Daily Standup Top Stories
ANALYSIS-Healthy gas storage warms Europe, but not enough
China Says Ready To “Join Forces With Russia” To “Defend National Interests” As Putin Confirms Xi Visit
Plans for new mid-scale LNG project in Louisiana gain ground
Crazy Optimism About China’s Economy – What markets will get hit the hardest? Energy or consumers?
Highlights of the Podcast
00:00 – Intro
01:41 – Healthy gas storage warms Europe, but it’s not enough
03:34 – China says it’s ready to join forces with Russia to defend national interests as Putin confirms his visit
04:55 – Crazy optimism about China’s economy, what markets will get hit the hardest? Energy or Consumers?
05:28 – Chinese consumers trapped inside their apartments during the first part of the pandemic accumulated more than 2.2 trillion in bank deposits
08:05 Plans for new mid-scale LNG project in Louisiana gaining ground
09:07 – Chesapeake Energy is reducing their. Drilling amid nat gas price slump
10:26 Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Stuart Turley: [00:00:15] Hey, everybody. Welcome. Today is a great day. It’s Friday. Have you had a good week? Welcome to the energy news beat. Stand up. My name’s Stuart, president and CEO of the Sandstone Group. And today is February 24th. It’s Friday. I know. [00:00:32][17.6]
Stuart Turley: [00:00:33] That we’re all looking forward to getting out of the office, so. We’re going to run through these really important stories real quick. But first check out our Energy News Beat Substack. It’s the energy news beat @ substack dot com. Ask any questions that you want from Michael and myself, and that is questions and Energy News, Beat.com. We have several. Really good stories for you here this morning. [00:00:59][26.4]
Stuart Turley: [00:01:00] The first one analysis Healthy gas storage warms Europe but not enough. China says it’s ready to go join forces with Putin. Theres some interesting twist going on in there. What is going on with all the crazy optimism, crazy optimism about China’s economy? What markets will get hit the hardest, energy or consumers? It’s going to be kind of interesting. See how that plays out. [00:01:26][26.4]
[00:01:27] Plans for new mid-scale LNG projects in Louisiana they gained ground it’s pretty cool. Now. Chesapeake Energy to reduce drilling amid net gas price slump. So let’s take a look here the first one healthy gas storage warms Europe, but. It’s not enough coming out of Oslo as. Europe emerges. From a mild winter with gas. Storage close to record levels. It. Must brace for another costly race to replenish its reserves. On the international market. [00:02:00][32.5]
Stuart Turley: [00:02:00] Now, here’s. Where this is. Some pretty. Good analysis going in here. It says the situation on the gas market is currently no longer tense, said. Markus Kramer. CEO of. Our. W.E., Germany’s biggest utility, told Reuters. We do not expect filling storage to be as costly as next summer as it was the last year. Jacob Mandel, senior analyst at Aurora Energy, said. He also said. Firms that rely. On spot supplied to fill. Storage rather than. Hedge against. Future price. Jumps will. Risk. Paying similar costs to last summer. So there is all of the contracts and I love the way that the. [00:02:47][46.8]
Stuart Turley: [00:02:48] Author phrase this contracts in tatters. Russia’s long term contract price is based on complex calculations, are not public, but are much cheaper than the spot market rate. This is going to be very interesting to try to find out. LNG for now, renewables. For the. Futures, the motto that people are forgetting that they’re not going to be able to get a lot of the supplies for either the renewable or any of those things. [00:03:15][27.4]
Stuart Turley: [00:03:16] So it’s going to be really tough I can’t tell you any any kind of pricing hedging. Because we’re trying to figure out. But we have the really low price, but we’ve got a bottleneck on getting LNG out. So there’s going to be some mixing going on there. We’ll keep you posted on that. Let’s go to the next one. [00:03:33][17.5]
Stuart Turley: [00:03:34] China says it’s ready to join forces with Russia to defend national interests as Putin confirms his visit. I’ll tell you, this is kind of crazy. Here we have President Biden going over to ukraine and then you had President G. And Putin cooking pancakes together. Now we have during a virtual meeting at the end of last year, they were talking about doing this and he said they will work together like like minded partners further to promote the development of the international order in the direction of accruable development. [00:04:15][41.9]
Stuart Turley: [00:04:17] They are pulling so close. The biggest fear out of this is that they’re going to start arming Russia. And when you take russia with the most natural gas and energy and then you have China who can produce most of the weapons and they come together and then you have Russia working with Iran, and then you have Iraq and China starting to deal in one. [00:04:42][25.0]
Stuart Turley: [00:04:42] This is no longer a very good situation and our current administration is not helping anything out at all with this. So take a look. Let’s see what’s going on. Crazy optimism about China’s economy, what markets will get hit the hardest energy or consumers?. This is really kind of amazing because you have the folks. That are out there from goldman Sachs and others. They’re saying it’s going to be 110 to 130 because of China’s economy and its growing bank. [00:05:15][32.6]
Stuart Turley: [00:05:15] There’s a lot in this article and I’m not sure how I’m going to two factor in this number, but let me throw some of this at you and I. Want to hear your feedback as well. Chinese consumers trapped inside their apartments during the first part of the pandemic accumulated more than 2.2 trillion in bank deposits. The Financial Times put the figure at 2.6 trillion. But there are. I love the way the author says there’s four primary reasons to doubt it. [00:05:49][33.6]
Stuart Turley: [00:05:49] First, China’s disease statistics are questionable, really. China portrays smooth COVID exit leaves scientists wanting more data. So. Second, if china were overcovered, as the regime maintains, the economy is still plagued by overdependence on property which accounts for almost 30% of gDP. [00:06:12][23.2]
Stuart Turley: [00:06:14] So housing is critical because it also accounts for about. 70% of the wealth of the middle class. So what we’re seeing is in throughout the rest of the world, as the middle class is dissipating and migrating, the rich are getting richer and the poor are getting poorer and the middle class is dissipating this article is also saying the same things happening in China. The property sector downturn is hard wired into the first. Half of 2023. The Rhodium Group last month reported that. Third, the chinese economy is far weaker than Beijing claims. [00:06:52][38.6]
Stuart Turley: [00:06:53] I don’t know how we compare because we don’t know that we actually trust any of the numbers coming out of China the National Bureau of Statistics reported that GDP grew 3% last year. But how could it have grown when everything was locked down? [00:07:08][14.8]
Stuart Turley: [00:07:09] So China is back. Here’s how the Financial Times summarized the message but they’re really optimistic. And people that want to believe are very optimistic as well. I don’t know. It’s kind of like The X-Files. He wants to believe. I want to believe that there’s going to be a lot of demand. I’m just not going to believe that it’s going to have that big of impact of oil to be able to bring it with the other items in play, to bring it over the $100 a barrel I believe the 80 or 9000 in that range is going to remain solid for a while. So with that, everybody’s getting excited about the China demand I’m skeptical. [00:08:02][53.6]
Stuart Turley: [00:08:03] So let’s. Come over here for plans for new mid-scale LNG project in Louisiana gaining ground. I’ll tell you what. Any way we can expand our lNG market, our natural gas, our United States drilling, I’m happy about Gulf Stream LNG development a recently launched midsize Greenfield LNG export project is file an application to the DOE seeking authorization to export up to 4 million tons per year of lNG to free trade agreements and non FTA countries. [00:08:42][38.6]
Stuart Turley: [00:08:43] This is huge. It’s a 500 acre. Site, 1.3. Kilometers of Deep water. Mississippi River frontage is located south of New Orleans. This is really cool. So the article title is. Plans for new. Mid-scale LNG. We’ll keep you posted on that this is some really pretty cool news. [00:09:04][21.2]
Stuart Turley: [00:09:04] On the natural gas front. Chesapeake Energy is reducing their. Drilling amid nat gas price slump. It tells me it’s a bad thing for the ENP, but it also tells me it’s a good thing that management is paying attention we certainly see that it’s prudent to pull back capital and we think we’re going to see others do the same. [00:09:25][20.8]
[00:09:26] Chief executive Nick Down also said energy firms pulling back in shale in Louisiana and East Texas. We’re making money on the capital that we’re investing, but the margins are not nearly on a full cycle basis they were historically. [00:09:42][16.0]
Stuart Turley: [00:09:42] So henry Hub, natural gas futures on Wednesday Dip below $2 for just a little bit currently. When we’re reading this at 9:55 on thursday night. Net gas is 2.1. So Chesapeake shares were up 2.3 to 7977. So really interesting. I applaud Chesapeake for Watching their numbers. And just. Taking care of their shareholders. [00:10:11][28.9]
Stuart Turley: [00:10:12] So with that, I have an absolutely fantastic weekend. We’ll be watching the news and keep an updated list. Stay tuned to energy news beat dot com and the energy news beat substack. Thanks. Look forward to speaking to you soon. [00:10:12][0.0]
