Daily Energy Standup Episode #279 – OPEC Monitoring, Legal Setback for Gas Ban, Chevron’s Regulatory Woes, and Oil Price Surge

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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 Standup here on this gorgeous Thursday, January 4th, 2024. As always, I’m your humble correspondent, Michael Tanner, coming to you from an undisclosed location here in Dallas, Texas, rocking a solo show. Stu has the night off, but we have an excellent menu for you lined up. First up, Opec+ are set to hold monitoring meeting in early February. Own dun dun dun and be back at it again. Next up, appeals court delivers fatal blow to California pushing natural gas ban. I hate to see that. Then finally, Chevron impairs California oil and gas production assets due to regulatory challenges is an absolutely hilarious story. I will then quickly cover what happened in oil and gas finance guys. We had we had prices up a little bit, mainly due to some Libyan oilfield disputes. So we will we will talk about all of that and a bag of chips. Guys, before I do that couple thing, remember 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 do in the team do an absolutely tremendous job curating that site to make sure it stays up to speed with everything you need to know to stay up to speed with the energy business. We also cover the oil, gas industry and finance extensively. We got a lot of really cool projects that we’re working on content wise on that’ll be coming out over the next couple of weeks of Stand By There. You can hit the description below to see all of the timestamps links to the articles that we are about to cover. So, you know, we’re not just blowing smoke. You can also check out Dashboard.EnergyNewsBeat.com the best place for all of your data news combo. Go ahead and subscribe to us. YouTube, Apple Podcasts, Spotify or wherever you get your podcast. We really appreciate it. [00:02:11][116.5]

Michael Tanner: [00:02:11] But let’s go ahead and let’s go ahead and just dive in here, guys. At first I want to talk about OPEC’s asset monitoring meeting in early February. You know, I read kind of the top headlines. This is from our favorite brands over at Routers, OPEC, plus plans to hold a joint ministerial monitoring committee meeting in early February. An exact date has not been provided, according to three sources from the alliance. What this committee really is, it brings together within OPEC, it brings together Saudi Arabia, Russia and the UAE to specifically talk about OPEC cuts. It’s mainly what that kind of a procedural thing. The last full ministerial meeting was at November 30th. That was, you know, again, led by Saudi Arabia rolling over its current voluntary cut. You know, it’s basically what they’re supposed to do is assess these cuts in January and see kind of where things are going. You know, the interesting part about what happened with OPEC is we know last month Angola quit mainly because it was unhappy with all these production cuts. So again, we production cuts are great, but you’re also losing money at the same time. Sure. If prices go up, there’s an offset. But how much of the price increase offset is actually because of the cuts? So I think that’s partly where I think some of these smaller countries outside of the, you know, the four big ones, Saudi Arabia, UAE and Russia, they’re maybe not able to take the hit as much. So it’s clearly there’s some you know, they haven’t sealed up the ranks yet. They’ve got to they got to come within their own. I don’t know if we’re going to see more cuts. I’d probably lean towards. Yes. If only because they want prices to go. You know, they’re more prices up. I mean, bread sitting just a little bit below $80 right now. They’d love to see that $90 level. But we will be monitoring this joint meeting to see if anything interesting comes out. [00:03:56][105.7]

Michael Tanner: [00:03:57] Next up, we’ve got appeals court delivers fatal blow to California’s city pushing natural gas ban or Berkeley, California. And 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 for 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 love states after it failed to receive a majority support in the courts. Non recuse active judges. The Berkeley filed a motion last year basically that said their law 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. Is joining heating refrigeration instead. 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 are very pleased, although they do come out and say who they’re lobbying for. People will use equipment that uses natural gas. They’re very pleased. The full court order denied Berkeley’s request, thereby allowing the brokers residents elsewhere to You 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 pie 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 for 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 to force. We all get to enjoy our gas because even the people in our favorite state, California. [00:06:24][147.5]

Michael Tanner: [00:06:25] Speaking of that, 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 charges 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 there specifically saying this, what is this? They said in the filing it will impair oil and gas production assets mostly in California because of, quote, continuing regulatory challenges. If Stu is here, he would say legislation to regulation or regulation to legislate. He’d be pounding it 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 for the move of $1,000,000,000 when it 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 boat, but I would be very nervous if I was, because even the bigger companies can’t quite figure out what to do. [00:07:59][93.9]

Michael Tanner: [00:08:00] Speaking of oil prices, let’s move to finance. Oil was up about 3% today. Absolutely wonderful. Overall stock market, though, saw the second consecutive days of losses. S&P 500 drops about 8/10 of a percentage point. NASDAQ down a full percentage point dollar index, actually up about 1/10 of or 1.1 percentage points, which makes the jump in crude, albeit more interesting. Crude up half a percentage point currently trading as we recorded at about 530 on the third 73 on the nose, Brant trading about 7/10 of a percentage point, up 79.5, natural gas up a full percentage point $6 and 60 excuse me $2.69 on the nose. [00:08:38][37.7]

Michael Tanner: [00:08:38] Mainly the jump in crude price was off of Libya’s largest oil field, halting production. You know, I’m trying to get the name of the facility. I think it was I don’t know the name of the oil field. What is their largest their largest oil field? You know, basically it’s the Cheraw oil field. There’s 270,000 barrels of oil today per day. And yesterday, protesters showed up and basically occupied to the point where they have to do a complete full stoppage in a warning of a force majeure if they’re not able to meet the demands of the protester. According to a letter signed by the National Oil Corporation’s board and obtained by Bloomberg, they had 20 vehicles demanding job services, new refineries. Basically what it is, is they’re holding out for better wages. So this isn’t a protest for the workers there. This is other people in the country saying, hey, we want a better life. I’m all for that now. You know, I’m all for them protesting about it. Very interesting here, you connector going on Libya right now. You’ve got a non work protest happening, shutting down the largest oil field and we see prices run a little bit. It’s again, it’s how much we teeter on this. You know I think the other interesting thing is, is we’ll see tomorrow we will see the EIA crude oil storage numbers. So we’ll be able to get an idea. We also know that that Red Sea stuff is still going on. So we’ve got a lot of what I would say, teetering macro events that could possibly push us pirates. What really drove prices up today. But you got got to love it, folks. You know, protests in Libya driving up prices. That’s really all I’ve got today. [00:10:04][85.5]

Michael Tanner: [00:10:04] You know, we’ve got some other stories that should drop, but I’ll let us cover that next week. We got plenty of stuff, guys. You’ll hear. I don’t know what. Interview we have coming up tomorrow. You’ll hear our weekly recap on Saturday and then we’ll be back in the chair Monday mornings for you guys for the news and to keep you guys up to speed with everything going on. So with that, guys, have a great weekend. We’ll talk to you on Saturday for the weekly recap and we’ll be back in your inbox on Monday. Until then, folks, so you. [00:10:04][0.0][586.9]

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