Daily Energy Standup Episode #280 – Weekly Recap: OPEC Dynamics, LNG Ventures, Regulatory Challenges, and Impacts on U.S. Energy Assets

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OPEC’s Influence on Oil Prices To Remain Significant In 2024

Highlights of the Podcast

00:00 – Intro
01:18 – OPEC’s Influence on Oil Prices To Remain Significant In 2024
07:38 – QatarEnergy, ExxonMobil moving forward with Golden Pass LNG work
11:56 – Appeals court delivers fatal blow to California city pushing natural gas ban
14:24 – Chevron impairs California oil, gas production assets due to regulatory challenges
15:57 – 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 is going on, everybody? Welcome to another edition of the Daily Energy News Beat. Stand up here on this gorgeous Saturday, January six, 2024. Welcome to a weekly recap where we bring you the top stories from the shortened weeks of a mainly be on the stories we cover both on Wednesday and Thursday. Lots of great stuff going on, guys. You know Libya shutting down due to a protest. Oil spiking up. We’ve got you know, California, a Chevron slashing 4 billion in California amongst a host of stories. I’ll let the team decide which ones they want to cover. Before we dive in, guys, remember all the news and analysis you are about to hear brought to you by the world’s greatest website. www.EnergyNewsBeat.com the best place for all of your energy news doing the team do a tremendous job of keeping that website upbeat with everything you need to know to make sure that tip of the spear when it comes to the energy and oil and gas business, Apple Podcasts, Spotify, wherever you get your podcasts, follow us at Energy News Beat on YouTube. You can go ahead and hit the description below, see all of the links to the show and go ahead and hit the different timestamps. Jump ahead to whichever one you want to see. I’m going to go and turn it over to you and the weekly recap. We’ll see you next week, folks. [00:01:17][63.0]

Stuart Turley: [00:01:18] Hey, let’s start off with our buddies over there at OPEC, and I want to give a shout out to Irina Slav. I absolutely love Irene as she is an absolute hoot. Irina Slav at Substack dot com. OPEC’s influence on oil prices to remain significant in 2024. Mike, I just want to read these three bullet points real quick. Fears lower demand and rising non-OPEC supply threatens the OPEC cuts. Bullet point number two U.S. oil producers took everyone by surprise this year, adding 1 million barrels in daily output to go U.S. oil. OPEC’s share in the global total may have fallen because of the cuts, but it’s still pretty solid at 27% of the total. This is going to be the only time that I quite honestly may disagree a little bit with Irina No, I’m going to talk to her next Monday on the international show with our man, Cavett. And it is a great group, but David Blackmon and everybody else, damn it, Nina, here’s where I disagree a little bit. Oh, pick is losing the ability to manipulate prices because of the Dark Fleet and BRICS. BRICS is now really trading outside of the petro dollar. And there’s nothing in this next year that’s really going to show that BRICS is going to have their pricing matrices priced into the dollar, that you’re going to see the demise of the U.S. dollar kicking in with the pricing matrices stabilizing out under BRICS. That’s still yet to be determined, but they don’t have that handle yet. [00:03:12][114.3]

Michael Tanner: [00:03:14] Yeah, I mean, obviously the dynamics of OPEC plus have have stumbled a little bit with the addition of BRICS, if only because of the fact that there seem to be different. I love what I mean A does here is points out that, you know, the non-OPEC that first bullet point, non-OPEC supply threats are almost more important than the cuts happening elsewhere of OPEC. Now, you have to take us off the table. As she aptly points out, we’ve done an incredible job of adding barrels to the market, a little over 1 million barrels per day added back to the market. That’s one thing you won’t hear Joe Biden talk about on the campaign trail. You know, he’ll he’ll he’ll leave that convenient fact out that he was responsible for adding 1 million barrels of oil to do. The U.S. market kind of crazy. [00:04:00][45.3]

Stuart Turley: [00:04:00] It is crazy. But let’s give a shout out to our great oil and gas industry because the regulatory legislation, through regulatory actions taken by this administration have been horrific and the consumers getting it in the drive through, in fact, they’re getting hit in the back of the head with a shovel so hard by this administration’s regulatory actions, their price for energy is gone through the roof and they get hit in the back of the head with a shovel. They got to put their eyes back in their head, go around. It’s a. [00:04:30][29.5]

Michael Tanner: [00:04:30] Hard thing. I say it tongue in cheek because the cost of energy has also then risen, even though oil. And we even though we’ve added 1 million barrels to the market, energy costs for everybody have risen. So it’s you know, I’m you know we can thank Heinz 57 for that. So I think OPEC’s you know, opec+ is. [00:04:48][18.6]

Stuart Turley: [00:04:50] Large as a mud. [00:04:50][0.6]

Michael Tanner: [00:04:52] OPEC lots I think is really in an interesting position. They can continue to cut, cut, cut, cut, cut. And as we sit here right now, oil’s 70 bucks, not even some I mean, not even a fool. I mean, the only thing that me and I hate to say this, the only thing that’s going to save oil prices and what I mean save I mean, get it back to the 90, $100, $120 oil prediction that everybody had. I mean, let’s be very. Clear here. Everybody into a quarter three of 2023. Every talking head was saying 90 to $100 oil. As we stand today, in 2024, oil is 70 bucks. And the only thing that can possibly get us near is a full blown Lindsey Graham style war with Iran, which nobody wants and we should avoid at no cost. [00:05:33][41.1]

Stuart Turley: [00:05:33] That man needs to be run out of town. [00:05:35][2.0]

Michael Tanner: [00:05:36] He’s been lobotomized. He’s been lobotomized. [00:05:39][2.3]

Stuart Turley: [00:05:40] What a chatter head. Lindsey Graham being a Republican is absolutely a chatter head. And Lindsey Graham, if you’re listening to this show, you’re invited to come on this podcast. I will fly out and talk to you. I want to find out what you’re thinking. I want to look under your toupee and find out. [00:05:58][17.6]

Michael Tanner: [00:05:58] I’d prefer to talk to his stunt double. I mean, he’s been lobotomized, but that’s beside the point. Point is, outside of that horrific thought of war with a direct conflict with Iran. [00:06:07][9.2]

Stuart Turley: [00:06:07] But Iran Iran had their destroyer go into the Red Sea and oil burned for 12 hours. And so now you and I have talked about this last year. You can see war is break out and it really does not impact it. Here’s where I’m going to say it does impacted if Lindsey Graham gets his way because the I Iran is shipping everything that they can not in U.S. dollars you eliminate their man oil and then have may are you raising your hand? [00:06:43][36.1]

Michael Tanner: [00:06:44] I’m with you no I’m just saying I’m with also point of the matter is I’m you know all that being said do markets open today at at you know, 6:07 a.m. this morning markets open 730. What happened or excuse me 830 hour time we’ve seen an absolute tumble from 7 a.m. up at 70, a little north of 7350 all the way to currently trading here. I mean, it’s about 11:30 a.m. here on Tuesday is 7064. [00:07:09][25.5]

Stuart Turley: [00:07:11] And hang on, I think this is some of the politicians they’re doing some insider trading in. They called up and they had the stock market reduce it so they can short the mark. [00:07:24][12.8]

Michael Tanner: [00:07:25] I mean markets are down significantly. Don’t don’t get me wrong and come on you you they’re all just excellent traders. Oh, all right. Very interesting. We love I read to go check this one out in Qatar. [00:07:38][12.7]

Stuart Turley: [00:07:38] ExxonMobil moving forward with Golden Pass LNG work. This is huge. I always love seeing in Qatar and other foreign countries buying our great assets in Japan has bought a lot of the LNG facility so they can nail down theirs. They just announced that last month as well too. Then you have total energy buying enough for two nuclear reactors they have bought in their ERCOT that you’re not going to see that. I’ve got a bet with you. What right now we’re going to write this down. I bet you can’t find it in their earnings report coming up. So it’s going to be interesting to see where they bury that. Now, let’s go to this article. State owned guitar owns 70% stake in the Golden Pass project with capacity more than 18 empty pay and offtake, 70% in the capacity on long term contracts. 30% is only what ExxonMobil do. You know that that is horrific for energy security for the U.S.? [00:08:51][72.9]

Michael Tanner: [00:08:52] Yeah. No, it’s it’s it’s one of the few areas where I agree with our favorite Senator, John Fetterman. I mean, he’s he was all over the U.S., the Nippon Steel taking over U.S. Steel. He was all over. I mean, he he’s obviously come out of whatever sickness he had. And he’s like he’s like thinking it’s crazy. [00:09:09][16.8]

Stuart Turley: [00:09:09] Hey, do you think on a conspiracy theory he actually signed up for the chip for me? LOL No, I’m kidding. But I don’t know. I mean, wow, where did this come from? [00:09:19][9.7]

Michael Tanner: [00:09:19] You’re on the chip. If anyone’s on the chip, it’s you. Thank you. Thank you. Thank you. Very little we could point to about six months ago, Duke got the chip involved. It’s been put off the rails since, but no, it’s it’s very fascinating. And the government and specifically the Federal Trade Commission is going to have a they’ve got they’ve got their hands full right now. I’ve heard rumblings that they don’t like this Permian consolidation going on and that the Exxon Pioneer deal, the Chevron has a and all of these other ones are going to get a huge scrutiny. Look, from from the FTC from the standpoint of is this to do they think this is too much consolidation? I do believe it is, but we can discuss that in another look. The point is the problem is they’re too busy worrying about if Chevron should buy has two American companies. When you’ve got Japan coming in, buying up all our stuff. I mean, we like Japan. I got nothing against Japan, but we should be owning. U.S. Steel. You’ve got Qatar energy coming in, swooping up. You know, one of our most. Sabine Pass is one of our most important infrastructure, transit for natural gas. And now we’re going to take the biggest export terminal available near that. And we’re going to hand it over to Qatar because, oh, yeah, they’ve got our best interests at heart for sure. I know I’ve never been there, but. [00:10:35][75.4]

Stuart Turley: [00:10:36] I’m going to get my passport updated so I can go live there. Here’s one of the things that please. [00:10:40][4.1]

Michael Tanner: [00:10:41] Oh, yeah. Shooting this show at midnight. [00:10:42][1.6]

Stuart Turley: [00:10:43] Yeah, we’ll see. We’re off and running. Maybe. Hey, one of the things, though, is the Venezuela and Ghana item going off because that impacts Chevron and it has big time and it’s not being covered in the main news. It’s like, ho hum. I mean, Venezuela, come on. It’s overtaking all of our American oil companies that are out there drilling in Guyana, some of the largest areas in the world. [00:11:15][32.3]

Michael Tanner: [00:11:16] Yeah, man, I don’t think we’ll act that. That’ll actually I mean, it’s more you know, they still I’m not too worried about the Venezuela call. [00:11:23][7.3]

Stuart Turley: [00:11:23] Maybe he’s meeting with Russia. He’s signed the deal. He’s done some more things. [00:11:30][6.9]

Michael Tanner: [00:11:31] So you’re gonna coordinate that meeting between Putin and Mastro? [00:11:34][3.4]

Stuart Turley: [00:11:35] Actually, it’s kind of funny you mention that, because Armando asked me this morning if I was on the plane with the Venezuelan and Brazilian presidents and Putin. And I didn’t say, by the way, if it did happen, Putin would have said the US sanctions don’t matter because he doesn’t mind. It’s mind over matter. [00:11:54][19.3]

Michael Tanner: [00:11:55] Maybe mind over matter. Appeals Court Delivers Fatal Blow to California’s City Pushing Natural gas ban or Berkeley, California in a federal appeals court rejected their petition on Tuesday to rehear a case related to a natural gas ban that was proposed by Said city. The U.S. Court of Appeals from the Ninth Circuit ultimately denied Berkeley’s position petition excuse me, for rehearing this ban, which was a motion that it received from the Biden administration Democratic led states after it failed to receive a majority support from the court’s non recuse active judges. The Berkeley filed a motion last year basically that said their law, you know, it was overturned. Their law banning natural gas violated a federal statute that was then appealed by Berkeley. They worked it all the way up until the federal appeals court. It got turned down, which means it’s either going to be taken up by the Supreme Court or if what they do most likely is not pick it up. And this is going to stand as a win for your natural gas burner, you know, win for all the cooks and diners in California making imagine going to a diner and having my eggs cooked on a flat top. I got a flat top or a steak cooked without a gas grill. Unbelievable. Guys, I’m quote, coming out of the Air Conditioning Heating Refrigeration Institute. Absolutely. They’ve got lobbyists for everything, folks. The h r i. Naturally, the eight is a quote. Naturally, the h r i in particular are member companies that manufacture products of companies that use natural gas. I’m very pleased, although they did come out and say who they’re lobbying for. People will use equipment that uses natural gas. They’re very pleased. The fourth quarter denied Berkeley’s request, thereby allowing the Birkin’s residence elsewhere to clearly have choices with respect to their energy choices, according to the president and CEO over there. Stephen, you’re a, you know, absolute this was you know, Ban was originally enacted in July 2019. They went ahead and I passed and said if Ban was going to go into effect January 20, well, that came and went a little thing called COVID bye. Got in the middle of that. You know, the California Restaurants Association stepped up. I mean, when people said they’re coming for your natural gas stoves, this is the stuff we were talking, you know. Yes, I know everybody. You know, everybody, like on the Democratic side like to use that as a trope that all they said we were coming from natural gas stoves, but we’re not. You’re kind of or at least in California. Luckily, the good people of the ninth Circuit over there in California came through for us. We all get to enjoy our gas bills. Even the people in our favorite state, California,. [00:14:23][148.1]

Michael Tanner: [00:14:24] Chevron, just impaired. California’s there, their California oil, gas and production assets due to regulatory challenges. Absolutely unbelievable. They said in a filing today that Chevron will book fourth quarter chargers of 3.5 to 4 billion, citing assets that it said sold in Gulf of Mexico and policies in California, prompting the company to slash investments. Mainly they come out and said that it’s mainly taking the charges due to the California assets. You know, they’re going to continue to take this, but it goes to show you folks, they’re specifically saying this. What is this? They said in the filing it will impair oil and gas production business mostly in California because of, quote, continuing regulatory challenges. If Sue is here, he would say legislation, deregulation or regulation. Through to that he’d be pounding in regulation through legislation. This is what’s happening. And when you do this too much, the only companies that can afford to do this type of stuff are Chevron. And guess what? Even they’re going to get out of the business. Even they’re telling you we’d rather walk away and slash our investments by four, but move up $1,000,000,000 when and walk away instead of attempting to work. That means that there’s nothing to be done here. It means there’s zilch to be done. I’d be super nervous if I was a California producer. Even your cat. Even Chevron can’t figure out how to make it work. Now. There’s still some companies there that are making it work. You know, we we will we know a lot of people that produce a lot of oil in California. I’m not saying in a but I would be very nervous if I was because even the bigger companies can’t quite figure out what to do. [00:14:24][0.0][828.3]

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