Canada’s Oil Sands Time To Shine!!

In an unexpected turn of events, U.S. spot natural gas prices in Texas dropped below zero on Tuesday despite soaring demand driven by a severe heat wave. This phenomenon, typically seen in the low-demand seasons […]

Highlights of the Podcast

00:00 – Intro

01:30 – EU Sanctions 17 Ships that Carried Oil for Russia

Fervo Energy Announces 320 MW Power Purchase Agreements with Southern California Edison

05:01 – German airline Lufthansa hikes ticket prices by up to $77 due to environmental costs

07:19 – Forget Shale: Canada’s Oil Sands Are Having Their Moment

09:27 – Hedge Fund Making 20% a Year For Last Decade Targets Uranium M&A

12:20 – Markets Update

14:40 – Texas Natural Gas Prices Turn Negative Even Amid Heat Wave

17:16 – Outro

 

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

Michael Tanner: [00:00:14] What’s going on, everybody? Welcome into the Wednesday, June 26th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, EU sanctions 17 ships that carried oil for Russia. Ooh. Next up, Fervo Energy announces 320 megawatt power purchase agreement with Southern California Edison. Love that. Next up, German airline Lufthansa hikes tickets prices by up to $77 due to environmental cost. Interesting one there. Forget shale. Canada’s oil sands are having their moment in the sun. Great article here. Finally in the news segment. Hedge fund makes 20% a year for last decade targeting uranium M&A. Super super interesting. Yep. You will then toss it over to me. I will quickly cover what happened in the oil and gas markets today over what the AP estimated is what you’ll see with the crude oil inventories today. And then we’ll finish up with Texas. Natural gas prices turn negative even amid a heat wave. An absolute crushing blow to the Permian Basin. So we will cover all that and a bag of chips, guys. As always, I am Michael Tanner, joined by Stuart Turley. Where do you want to begin? [00:01:29][75.3]

Stuart Turley: [00:01:30] Hey, let’s start with our buddies over there. What? Hey, you. Holy smokes. Batman! Michael EU sanctions 17 ships that carried oil for Russia. However, buried in this article are a couple nuggets. A total of 27 ships were sanctioned, including two ships that stored LNG and general cargo. Vessels that carried restricted goods are linked to sanctioned entities. Michael, Russia just passed Japan for the fourth largest economy in the world. You know what Biden said after he saw this list of 17 things ships being sanctioned. Go ahead, sanction more. Please make. [00:02:14][44.0]

Michael Tanner: [00:02:14] Way sanctioned by. [00:02:15][1.1]

Stuart Turley: [00:02:17] What? This is just not. I can’t believe that they’re doing this again. But buried in there was the nugget that everybody was denying that the dirt fleet was going to have LNG tankers. I’ve been saying for a while it’s there. So anyway,. [00:02:34][17.4]

Stuart Turley: [00:02:35] We’re off to the next story here. You gotta love a good hey, hey, hey, let’s go to Fervo energy announces 320 megawatt power purchase agreements with Southern California Edison. I love me some good geothermal I love nuclear, geothermal. I’m a geothermal kind of guy, you know. Why am I going, wow, our great oilfield service companies know how to do geothermal. I mean, we can drill holes in Texas and God bless them for showing them how to do it. They’re in California. This is actually very cool. This announcement is another milestone in California’s commitment to clean zero carbon electricity, said California Energy Commissioner Chair David Hochschild. Enhanced geothermal systems complement our abundant wind and solar, providing critical baseload when those resources are limited. This is key to ensuring reliability. Finally, something that is reliable and that’s geothermal. I mean, it’s just unbelievable. They have already servo Michael has already done 53 megawatt power from Cape Station to California Community Choice Aggregators 2021 I love them. I got to go get the CEO on the podcast. That’s pretty darn cool. [00:03:53][78.3]

Michael Tanner: [00:03:53] You do. It’ll be very interesting. I’d love to. Do you know, one of our favorite podcast that we do is the Deal Spotlight. I love to do a geothermal deal spot. [00:04:02][8.1]

Stuart Turley: [00:04:02] Oh sweet. [00:04:03][0.5]

Michael Tanner: [00:04:03] I, I would be loved. I would love a little bit behind the curtain because I’m not even sure how these things work. Basically you drill, you drill for these, you know, geothermal basically. I mean, from a low level. What does it do? You’re drilling oil, you’re drilling a well and the well, the goal is to produce water that then you run through a turbine and that turbine spins and produces electricity. [00:04:22][18.6]

Stuart Turley: [00:04:23] So and normally you build a closed loop system so that the closed loop system is once it comes through the turbine, then it goes back into the ground to reheat again. [00:04:32][9.2]

Michael Tanner: [00:04:33] Absolutely, absolutely. So it work. So I would love to look at this. I’m a big fan of geothermal. If they can figure out some of the you know obviously there’s still a retrofitting of the grid that needs to happen. But you know we like what Turbo Energy’s doing. They’ve raised a boatload of money. So hopefully they can they can figure this out by the fact that they’re able to do business and get this stuff permitted in California is a testament to they’ve shown something at least. [00:04:58][25.3]

Stuart Turley: [00:04:59] Oh, absolutely. I hats off to them. All right. Hey, let’s go to German airline. German airline lose tons last time that before you. You already sneezed once today. Hikes a ticket. Up by 77% due to environmental change. A little inside baseball here. Our producer had to cut the show here just a second ago because an eardrum went rolling by his ears monitor there. It was horrible. Anyway, German airline said that it would an add an environmental costs surcharge ticket prices soon this week, which could be as high as €72 or $77 for some flights. It’s intended to cover part of this steadily increasing additional cost due to regulatory environmental requirements, Alexander said in a statement, pointing out regulations from the European Union and International Civil Aviation Organization. That’s pretty amazing. It depends on the flight route and fare between €1 and 72. All it has all. [00:06:03][63.9]

Michael Tanner: [00:06:03] To do with the sustainable fuel quotas and how much of the sustainable fuel is being used. And, you know, and what they’re trying to do is say, because that comes into effect at the beginning of 2025. They’re trying to get enough in the barrel right now before the rule comes into an act. You know, according to the International Air Transport Association, they say that sustainable aviation fuel could cover around 65% of emissions reduction in the aviation industry, which nascent within the EU, needs to be net zero by 2050. [00:06:31][28.3]

Stuart Turley: [00:06:32] Right. So if you weigh 400 pound human, either male or female, and you wonder and you say, May I have another extender seat seatbelt extender. Do you have a prorated tax increase again on top of your normal increase fares? Should you be. [00:06:50][17.7]

Michael Tanner: [00:06:50] You’re going to have a they should have a scale when you get onto the plane to see how much how much of the extra fee you have to charge people get it. You’d like to think people get into shape pretty quickly if you said if you said if you gave people a weight target to have lower flights, I guarantee you’d get people working out. [00:07:07][16.8]

Stuart Turley: [00:07:07] Oh, absolutely. I think that’s a great. [00:07:09][2.3]

Michael Tanner: [00:07:10] We might get you on a treadmill. [00:07:11][0.9]

Stuart Turley: [00:07:11] Oh, if I didn’t have a broken leg, I would be right there with you. [00:07:15][3.8]

Michael Tanner: [00:07:15] That’s a good point. All right, let’s go up to Canada OPEC. [00:07:18][2.7]

Stuart Turley: [00:07:19] And forget shale. Canada’s oil sales are having their moment. Do you know what Canada and Oklahoma State have in common? There’s only one word or one syllable that everybody that they all know. Oh, Canada. That’s the only thing they know in the whole thing. And then at OSU Oklahoma site to fight song are you. Oh yeah. Yeah. Oh, yes. You okay? There you go. Canada oil signs were once again dirty. You know, everybody’s like ooh oil signs. Pride producers have been the top performing companies in the energy sector over the last several years. They gained an average of 37% over the last 12 months, outpacing the impacts the index of the largest U.S. energy complaint companies. I did not know that by 19%. The two biggest Canadian natural resources, NQ Cnq down and the other one, Imperial Oil and Chevron K’Nex. Wow. Part of that is because of the new Trans Mountain oil pipeline is pumping out like you wouldn’t believe, and China is buying every single drop that they possibly can. [00:08:33][73.7]

Michael Tanner: [00:08:33] Yeah. And again, there’s a difference between the oil sands producers up there in Canada and the actual shale producers, which, you know, you’re talking about the Montney and a few other formations up there that are kind of like the Permian of Canada, but the oil sands is is definitely different. I mean, you know, this article goes on to point out that, you know, considering the fact that it costs a lot more to drill the oil sands, aka more CapEx up run, you know, it’s super expensive to operate, huge environmental footprint relative to that, but also huge discounts on the oil once it’s produced because there was no capacity transported anywhere. So you saw these huge differentials, right. [00:09:09][36.0]

Stuart Turley: [00:09:10] And now that they’ve got a pipeline to pump it out and Canada wants to buy everything they can, God bless them, pump everything they possibly can. Yeah, I wish we had that heavy oil sands instead of buying it from Venezuela or Iran. It would make a lot more sense. But hey, what do I know? [00:09:27][17.1]

Stuart Turley: [00:09:27] Let’s go to hedge fund making 20% a year for the last decade targets uranium and M&A. Michael, we don’t give investment advice here. We can barely sing and OSU fight song. But it’s a strategic asset. And with the the big thing that’s going on right now is the boom in nuclear around the world. NexGen counts L1 as its biggest shareholder after the Australian firm First Invest invested in early 2021. The fund’s uranium stock positioning has weathered the swings. I see all this as just nothing but great things over the past five years. The metal has climbed 233%, more than triple the gains in gold and copper. Even a slight, you know, once we buy all of the uranium that the Clintons sold to Russia back, it’s going to be having, there’s going to there’s going to be a whole new demand for uranium. [00:10:31][63.4]

Michael Tanner: [00:10:32] Yeah. I mean, it’s it’s pretty crazy that, you know, your best long short fund, obviously based in Australia, has been literally performing at the level by only trading uranium. It’s crazy. Here’s the quote from Amir Naqvi. He’s the head of research at such a strategic asset that once they get their final approvals, it’s a very high likelihood that it would be a good takeover candidate for one of the major. So, I mean, basically what they’re doing is nice front running uranium stuff kind of crazy. [00:10:58][26.0]

Stuart Turley: [00:10:58] Yeah, I had interviewed another uranium new uranium company for in the US, and they’re using drilling like oil and gas drilling and siphoning out the water out of the fracking. So they’re fracking for uranium. Boy, that’s pretty cool. Hey, if it is. [00:11:17][18.5]

Michael Tanner: [00:11:17] It is kind of crafty. [00:11:18][0.6]

Stuart Turley: [00:11:18] You know. [00:11:18][0.2]

Michael Tanner: [00:11:19] All right. Well, we’ll we’ll cover the the interesting AP crude oil inventory guesstimate as long with oil prices. But before we do that as always guys, thank you for checking us out on the world’s greatest website energy newsbeat.com. The best place for all your energy and oil and gas news. Stu in the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy in the oil and gas business. Hit the description below for all the links to the timestamps. Links to the articles, links to our Substack. As we mentioned yesterday, we are launching tomorrow’s news today. Can’t tell with Jim Cramer screaming behind me. He he comes on at 5 p.m. which means we’re actually recording this the night before it gets released. So as you listen to this on Wednesday, we’re actually recording this Tuesday night means sell. [00:12:03][44.3]

Stuart Turley: [00:12:03] Sell sell. [00:12:03][0.2]

Michael Tanner: [00:12:04] Sell. Yeah. Meaning if you subscribe to our Substack, we’ll give you tomorrow’s news today and get you an early access to the stories that we cover on here to go check that out, guys. The Energy news beats substack.com. You can also check us out. Dashboard.energy newsbeat.com. [00:12:19][14.9]

Michael Tanner: [00:12:20] But let’s go ahead and move over in overall prices guys market to a decent day on Tuesday. You know we were up about 4/10 of a percentage point for the S&P 500. Nasdaq rallied a little bit 1.16 percentage points two and ten year yield fairly flat dollar index up 2/10 of a percentage point. Bitcoin up three percentage points. Still trading about $62,000 per coin. Crude oil lost a little bit off the off. Its standard today opened about 8150. Drop to its closing price $8,680.68 mainly off the back. If we can go ahead and throw this up off the back of a very interesting API crude oil inventory guesstimate numbers come out 914,000 barrel build is the guesstimate. As you guys listen to this, at about 10:30 a.m. or 9:30 a.m. Central Standard Time, you, the EIA will release exactly what their inventory numbers are. Obviously, if you have access to some broad proprietary data, you’ll know better. And as always, the EIA lets everybody know, too late. But you know, really what kind of the other thing that really hurt oil prices today was we had some fairly weak U.S. consumer confidence data. US consumer confidence decreased in June. The and you know, while some of that consumer confidence was a little bit higher in in, in in in terms of the labor market and inflation, there still is this overall concern that the economy isn’t where it needs to be, which could dent gasoline demand, which could also show that, you know, there’s also now this weird timing with people, you know, we expected three rate cuts in the beginning of the year. That was the sentiment. Now we only expect one. We also saw Fed Governor Lisa Cook on Tuesday say that a rate cut is likely if the economy performs as expected, but declined to say when the US central bank will act. A quote from the fed was the decision on interest rate is still in the Or. This is a, I Dennis Kistler, he’s SVP of trading over BC financial. A decision on interest rates is still mixed, and most of the crude market is priced in a quarter percent cut by September. You better hope that comes around. It’s going to be super interesting. Seems to be what’s going on. This is a lot of the geopolitical stuff. You know, the war in Ukraine seems to be going getting escalating more while the war, while the war in Gaza seems to be winding down. So there seems to be some crazy political things going on. But all that being said, I think the geopolitical pressures could could continue to support prices in the short term, even if we don’t necessarily have the best demand forecast outlook. You know,. [00:14:40][139.5]

Michael Tanner: [00:14:40] Final article I wanted to cover here. Two Texas natural gas prices turned negative, even amid heat heatwave. In a pretty unexpected kind of turn of events, we saw us spot natural gas prices, specifically in the Permian drop below zero on Tuesday. Regardless of the fact that we’re having record heat waves right now throughout. And this is mainly due to the fact that we saw a pipeline maintenance that was able to strand some gas out there. Kinder Morgan’s Permian Highway gas pipeline was operating at reduced capacity due to. Necessary repairs, which basically contributed to the price plunge so people were forced to shut in their stuff. We did see, you know, next day prices for Waha fell to below negative one dollars. That’s never it’s never good. It marks the 18th occurrence of negative pricing in Waha this year. So don’t be fooled guys. If you’re you know you know we talk to investors all the time. We’re looking to get into oil and gas, looking to invest in projects. I take calls all the day from people just wanting to learn. And I tell people that you’re investing in a project in, you know, someone calls you up and say, we’re drilling a well in West Texas. Ask them what their gas takeaway solution is, because if there’s none and they’re accounting for gas in their revenue projections, they’re pulling a fast one and pulling the wool over your eye because. [00:15:54][74.0]

Stuart Turley: [00:15:54] Unless they’re bitcoin mining. [00:15:56][1.5]

Michael Tanner: [00:15:57] Well obviously. But that’s gas take away. If that is correct your gas take away problem is oh we’re bringing in onsite bitcoin. But the difference with onsite bitcoin mining is most people who bring in onsite bitcoin mining don’t participate in the upside of bitcoin. All they do is have a someone to take away. Now hold let me finish. Do all that you do is usually have somebody to pay. Now there are ways you can structure a deal to where you can actually participate in the upside of Bitcoin. The problem is then you’re going to have to pay some capital for the servers that go on site. That’s the difference. If you want no capital spend, but just someone to take away your gas because you can’t sell it to the market. Otherwise all these bitcoin miners will feed in. The problem is not only buying it for 5,075%. Oh yeah, the difference. But if you get it on the capital side, then you might be able to participate on the upside of bitcoin if that’s your thing. So point is it’s all to think about. Walk on the Permian Basin is getting slammed though with gas take away you know pretty crazy below. Negative. There is an expansion that’s happening right now or that did happen to that Kinder Morgan Permian pipeline that was done in December of 23. Hopefully we they can get this back. It looks like June 27th. Few days will be when they return. [00:17:04][67.7]

Stuart Turley: [00:17:05] So until June 20th 7th or June 20th of 27 and. [00:17:09][4.2]

Michael Tanner: [00:17:10] Well, hopefully 2024. But it could be June 27th, 2027. You never know. But that’s all I got to. What else do you got? [00:17:17][7.0]

Stuart Turley: [00:17:17] Oh, I don’t know. It’s going to be an interesting one. Today is Wednesday. Tomorrow will be the debate. And I want to see if he comes out all hyped up and juiced up. As Trump said, it’s. [00:17:30][13.1]

Michael Tanner: [00:17:31] Whatever cocktail they’re both going to be on. I want I want access to that cocktail. [00:17:36][5.0]

Stuart Turley: [00:17:36] Oh, absolutely. [00:17:37][0.4]

Michael Tanner: [00:17:37] They’re both going to be hyped up. You know it. [00:17:39][1.7]

Stuart Turley: [00:17:39] Oh, I know it’s going to be a lot of fun. I’ll tell you. It is an absolute hoot what’s going to happen. And then when you have, Julian Assange being released right beforehand, you can’t buy this kind of entertainment around or Omegle. [00:17:53][13.8]

Michael Tanner: [00:17:53] No, I you know it. Quick guys. I’m glad Assange is free. I think there’s a little bit of, you know, there’s a little bit of chicanery that happened around there. And I’m all for a free press. You I’m not trying to go to jail. You know, I’m trying to leak government documents at Newsbeat. So I want to make sure that, oh, no. [00:18:08][14.3]

Stuart Turley: [00:18:08] We know we don’t. Yeah, we believe in a free press, but yeah. I can’t believe she didn’t drone him. You know, on the way out of the thing there. That was a great line. What? Why can’t we droning? [00:18:19][10.3]

Michael Tanner: [00:18:19] Good grief. Yeah. So now you’re turning. Now you’re turning it into a verb. That’s crazy. [00:18:24][4.4]

Stuart Turley: [00:18:25] So I didn’t she did. So with that. [00:18:27][2.7]

Michael Tanner: [00:18:28] Well, that’s all I’ve got with that. So we’ll let you guys get on out of here and start your day. We appreciate everybody checking us out. World’s greatest podcast energy Newsbeat for Stuart Turley I’m Michael Tanner. We’ll see you tomorrow folks. [00:18:28][0.0][1068.5]

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