Daily Energy Standup Episode #282 – Oil Demand Predictions, CBDC Support, BP Takeover Talks, BRICs Expansion, and More

Daily Standup Top Stories

Standard Chartered: Oil Demand Growth To Remain Robust In 2024 And 2025

January 8, 2024 Mariel Alumit

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

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Michael Tanner: [00:00:14] What’s going on, everybody? Welcome in to the Energy Newsbeat podcast January 8th, 2024. Here are our top headlines for the day. Starting off Standard Chartered Oil demand growth to remain robust in 2024 and 2025. Next up, 75 U.S. lawmakers now support Cbdc and tight surveillance bill. Interesting one there. Next up Gavin Newsom’s ten favorite myths about energy and climate. Refuted though. Um great article. Next up takeover talks trigger rally at beleaguered BP. Spicy one year. Finally Brics expands footprint in the global South. I will then quickly cover what’s going on in the oil and gas finance segments. Markets up high, but oil does fall about three percentage points, mainly off the back of Saudi cutting its official selling price. Um, and then all of that, we will send you out of here to get your day started. I’m Michael Tanner, joined as always, by the executive producer of the show that prepared the show. I’m the director and publisher of the world’s greatest website. Energy. Newsbeat.com Stuart Hurley. How are you doing today? [00:01:22][67.9]

Stuart Turley: [00:01:23] It’s a beautiful day in the neighborhood. And for our podcast listeners, you and I should have called ahead because we both got blue shirts on today. [00:01:29][6.4]

Michael Tanner: [00:01:30] We do. Hopefully. That’s, uh. Hopefully that’s a sign of good things to come, but let’s go ahead and kick this off. Stu, where do you want to begin? [00:01:35][5.3]

Stuart Turley: [00:01:36] Hey, let’s start with our buddies over there at Standard Charter. Uh, I thought this was pretty funny. Michael, there’s only three real quick bullet points here. Standard chartered has predicted the oil demand growth in the current year will clock in at a robust 1.5 million barrels per day in a 1.41 in 2021. That’s demand growth. Uh, the analysts have predicted that the global monthly demand will move above the 104 million barrels per day for the first time in August 2024, eclipsing 105 in August 2025. I’ll tell you what. Um, for all the, um, folks that were saying, was it the over at the IEA? Oil’s dead. Ding dong. The wicked witch is dead. Um, and then all these people got data. What’s up with data? [00:02:28][52.6]

Michael Tanner: [00:02:29] Well, I think I think it’s because as as as energy becomes cheaper, more people are going to want use it. So there’s this there’s this interesting combination that if if energy was free, we’d use as much as possible. As prices go down, we will begin to use more. You know, specifically on the oil side, we’re going to use more oil. It’s part of the reasons why these cuts that we’re seeing from Saudi Arabia, they’re meant to bring prices up because the less oil on the market price goes up. So it’s a self-fulfilling prophecy. That is, you make energy cheaper. People will consume more of this. Now they’re coming out on a limb here and really on a limb in terms of public sentiment. If, you know, obviously the IEA and the IEA are in sort of limbo. They think there’s going to be short term demand growth. Remember the the IEA came out and said we’re going to see probably record production in 2024, but it’s then going to peak at somewhere around 2025, 2026 and then go on down. Obviously, Standard Chartered is not necessarily saying that they’re seeing huge demand growth in 2024. Slightly less, but still more demand growth in 2025. And you can only imagine that these, you know, um, and then they also say, you know, that the oil demand growth post will remain in the longer term averages, which means we’re going to see growth where we’re going to see less growth. What does that mean? We’re growing but at a slower rate. The acceleration of growth is slowing down. So um, I love this article from Standard Chartered. We love their analysis. You know, they also have come out you know, obviously they’re fairly bullish. They do expect China to lead those projected demand growth. With China. Expect to see an uptick in demand to the tune of about 500,000 barrels per day in 2024 and about 375,020 25, while while India clocks in second, with their growth expected to be somewhere around 329,000 in 2024 and 373,000 in 2025. So they actually see India as the larger growth opportunity. But yet China still with the largest gross, um, uptick in demand growth. So very interesting. We love this report. What’s next. [00:04:37][128.3]

Stuart Turley: [00:04:38] Let’s go to 75 U.S. lawmakers now support CBC anti surveillance bill Michael CBC is not something you smoke. It’s actually central bank digital currency which I am way against. I just thought I’d let you know okay. And here’s my prediction on this article. And for Bitcoin I think you’re going to see cryptocurrencies specifically Bitcoin go big people uh are afraid of central. Bank currencies and I couldn’t applaud more. Anybody mining for Bitcoin. Home run. So let’s go to this. The bill specifically the bill prohibits the Federal Reserve and the Federal Open Market Committee from using any central bank digital currency to implement monetary policy. Michael, when they did the mechanisms already in place, the, uh, they’ve already built it. It’s already there. They’re waiting for a crisis to put it in place. Once they do that, I read another article over the weekend. And, Michael, are you ready for this? If you don’t, uh, if you post anything on social media and you have an electric charging, they can shut your charging down with this. They don’t want you driving out of town so your credit cards won’t work past 15 miles. So this is something that is horrific about control. [00:06:08][89.9]

Michael Tanner: [00:06:09] Yes, central bank digital currencies give me the heebie jeebies. You know, it’s really a way to implement mass amounts of really just, you know, countrywide censorship. You know, you’ve you you’ve purchased too much meat. You’ve done this. You’ve done that. Now we can just cut off your access to literally the markets. I mean, you know, I mean, we talk about what Swift did by reshaping the way the Russian economy has to operate when they don’t have access to all of these banks. I’m not saying that I agree or disagree necessarily with that decision, but it can become a very nightmare for people when when you get cut off from the banking system. It’s exactly what I think a central bank digital currency is designed to do. It’s designed to give the the fed more power. So I applaud the 75, um, Congress, uh, men and women for, uh, taking on this. [00:06:57][47.6]

Stuart Turley: [00:06:57] Absolutely. And there was a bunch of folks running around saying, oh, uh, Biden was going to announce, uh, that he was going to recall the dollar. Uh, and I don’t have any idea if that was true or not. But boy, now that you see that the thing’s been implemented, that’s the first step that they do. Okay, let’s go to Gavin Newsom. Ten favorite myths about energy climate. And, uh, it is refuted. And, uh, you know, you and I have talked on the podcast about our buddy, uh, Gavin Newsom. Yep. Uh, if he dives into the, uh, ocean there, they’re going to blame it on Exxon for an oil spill. He’s got so much oil in his hair, I guarantee you, you know, penguins would be dying. [00:07:41][43.7]

Michael Tanner: [00:07:41] Yeah. It’s the most prolific oil field in California. Is Gavin Newsom his hairpiece? [00:07:45][3.5]

Stuart Turley: [00:07:46] Oh, yeah. They just kind of go do, uh, get it out of his due. Ray, I love me a new rig out there. I always wore one when the kids were funny. Okay. Myth number one, uh, Newsom’s energy policy drives progress. Ooh. Uh, I don’t think that I’m going to vote on that. All of our listeners that listen to the podcast, if you have any others, it should be added this list car myth number two, supporters of fossil fuel are climate change deniers and, uh, climate changes. It’s called seasons. Okay. [00:08:21][35.4]

Michael Tanner: [00:08:22] Uh, um, and remember I say this. I’ve said this briefly. I’m not that old, but I’m old enough to remember when it was global warming and they did the sleight of hand to climate change. [00:08:32][10.3]

Stuart Turley: [00:08:33] It’s the shell game. My God, I talked about it this morning on the on the energy, uh, realities. Now that instead of that. And it’s the shell game with no PE and all you’re doing is move it around. Okay, so let’s go to the next myth. Number three, 97% of climate scientists agree that we face a climate crisis that requires the rapid elimination of fossil fuels. Uh, yeah. Go home. Uh, no, that that is not true. In fact, uh, we love our, uh, interview with Patrick. Uh, more he’s now. I mean, that is one sharp cat founder of, uh, Greenpeace. That’s number four. California is a climate leader. Um, and, um, I know that, in fact, they are a leader in the highest prices of energy to the consumers and the greatest, highest prices for U-Haul trucks leaving California. I’m not kidding. Okay, let’s go here. Myth number five, the U.S. should lead cop 28 and committing to net zero by 2050. [00:09:41][68.3]

Michael Tanner: [00:09:42] Um, I love what it says. Truth net zero by 2050 is a death sentence to any economy that adopts it. China won’t be developing world. The discipline needs fossil fuels. U.S. should be leading the way in energy freedom, which I like. [00:09:56][13.3]

Stuart Turley: [00:09:56] And oh yeah, look at the myth number six. There is a graphic. If we could have our producer pull this graphic in installed electric Pasadena in California solar and wind in 2013. There’s the yellow bar. That’s about, what, ten? Percent, uh, estimated there. Then you have 2022. Solar and wind goes to probably 65, but the reliable capacity drops down. And I wonder how much money that was. Let’s go to myth. Just a few. [00:10:26][29.8]

Michael Tanner: [00:10:26] Trillions. No worries. [00:10:27][0.8]

Stuart Turley: [00:10:27] Billion. What’s a few trillion between friends? Uh, California’s grid is the model for the US. Look at that graph chart. Uh, well, Miss Producer, if you could pull this in residential electricity prices, it is going up at a dramatic price. Uh, California is myth number eight. Solving solar and winds with batteries. One day of world energy. Uh, 460,000,000MW. 1 trillion in Tesla Mega packs 190 trillion. Next. I’m not even gonna argue that one. Myth number nine. Uh, ice ban is a model for the US. [00:11:08][40.7]

Michael Tanner: [00:11:11] We got to get the picture up here. August 25th, 2023 CIA announces gasoline car ban. Seven days later, California tells citizens not to charge their EVs. [00:11:22][10.9]

Stuart Turley: [00:11:23] Oops. Um, and and then there was another California man. Uh, two months ago, he ordered a Tesla. I want me a Tesla Cybertruck. It’s bulletproof. I need one. Just, you know, our fans love me, but not that much. And so when I. What I want to do is, uh, when you sit back and take a look, this man ordered a EV. He then, uh, the electric company told him that he had to have another complete 100 Meg circuit come into his house, and then he wanted to add another, uh, something else, EV. And they said, oh, you gotta to have a third. But yet we don’t have any available, so you can’t even get an EV to charge at home. So California cannot add enough power. I thought that was pretty cool. So let’s go on to myth number ten. Kas anti oil efforts are a model for the US. Look at this graphic. These oil companies are ripping us off. They think that the oil companies are actually ripping them off when it’s actually, uh, how they’re doing all their policies. [00:12:25][62.3]

Michael Tanner: [00:12:26] I don’t know who wrote, um, Gavin Newsom’s energy policy, but. [00:12:29][2.9]

Stuart Turley: [00:12:29] Uh, he was definitely some, um, um, I our guy of the week. They got fired. So, um. [00:12:36][6.2]

Michael Tanner: [00:12:36] Former I, our guy of the week. All right, what’s next? I love this next one. [00:12:39][3.4]

Stuart Turley: [00:12:40] Oh, and have fun. Takeover talks, triggers rally at beleaguered BP. My uncle, you can’t buy this kind of entertainment. I picked this one out just for you. I knew this would make your day. Uh, BP has a market cap of more than, uh, 80 billion, uh, pounds, which would probably make, uh, any offer one of the biggest in the world. 80 billion pounds. I thought this was pretty good. Brant Crosetti, word is that absence of a permanent chief executive, a less inhibited balance sheet and lowly valuation may also catch the eye. This is between BP and shell. [00:13:17][37.0]

Michael Tanner: [00:13:18] Yeah. I mean, so I guess what’s what’s the rumor here? The rumor came out a little earlier this week and, and into the week in that BP could possibly set itself up to merge with somebody that did the two mega-cap companies that came out as its possible suitors. You know, obviously the first one is shell them both being kind of European style, uh, companies. Um, would that be a good merger? Chevron, while they also just bought has could also emerge as a, you know, a possible suitor. I think the interesting part is this is this is obviously going to take some time with a market capitalization of, you said more than 80 billion. It would make this by far the largest basically takeover in the oil and gas business in a hot minute, specifically in 2024 and 2023. Right. You have to remember, last year, at the end of last year, CEO Bernard Looney, CEO of the holding company, and then also CEO David Lawlor, both left over in mysterious circumstances. You know, I don’t want to I don’t want, you know, rumor mill on why BP’s CEO Doug Lawler left out. I’m going to leave that up to the rumor mill. I’ve heard some things, but I don’t want to say anything specific. We do know that, uh, Bernard Looney had had some good times with his former employees, uh, with his subordinates, and probably got a little too friendly with them. Um, sure. Causing probably a little bit of an HR issue, which specifically caused them to not pay him the $32 million in pay and bonuses over the life of his contract over, quote, serious misconduct. So that quote you mentioned, Stu, you’ve got no CEO. You’ve got a pretty indebted company right now that’s trading at a at a fairly low valuation relative to its super market cap. Here’s the ability for if rate cuts do come, they’ll be one of the companies lined up to take advantage of it. We very they very well might be able to be acquired for something that’s in a. Attractive target for somebody. Now the question is how do you piece together? Do you keep BP as part of the portfolio? Do you shell BP and toe to shell? And then you rip off BP to somebody in the United States to Chevron, take BP to shell take on right. BP and you you know, there’s a they got a lot of stuff going on, you know, to give you guys an idea. You know, I mean, they’ve got, you know, assets all over the world. They’ve got you know, they have some stuff in Libya, they’ve got, um, you know, a multiple of international projects. We know things in the North. It hit well, we do know they have a, a pretty UN investable renewables division, which seems to, you know, how all this stuff gets weighed in a potential deal is, is hilarious and how much they’re valuing you know some of the. [00:15:57][159.1]

Stuart Turley: [00:15:57] The big the big, uh, squirrel in the room eating is nuts is is the fact that shell and BP went after the renewables at such a rate. Their investors squeaked very, very loudly when the profits didn’t come in and they lost billions and out of the renewables. So the European oil companies lost it big and the US didn’t go as big. So anyway, uh, so if you get shell and BP demerge, you’re going to get an uglier baby. Yeah. [00:16:31][34.0]

Michael Tanner: [00:16:31] He it’s it’s still got three arms. All right, what’s next? [00:16:34][2.6]

Stuart Turley: [00:16:35] Let’s go to BRICs. Hey, you heard it here. Second, the other day when I, uh, said that, uh, Putin’s going to be the, uh, new president, it is now official. Uh, Putin is the president of BRICs for this year, and it is going to be expanding. Uh, this is just amazing. August, the bloc had announced that it would be admitting six new members. But now Putin is really sweeten in the pot for I believe it’s 30 more. Let me look at the number here. [00:17:05][30.0]

Michael Tanner: [00:17:05] Are we now that Putin’s president of BRICs. So we finally going to get able to apply as a podcast? [00:17:09][3.9]

Stuart Turley: [00:17:10] Uh, yes. I think Putin’s actually going to sponsor the podcast because he’s seen our, uh, imitations. I think he, you know, he’s he’s all jealous that, uh, he’s now watching the shark over the tank. So as the five, uh, let’s see, where is it? He said, I think it was about 30 that he’s planning on bringing on board. That’s huge. [00:17:29][18.8]

Michael Tanner: [00:17:30] It is. Uh, it’s going to be absolutely crazy. BRICs is becoming kind of the new powerhouse in the world, considering you have the G7 on one side, which is the, you know, United States, Canada, France, Germany, Italy, Great Britain, Japan, and then you have all of these other countries, these BRICs members. You know, I definitely think Argentina is going to be one country to watch out for, to get in there. We know Saudi has now joined. We know that the BRICs is almost becoming the new OPEC in terms of global oil control. [00:17:58][28.2]

Stuart Turley: [00:17:59] Yep. It will be uh, because uh, also you heard it here. Second Japan. Maybe this is my opinion. Don’t have the facts in yet. What I’m, uh, trying to say is when you sit back and take a look. Japan. You heard it here first. Japan may be leaving the G7 in a few years. Because if if the United States weaponizes, uh, more pipelines to Japan. Japan is already, uh, grumpy enough at the U.S.. They’re taking energy deals in setting them up, being quiet about it. I guarantee you Japan is going to be in BRICs, in Japan is going to go away from the G7 because we. [00:18:42][43.3]

Michael Tanner: [00:18:43] Interesting. So now that’s a prediction right there. [00:18:45][2.5]

Stuart Turley: [00:18:46] That is you heard it here. Second. And I guarantee you I’ve gone on the record. If that happens you’re going to go back. Stew was right twice. [00:18:53][6.8]

Michael Tanner: [00:18:54] Blind mice fades cheese every once in a while. [00:18:55][1.6]

Stuart Turley: [00:18:56] Hey, one last one. As nuclear debate nears, French minister uh, sees potential for 14 new reactors. Had a great interview this morning with, uh, John Cash. He’s with your, uh, energy. It’s. You are there hyphen energy? He’s a uranium mining company in the US. Pretty cool. We had a fabulous talk. Uh, France is got, uh, a ballpark, 52, uh, reactors. They’re only running 25%. And so now they’re adding up to 14 reactors so they can sell it to Germany. Yeah. Sell the power. You can’t buy this kind of entertainment now. [00:19:41][45.2]

Michael Tanner: [00:19:42] It’s absolutely insane. That’s a great interview. We’ll definitely have to check that out when you release it. [00:19:47][5.0]

Stuart Turley: [00:19:47] Uh, whenever we get production, we got a bunch coming. We got a bunch more interviewing. We got lots of stuff cooking. [00:19:52][5.1]

Michael Tanner: [00:19:53] Yeah, we’ll go ahead and switch over to finance guys. But before we do that, as always, remember, guys, the news and analysis that you’ve heard and are about to hear is brought to you by the world’s greatest website, Energy News Beat.com The best place for all your energy news. Doing the team do a tremendous job. Making sure that web site stays up to speed with everything you need to know to be at the tip of the spear. Hit the description below to see all the different links, timestamps, and ways to interact with the show. But moving on to finance, we saw overall markets actually up fairly decent. Today. We saw Nasdaq climb two percentage points S&P 500 up 1.5 percentage points. You know really on the on the cusp of all time highs 30 year yields um dropped about a quarter percentage point. Dollar index stays fairly flat only down about 1/15 of a percentage point. Bitcoin up big $46,000 on the brink of $47,000. That’s about 6.7% on the day. We did see crude oil tumble somewhere around three percentage points. Brant crude oil stays the same at about 77. We’ll talk about the difference there. Natural gas actually saw briefly above $3 today. Stumbled back down to $2.91. Going back to crude oil though. Still, I think the main reason why we see oil falling was, was Saudi Arabia slashing what’s known as their Ops, their official selling price, which is basically their stated selling price for all of their crude. To give you guys an idea, they slashed it more than $2 a barrel to only $1 or excuse me, they slashed their official selling price by $2 a barrel, um, to one dollars and $0.50 a barrel, which is again, it used to be $3.50 between that Omar and Dubai quotes. Um, this is the biggest price cut in 13 months. It’s in line with market expectations as refiners have been falling for a while now for Saudi Arabia to make their middle their crude a little bit more, uh, affordable relative to other Middle Eastern producers, specifically from that arbitrage across the Atlantic, you know, uh, quote out of, uh, you know, a trader from a North Asian refinery, Saudi crude is still relatively more expensive compared to other regional crude. We are happy to see such prices making it much more affordable. Us to Saudi coming in and having to cut a little bit. You know, this is all despite their 2.2 million barrels per day cuts of OPEC plus um, you know, it’s clear that these market participants aren’t terribly convinced, um, that this reduction will be enough to stop a pretty big buildup of global inventories as we saw demand. Um, as we talked earlier in the show, demand seems to continue to grow, which only means that these global, larger global inventories are will be helpful. Now, do we think there’s I’m good. Do I think there’s going to be a massive price rally due to all this? Uh, remains to be seen. It depends. You know, if you’re Jeff Currie, who’s now the the University of Chicago Center for Energy Research, he’s the new head over there at University of Chicago. I saw him on quote yesterday. Energy is the most investable industry in America right now. And I he obviously hasn’t looked at any shale companies financials. So I saw one quote from our friend WTI realist. He quoted it and said local man announces he’s no longer being drug tested. That was the quote I was it was just cracking. Uh, the internet will always be undefeated. Our favorite WTI um, realist out there. Um, absolutely hilarious. Nothing else really stew on the docket for today from an oil and gas side again we southwestern Chesapeake. We’ve got the news of BP rumbling out there. Everyone’s kind of outside of that though. It’s kind of all quiet on the Western Front for us. What else should people be scared about? [00:23:16][203.6]

Stuart Turley: [00:23:17] I don’t know, we need to have you ask a new question in the future. Uh, you know, um. [00:23:23][5.7]

Michael Tanner: [00:23:23] You know, Levi and say everything’s great. You don’t have to. [00:23:26][2.5]

Stuart Turley: [00:23:26] Be honest with us. Uh, buckle up, hug your family, and, uh, look forward to the fantastic, uh, podcast now. [00:23:34][7.9]

Michael Tanner: [00:23:34] It’ll be great, guys. Well, as always, we appreciate you checking us out. World’s greatest podcast energy news. Be check us out. Energy news beat. For Stuart Turley I’m Michael Tanner. We’ll see you tomorrow, folks. [00:23:34][0.0][1372.1]

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