Solar

The mood on Wall Street is suddenly, that the market will have a traditional post-Midterm bull run into Christmas. Buy them all. There might be some threat from the major turn in the Chinese market, sucking money back into China, and of course the FTX Crypto collapse is widely reported to involve a $30bn personal net worth loss for the now-notorious Sam Bankman Fried, and an $8bn black hole. Will that negatively affect markets? Well […]

What can you do but write an earnings note during earnings? Well, we put out a theme note yesterday on East Med, which had good reviews, but question marks over the materiality to the big winner, Chevron. As the oil space, and its respective components, have settled into a sensible valuation structure and lack of differentiation between themes, the quest is on to look at Kosmos or offshore drillers for some excitement. And we will […]

Brooklyn Cop at 844th Precinct accuses innocent Sankey of being “weird-looking” “They” got caught speeding yesterday: fast unwind of long natgas / short refining trade Terrific Happy Hour with Jay Saunders and a couple of other hitters last night; introducing Scope 4 Jennison portfolio manager (PM) Jay Saunders is very popular in the market, you can tell that by the players that dialled in to participate in his call yesterday. He co-runs the Jennison Natural […]

Labor Day outlook for oil and energy markets into year end; there is plenty more research to be done. You could make a big call on oil today for the next four months, and be wrong by Tuesday this week, with OPEC+ meeting Monday. If they cut and crank oil prices, you could make a bear call today, reverse your view on Tuesday and be wrong by Thursday when the ECB may be pushed towards […]

Observations on the “Inflation Reduction Act”: We read all 730 pages, with 198 being on healthcare, and conclude that, rather than calculate an “Excel told me” analysis, but rather, because of the surprise announcement of the Bill, the stock market provides an early indicator of the Bill’s likely impact: we show you key stock price performance since the Bill was shock-announced by Senators Manchin & Schumer on June 27th: We temper this market reaction. We […]

Expecting a recession. Most market participants worry about a recession. No less than Goldman Sachs is clearly concerned: Bloomberg 8/29/22 Goldman Says Buy Commodities, ‘Worry About Recession Later’ •             Slowdown risks outside Europe seen ‘relatively low,’ bank says •             Equities could suffer as raw materials gain, analysts forecast We are all aware of the obvious mega-problems, that Putin is pushing Europe into a depression, China is straight-up missing in action, and the rapid expansion of […]

I asked a major activist investor if I should zip over to Denver this week for the Enercom conference, (starts tomorrow). It’s a staple of the August energy conference diet, which is not a rich diet. Enercom, you pay to attend and a plethora of smaller oil & gas exploration and production companies make presentations with meet & greet. I’ve been once and a client told me as I headed there, the first time he […]

The two weeks, mid-earnings, when we pull together company results transcript comments, are not a science, they are an impressionistic art; a colour to our themes. Basically these are comments that caught our eye over the past week. Like sellside analysts, the companies tend to all present the same more-or-less generic message, but occasionally, as we strive with Sankey Research, a comment stands out, is differentiated, or so wild that it is worthy of note. […]

Big week for what should be terrific oil earnings this week. Watching Iraq Highlight charts – market rebounding, oils catching a bid ~ Week ahead: It’s good to see that oil earnings have worked back onto generalist earnings calendars, as shown from “Earnings Whispers” below. Devon aftermarket Monday sure, BP, Marathon Petroleum and Oxy Tuesday, etc, but believe me, a year ago Berry and Callon did not make these lists (see Wednesday below). Marathon Oil […]

Action items: Every house in Morocco has a flat roof – but there all-but no visible solar. The projects here are mega; centralised. In Mexico you see a lot of panels. Our overall thought/dream has been that almost everything that uses energy should have a booster solar panel on it, attached to a battery. A “US Solar Buyer Consortium” is open-bidding $6bn for 7GW of US-built panels. Stalking horse to justify solar panel imports? Sure, […]

Greetings from La Villa des Orangers, Medina (Old Town), Marrakesh, Today – are the big E&Ps cheap? Antero LNG exports – 70mmcfd or 1bcf/d? Postcard from Morocco They say if you want a question answered on the internet, don’t ask the question, but rather post a bold false statement, and you will be flooded with corrections. It is an interesting point on human psychology. Earlier this week we said that Antero was exporting 1bcf/d of […]

Few, As they say on the internet. Today we have a PORTFOLIO MANAGER SPECIAL in the presentation, which includes a full glorious ppt on the largest stocks in the market, and for bonus, a Sankey Recommendation on each stock. The oils look great on these charts. The recommendations on names like Google (BUY) or Disney (SELL) are purely quanatitive interpretation of charts, we do not cover non-energy related stocks fundamentally. So this is quantitative analysis, […]

Happy May Day Sunday, Today in partnership with Greg Bordelon of Isentropic Capital, we publish a note on natural gas markets by way of thesis overview to a theme that we will continue to pursue. The note is long graphics, and particularly interesting on US markets. If you only want to read half, read the second US half. It is as noted graphic intense. European gas markets are fundamentally far more un-analysable than US right […]

We have a big Renewable Diesel note coming later today, so in recognition of your Sunday time, just a couple of points on next week. Valero management are in New York City Monday/Tuesday. See what we are doing here? Our Renewable Diesel note is not published tonight by happy accident, it is a cunning plan. One Valero event is a Mark Mills presentation, presumably he of the Manhattan Institute and steely-eyed critic of the energy […]

In the war of the market, we have reached a crucial battleground: the 200-day moving average on the S&P500. Do we hold, do we bounce, do we break? That is pretty simple; we broke the 200 last week. Re-gaining it will be a battle. And by the way, we broke the 200-day on the Nasdaq like throwing a crystal decanter against a brick wall. The market went through the NASDAQ 200 like a falling chain […]

Strategy Session last night with William Su of Blackrock, a tenured oil analyst & investor. My first question was whether we would see a positive gamma squeeze in oil given the rapid increase in open call interest. The charts below show: 1) the price of a 3-year at-the-money (ATM) WTI call, going up and up and up, and alongside it to the right 2) the scale of open interest in $100/bbl call options for June […]

Well, I’m in one of those mindsets where every headline I read my reaction is “Bullish oil.” Iraq Oil report carries a much higher oil production number for Iraq than other sources. My reaction: “Bullish.” Libya struggles, my reaction: “Bullish.” These two elements are theoretically in opposition, but on the one hand, variable Libya performance is ongoing, on the other, the lack of spare capacity in oil markets is clearly driving prices and if Iraq […]

Has Covid-19 forced you to wear glasses and a mask at the same time? You may be entitled to condensation. Vin Diesel only eats two meals a day to keep in shape for making movies: Breakfast and breakfurious A genie granted me one wish, so I said “I just want to be happy.” Now I’m living in a cottage with 6 dwarves and working in a mine. Robert Burns: “The best-laid schemes o’ mice an’ […]

Make a good call, they always play out really fast and leave you wondering what’s next. We left last year predicting a bad January but a good year for markets, and a good year for oils. Markets have been quite the ride, notably yesterday the NASDAQ was crazy, while the oils have been good. In our cross plot of performance shown below, it is clear that some 2021 laggards are ripping this year, notably refining. […]

Long EQT short Sunrun this morning. Mega-theme, the ESG backlash, as energy reality intrudes on excessive alternate ambition Highlighted: a major positive announcement from Li-Cycle $LICY today regarding a $50m equity investment by LG, as part of a commercial agreement that will expand their Rochester Hub by 40% of 35,000 tonnes, equivalent to 90,000tonnes of lithium ion batteries annually. I am speaking to the company today, through newly appointed IR Nahla Azmy. More after that! […]

Quick note today as I have two events. One of my favourite parties, this morning an NY Marathon party in Carroll Gardens adjacent to the running route, which starts at 9am. It is the only party I know of that starts at 9am on a Sunday. And then to the NY Giants game playing the Raiders at Meadowlands 1pm. You can get there easily, getting out involves multiple trains. It is a family tradition to […]

Ezra’s first quarter as EOG CEO and he lofts it out of the park – massive increase in regular dividend, big special, buyback, he is in NYC next week, take a victory lap Pioneer wanes yesterday after weak buyback guidance Apache on fire We like Denbury on CO2 negative oil, and encourage Oxy carbon ventures Sunrun – we expected either a crashing miss or wild beat and massive stock reaction; we got neutral Delek beats; […]

Huge week for earnings on deck this week, just about 50% of the market cap of the S&P500 reports,  and to celebrate, the traditional Sunday Sankey is back with a full presentation attached. Sample slide: Bloomberg lists Kuwait’s oil production capacity as 3.08mb/d. In the slide shown in the Sunday Sankey presentation today from the authoritative MEES, Kuwait’s production capacity has dropped by more than 500,000 b/d over the past three years to just 2.63mn […]

Marketing in The City – Denbury highlighted by Europe Being long (client) and short (Pioneer $PXD) European natural gas Europeans worried as always about US E&Ps growing – EOG seen as likely to ramp A note on re-repricing options with special dividends Shell profit winning & warning – but no unknown unknowns HAPPY HOUR TONIGHT WITH KATHLEEN KELLEY – OPEC EXPERT. 5PM Eastern. Marketing in The City of London yesterday, I sat down to lunch […]

Well, your (temporarily) London-based correspondent on the front line of the global energy crisis can report… it’s windy in the UK! Hosting meetings with Embark autonomous trucks tomorrow, RSVP, very interesting, featuring 25-year-old CEO Alex Rodrigues and CFO Richard Hawwa. Two impressive young executives. Join my group meeting if you are shy. Please click this link to submit interest     You in London? I am marketing notably will be in The City next Wednesday 6th […]

Good morning from London Great week last week for all our favourite sectors, the Oils, Metals & Mining, Refining, as well as recovery play JETS (exchange traded fund ETF performance is shown below for past week/year to date). Last week firmly re-establishes oils – almost even including MLPs – into the position of market leadership this year. Other leading sectors year to date, but not the past week, are Retail, Homebuilders and Communication Services.  See […]

The US has negative unemployment, by one measure. The confirmation of that on Friday led to an interesting market reaction. The data point on negative unemployment released before the market was that there are 8.6 million people considered out of work in the US and nearly 10 million job openings. This could be a moot point in the EU where movement of labour is much more challenged by language and culture, but in the US, […]

We found ourselves standing on the North Slope, Alaska, above the Arctic Circle, surveying the endless flat tundra. There there is no sunlight from October to early March; total darkness over half the year. For the rest of the year, the sun does not go down – no darkness. That place, my friend, is Far North. The nearest city is Anchorage, 1,000 miles south, itself as distant as Perth Australia; palpably remote; strange and distant […]

China: no Totalitarian regime has ever survived long term, much less thrived. Ex-China, just about the one remaining global totalitarian state is North Korea, which is maintained by China as a buffer. It stands in contrast to South Korea as a testimony to totalitarianism vs democracy. North Korean GDP per capita is $1,300, vs South Korea at $31,000. So the question is, when will China collapse on itself? Certainly, its demography is weak, and we […]

Greetings, It is all about the presentation this week; please click on the attached file for a look at what is in store for the week ahead – earnings; OPEC chat; what to buy when US natgas prices hit $4/mmbtu, which they did this past week; factor performance disconnection; and our only solution since we wrote The Renaissance Thesis of US E&P in 2017, namely hard cash return to shareholders. These oils have to bribe […]

Happy Father’s Day, Markets are roiling on Fed comments, and how we get off the heroin of money printing to stimulate the economy. It will be very hard, and markets clearly will not like it. We hosted Steve Levine on Happy Hour this past week, he’s excellent. He does not support my argument made on Thursday last week in the morning note, that EV adoption by consumers will be slow. He asserts that EVs will […]

The note today is delayed by England vs Croatia, thankfully the currently ongoing Austria vs North Macedonia game is not imperative for me to watch.  There are some great slides in today’s presentation. For example on how solar projects do not deliver their IRR, on worrying Indian oil demand, on the global petchem balance by company, and our new mega-theme, of new young CEOs following through on our “Renaissance” theme of US E&Ps. This new […]

OIL RISK HIGH. We have an OPEC meeting tomorrow, and the word is that Iran is pumping into storage on anticipation of successful negotiations with the Biden administration, which, for reasons I do not fully understand, is very keen to make a nuclear deal. This will allow Iran back into global oil markets. We understand that OPEC is warning Iran not to flood the market, and Iran is saying “we are going to flood the […]

Watching Iran, but 1mb/d of oil exports are already in the market. Huge week ahead for ExxonMobil, with the Shareholder Meeting and board vote on Wednesday this week. We wrote about it on Thursday, see the note on www.sankeyresearch.com or emailed. Noted that Halliburton shareholders rejected the company’s pay proposal last week, which is encouraging. The pay of oil executives relative to shareholder returns has been an abomination for years. Executives should try a few […]

Good day, The week ended with the guided announcement from Marathon Petroleum that its deal with Seven & i to sell the massive Speedway gasoline retail network had closed for $21bn cash, and upside guidance from Marathon Petroleum on an imminent Dutch Auction for $4bn of stock, within a $10bn open buyback authorization. It was uncertain how much debt would be paid down, but that was announced light at $2.5bn. MPLX, the 63% MPC-owned MLP, […]

In the famous TINA market – There Is No Alternative – the question for those who did not get destroyed on “YOLO” calls based on “stonks always go up” – is where to head to if tech is melting down, and cryptocurrencies are airdropping. Cash is likely a short-term move, but a terrible medium and long-term option. You hide in a rising yield on the T Bill, but that too feels like a very poor […]

A salesman knocks on a door, answered by a 12-year-old boy wearing slippers, an oversized silk dressing gown, smoking a fat cigar in one hand, a huge snifter of brandy in the other. Stunned, the salesman asks “Are your parents in?”  The boy replies “What the fk do you think?” Americans love T shirts. They have the constitutional right to bare arms. Wife: “You need to do more chores around the house.” Husband: “Can we […]

All presentation today, see attached link, after the Sunny Saturday Sankey published yesterday and emailed to you, outlined the past week. The week ahead is extremely busy with results – you can see my diary in the attached presentation. The monster week of earnings is behind us, with impressive results from FMAGA – Facebook, Microsoft, Amazon, Google, Alphabet. Week ahead also has Secretary of State Blinken travelling to Ukraine. “I can’t tell you that we […]

We’ve talked about QuantumScape, we have raved about Li-Cycle, a client asked us about Stem Inc, which is coming public through Star Peak Energy Transition SPAC (STPK), to trade as $STEM, assuming deal completion. I have requested to speak with the company, the following are my first impressions. With hearings in Washington on SPACs, we think this is a great opportunity to buy some beaten down names. We don’t think there is any major problem […]

This week I am heading to Oklahoma to meet Devon CEO Rick Muncrief and then Houston to bid farewell to outgoing ConocoPhillips COO Matt Fox. Opposite ends of the spectrum for me – never met Rick, have hung out many times over the years with Mr. Fox. The lowlight in professional terms with Matt was doing the first marketing trip for COP in NYC after the dividend cut in 2016. The highlight was Matt making […]

One great business for sure is going to be lubricants for windmills. Guess who dominates the specialty oil lubes for windmills market? ExxonMobil. Guess who has their annual analyst day this week? ExxonMobil. March 3rd 9am Eastern, we get the latest iteration of The Big Unit’s story. Will they, like $EOG, get attracted like a moth to the flame of promising growth? We suspect ExxonMobil will, not that we have a problem with their Guyana […]

Snowing again here in Brooklyn Heights. One thing that is very striking in this week’s charts is the 6-10 Day weather forecast for North America. It is freeeeezing. Bluest map I can remember publishing, and we publish it just about every week in mid-winter and high summer. As noted our Happy Hour this past week was very bullish oil, basically the call is that oil just went up 15% in a month and is rising […]

Quote of the day: SINGAPORE, Jan 28 (Reuters) – Shares in small Australian nickel and cobalt explorer GME Resources GME.AX jumped as much as 53% on Thursday, apparently driven by the similarity of its stock ticker code to U.S. retail investor darling GameStop GME.N. Looking forward to Happy Hour tonight! This should be a good one. As always 5pm – please register interest. Just ping me an email to join, it is a great client-only […]

“Go placidly amid the noise and haste, and remember what truth there may be in silence…”  Desiderata* ARK Invest has published its Big Ideas for 2021, and its important to take a look. We can also take a look back at the 2017 predictions. From an investment standpoint, and shareholder returns standpoint, the fund has been staggeringly successful. Obviously by extension so have the predictions, although current zero cost of capital market conditions are perfectly […]

Your correspondent listened to a loooong podcast yesterday hosting Abigail Hopper, President and CEO of the Solar Energy Industries Association. Hopper was previously head of the Interior Department’s Bureau of Ocean Energy Management (BOEM, big for offshore wind development, and of course offshore drilling). Before that, she was director of the Maryland Energy Administration and an adviser to former Gov. Martin O’Malley. As I learned at quite some expense of time, she was once a […]