ll ask him. I’ve we you know, we got to get him on the podcast here. But at least he’s attempting here to stand up. Good for Wayne Christianson. What’s next? [00:07:13][22.1]

Stuart Turley: [00:07:14] Hey, let’s go to the Brits across the pond. The Brits should stock up on torches, candles and prepare for power cuts. Oliver Dowden says he’s the deputy prime minister over there. Michael It’s kind of huge. [00:07:28][14.3]

Michael Tanner: [00:07:29] It’s a little crazy that the deputy prime minister is out there saying prepare your torches and candles because power cuts are coming. I mean, what does he know? [00:07:36][7.1]

Stuart Turley: [00:07:37] And that’s what scares me is because when somebody makes that kind of statement, you’ve heard politicians and it’s like a big warning. What about the head of the FBI testifying in front of Congress? He’s afraid of the terrorist attacks. When somebody like that says it, you got the deputy minister up there and prime minister of England saying, get your candles. This is not Frankenstein or the hunchback or anything like that, Carol. And along here, this is a problem. [00:08:08][31.2]

Michael Tanner: [00:08:09] Talk to me about these. He he he says they also announced plans for a, quote, resiliency camp, a mandatory boot camp for the English. [00:08:16][7.2]

Stuart Turley: [00:08:17] If this is about the FBI issues and the attacks on the grid and they don’t have the people to support it. So that’s what he’s talking about. The Russians have been hacking. It’s kind of like what we have on our News Beat website. Michael, It is unbelievable. I ran yesterday, I ran had 1468 people hit energy news. Me Do you know how many we had that were blocked for attacks? Really bad attacks. [00:08:50][33.2]

Michael Tanner: [00:08:51] I’m sure 50% of them. [00:08:52][1.4]

Stuart Turley: [00:08:53] All of them. That is the first time normally we get more attacks from the U.S., Iran, finally to the rest of the world yesterday. Yes, go Iran. Anyway, a unified government resilience website which provide practical advice on how households can prepare as part of the campaign to raise awareness as simple steps as individuals can take care of their resilience. [00:09:19][26.7]

Michael Tanner: [00:09:20] Michael It’s insane. [00:09:21][1.0]

Stuart Turley: [00:09:22] It’s insane. You need to be prepared no matter who you are, where you are in the world, be able to take care of your family for any natural disaster that just prepares you in case there’s another manmade disaster. [00:09:37][15.3]

Michael Tanner: [00:09:38] So I love how they launch an Internet website to tell you how to survive without Internet. It just the irony should not be lost in that. [00:09:47][8.3]

Stuart Turley: [00:09:47] No, it’s pretty pathetic. What’s next? Transition to insolvency. Europe’s largest wind farm facing bankruptcy. Michael, I have never in my life imagined that we’d had the last, what, four months of. Absolutely. The wheels have fallen off the renewables. I mean, you’re out. You were you were committing here. Kerry. Kerry, the other day you were you had your knife out and you’re like, if I have to do another negative story on wind, I’m going to shoot myself. Well, put the gun down. Okay. The world’s greatest Ponzi scheme is imploding. Wind and solar scam was never built to last. I like what this guy said. Simon Walker, the largest onshore wind farm, is facing bankruptcy and has filed for reconstruction in Sweden. The Marco Bitcoin ETF, though, is facing difficulties after signing a base load requirement against hydro. You can’t make this up, Michael. [00:10:54][66.4]

Michael Tanner: [00:10:55] No, you can’t. You know, what’s what’s hilarious is that that wind farm is owned 75% by the China generated general nuclear waste. [00:11:03][8.9]

Stuart Turley: [00:11:05] Whoops. But I love the sign. Right in their bankruptcy. Next exit. Here’s here’s. [00:11:10][5.2]

Michael Tanner: [00:11:10] Why. We’ll be getting off here. [00:11:11][1.1]

Stuart Turley: [00:11:14] They ran over the solar panels. Here’s here’s one that was funny. Here’s what I think is really funny about this, is that the bailouts when Obama bailed out Solyndra, it failed. The bailouts are coming. Buckle up. It’s going to be printing more money because you have all of these companies and all of these folks bailing out is going to be the next horrible piece of this puzzle. So let’s go to the next one. I kind of like this story, Michael. Plans for a nuclear powered 24,000 t u container ship unrivaled in China. This thing is huge. I think it’s fantastic. This is bigger than an aircraft carrier. I mean, it is right in that range is what the size of that 24,000 t u class ship is. And the reason I like it is it’s a small modular reactor using molten sand. It’s not like what’s in the military ships right now. I think this is a true way cool advance for getting pollution off of the oceans. I think this is phenomenal. No, I. [00:12:35][80.7]

Michael Tanner: [00:12:35] Mean, there’s a lot of there’s a lot of transit that happens on the seas. And if we could move to a as you see on the side of this, this ship, if they got plastered on the homepage, embracing a net zero future, this is one of the areas where I could see small modular nuclear reactors coming in extremely handy. Much like long haul trucking for EVs is probably they’re not long haul trucking for EVs, but long haul trucking for a I. And like the autopilot stuff is the sweet spot for that. I don’t think we’re going to be having ice driving, you know driverless cars driving around the block. But you might see a bunch of them flying down the interstates. I see the same thing here. A lot of this stuff could become AI driven. Up until that last mile, the fact of the matter is, getting nukes on this even lowers the amount of energy costs and makes a lot of this stuff more affordable. So I’m all for it. [00:13:24][48.8]

Stuart Turley: [00:13:25] Oh, I am, too. I thought this was a excellent article and I think that the small modular and new nuclear yesterday we had that story you and I were having a little fun with, but nuclear was the only answer. No, it’s part of the major issue. I think without nuclear, it will be tougher. But both are going to be bad because of the legislation through regulation. Anyway, that’s all I got tonight. [00:13:49][24.9]

Michael Tanner: [00:13:50] I will go ahead and kick it over to the finance guys. Overall markets down about 3/10 of a percentage point. That’s for the S&P 500. Nasdaq drops about 5/10 of a percentage point. U.S. Treasury 30 year fixed down point to two percentage points. Ten year Treasury bonds up 1.7%. Dollar index rises about 2/10 of a percentage point. We did see crude oil and this is going to hurt drops below 70 for the first time in what feels like an absolutely insane amount of time. Currently trading 6950 as we record this about 6 p.m. here on the six, Brant drops about one and a third percentage points down to 7527. I mean, and what’s interesting, Stu, is we had an absolute drop of in the Strategic Petroleum Reserve. Remember, we were asking me about a 800,000 barrel build. We saw 4.6 million barrel draw, which did nothing to bully prices again. We did see we see a large gasoline build about 4.5 million barrel build in the gasoline petroleum reserves, as we call it, or gasoline stocks, as it’s more commonly shown. That actually has a much larger effect and is really what’s been driving a lot of this this softness, mainly by people saying demand is down if gasoline isn’t necessarily correlated with the price of oil. But what it does show is that there’s a lack of demand out there, and that’s what’s pulling down at this point. Prices. I mean, I think we need. Still hold a moment of silence for everybody who thought $100 oil was coming this year. I know. We’ll put you in there. We’ve got to put a few other things. [00:15:19][88.8]

Stuart Turley: [00:15:19] Goldman Sachs. Whoa. You’ve been sitting here browbeating me like a rented mule. You got a newspaper smacking me in the nose. And I have gone on record several times saying I have no clue what is going to happen on this. I did say it would probably be around that hundred, but I have no clue because the pricing metrics are gone. [00:15:44][25.4]

Michael Tanner: [00:15:45] You’re right. You didn’t say 100. You said 120. Fair enough. I’ll. I’ll. I’ll accept your idea. Yeah, we got through Goldman Sachs in there. Throw it all. Your favorite ounce in there. Guys, moment of silence real quick. I mean, that’s over because. Brutal, Stu. Now I say all that to say again what’s going on? Because I think that. Why was everybody like Stu and Goldman Sachs and people that are smart, why did they think oil was going to be $100? If you had asked me if I thought oil was going to be 60 or 106 months ago, I say it’s probably going to be more 100 than it is 60. The question is, why is it here? I think there’s a mix of reasons. I think, you know, again, we’re seeing the demand as we’ve swung back and forth between fundamentals and non fundamentals. I think the pendulum is now moving back towards the pure fundamentals of it looks like demand growth may not be where it is. We see production growth coming, we see rigs, you know, and I don’t want to say production growth coming, but we see the fact that that new with these new wells coming online that we’re drilled fact in this higher oil price environment will only continue again to have that compounding effect. It’s a little confusing still. We also saw natural gas drop today. It’s trading at $2.57. That’s mainly due to some new weather data that dropped. But, you know, interesting, interesting times in the oil and gas markets, folks. [00:17:02][77.3]

Stuart Turley: [00:17:03] Let me throw this at you. I want to ask you your opinion on this. Venezuela taking over the oil fields in in Guyana in the next door neighbor and having him, the socialist guy, come out and say, here’s the new map. And so he’s already claimed the land and the big oil companies are now having their. You think in the past the U.S. would not have gone to war over something like that? We would have seen prices go up. This is just as bad as there’s ground hitting ships. And we would have seen prices going on. You can’t use a normal price model any more because of this. We got countries invading other countries. We got countries claiming oil entire fields and going, They’re now mine, they’re no longer yours. You go away and nobody’s doing anything. And in it, price goes down. I have no clue. But what is your thought on him taking it? [00:18:05][62.1]

Michael Tanner: [00:18:05] For our podcast listeners, I’m playing the world’s smallest violin. We get it. Stu, you’re upset. Yes. I don’t know. [00:18:14][8.2]

Stuart Turley: [00:18:14] No, I’m. [00:18:14][0.2]

Michael Tanner: [00:18:15] I honestly, I give him give me every chance I can to rub in the fact that that oil’s not 100 bucks because you, you, you, you personally weren’t the only one. [00:18:22][7.9]

Stuart Turley: [00:18:23] You have that bird up your saddle. Dude, I don’t have a thing. [00:18:28][5.4]

Michael Tanner: [00:18:29] I I to answer your question, it goes to show you that we swing back between fundamentals and sentiment. If we were in a sentiment driven market, exactly what you said, prices should have spike, but it’s not this. The flavor of the day is back to the fundamentals. And I think, again, these this rise in gasoline stocks is showing people that the demand may not be there and may not come back. One thing I found interesting was that Exxon decided to drop kind of a really long updated forward guidance specifically on on where they see their their output going. I thought, you know, you can you can read the whole deck. You’re going to Exxon and check out their corporate investor reports. The interesting part, though, is do they announce record CapEx spending of $24 billion in 2024 and and project guidance of 22 to 27 billion of spending from 2025 to 2027. So they’re not messing around? [00:19:22][53.4]

Stuart Turley: [00:19:23] Nope. I think it’s fabulous. [00:19:24][1.0]

Michael Tanner: [00:19:24] They also are investing somewhere in the neighborhood of about 20 billion into low carbon solutions. I love this quote from RBC. Exxon’s going to need to convince investors on the merits of low carbon spending from here. That’s according to our friends over at RBC Capital. So very interesting to talk about where Exxon is going. They’re spending a lot on CapEx, but they’re diving into that, you know, diving into that that low carbon market. The acquisition of Denbury obviously gives them that CO2 infrastructure. Also, they’re strip mining their strip lithium drilling that they’re doing right now. They’re targeting they’re in Arkansas, they’re drilling over there in the in the smack over formation. Anybody who’s familiar with the East Texas East Texas shale plays, you’ll know the smack over formations are extremely. Well. So. Absolutely. Interesting stuff. They expect our production from that up and running. [00:20:15][51.1]

Stuart Turley: [00:20:16] But that’s what we’re in Arkansas. Yeah. [00:20:17][1.5]

Michael Tanner: [00:20:18] Arkansas. [00:20:18][0.0]

Stuart Turley: [00:20:19] So is this makeover. The brother that is dating the sister? [00:20:22][3.0]

Michael Tanner: [00:20:23] Exactly. [00:20:23][0.0]

Stuart Turley: [00:20:24] Okay. Just thought I’d ask. [00:20:25][1.0]

Michael Tanner: [00:20:25] Absolutely. I do. That’s enough for me. What do you got going on? What should people be worried about? We’re done for the week. [00:20:31][5.3]

Stuart Turley: [00:20:31] Oh, yeah. I think it’s been a wonderful, crazy week. Just interviewed Congressman Nunn, and he is a cool cat. He is a veteran. And that’ll be coming out on Saturday, I bet. No, we have no, we have actually, Nate, we have some big dogs at Nate. That one’s coming out Saturday and then the other one will come out next week. [00:20:55][24.2]

Michael Tanner: [00:20:56] Friday, You mean? Because we got a weekly recap that will drop on Saturday. [00:20:59][2.9]

Stuart Turley: [00:21:00] Thank you. [00:21:00][0.3]

Michael Tanner: [00:21:01] I’m Entertainment will cover all our top stories, but no lot of interviews lined up. We appreciate everybody who stuck with us this week. It’s been a long week, but hopefully we’ve made it just a little bit easier covering your energy news. We’ll let you go, guys, for Stuart Turley and Michael Tanner. Have a great weekend, guys. We’ll see you back here. Interview tomorrow, the weekly recap on Saturday, and we’ll be back in your inbox on Monday. Every weekend, guys. [00:21:01][0.0][1210.2]

---

– Get in Contact With The Show –

---