Daily Energy Standup Episode #63 -Record credit card dept may hit less demand for gas, China starts buying Russian Crude, Barclays to stop buying oil sands

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Chinese Refining Giants Resume Purchases Of Russia’s Flagship Crude

Troubling signs emerge as credit card debt hits record high

Carbon Offset Market Could Reach $1 Trillion With Right Rules

Barclays Vows To Stop Financing Oil Sands Projects

Natural Gas Futures Contracts Suggest Europe’s Energy Crisis Isn’t Over

NATO’s Self-Declared “Race Of Logistics” Confirms The Bloc’s Military-Industrial Crisis

Highlights of the Podcast

00:00 – Intro
04:04 – Chinese refining giants resume purchases of Russia’s flagship crude
05:16 – Natural gas futures suggest use crisis ain’t over.
06:47 – Troubling signs emerge as credit card debt hits record high
08:47 – Carbon offset market, which could reach 1 trillion with right rules
00:12:52 – Barclays Vows to Stop Financing Oilsands Projects.
21:18 – Outro

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

Michael Tanner [00:00:15] What is going on? Everybody, welcome to another edition of the Daily Energy News Beat. Stand up here on this gorgeous Friday as always I am your humble, humble correspondent Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show to prepare the show and the director and publisher of the world’s greatest website, Energy Newsweek.com, Stuart Turley, My man. How we doing today?

Stuart Turley [00:00:38] Should be able to be all day in the neighborhood. Boy, I just didn’t get to follow in your lead there. Unless you’re a train man. They’re falling all over the place.

Michael Tanner [00:00:49] I assume you have a great conspiracy lined up for us to talk about it, but it is really sad what has happened both in Ohio and this most recent train crash. So we our hearts and prayers go out to all of the people affected by that. I mean, it seems like what’s going on in Ohio is an absolutely ecological disaster and there is literally nobody to be found helping them. So really, we could spend a whole go on that. But congratulations, guys. You made it to Friday. We can all take a deep breath. I don’t know about you. I am very excited. It’s been a long week. It’s been a good week. And we’re about to get you out of here quickly. But first, we’ve got some great stories lined up. First off, Chinese refining giant resumes purchase of Russian flagship crude to cover what’s going on with the Chinese refining game. The next natural gas futures contracts suggest Europe’s energy crisis isn’t over. Hmm. Interesting. I wonder what we can learn there. Next. We have troubling signs emerge as credit card debt hits record high. I’m still not convinced how this ties into the show, but Stu will correct me. Next. We have carbon offset markets that could reach 1 trillion with the right rules. I mean, if that title doesn’t tell you everything that you need to know about the article, stick around and will tell you what it means next. We have Barclays vows to stop financing oil sands projects. I mean, it’s just another example of banks getting out of oil and gas. I’m still will kick it over to me. I’ll cover slightly what happened over in the overall market started. We got some key jobs data and the P the producer price index, which I think overall hampered market oil prices and gas prices down four separate reasons. Two things I’ll cover. One, PDC jumps on the openly professing stock buyback train and we’ll read about what they’re doing. And then also I but I would be remiss if I didn’t cover this specifically the CFTC, which is the Commodity Futures Trading Commission with aggregates all of the commodities futures data, some of their third party data dividers have been hacked. A cyber related incidents. They’ve suspended their weekly Friday commitment of traders report. Andy Trader out there listening to me listen to this show you would you follow that immensely you are not going to be seen that for a couple weeks due to this cyber so we’ll quickly top on that and then we’ll let you get out of here, hopefully finish up your week and dive on into that weekend, guys. But first, check us out online at the world’s greatest website, BW Dot Energy News Beacon. I promise you, it’s the best place for all of your energy news dashboard on Energy News Beacon, Best place for all of your data and news combined. Again, we are hard at work at V2 coming to you, coming to a desktop computer near you soon. Stu Enough with the pleasantries. Where do you want to be?

Stuart Turley [00:03:27] Well, you know, Michael, all this air guy stuff, Do you think that they’re meeting with the AI? Our guy starts with, Hi, my name’s Aaron and I’m the air guy of the Week because they’re all having to like name buyouts and all this. I mean, buybacks and all these kind of programs almost sounds like an Alcoholics Anonymous around here with all that going on.

Michael Tanner [00:03:50] Yeah, I guess you know, the live in you is coming out. You think stock buybacks are the equivalent of alcohols Anonymous. Nice. Nice. Well, I always knew you were live, Stu. I always knew you were a lib because this first story.

Stuart Turley [00:04:03] First story, Chinese refining giants resume purchases of Russia’s flagship crude. This means an awful lot in a couple of different ways. State oil refinery giants. But Petro, China and Synaptic are back on the market for Urals and are buying it at deep discounts. So they are buying it less than the $60. However, you can always make up for things in volume. Now Russia is actually decreasing their production. Michael So how long can they just keep supplying everything to China at that current price?

Michael Tanner [00:04:44] So eventually it’s going to tailor off? You’re absolutely right. I think everybody wants to think that Chinese oil demand is going to go through the roof If that pays off and that happens, Russia’s in a good mode. But if it does it if it continued, you know, not continues, but if it if it stays flat. Yeah, you may not they’re not they’re going to run out of buyers very quickly.

Stuart Turley [00:05:05] Oh, yeah, absolutely. So this again follows in with everything that we’ve been talking about. As far as banks moving away. All right. Let’s go to the next one coming around the corner. Natural gas futures suggest use crisis ain’t over. First paragraph. Europe’s natural gas futures point to structurally higher prices for the rest of the year, as Europe will soon have to start filling inventories for the 2023 2024 games down here, prices likely to remain structurally higher before the Russian invasion. This is Henning Goldstein, director of energy and climate resources at Eurasia Group. Wow.

Michael Tanner [00:05:51] I think, again, to caveat this entire conversation, you have to separate the European natural gas market.

Stuart Turley [00:05:59] Absolutely.

Michael Tanner [00:05:59] U.S. natural gas market, because of the limitations of transporting. I mean, it’s not easy to transport crude oil or natural gas, but it’s a heck of a lot easier to transport crude oil than it is natural gas. So you have to bifurcate money. And just as a listener, you’re thinking about this. You know, you’ve been here in a sour on the U.S. natural gas market, has very little to do what’s going on in Europe where they’re well, they’ve seen prices fall, but they’re still in a it’s still in a tight market.

Stuart Turley [00:06:27] And tanker prices are getting ready to go back up. So, you know, you you Michael, you hit it right out of the park with that comment. And I didn’t mean to compliment you, but it is.

Michael Tanner [00:06:38] I know.

Stuart Turley [00:06:39] Yeah, I hate it. I’ll rub your belly later. All right, let’s go to the next one. All right. Troubling signs emerge as credit card debt hits record high. And Michael, you asked a legitimate question. What is this got to do with energy? And I know you you try to ride herd on me and everything else, and he’s sitting there. He’s taking it for our podcast listeners. He’s taking a drink out of his water bottle with his pinkie up trying to look like you, somewhat elite, but he’s not in here.

Michael Tanner [00:07:12] Has I have a sasquatch on my water bottle. Oh, we over the body. It’s the Sasquatch.

Stuart Turley [00:07:18] I love that. Okay. Total U.S. credit card debt. Although historically low unemployment has kept consumers financial footing generally strong, stubbornly high prices will allow maybe testing some borrowers ability to repay their debts, said Wilbert Van Clough in economic research. Now, here’s the thing, Michael. Another article I read today said that they are really looking at a 50 point. They’re not ruling it out on the next one at a 15 point basis to increase next month. So that happens. This does apply to energy from the standpoint people aren’t able to fill up and they they may have a job, but people have lost all their savings and their their backups and their other cash that will impact demand.

Michael Tanner [00:08:12] So we’ve got inflation because inflation has hit the energy markets so hard. The rise in energy costs across the board has tapped people of their savings. They’re reaching in, as you said, to the credit card. So I see your point when you talk about, okay, credit card debt is at its highest point. Well, why is it as high as one? Well, that’s because people are leveraged to the tips on energy.

Stuart Turley [00:08:36] Right. And, you know, if you’re a dog, those are pretty low ground and there are six or eight of them, You know, So, I mean, that’s really bad if you’re a dog. Yeah. So. All right. Well, that was funny. Okay. Let’s go to the carbon offset market, which could reach 1,000,000,000,002 trillion with right rules. I know you get tickled at that, Michael. That was really pretty funny. New York and London. The total value of carbon credits produced and sold to help companies and individuals meet their decarbonization goals would approach 1 trillion as soon as 2037. I got a real problem with carbon credits. They they flat allow you to keep polluting and just pay for it. And then you raise your prices and the consumers end up paying for you’re still polluting. So I’m not a carbon capture excuse me offset fan.

Michael Tanner [00:09:32] You’ve been a long week. Still. We’ll get you out of here quickly. Not worry. Here. Here’s how I feel. It’s a good it’s been a good week, though. I think implementing some sort of carbon market that allows for the exchange of credits designed to overall reduce the amount of emissions is not a bad thing. I actually think it’s probably the most efficient way from a market perspective to achieve long term actual sustainable emissions cuts, because the key is it’s, you know, it’s like dieting. What’s the best diet? It’s the one that you can sustain for five years. It’s not. Oh, I’m going to go, you know, Carnivore for 45 days and lose a bunch of weight. I’m going to go vegan for a month or I’m going to, you know, do some crazy milkshake or, you know, green tea diet. Yeah, it might. In the in the short term, you might absolutely lose some weight. But in the long run, you can’t sustain that and you’re going to then struggle and fluctuate back and forth. It’s the same you know, I use that analogy on this is you can implement something in the short term that actually helps, a.k.a. we’re going to you know, when implement this this you know, specifically an idea of a cap and trade idea. And it can work in the short term, but long term it’s it’s the incentives aren’t aligned for all parties. If the incentive in cap and trade is to figure out a way to acquire credits so that you can trade, you’re going about it wrong. The goal is to reduce emissions in any way.

Stuart Turley [00:10:58] Exactly.

Michael Tanner [00:10:59] In any quote unquote, free market solution that we come up with has to have that in mind, which is why there needs to be regulated a little bit. I know you hate hearing that those two that one two words or one word, two syllables or three syllables regulated. There needs to be some sort of cap around. Okay. This is there’s this is the total amount of emissions we can have. And over time, it gets slightly smaller, slightly smaller, slightly smaller. And there’s no real way to gain these credits other than you exist in a marketplace in which you’re eligible to receive credits.

Stuart Turley [00:11:30] That makes it great. And that is an excellent point. And I you know that I am not all or anything for legislation through regulation. I have to give John Guttentag a shout out today. I did an interview with him. He is an analyst from investors. And he also said that there are some serious issues.

Michael Tanner [00:11:51] There is the company that used to sponsor the show.

Stuart Turley [00:11:54] Oh, yeah, but they missed out on all the volume now. So anyway, but the Rascals. But here’s the thing, John. Guten Tag was dead on, right? And he said that not only is there legislation, the new rules that are coming out, there’s legislation through regulation. There’s also taxation through regulations. And I love that one.

Michael Tanner [00:12:15] A dish taxation without representation. We’re going back to the Boston Tea Party.

Stuart Turley [00:12:20] Absolutely. And here’s the thing. Some regulations are good, just like you described, but then also legislates legislation through taxation is bad. Taxation through regulation which he had in the in the podcast today was phenomenal. So I’m giving my hats off to him for going through that much.

Michael Tanner [00:12:43] I want to I don’t know how much I want to listen to a tax discussion with you, but I’ll I’ll leave that.

Stuart Turley [00:12:48] He’s great. I’m a knucklehead, so I.

Michael Tanner [00:12:50] Feel.

Stuart Turley [00:12:51] Okay. Okay. Barclays Vows to Stop Financing Oilsands Projects. Michael There’s a couple of things I want to read one paragraph in here, and then I want to tell a little bit about the oil sands commenting on Barclays new targets. Jeanne Martin, head of banking programs at Share Action, said disappointingly, despite not having published a new oil and gas policy for the last three years, the bank’s fracking policy remains unchanged and there’s no mention of new oil and gas. This means that Barclays continues to be out of step with the current minimum standards of ambition within the industry. Here’s a little bit about oil sands. Canadian oil sands is cleaner than anything Iran, Iraq, UAE, anything anybody does. And when they get done with a oh, look at you, you’re throwing up. I know what he’s got. Reverse peristalsis setting in for our podcast listeners. Reverse peristalsis is the act of violently throwing up peristalsis, the act actually swallowing. So Michael, bear with me though. The actual oil field sands, this is a misnomer, but this is part of the ESG pulling of financing for oil. But it’s mostly done in this one because part of this is also the hypocrisy in California. Importing 90% of their natural gas from southern port and top part is importing from Canada. So, you know, this is just hypocrisy central on this one.

Michael Tanner [00:14:33] Yeah, I mean, I think we’ve beat this is as you know, as you mentioned a couple shows ago, a dead horse that’s now getting up and they’re beating it again. I mean, I expect nothing less from Barclays. You know, obviously it’s shortsighted. Obviously, it’s going to continue to not help this energy crisis. You know, it’s their decision. I mean, you know, Canadian oil producers probably are I don’t know who’s at more risk of bankruptcy, Canadian oil producers or American oil producers. But, you know, they’re obviously out of the game. But luckily, we have, you know, banks here in the United States that, you know, for better or worse, are. You know, we we joke all the time. Black rocks out of oil and gas. They’re not they’re still in it. They’re just you know, clearly they’re ESG funds aren’t doing so well. So we just need to see how long my predictions do. In five years, Barclays will be back on oil and gas.

Stuart Turley [00:15:24] I give it to you years.

Michael Tanner [00:15:26] You heard it here first, folks. What else? What else you got for us?

Stuart Turley [00:15:29] I’m in, man. I am wiped out. It’s even Thursday evening when we’re recording this. And I’d. I’d like to pull the plug on tomorrow, but my our employees, it’d be a little bit like, lost against Stand It Without Me.

Michael Tanner [00:15:41] I know your people just love We love working with you, Stu. Absolutely. And he’s he’s is the one true thing he said all night. But we appreciate it, Stu. I’ll get us out of here quick, guys. I mean, I think from a from a market standpoint, we saw the S&P 500 drop about 1.3 percentage points. NASDAQ was down 1.9 percentage points. A lot of that is due to two reports that dropped mainly producer price index, which is an inflation metric that tracks wholesale prices. You know, we have the obviously, there’s the energy inflation. We have all of these different inflation. But the producer price index is one of kind of the core inflation numbers. We were expecting a 0.4% increase in that index. We actually saw 0.7% increase increased to top that off with a jobs number. That was really odd. We actually lost we actually lost about 1000 people on the weekly jobless claims. Not quite enough. Did boogie markets then in the afternoon, this sell off sort of continue to ramp as we had President James Bullard of the Federal Reserve. I don’t know which bank he’s the president of, but he was openly admitted that he was he backed a 50 basis point interest rate hike that didn’t pass last time. And we’ll be calling for it again this time. That spooked markets, drove everything. That’s really why crude oil ended up a little bit, down 7815 off the back of just some weaker dollar news because of that fact or some stronger dollar news excuse me, because of that fact. Natural gas trading down $2.41. We saw a 100 Bcf draw from natural gas reserves. We expected, you know, somewhere from there. I think, you know, if you rewind the tapes to I think I did say 100 on the No. So I will pat myself on the back and say I got lucky on that one. But is still to give context our last year we are about a 166 Bcf, so we are still wildly below our normal draw levels. And again, it’s what’s holding prices down again, currently trading $2.41. Last two things I’d like to bring up. If you’re a futures trader and you pay attention to the the Commodity Futures Trading Commissions commitment of traders report, you’re going to have to wait as they are a subbed as they have released a statement today. I’ll read you part of it, the CFTC Division of clearing a risk market Oversight board. But they released the following statement Update the public on the reporting delays due to the cyber related incident on the OH and Clear Derivatives, a subsidiary of Ion Markets, a third party service provider of clear derivatives order management order executing, trading and trade policy. Quote Following the eye on cyber related incident that’s got a SOC. You’ve got to released a press release because one of one of your third party providers got hacked by Russia’s price. Some guy got caught up in a phishing attack. They broke out one of those LinkedIn messages to one of those ladies you’re always getting hit up with. And they accepted it. Little do you know, it’s some some dude in Russia, Ukraine trying to hack you. I would say 500 bitcoin. But reporting firms are continuing to experience systems issues, submitting timely and accurate data to the CFTC. As a result, the weekly Commitment of Traders report that would normally been published on Friday, February 17th, will be postponed. They they intend to resume as early as 20 as February 24th, but it could bleed into March. EAC not good cyber taking us down. You know, I don’t know what would have stopped it other than you know, when somebody from you know, when somebody from Europe emails you and says, yo, quickly, I need your credit card info, don’t give it my right. I t it’s just my I think we’d be remiss if we didn’t mention we have the latest and greatest company to jump up and down and wave that they’re doing stock buybacks. PDC Energy On top of declaring an increased quarterly cash dividend, they also announced a FY $750 million increase to its share buyback authorization. Wow. They come out specifically in announced that the board of directors approved an incremental $750 million to the company’s existing 1.25 billion share repurchase program, bringing the total authorization to 2 billion. The company remains committed to returning a minimum of 60% of its annual post based dividend adjusted free cash flow to shareholders through the company’s share repurchase program and special year end dividend if needed. Wow. They are going after I mean, add this on to the list of companies that are saying share buybacks, share buybacks, share buybacks. This means something they want. You know, and I don’t want to force I didn’t know what this means. There’s obviously geniuses behind all this. You know, I mean, genius coming up with these reports, geniuses.

Stuart Turley [00:19:59] Genius.

Michael Tanner [00:20:01] So I don’t want to speculate on on why. I think it’s a little shortsighted to try to stick it into the you know, stick it into the side of an administration who’s. Already attempting to it. I mean, you can just do the stock buybacks, you can bury it in the press release like Conoco Phillips did. So. But instead, what do you come out and say? I don’t know. Smarter mind. Smarter minds than me. Clearly. Clearly for the rest of us do.

Stuart Turley [00:20:23] Well. For our podcast listeners, we’d like to thank everybody. The show is going totally ballistic. If you have any questions, please let Michael and I know we would also like to interview anybody in. That is a industry thought leader in the energy space, having some great interviews coming up. And then for our podcast listeners, also watch us on YouTube occasionally because Michael just about broke his arm tonight, trying to pat himself on the back. He’s not that flexible. So again, shout out to Michael for being right. The only the second time in three years on all of our shows. Great job, Michael.

Michael Tanner [00:21:02] He better be lucky than good, Stu. Better be lucky than good with that, guys. We’ll let you get out of here. Hopefully start your weekend. If not, finish up your day. We appreciate all of our energy workers who are happy to show up on the week as we appreciate you guys, But we’re out of here. It’s Friday for Stuart Turley. I’m Michael Tanner. Guys, we’ll see you Monday.