March 5

Daily Energy Standup Episode #322 – US Gasoline Reserve Sale and China’s Oil Access Blocked



Daily Standup Top Stories

U.S. Northeast Gasoline Reserve Could Be Sold Off

The U.S. could sell off its 1-million-barrel Northeast Gasoline Supply Reserve in the fiscal year of 2024, a funding bill up for discussion at U.S. Congress says. Under the draft text of the bill, “the Secretary […]

US funding bill blocks China from buying oil from Strategic Petroleum Reserve

WASHINGTON, March 3 (Reuters) – A measure in the U.S. funding legislation unveiled by congressional leaders on Sunday would block China from buying oil from the Strategic Petroleum Reserve. The desire for a hard line […]

Analysts Forecast “Lower for Longer” Prices in LNG Market

MUFG Bank forecasts a surplus of LNG supply by 2025, primarily driven by a surge in supply from the US and the Middle East, potentially leading to lower prices and the end of the energy […]

2 Ways to Play Europe’s $800 Billion Energy Crisis

The energy crisis that engulfed Europe after Western sanctions punished Russia’s invasion of Ukraine cost the continent hundreds of billions of dollars. Now, the Middle East crisis and the Houthi war on the Red Sea […]

Several OPEC+ countries extend output cuts through Q2, as Russia announces new reductions

OPEC and its allies will maintain their tight grip on oil supply, with several members on March 3 announcing extensions of their voluntary production cuts that had been scheduled to expire at the end of […]

EQT Announces Strategic Production Curtailment

PITTSBURGH, March 4, 2024 /PRNewswire/ — EQT Corporation (NYSE: EQT) (“EQT” or the “Company”) today announced it made the strategic decision to curtail approximately 1 Bcf per day of gross production beginning in late February in response to […]

Highlights of the Podcast

00:00 – Intro

01:19 – U.S. Northeast Gasoline Reserve Could Be Sold Off

03:04 – US funding bill blocks China from buying oil from Strategic Petroleum

05:20 – Analysts Forecast “Lower for Longer” Prices in LNG Market

08:37 – 2 Ways to Play Europe’s $800 Billion Energy Crisis

12:11 – Markets Update

13:14 – Several OPEC+ countries extend output cuts through Q2, as Russia announces new reductions

14:29 – EQT Announces Strategic Production Curtailment

17:39 – 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 Tuesday, March 5th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up, US Northeast Gasoline Reserve could be sold off. We’re not kidding you folks. That’s the headline. Next up, U.S. funding bill blocks China from buying oil from the Strategic Petroleum Reserve. Next up. Analysts forecast, quote, lower for longer prices in the LNG market. Not good for America’s natural gas players. And then finally, we’ll finish up with two ways to play Europe’s $800 billion energy crisis stool. Then toss it over to me. I will quickly cover what’s going on in the oil and gas finance markets. Oil prices set a little bit lower than the open mainly on so on some demand side bulls. We did see OPEC plus go ahead and confirm an extension of the 2.2 million barrel cuts they have already implemented. And then an interesting note outside of from EQT which has signals some headwinds going on for the natural gas market. So as always guys I’m Michael Tanner joined by Stuart Turley ahead. Kick us off. [00:01:18][64.3]

Stuart Turley: [00:01:19] Hey let’s get ready to rumble here Michael. US northeast gasoline reserve could be sold off this bill. Let me, the 1 million barrel northeast gasoline supply reserve in the fiscal year 2024. A funding bill up for discussion. This is about as despicable and stupid as it gets. Upon completion of such, sale, the secretary shall carry out the closure of the Northeast Gasoline Supply reserve. The bill says this. The near the, gas reserve holds 1 million barrels of gasoline, including 700,000 barrels located in New York Harbor, 200,000 barrels in the Boston, and 100,000 barrels in South Portland, Maine. What happens if we have an emergency, Michael? [00:02:17][58.0]

Michael Tanner: [00:02:17] Yeah, it seems to be the again, the Strategic Petroleum Reserve and the Northeast Gasoline Supply Reserve have turned into basically political tools in order to help help who’s ever in power and lower prices. I mean, there’s no one way to describe it. I mean, they they mentioned the second article that we’re about to cover about blocking China from buying any of this. Sure, I commend that. But should we be selling that anyway? You gotta remember, we did sell some PR stuff to China. I don’t want to jump too far ahead there, but they both these both these articles go hand in hand. [00:02:49][31.8]

Stuart Turley: [00:02:50] They do. And and I just find it absolutely despicable that our, energy policy makers, have the brainpower of a potato, but. [00:02:59][8.7]

Michael Tanner: [00:02:59] Yeah, it’s. Well, let me read me that second. Let’s read the second one. [00:03:03][3.7]

Stuart Turley: [00:03:04] Okay. U.S. funding bill, blocks China from buying oil. Strategic petroleum reserve. This one is a bit different from the standpoint that a measure in the U.S. funding legislation. This is a I think it’s in the same bill covering a different topic. The PRC, sales to China heated up, remember, in the 2022 midterm when he sold a bazillion barrels, he sold 180 million barrels to an all time low, and then he sold 1 million barrels to Unibank America, a Houston based arm of China’s Synaptics. oh. Wasn’t that the one Hunter was in? And nine and former President Donald Trump. Some spro was sold to Petro China International, a subsidiary of Chinese state oil Petro China. This is just unbelievable. [00:04:02][58.3]

Michael Tanner: [00:04:04] Yeah. And it’s unfortunately an issue for both sides of the aisle, clearly with with Biden and Trump both engaging in this. I mean, for once, I don’t think there’s been any bill that, that Senator Chris Murphy has put up that I’ve been a fan of, except for this one. [00:04:20][16.0]

Stuart Turley: [00:04:21] I think it’s disgusting because they’re going to sell more, Michael and what they’re going to do, it’s going to be the shell game. Oh, really quick for our podcast listeners, I’m moving Shell Game Around and they’re going to have another corporate entity that then the politicians are going to get money off of. And I think this is despicable. How do we replenish this strategic oil? Well, no. [00:04:45][24.7]

Michael Tanner: [00:04:46] I’m with you. You have to replenish it. But if we’re at least going to sell, I’d rather not be selling to China. But you’re right. There will always be ways to get around this. And, and and this is more of a symbolic gesture than anything. But at some point, at least I’ll take the symbolic gesture. But I’m right. If there’s not true hard line making sure none of this flows to China, it really is just nothing more than a vanity play. [00:05:07][21.1]

Stuart Turley: [00:05:07] Now, this is not even a vanity play. They walk by the mayor. And just kind of. And then kept going, this is not you know, so. [00:05:15][7.8]

Michael Tanner: [00:05:16] What’s what’s next? [00:05:16][0.4]

Stuart Turley: [00:05:17] I just got airsick. You know, I’m sorry about that. And analysis forecast lower for longer prices and LNG market. You know this is kind of while pipelines matter, not only do physics and fiscal responsibility matter, but they’re you’re seeing a huge pipeline move around the world. Cutter aims to leverage its position as the world’s lowest cost LNG producer to increase market share. Michael, they’re, really low because they have no, ESG or regulatory bodies, doing legislation through regulatory action. Here’s something that was interesting in here. When factoring in LNG export capacity under the care construction in the U.S. and other areas, we anticipate 200 empty of addictive additive global LNG supply capacity before the end of this decade can constituting 50% of the 409 empty, global supply. That’s nuts. [00:06:31][74.8]

Michael Tanner: [00:06:33] It really is nuts. And it comes back to the theme that we’ve been banging our hand on the, the table for for weeks now is why in the world would we ban new LNG projects in in light of this? [00:06:45][11.7]

Stuart Turley: [00:06:46] Well, the contracts are going to go away because they’re all I mean, how many? Yep. 25 year contracts are going to get signed. The more and more natural gas that is demanded around the world, especially in Asia. People need more power in the data centers are going to need more power. You want I gotta have nuke. [00:07:08][22.0]

Michael Tanner: [00:07:08] Yeah. And and and I’m going to probably push back on this. You know mUFG bank forecast of a surplus of LNG. I don’t know, I think we’ll find a way to consume it. And if we’re not going to end up in this glut now, I do think we’re going to have a war. We’re probably slightly oversaturated. And this doesn’t mean that the US natural gas market is it going to get slammed, though. And we’ll continue to get slammed because, you know, it’s do I believe we’re going to be in a massive supply glut come 2025. And it will be more oversupplied than undersupplied, which will lead to lower prices. I don’t think necessarily the idea that we’re going to become super oversupplied is going to be a true, a true thing. But, you know, there are some interesting notes in here. And and they do a good job, I think, of explaining what some of the drivers of it are. [00:07:59][50.1]

Stuart Turley: [00:07:59] Well, one of the things to think about is the, who is blowing up, ships in the Red sea are not affecting LNG tankers as much as they’re avoiding, the Red sea and have been it’s not that they have been, rolling through. You also have to look at LNG is not going to have a dark fleet. Because the tankers are all newer, there’s not a rust bucket brigade of, a parade running around with tetanus shots being handed out. All right, you ready? [00:08:35][36.2]

Michael Tanner: [00:08:36] Absolutely. What’s next? [00:08:37][0.9]

Stuart Turley: [00:08:37] Two ways to play Europe’s $800 billion energy crisis. This is kind of wild, Michael. You know, the sanctions that pushed Russia’s invasion of, Ukraine, hundreds of billions of dollars on those sanctions have cost the consumers. Germany earmarked 16 billion for the construction of four natural gas power plants to complement the renewable energy expansion in Austria has made its largest natural gas in four decades. Yesterday, you and I talked about Denmark and their gigantic, natural gas coming in off of the, North Sea. So Europe is to come to shape with the global changing natural gas and LNG markets. Total energy is, is actually a hoot. Yeah, they were the ones we talked about yesterday as well. You have MCF energy. The small cap is backed by Ford. Nicholson is convinced that this is the right atmosphere to boost it. We have several others in here. Ten more companies looking to capitalize on the energy bull market. Halliburton, Schlumberger, Enbridge, Gulf LNG, Trans Ocean and Imperial Oil, Pemba pipeline, Arc resources. Tourmaline and precision drilling. That’s a who’s who in the oil space. Oil and gas basin. [00:10:17][99.7]

Michael Tanner: [00:10:18] No, it really is. You know, I’m probably going to put my money on, MCF energy, mainly because, you know, they’re an actual producer. And if those prices if, if, if we look and there isn’t the US LNG as available on the market, they could continue to rise. But I’m going to tend to avoid probably some natural gas. But I mean, it’s never a bad idea to hit Enbridge when you’re talking about we will always need midstream. Now do I like the master limited partnership set up? Not so much. You know, I think, you know, not not sure if I want to invest in trans. It’s an interesting list, but, I’m not sure if any one of them are going to necessarily catch my trans ocean. [00:11:00][41.6]

Stuart Turley: [00:11:00] I would not touch with a stick. We don’t give in, investment advice, but I do like gold or. Yeah. So. [00:11:08][8.3]

Michael Tanner: [00:11:10] What else you got? [00:11:10][0.5]

Stuart Turley: [00:11:11] That’s it for me, man. After you. [00:11:12][1.6]

Michael Tanner: [00:11:13] All right, well, we’ll, before we get into finance, guys, we’ll go ahead and pay the bills here. As always, the news and analysis that you’ve just heard and we’ll continue to hear, is brought to you by the world’s greatest website, the best place for all of your energy and oil and gas news 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 business. Check out the description below for all articles, links, to the podcast or excuse me links to all of the articles timestamps for the podcast. You can also check us out on YouTube. You can also where we have a new survey that we’re rolling out. So please hit the description. Go fill out the survey. It’s going to get you some free access to a really cool project that we’re working on right now in correspondence with Energy News Beats. So check that out. Also check out Get it while you still can. And as always guys again visit us online [00:12:09][55.4]

Michael Tanner: [00:12:11] As we move over to the financial side of things we saw the S&P 500 a fairly flat day, only down about a 10th of a percentage point, Nasdaq down about, half of a percentage point. I point out two year yields of about 1.5 percentage points. Ten year yields only rise about 0.7. Percentage point dollar index fairly flat. We did see Bitcoin up $4,000 today at 7% up to 67,500. So so Bitcoin continues to be on its bull tear especially is that having comes up. we saw crude oil prices down about a 1.5 percentage points currently trading 7879 as we record this about 3 p.m. here on the fourth. So pretty weak day considering that OPEC was going to come in and and theoretically extend their output cuts. I mean that’s kind of the the back end of the show here I wanted to talk about was mainly you know, we found out yesterday that or excuse me, found out on Sunday specifically that OPEC went ahead and decided to extend its 2.2 million barrel voluntary cut through the end of quarter two. Russia’s going to go ahead and cut both oil output and oil exports by another 417,000 barrels. And that Brant spread widens just a little bit. Brant still trading about 8338 as we again record this. So super interesting. You know them kind of getting ahead of the curb here saying, hey, we’re going to keep cutting in. And oil prices specifically here in the United States. And that WTI index doesn’t necessarily respond. I think the other interesting note, is we did see, you know, I, I think maybe the market was expecting more. Who knows? I, I find it super interesting that prices didn’t necessarily hold themselves. I think it has again, a little bit to do with with what’s going on in the Middle East. It seems like a cease fire is a little bit more imminent than it was yesterday. These things kind of swing again and again. So, you know, I think there is also, you know, but as we move seasonally into, into summer, some of the heating oil is going to become less valuable, which is going to maybe be a, push down on prices. But again, I think, you know, with OPEC coming out and extending their cuts, it’s a signal that they’re willing to continue to support the market. You know, this is just a little tidbit. There’s not much to this press release other than to say that EQT announced a strategic production curtailment. That’s a phrase I our guy of the week right there Cameron Horowitz, great job. That’s a headline right there that basically says we’ve made a strategic decision to curtail approximately one BCF, per day of gross production beginning in late February in response to the current low natural gas price environment resulting from a warm winter weather and consequential elevated storage levels, the company expects to maintain the program through the month of March and will reassess market conditions thereafter. Curtailments are expected to total 30 to 40 BCF of net production. During the first quarter. oh yeah. As you. If you’re not watching on YouTube, folks whose eyes were about as big as his glasses. That’s a pretty interesting press release right there, that it’s more profitable for you to turn off gas. Than it is to produce it. Wow. [00:15:23][192.5]

Stuart Turley: [00:15:24] Wow. I did not see that one coming. I have to hand it to Toby Rice. I mean, he knows what’s going on. [00:15:31][6.4]

Michael Tanner: [00:15:31] He’s trying to unleash sound, eat, unleash LNG, and all that’s gotten him is a BCF offline per day and no LNG exports. So, I feel bad for the guy just getting hit left and right. [00:15:41][10.1]

Stuart Turley: [00:15:42] No, but, good management, good numbers. And he does turn them out consistently. [00:15:47][4.5]

Michael Tanner: [00:15:48] He he does. He does. But we got a we love a good iron guy candidate of the week Cameron Horowitz. Great job. A strategic production curtailment. That’s all I’m going to start saying when I got to shut in wells, not on strategic curtailment. [00:16:02][14.0]

Stuart Turley: [00:16:03] I like that it is strategic. [00:16:04][1.1]

Michael Tanner: [00:16:04] They’re shutting it down for I’m sure I, you know, economics of scale. I mean, I you can understand why a company this large would do it. It just it just I it gives us more news for the aggregators, I guess. I’m not sure it’s not stoop. [00:16:17][12.7]

Stuart Turley: [00:16:18] That’s about it. Just buckle up, get ready for some fun. [00:16:20][2.5]

Michael Tanner: [00:16:21] You’ve got two solo shows coming up. I’ve got to go across country out of LA and hold the fort down, for some of our consulting work. [00:16:27][6.1]

Stuart Turley: [00:16:27] So going out of the country, aren’t you? Oh, well. [00:16:30][2.5]

Michael Tanner: [00:16:30] Basically, I go to our favorite state, California. [00:16:32][1.6]

Stuart Turley: [00:16:33] You’re going to a third world. California, I love. [00:16:36][2.8]

Michael Tanner: [00:16:37] It. I’m actually. I mean, I’ll be in Beverly Hills. I’ll be the farthest thing from a third world country in retrospect. But I will be on another planet. [00:16:43][6.3]

Stuart Turley: [00:16:44] Oh, boy, talk about an oxymoron there. You got, homeless laying out there on Radio Drive, and then you got the other people in the. [00:16:53][9.1]

Michael Tanner: [00:16:54] Beverly Hills Hotel. Baby. [00:16:55][0.9]

Stuart Turley: [00:16:56] Are you really? [00:16:56][0.3]

Michael Tanner: [00:16:57] No. It’s, different. It’s the. I forget what, though. That’s not that, unfortunately. [00:17:00][3.5]

Stuart Turley: [00:17:02] Okay. Cool. Hey, we’ll have to do a live podcast from there. [00:17:05][3.3]

Michael Tanner: [00:17:05] Yeah, maybe it will be busy. We’ll be there representing again some of our consulting business, but. But no. So Stu will be in here. [00:17:12][6.6]

Stuart Turley: [00:17:13] If you turn into a street, bum or a homeless guy. Let’s do a show. I think that would be great. [00:17:20][6.9]

Michael Tanner: [00:17:20] What do you. I from the border. Just how you like it. [00:17:22][2.0]

Stuart Turley: [00:17:23] If you get Governor Newsome there, I want to talk to oil slick. I think that would be great. [00:17:28][5.0]

Michael Tanner: [00:17:29] There’s no way, there’s no way you keep dreaming. But that’s what I mean. Yeah. If he’s there, we’ll get an interview done. Okay? Don’t worry about it. Bye, guys. We’ll let you get out of here. Appreciate you joining us on this Tuesday. You’ve got stew for the rest of the week. I will be back in the chair Monday. We’ll see you later, folks. [00:17:29][0.0][998.0]

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