Daily Energy Standup Episode #304 – Lower Earnings, Record Consumption, and Geopolitical Shifts

Daily Standup Top Stories

TotalEnergies reports lower LNG earnings, sales

Highlights of the Podcast

00:00 – Intro01:44 – TotalEnergies reports lower LNG earnings, sales03:36 – The True Costs Of Net-Zero Are Becoming Impossible To Hide08:13 – U.S. natural gas consumption established a new daily record in January 202409:22 – Analyzing The Mediterranean Corridor’s Provisionally Planned Extension To Lvov11:35 – Oil Market Needs $14 Trillion: OPEC Secretary General15:44 – Markets Update19:58 – 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 in to the Thursday, February 8th, 2024 edition of the Daily Energy News Beat standup. Here are today’s top headlines. First up, TotalEnergies reports lower LNG earnings and sales. Interesting one there. Next up, oil market needs $14 trillion according to the OPEC secretary general. Absolutely unbelievable. Next up, the true cost of net zero are becoming impossible to hide. Then we’ll go to analyzing the Mediterranean corridor. Provisionally planned extension to move. This is you know, we love a good Club Med story. We know that for a fact. Oh, and we’ll finish up with U.S. natural gas consumption. Establish a new daily record in January 2024. We talked about a little bit that last night on The Daily Show. Excited to do that here. Then we will switch over, cover quickly. What’s going on in the oil and gas finance markets? We’ve got oil prices currently sitting. And you know we’re we’re here live at Nape. So I’m doing everything on my phone here. But oil is trading about 7384 right now. Brant oil about $79. And then the only other thing I saw in the market today was we saw a merger. CRC California Resources Corporation is going to acquire Aera Energy in an all stock transaction valued at about $1.2 billion. On an interesting note, when we get into about who some of the beneficiaries of that is. So we’ll cover all that in the bag of chips, guys. But for Michael Tanner, Stuart Turley, we’re here live at nay. Good to see you in person again. And let’s fire this off. [00:01:41][86.4]

Stuart Turley: [00:01:42] Hey let’s get ready to rumble here. Total energy is Michael, as we normally call them. Reports lower LNG earnings and sales. And here’s a little bit why on that, Michael, they said Wednesday that the company’s integrated LNG business logged a decline in its adjusted net operating income due to lower prices. So it means their volumes was the same now, compared to the 134 billion in the previous quarter, their net income rose 8%, reflecting the evolutionary crisis. So what has happened was a couple things that are not listed in this article is the lesser amount of natural gas being demanded in Europe because of the killing of the, industries, IT industry, manufacturing, because of low cost energy has been shut down. It’s having a flattening effect on LNG. Yeah. Oh yeah. Second order of magnitude. [00:02:49][66.9]

Michael Tanner: [00:02:49] Again is what we like to talk about. You know, I mean you give you guys an idea. You know in Europe you’re still we’re still trading at over $14 per MMBtu, which is unbelievable. And what what this article points out is that a that’s a decline of over 31%. I mean, if we were getting those net backs here, everybody be drilling natural gas. We’re sitting in here at the place A deals. You’d see no oil. You’d see only gas prospects. [00:03:13][23.7]

Stuart Turley: [00:03:14] Oh yeah. At $2. You’re not really getting real high on that. Now, here’s the problem, Michael, is those tankers are not cheap. Those tankers, not at all. And then you got a home owner, and there are record orders for tankers around the world. Asia is going nuts for LNG. Yeah. So, anyway, I, I thought this was a great article. Let’s roll to the next one here, Michael. The true cost and here we go. It is. The true cost of net zero are becoming impossible to hide. You know, it is becoming impossible to hide because the data is now surfacing. They have been hiding the data, Michael, for so long that they’re even manipulating the data in the, article on that. It’s now the hottest summer, hottest year in history. Well, it’s because they’ve manipulated the data in order to do it, and it’s kind of cool finding out how they’re doing it. Now. Britain dumps another net zero. Gimmick. The Wall Street, reports this, they use natural gas to fuel the cabinet size broilers to provide central heating and hot water, forcing them to not electric heat pumps. Electric heat pumps don’t work nearly as efficiently in the U.S.. The British thermal kind of ironic British thermal, that, it does not work nearly as high because you have, either coal or wind and solar and it does not work. So anyway, I thought that was pretty funny. The Windex, I thought this was another one. The Biden win tax. The U.S. manufacturers have yet to stand up to. I’m not going to use the word. All right. Idiotic regulations. This is a quote out of the article. This it? Yeah, yeah, yeah, just hey, Google, this is a quote out of the article. So Biden’s games are unraveling and. And Bloomberg reports a 48% surge in cost. The Rex is much needed. Wind farm power plans 48% cost on that. And so. Oh, hey, everybody, for our folks, watching out there, we have the RT Trevino. We do. He’s the big dog over there at Peco’s Operating. And we love you, Artie. Thanks. Thanks for stopping by, baby. [00:05:41][147.7]

Michael Tanner: [00:05:42] Absolutely. All right. [00:05:43][1.2]

Stuart Turley: [00:05:44] Well, and again, the wind farms are even being canceled in new Jersey. And I think it’s a great thing because they’re killing all the right whales up there, and. [00:05:52][8.4]

Michael Tanner: [00:05:53] Well, it’s going to come back to the East coast. Continues to shoot themselves in the foot. [00:05:58][4.7]

Stuart Turley: [00:05:59] I think a little higher than that. [00:06:00][0.9]

Michael Tanner: [00:06:00] And they’re going to end up like we all. We keep saying they’re going back on Russian crew. Don’t you worry. They will end up on Russian crude. [00:06:07][6.6]

Stuart Turley: [00:06:07] Right? I’m going to have something on that here in just a minute. And I think I might as well just give my $0.02 here. Watch what happens shortly on Tucker Carlson. Tucker Carlson is going to be in. He’s already interviewed Putin. So, you know, hey, we were teasing about this. You know, a my Putin imitation. And when when Tucker Carlson releases that, there is going to be a huge backlash. They’re already trying to ban. I believe you just said that they’re trying to. [00:06:40][32.5]

Michael Tanner: [00:06:41] But yet the EU is putting a travel ban on him on Tucker Carlson. [00:06:44][3.6]

Stuart Turley: [00:06:45] Yeah, it’s because it’s. [00:06:46][0.9]

Michael Tanner: [00:06:46] One that you’ve got. [00:06:46][0.5]

Stuart Turley: [00:06:47] Right? I don’t blame them because, you know, I’m I’m going to go up to Schwab. You know, Charles Schwab and say, hey, dude, you’re a nut. Now, here’s the thing. What you’re going to find out is, I think that Tucker Carlson is going to go ahead and expose that there was a deal. There was a cease fire between Ukraine and Russia. The Biden administration and the EU. And it. [00:07:15][28.3]

Michael Tanner: [00:07:15] Yep. They sent Boris Johnson down there to blow the deal up. [00:07:18][2.8]

Stuart Turley: [00:07:18] Exactly. Now, here’s what’s going to happen. I think that people are going to say Putin’s a bad guy, but he’s not that bad guy. And so energy makes a difference. And I think you’re going to see an opening up within six months of people buying, Russian, say, and that’s not talked about. And I think you heard it here first, Michael. And I’ve got a few other things I’m working on to back that number up with. So anyway, let’s go to the natural gas consumption, establish a new daily record in, in, the US. This is from our buddies over there at the EIA. I think they finally got something right. It’s got to be a, election year. They needed some, some wins. What do you think? [00:08:04][45.6]

Michael Tanner: [00:08:05] No. They do. And and we touched on this a little bit on yesterday’s show, specifically, with their short term energy outlook, but really baked into those numbers as you show here was an absolute crushing, the natural gas consumption record, the the the largest. I’m trying to find it right here in, you know, on January 16th, 2024, a record high of 141 point 5,000,000,000 cubic feet of natural gas was consumed. And that’s on a per day basis. [00:08:32][26.7]

Stuart Turley: [00:08:33] Right? [00:08:33][0.0]

Michael Tanner: [00:08:33] That’s one day per day. [00:08:35][1.7]

Stuart Turley: [00:08:36] And we’re still down at $2, Mark. [00:08:37][1.7]

Michael Tanner: [00:08:38] You know, it’s pretty pretty crazy. [00:08:39][0.9]

Stuart Turley: [00:08:39] I don’t get it. [00:08:40][0.6]

Michael Tanner: [00:08:40] Well, because you also have to notice that we were we started as we talked a little bit about yesterday, we were about 13% above the five year natural gas storage average. So right as we begin to move below that, five, you know what a five week rolling average or five year, I think it’s a five year rolling average, right? You’re going to see prices, hopefully not settle out a little bit. But I mean, if we look right now, I mean, I mean, we’re we’re $2.96 right now for spot price on natural gas. And you know those net backs you know the WA has got can’t be much better. Yeah. [00:09:12][32.1]

Stuart Turley: [00:09:13] I had a joke, but HR does not want me to jump in. Yeah, sure. Yeah. Ixnay on the joke. Okay, let’s go to the next one. Analyzing the Mediterranean corridor is provisionally planned. Extension to Elba. Oh. Now, Michael, if we could have the, Mister producer, if you could bring up the map. That map really shows a corridor of pipelines and natural gas coming out of Russia and going through the Ukraine. And here’s where this story is going to end up. And that goes back to my Tucker Carlson story that it is, going to gain precedence again because the war in Ukraine is going to end very soon. Zelensky’s toast. He’s going to be the fall guy for this. But if you can take a look at this map, you can see that net Russian natural gas going right on through down to the Strait of Gibraltar. You know that. That is an absolute gigantic swath through swath. That’s how we say that in Oklahoma. That’s a swath all the way through there of low cost energy. And and so let’s go through some of these numbers here. And it goes through the deputy chair of the Russian Security Council, Dmitri Medvedev, drew global attention to the Mediterranean’s corridor, provisionally planned extension to LV Ovie on his tweet. Let’s see what it says here. It says the point here is that it’s not tracks in the West and, they differ with it’s that the business is a lot more, president than politicians. People want business. They want low cost food and the the farmers all across the EU. My hat’s off to you guys. We love the farmers. No farmers, no food. And I applaud you guys, man. Have you seen the stuff they’re throwing? [00:11:19][125.6]

Michael Tanner: [00:11:20] Yeah, they’re going crazy. It’s happening. But the hard part is it’s actually tough to find. You can’t Google it. You got to go. You got to go to new source like Energy News beat.com to find out about this stuff. It’s crazy. [00:11:31][11.1]

Stuart Turley: [00:11:31] It is absolutely nuts. And so let’s go to our last story here. Oil market needs 14 trillion OPEC secretary general. I trust OPEC more than the IEA. the IEA is much like the EIA and not old MacDonald’s farm. They had an E-i-e-i-o. I think okay, global market will require 14 trillion investments over the next 20 years. If oil producing nations hope to be able to fulfill global energy demands through 40, 45, that is really critical, Michael, for a couple reasons. You don’t have to print money in order to get those trillions because there is a return on investment. Now the side effect of this is Blackrock and all of the other ESG funds have now started funding oil and gas. And now they’re also allowing to fund coal. They realize around the world it’s okay to have a transition. And the transition may require a few more years or decades. People are tired. Political people lose their jobs when people don’t have low cost energy. [00:12:52][81.1]

Michael Tanner: [00:12:53] Michael. No, absolutely. I mean, I think it’s there’s some interesting notes in this article here. They say India’s oil demand is expected to double by 2045, up from 19 million barrels per day to over 38 million barrels per day. And that’s according to Prime Minister Modi. He said, based on this in India is going to be consistently growing its energy. We aim to increase our share of natural gas to 15% of primary energy consumption, up from 6% today. And by 2030, Modi mentions that refining capacity will be up to 100 or 450 Mtpa, which is a big number. [00:13:30][37.1]

Stuart Turley: [00:13:30] You hit a big, big point. Iran and Iraq are now selling huge amounts of oil. Russia is still selling huge amounts of oil. I believe the number of their increased capacity is I’m going to throw a number at a million barrels per day. Okay. Yes. What’s happening? It’s the Russia oil and the Iraq oil’s coming to India. It’s being refined and going back to Europe as diesel because Europe has hosed it down. So India is smart because their profits that they make, you’ll pay for lower energy costs for Indian. I think it’s phenomenal for them. It’s showing the West their hypocrisy that they have is actually costing the West consumers more. Go figure that one out. [00:14:23][52.5]

Michael Tanner: [00:14:23] Well it’s as always the consumer’s going to take it in the drive through. But as we agree when OPEC comes out with forecasts we listen. When the IEA comes out with forecasts we go let’s go. [00:14:35][12.3]

Stuart Turley: [00:14:35] Fact check. [00:14:36][0.2]

Michael Tanner: [00:14:36] Yeah absolutely. [00:14:37][0.6]

Stuart Turley: [00:14:38] Do you think that they would ever get banned on Twitter OPEC. [00:14:40][2.7]

Michael Tanner: [00:14:41] Yeah. No Hamas is still on Twitter. [00:14:44][2.6]

Stuart Turley: [00:14:44] So wow. Yeah. Wow. okay I’m done. I got nothing on that one. All right. [00:14:53][9.0]

Michael Tanner: [00:14:53] We’ll go ahead and and flip over to finance. Before we do that guys. We’ll go ahead and pay the bills here. As always, the show is sponsored by the world’s greatest website, EnergyNewsBeat.com The best place for all of your energy and oil and gas news. Steering the team do an outstanding job of making sure that website stays up to speed with everything you need to know to be the tip of. The spear when it comes to the energy business. You can check out the description below in the Five Guys to all the links to the podcast. All of the different, news sources that we went over here. You can find them, read them, skip ad, do all the timestamps, everything you need, email the show questions@energyNewsbeat.com. Check out our data news combo product dashboard.energynewsbeat.com. The best place for all your data. News combo. Really pushing that hard energy to a lot of cool stuff coming around the corner guys. So just check us out again. www.energynewsbeat.com. Well your record is about 145 so yeah you markets are still open right now. We’ve seen crude oil run a little bit. It’s up to 7383. Main reason for that just mainly has to do with with with what we saw the EIA come out and drop today. And let me go ahead and just pull this up. We did see a larger than average U.S fuel star drop. drop. Remember we were supposed to see about a 500,000 barrel drop according to the EIA. What we went ahead and saw was a 31., or, excuse me, crude oil reserves, were drawn down by 5.5 million barrels. So again the estimate yesterday 500,000 barrel draw. We now see today 5.5 million. And that only brought prices up to $73. We only seen about a percent rise on that. We did see a larger than average U.S gasoline stock pull at about 3.15 million barrels. Compared with analysts estimates about 140,000 barrels, according to our favorite people over at the EIA, distillates fell by 3.2 million barrels compared to the estimate of 1 billion barrels. That’s really what’s happening as we’re talking about prices being buried, we did see. But finally, utilization shrink point a half a percentage point to 8242. And we’re still seeing some of the effects of that deep freeze that happened about two weeks ago, U.S Gulf Coast. We saw about 15% of its refining capacity still be, offline, which is really, bringing down, utilization rates to the lowest level since September 2021. Really during the middle of Covid right there. You know, the only about the only other thing I saw that was really interesting was we did see a, merger this morning, Aera Energy and, Aera Energy goes ahead and gets acquired by CRC resources for a valuation of about $2.1 billion. And one thing I just find interesting, I guess before I get into that, both these companies are California operators, and we’ve talked here on the show at nauseam about how it’s becoming extremely hard to do business in. Yeah, in California, we saw Chevron in their earnings report write down the value of their earnings assets, by over about $5 billion from a write down due to their California stuff. But CRC California resources, the two of the big players out there, it’s an all stock transition. What’s funny is one of the biggest investors and, you know, era energy is, is, is is owned by two specific companies. I cave, which is a large international private equity company, and the Canada Pension Plan Investment Fund, owning a cool 49% of that. So interesting. What’s also interesting is that they took stock. They didn’t take cash. Now this stock gives them more liquidity because you can you you know, you can use that stock as collateral and carrying out loans against it. But it’s interesting that they didn’t go for an all star. They didn’t look for a deal specifically with cash. You know, considering what the Trudeau administration is attempting to do there, which is divest of everything from oil and gas. So it’s clear the Canada pension, but they’re still all for oil and gas. [00:18:43][229.8]

Stuart Turley: [00:18:44] Oh, yeah. They like money. [00:18:45][1.3]

Michael Tanner: [00:18:46] Exactly. [00:18:46][0.0]

Stuart Turley: [00:18:47] You want to survive? Wasn’t that the Terminator? If you want to leave, you come with me. [00:18:52][5.0]

Michael Tanner: [00:18:52] Yep. Okay. Absolutely. To give you guys an idea. Now, that’s the iccv. They’ve ICDs doing about, 31 billion of net assets. So they’re becoming they’re the 51% owner there. I think the other thing that was interesting to see is here’s the here’s, Bill Rogers, he’s the managing director and global head of sustainable energy. He went he goes ahead and says this, this transaction provides needs to be investments, an excellent opportunity to scale up our investment in California’s energy transition with Eren Energy and CRC, both lean and continue to enable new carbon management solutions, each bringing complementary strengths to the table. So they’ve got to obviously come out and say, no, no, no, no, no, we did this for renewable energy reasons. But let’s be very clear here. It’s high oil and gas is going to continue to rule the day there. [00:19:35][42.3]

Stuart Turley: [00:19:35] Yes. You gotta make money to spend money. [00:19:37][2.2]

Michael Tanner: [00:19:38] Absolutely. All right. Well we’re live here at Nape. It’s about 145. We’ve had an excellent day here on when we’re recording this Wednesday here. You guys are listening to this on Thursday. We’re getting there. We’re gearing up. We got to be ready to go tomorrow. It’s going to be a busy day. [00:19:49][11.1]

Stuart Turley: [00:19:49] Oh huge day. We’ve still got lots of people to interview today and it is nutty out there today. Stay safe. We’ll see you next time. [00:19:57][8.0]

Michael Tanner: [00:19:57] Yeah, absolutely. Anything else people should be concerned about. [00:20:00][2.3]

Stuart Turley: [00:20:01] Watch Tucker’s interview dropping off. And, because the second order of magnitude effects of that single interview. Third and the fourth and the third and the fourth, the Biden. Administration is trying to shut it down. The EU is already trying to shut it down. And what you’re going to hear out of that is that you’re going to see an end. Tucker. And my opinion is going to be able to end the war, because people are going to realize that. Putin I’m not going to say if he’s a good guy or not. He’s not as bad as he was because of the child trafficking that is becoming documented. The 30 plus weapons labs that the US had in Ukraine. Ukraine is a crime sim and I’m glad it’s finally coming to light. [00:20:52][51.2]

Michael Tanner: [00:20:52] Yeah. No. [00:20:53][0.3]

Stuart Turley: [00:20:53] Let’s end that, crime scene. [00:20:56][2.9]

Michael Tanner: [00:20:57] Yeah. No, it’s going to be very interesting to see what Tucker comes out of. That’s kind of the talk of the town right now. But with that, guys, we appreciate you checking us out. Have a great week. You will see our weekly recap drop on Friday. Or excuse me, we got interviews drop in Friday. Weekly hit caps coming on Saturday right. [00:21:10][13.8]

Stuart Turley: [00:21:11] We have lots of interviews. [00:21:12][1.0]

Michael Tanner: [00:21:12] You guys are about to be inundated with interviews, so get ready for all the people. We saw George Bush this morning who’s running for Texas Attorney general? We we talked with the TCU energy, administrators. Right. We’ve got just a host of other subjects. [00:21:24][11.7]

Stuart Turley: [00:21:25] And regions coming up. And then. Yeah, I mean, he is one cool cat. [00:21:29][3.8]

Michael Tanner: [00:21:29] Absolutely. Car Ingram everybody was here. So it’s going to be awesome. But with that guys we’ll let you go for Stuart Turley I’m Michael Tanner. We’ll see you next week guys. [00:21:29][0.0][1245.9]

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