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Utility-Scale Solar | Electricity Markets and Policy Group
This has some nice data and trends. LSS, solar is killing it.
This has some nice data and trends. LSS, solar is killing it.
TheTalkingMule
Distributed Energy Enthusiast
This is getting sad. Iraqi oil toll collectors begging for money in the streets.
UPDATE: Iraq seeks pre-payment for oil exports
UPDATE: Iraq seeks pre-payment for oil exports
TheTalkingMule
Distributed Energy Enthusiast
My Chevron 2023 put price alerts are going off like popcorn this morning. $60(~$112B market cap) Jan2023 puts are $5.50!
Imagine going back in time to short Peabody. Are we in this window yet? Probably not, but you could start buying puts every 6 months or so and stand a pretty good chance of making a boatload.
Imagine going back in time to short Peabody. Are we in this window yet? Probably not, but you could start buying puts every 6 months or so and stand a pretty good chance of making a boatload.
My Chevron 2023 put price alerts are going off like popcorn this morning. $60(~$112B market cap) Jan2023 puts are $5.50!
Imagine going back in time to short Peabody. Are we in this window yet? Probably not, but you could start buying puts every 6 months or so and stand a pretty good chance of making a boatload.
Too much time-value to lose in that trade. 2023 could very well be Peabody of 2014 and not Peabody of 2016.
TheTalkingMule
Distributed Energy Enthusiast
I've locked in my simple strategy and begun putting in orders. Trying for the top of each quarter I will buy the furthest out put contract I can buy for $4.20, adding +1 to the number of contracts purchased each quarter. Aiming for one contract at $60 Jan2023 this quarter.
Check in with me in 2025 for final results!
mblakele
FSD Beta (99)
OPEC+ production cuts have done little to boost oil prices
[...]
At first blush, the coalition’s efforts appear successful (see chart). The price of oil rose fairly steadily from the start of 2017, apart from an episode of widespread non-compliance at the end of 2018, when some members ignored the production limits. But the researchers find that only about 6% of the oil price on average, or around $4 per barrel, was attributable to OPEC’s restrictions between 2016 and 2020. Not only did some members consistently produce more than they promised to, but producers outside the agreement, such as America, seized the opportunity to increase their own market shares. The researchers find that far more drastic cuts would have been required to push global stocks down to the levels OPEC+ had envisaged.
After the upheaval of March and April, the pandemic has convinced OPEC+ to try again. Its members agreed to record cuts of 9.7m barrels per day (around 10% of global supply), a target that was eased by 2m barrels per day during the summer’s economic recovery. This week OPEC+ will debate a second such production increase. With new lockdowns further hurting demand, the coalition is expected to defer it. OPEC countries such as Nigeria and Iraq, struggling under the burdens of covid-19 and reduced oil revenue, are unhappy. But without a sustained increase in demand, the coalition has little choice but to put up with painful limits.
[...]
At first blush, the coalition’s efforts appear successful (see chart). The price of oil rose fairly steadily from the start of 2017, apart from an episode of widespread non-compliance at the end of 2018, when some members ignored the production limits. But the researchers find that only about 6% of the oil price on average, or around $4 per barrel, was attributable to OPEC’s restrictions between 2016 and 2020. Not only did some members consistently produce more than they promised to, but producers outside the agreement, such as America, seized the opportunity to increase their own market shares. The researchers find that far more drastic cuts would have been required to push global stocks down to the levels OPEC+ had envisaged.
After the upheaval of March and April, the pandemic has convinced OPEC+ to try again. Its members agreed to record cuts of 9.7m barrels per day (around 10% of global supply), a target that was eased by 2m barrels per day during the summer’s economic recovery. This week OPEC+ will debate a second such production increase. With new lockdowns further hurting demand, the coalition is expected to defer it. OPEC countries such as Nigeria and Iraq, struggling under the burdens of covid-19 and reduced oil revenue, are unhappy. But without a sustained increase in demand, the coalition has little choice but to put up with painful limits.
mspohr
Well-Known Member
Bloomberg - Are you a robot?
A year ago, if anyone in the petroleum business had suggested that the moment of Peak Oil had already passed, they would have been laughed right off the drilling rig. Then 2020 happened.
Planes stopped flying. Office workers stayed home. “Zooming with the grandkids” replaced driving to see family. A year of global hunkering yielded the sharpest drop in oil consumption since Henry Ford cobbled together the first Model T. At its worst, global demand dropped by a staggering 29 million barrels a day.
As a once-in-a-century pandemic played out, British oil giant BP Plc in September made an extraordinary call: Humanity’s thirst for oil may never again return to prior levels. That would make 2019 the high-water mark in oil history.
A year ago, if anyone in the petroleum business had suggested that the moment of Peak Oil had already passed, they would have been laughed right off the drilling rig. Then 2020 happened.
Planes stopped flying. Office workers stayed home. “Zooming with the grandkids” replaced driving to see family. A year of global hunkering yielded the sharpest drop in oil consumption since Henry Ford cobbled together the first Model T. At its worst, global demand dropped by a staggering 29 million barrels a day.
As a once-in-a-century pandemic played out, British oil giant BP Plc in September made an extraordinary call: Humanity’s thirst for oil may never again return to prior levels. That would make 2019 the high-water mark in oil history.
I'm glad you posted this. There is a lot of good content here, too much to highlight.
I like that Birol and others are starting to recognize that, regardless of the timing of a volumetric peak, oil is losing value. I've tried to make that point for several years. A simple metric for gross value of crude is to multiply annual barrels produced by the average Brent price per barrel. That metric peaked several years ago, but now Covid has accelerated this gross value decline. And it is a tough metric to boost. If the industry overproduces, then the price of oil falls taking total value down. Or if the industry were underproduces, then higher fuel prices kill off volume demanded, again killing total value. So the total value of the oil industry is already in decline. This is fundamentally what makes oil such a bad investment. It's really hard to avoid asset impairment when total industry revenue is in decline.
TheTalkingMule
Distributed Energy Enthusiast
Some early indications of a Saudi policy reversal?
Back in 2017 Saudi Arabia essentially cut their exports to the US by 50-65% in what was a short term plan to juice the global pricing of oil. In March of that year they invited hedge fund folks to their actual OPEC planning meeting for the first time ever. The recommendation was to cut exports to the US dramatically since ours is the only truly transparent market. If you can limit our supply glut, the whole market will appear balanced or even under-supplied.
That worked for a bit and SA then resumed pumping a bit more at higher prices. Didn't last long and US commercial stockpiles of crude went from 395Mb in June of 2018 to 485Mb by June of 2019.
They tread water for a year with no real logical move to make, but at least WTI was still somehow $50-60. Then the pandemic hits and all plans are obliterated. It's December of 2020 and NBC News is printing stories that global oil demand has perhaps peaked for good.
So what is a totalitarian dictator to do in times like these? @jhm would tell MBS, the defacto leader of the Saudi Royal Family and OPEC+, to pump like mad for here on out to maximize total return and drive US oil out of the marketplace for good. Back in June it almost looked like that was the plan. In what was called a price war with Russia, SA for a couple weeks sent their normal "pre-hedge fund plan" amount of oil to the US market(1.5Mb/d). But that didn't last more than a few tankers worth of crude. I imagine the entire world rained down fury upon the Aramco decision-makers and they relented.
Last week's Saudi imports to US totaled just 27kb/d(essentially nothing and lowest ever). If their new strategy is to reverse this and juice US imports, the recent run up in Chevron(CVX) valuation from $67 to $96 and WTI from $37 to $47 should be awfully short-lived. I'm not sure what impact setting prices "down $0.30 a barrel from December" means to the balance of imports, but usually these guys are going pretty hard one way or the other. Not advice, but as we wind out of the pandemic and jubilation invariably hits the oil markets one last time, a short oil position looks pretty obvious.
I'm gonna stick to my system of escalating quarterly Chevron long puts and steer clear for trying to time WTI with SCO unless is painfully obvious that's the move.
Saudi Arabia raises official January crude price to Asia
DUBAI (Reuters) - Saudi Arabian state oil giant Aramco has raised the January price for its Arab light crude to Asia to $0.30 a barrel over Oman/Dubai crude, up $0.80 from December, a company document showed.
It has also set the January OSP of its Arab light crude oil to the United States at plus $0.55 a barrel over ASCI (Argus Sour Crude Index), down $0.30 a barrel from December, according to the document.
DUBAI (Reuters) - Saudi Arabian state oil giant Aramco has raised the January price for its Arab light crude to Asia to $0.30 a barrel over Oman/Dubai crude, up $0.80 from December, a company document showed.
It has also set the January OSP of its Arab light crude oil to the United States at plus $0.55 a barrel over ASCI (Argus Sour Crude Index), down $0.30 a barrel from December, according to the document.
Back in 2017 Saudi Arabia essentially cut their exports to the US by 50-65% in what was a short term plan to juice the global pricing of oil. In March of that year they invited hedge fund folks to their actual OPEC planning meeting for the first time ever. The recommendation was to cut exports to the US dramatically since ours is the only truly transparent market. If you can limit our supply glut, the whole market will appear balanced or even under-supplied.
That worked for a bit and SA then resumed pumping a bit more at higher prices. Didn't last long and US commercial stockpiles of crude went from 395Mb in June of 2018 to 485Mb by June of 2019.
They tread water for a year with no real logical move to make, but at least WTI was still somehow $50-60. Then the pandemic hits and all plans are obliterated. It's December of 2020 and NBC News is printing stories that global oil demand has perhaps peaked for good.
So what is a totalitarian dictator to do in times like these? @jhm would tell MBS, the defacto leader of the Saudi Royal Family and OPEC+, to pump like mad for here on out to maximize total return and drive US oil out of the marketplace for good. Back in June it almost looked like that was the plan. In what was called a price war with Russia, SA for a couple weeks sent their normal "pre-hedge fund plan" amount of oil to the US market(1.5Mb/d). But that didn't last more than a few tankers worth of crude. I imagine the entire world rained down fury upon the Aramco decision-makers and they relented.
Last week's Saudi imports to US totaled just 27kb/d(essentially nothing and lowest ever). If their new strategy is to reverse this and juice US imports, the recent run up in Chevron(CVX) valuation from $67 to $96 and WTI from $37 to $47 should be awfully short-lived. I'm not sure what impact setting prices "down $0.30 a barrel from December" means to the balance of imports, but usually these guys are going pretty hard one way or the other. Not advice, but as we wind out of the pandemic and jubilation invariably hits the oil markets one last time, a short oil position looks pretty obvious.
I'm gonna stick to my system of escalating quarterly Chevron long puts and steer clear for trying to time WTI with SCO unless is painfully obvious that's the move.
Why The World Might Not Have Enough Oil To Meet Demand Trough 2050 | OilPrice.com
OMG, Rystad still thinks the world needs to find an extra 121B barrels of oil reserves at a cost of $3T by 2050. I figure EV battery makers can cover that at 10X less cost. It's amazing just how dumb oil analysts can be.
OMG, Rystad still thinks the world needs to find an extra 121B barrels of oil reserves at a cost of $3T by 2050. I figure EV battery makers can cover that at 10X less cost. It's amazing just how dumb oil analysts can be.
NY State pension fund divesting fossil fuel stocks. This story lists specific tar sands and fracking stocks that may be sold off...
State getting out of oil stocks
"According to the Youth Climate Leaders group, the firms that will come under scrutiny and which may be sold off in coming years include the following. For tar sands: Imperial Oil, Canadian Natural Resources, Husky Energy, Suncor Energy, MEG Energy Corp., Athabasca Oil Corporation, Cenovus Energy, Japan Petroleum Exploration, and Tatneft.
Shale oil and gas companies (which also use hydrofracking or fracking) include Devon Energy, Continental Resources, QEP, and Pioneer.
Integrated oil and gas companies include multinational giants like Exxon/Mobil, BP, Shell, ConocoPhillips, and Chevron, as well as equipment and service firms like Schlumberger and Baker Hughes."
State getting out of oil stocks
"According to the Youth Climate Leaders group, the firms that will come under scrutiny and which may be sold off in coming years include the following. For tar sands: Imperial Oil, Canadian Natural Resources, Husky Energy, Suncor Energy, MEG Energy Corp., Athabasca Oil Corporation, Cenovus Energy, Japan Petroleum Exploration, and Tatneft.
Shale oil and gas companies (which also use hydrofracking or fracking) include Devon Energy, Continental Resources, QEP, and Pioneer.
Integrated oil and gas companies include multinational giants like Exxon/Mobil, BP, Shell, ConocoPhillips, and Chevron, as well as equipment and service firms like Schlumberger and Baker Hughes."
TheTalkingMule
Distributed Energy Enthusiast
Meanwhile, the clown directing funds for the California Teachers Pension has been all over CNBC defending his flat refusal to divest from XOM. They've initiated an "aggressive dialog" with Exxon to move into cleaner energy. [rolleyes]
When are we gonna call out these clowns for talk and no action? It's like BP......lots and lots of talk. Meanwhile the oil flows and no action is taken.
Anywho......VERY interesting US oil report this week. Supplies up a TON but apparently there's a vaccine do WTI needs to pop. Imports look higher too. Bad sign for WTI for sure! I know I said no SCO, but it might be worthwhile if WTI approaches $50 before the new year.
When are we gonna call out these clowns for talk and no action? It's like BP......lots and lots of talk. Meanwhile the oil flows and no action is taken.
Anywho......VERY interesting US oil report this week. Supplies up a TON but apparently there's a vaccine do WTI needs to pop. Imports look higher too. Bad sign for WTI for sure! I know I said no SCO, but it might be worthwhile if WTI approaches $50 before the new year.
Be careful. Repetitive Ocular Rotational Stress Disorder is no joke.
TheTalkingMule
Distributed Energy Enthusiast
Just when you thought maybe big oil was gonna spike.......OPEC goes and lowers their demand forecast. Everyone took a major dive today, Chevron, OXY. Oh well.
First vaccine shots were going in arms and we were gonna buy Chevron puts with SP at $100! Nope. CVX back below $89 and probably gonna tumble more.
First vaccine shots were going in arms and we were gonna buy Chevron puts with SP at $100! Nope. CVX back below $89 and probably gonna tumble more.
Bombshell Report Pours Cold Water On Global LNG Outlook | OilPrice.com
WoodMac is starting to figure out there might be a problem with too much LNG capacity. It still boggles my mind that the analysis is based in whether the governments of the world will pursue more ambitious climate targets. What they should be doing IMHO is modeling learning curve cost declines for wind, solar, batteries and electrolyzers. Such an analysis would would lead to a curve for a price cap on LNG. ROI on LNG investments will turn negative in a certain number of years. Volume won't count for much when the RE cap on LNG is under $2/mmBtu.
Additionally, as the RE cap on LNG declines, it will be increasingly easy for governments to accelerate their climate goals. So the policy risk is likely to have RE cost declines as leading indicator.
WoodMac is starting to figure out there might be a problem with too much LNG capacity. It still boggles my mind that the analysis is based in whether the governments of the world will pursue more ambitious climate targets. What they should be doing IMHO is modeling learning curve cost declines for wind, solar, batteries and electrolyzers. Such an analysis would would lead to a curve for a price cap on LNG. ROI on LNG investments will turn negative in a certain number of years. Volume won't count for much when the RE cap on LNG is under $2/mmBtu.
Additionally, as the RE cap on LNG declines, it will be increasingly easy for governments to accelerate their climate goals. So the policy risk is likely to have RE cost declines as leading indicator.
Erleichda
Member
Falling Battery Costs To Help EV Prices Match ICE Vehicles in 2023 | OilPrice.com
The new BNEF EV battery cost survey is out. As I expected avg pack cost has fallen 20% (in line with historic record) from $156/kWh in 2019 to $126/kWh in 2020. One more decline of 20% gets to the Holy Grail of $100/kWh.
Last year, BNEF predicted that $100 would be achieved in 2024. As I predicted, this year they have bumped that up to 2023. This is still way too conservative. I say it will happen in 2021 or if mineral prices create headwinds, 2022.
A key issue is just the mix of battery products on the market. Batteries for busses outside of China and for hybrids are several multiples higher than average. Cheaper batteries do exist. Bus batteries in China are a fraction of the cost of those used elsewhere. Basically the volume-weighted average that BNEF reports is inflated by the laggards in the industry. Those laggards can either catch up or lose market share. Either way the average price will continue to fall by double digit percents each year.
The new BNEF EV battery cost survey is out. As I expected avg pack cost has fallen 20% (in line with historic record) from $156/kWh in 2019 to $126/kWh in 2020. One more decline of 20% gets to the Holy Grail of $100/kWh.
Last year, BNEF predicted that $100 would be achieved in 2024. As I predicted, this year they have bumped that up to 2023. This is still way too conservative. I say it will happen in 2021 or if mineral prices create headwinds, 2022.
A key issue is just the mix of battery products on the market. Batteries for busses outside of China and for hybrids are several multiples higher than average. Cheaper batteries do exist. Bus batteries in China are a fraction of the cost of those used elsewhere. Basically the volume-weighted average that BNEF reports is inflated by the laggards in the industry. Those laggards can either catch up or lose market share. Either way the average price will continue to fall by double digit percents each year.
TheTalkingMule
Distributed Energy Enthusiast
Bloomberg - Are you a robot?
Here's the Bloomberg write up on battery prices. Note that the $126/kWh figure is for electric cars.
Here's the Bloomberg write up on battery prices. Note that the $126/kWh figure is for electric cars.
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