Which way? Energy

Discussion in 'Commodity Futures' started by themickey, Aug 6, 2021.

  1. themickey

    themickey

    upload_2021-9-2_1-0-6.png
    Place your bets, how far can it go, Natural Gas?
    Could double from here.
     
    #11     Sep 1, 2021
    Bastion_01 likes this.
  2. Overnight

    Overnight

    If it reaches 5.x, short it. If it does not, short it anyway around middle of February.
     
    #12     Sep 1, 2021
  3. My numbers are not expecting a spike in heating demand, but of course my model could be wrong and it rips before coming off. Either way, my estimate for Nov. is at around 3.8~. I've decided to share some of the things I've picked up over the year, around gas/oil, and posted how I came to the 3.8~ here, https://bastion.substack.com/p/ngx-fair-valuation
     
    #13     Sep 1, 2021
  4. Nine_Ender

    Nine_Ender

    Long term chart suggests it's impossible to know how high these moves will go. There is also a good chance nat gas does well longer term as a greener option. Nevertheless, even at less then $4 nat gas, many Canadian nat gas producers were putting up oversized earnings numbers Q1 so it's a really solid group of stocks to own or trade. They are highly volatile in how they move but any sp drops have been really lucrative buying opportunities.
     
    #14     Sep 14, 2021
  5. themickey

    themickey

    https://www.marketwatch.com/article...politics-of-oil-51631780102?mod=mw_latestnews

    How the Energy Market Is Changing.
    Oil’s Oracle, Daniel Yergin describes the new dynamics.

    Published: Sept. 16, 2021
    By Avi Salzman
    [​IMG]
    Daniel Yergin, author of “The Prize” and more recently, “The New Map: Energy, Climate, and the Clash of Nations.” Photograph by Jesse Burke

    Daniel Yergin has written some of the most influential books on energy, while advising companies and governments on policy and markets. He is now vice chairman at IHS Markit. His latest book, The New Map: Energy, Climate, and the Clash of Nations, looks at how the politics of oil have changed in the past two decades, with the boom in U.S. shale and the rise of China. Yergin, 74, recently sat down with Barron’s to discuss the new dynamics of energy markets. The interview has been edited for clarity.

    Barron’s: You’ve written about the oil age, which has lasted for over 150 years. Is it over now?
    Daniel Yergin:
    I’ve been thinking about it going back to my fourth book, The Prize. The assumption was that demand would always just grow, or when it peaked, it would be so far into the future it wasn’t worth thinking about. And that oil had a permanent monopoly on transportation. None of that is true anymore. I think oil and natural gas will continue to be important parts of the energy mix for quite a long time. But it’s going to be a very different mix. Renewables will be a much bigger part of it. Maybe it will be hydrogen or another thing. So it won’t be an oil age—it will be an energy mix age.

    The oil industry has had booms and busts for decades. Prices go up, drilling rises. Prices go down, drilling slows down. Now, U.S. oil companies are doing something new—they’re holding back on producing oil even as the price rises. They say they’re going to be more disciplined, no more “drill, baby, drill.” Do you think that holds?
    I think it is holding, because we are now seeing the second shale revolution. It’s the revolution in the relationship between investors and companies. It’s no longer growth at any cost. You have to return money to investors and rebuild confidence to bring investors back into the field. I think it’s unlikely that we’re going to see irrational exuberance as we’ve seen in previous periods. I think the investor pressures are quite considerable, and the investors are not going to come back in large numbers until they’re convinced that there are really adequate returns on a consistent basis.

    Do you think that the industry is investible now? The stocks are up a lot from last year, but have flatlined in the past few months.
    It won’t be an oil age—it will be an energy mix age.

    — Daniel Yergin
    I think they’re becoming investible again. There was this exuberance a month or two ago that prices would go to $100 a barrel. We were skeptical unless there was a real crisis of some kind. It seems that prices are probably in the $60 to $80 range. What we did see before the shadow of Delta fell across the land was that demand was coming back much stronger than many people expected. Oil demand rose about seven million barrels a day from the first quarter to the third quarter of this year. The world’s going to continue to use a lot of oil for some time.

    There will be some investors who want nothing to do with the industry. But for others who see that the returns are there, and they’re consistent, they will be very interested in those returns as part of their portfolios. As long as we don’t have another big virus-driven downturn, or some big crisis in U.S.-Chinese relations that shapes the world economy, these companies are going to be much more focused on paying down debt and returning money to investors than they have in the past.

    You mentioned U.S.-China relations. Your book examines how much the world has changed when it comes to the politics of energy. Globalization has been falling apart in the past decade. Obviously Donald Trump was behind some of that, but it happened before him and has continued after. Does that change the dynamics in oil, and maybe even prices in the future?
    I do think that oil figures very much in geopolitics, which is part of the story that I was writing. It figures in U.S.-Chinese relations in different ways. For China, its ownership claims in the South China Sea have a lot to do with the passage of oil imports. The Chinese import 75% of their oil. And they wish they were in the position the U.S. is of being self-sufficient. They worry about the U.S. Navy and that oil transport. On the other hand, China has become quite an important market for U.S. oil and gas exports, which is something that most people don’t know.

    The overarching question is where U.S.-China relations go from here. As you mentioned, the change started before Trump came in. Up until about 2015, it was governed by what I call the [The World Trade Organization] consensus—that China would be a responsible stakeholder, part of the same international order. It’s really remarkable how much things have changed. [Barack] Obama’s last national security strategy talked about constructive engagement with China. And you look at what has happened since, under not only Trump but also [President Joe] Biden. Biden has the same people over there as were under Obama. Biden’s saying China is a strategic competitor, talking about great-power competition. And the Chinese see it the same way. Ultimately, the great geopolitical and economic question of the 21st century is where this U.S.-Chinese relationship really goes.

    Part of Trump’s China trade deal was that the Chinese would buy a certain amount of our fossil fuels. Does that start to change? Could China say, “We’re pivoting to Russia” or some other supplier?
    I think it certainly could happen, because the Chinese have shown if they have displeasure, they’ll act. No more Australian wine goes to China. They’ll cut off sales of rare-earth elements to Japan. But the downside of that for them is that we’re a really important export market for them, too. So retaliation would beget retaliation. They see importing oil and gas from the U.S. as part of a strategy of trying to manage the trade balance between the two countries so that they can continue to sell a lot of stuff to us.

    You write a lot about Russia, too. Where do the Russians fit in this? How does the U.S. shale boom affect them?
    The relationship between Russia and China that was formerly based on Marx and Lenin is now based on oil and gas.

    — Daniel Yergin
    I have an anecdote in the book about somebody asking [President] Vladimir Putin a question at the St. Petersburg Economic Forum. Well, that somebody was me. I happened to mention the word “shale.” And that’s when he started shouting at me in front of 3,000 people, which was pretty uncomfortable. How low can you get down in your seat when that happens?

    I realized that he doesn’t like U.S. shale for two reasons. One, it makes us a competitor in the European gas market, which [the Russians] regard as their backyard. And secondly, he sees it as an adjunct to U.S. power, giving us some flexibility in the world that we previously didn’t have.

    Putin has made Russia a global player. And his relationship with China has become very strong. The personal relationship between him and [President Xi Jinping of China] is very strong. There are some in Washington who think somehow we can peel Russia away from China. And he might want to have some flexibility. It’s good for Putin to meet with Biden. But basically, I think Russia and China see eye-to-eye on many issues—in particular their opposition to what they see as a U.S.-dominated international order.

    How does oil play into that?
    The relationship between Russia and China that was formerly based on Marx and Lenin is now based on oil and gas. Russia has become an important supplier to China, and with the development of liquefied natural gas, or LNG, in the north, it can be an even more important supplier. That’s a very conscious strategy for those countries to kind of hitch their wagons together from an energy point of view.

    All of these new dynamics, including the U.S. shale boom, are also changing things in the Middle East.
    It really struck me when there was the attack on that crucial facility in Abqaiq in Saudi Arabia in 2019. If that had happened five years earlier, you would have had oil prices spiking. This time, the market just shrugged it off. I think that the development of U.S. shale has turned out to be an enormous security cushion against a panic in the market. But at the end of the day, there is still only one world oil market. If you have a major and extended disruption, that will affect everyone. The U.S. is in a much better position than it was in 2008, but it isn’t divorced.

    Does that make it less likely there will be war in the Middle East, or at least less likely that we’ll be involved?
    I think there will be questions about the nature of our military commitment. How important is the relationship with the Gulf countries? And you’ve seen Saudi Arabia make a turn toward what they call a strategic relationship with Russia. [The new oil alliance] OPEC+ is really a Saudi-Russian deal.

    If we are moving out of the oil age, who will hold the power in what comes next?
    We’ve focused on the supply chains for oil for a long time. We’re just beginning to look at the supply chains for a net-zero carbon world, and there are a lot of complexities there.

    If you’re looking for where geopolitics and energy come together in net-zero, it’s China, because China has such a dominance over the supply chains—80% of the lithium ion battery supply chains, 60% of the world’s rare earths.

    China is very dominant in those supply chains, and the supply chains are relatively small compared with what you’ll need to build up. We’re going to need a lot of mining to meet these targets. We’ve been so accustomed to Big Oil. In due course, we’re going to have to be talking about the Big Shovels.
     
    #15     Sep 16, 2021
  6. themickey

    themickey

    https://www.smh.com.au/environment/...arm-with-indonesian-help-20210923-p58u5y.html

    Sun Cable scales up plans for world’s biggest solar farm with Indonesian help

    By Peter Hannam September 23, 2021

    Sun Cable, the energy company backed by billionaires Mike Cannon-Brookes and Andrew “Twiggy” Forrest has scaled up plans for the world’s biggest solar farm by as much as 40 per cent and secured key support from the Indonesian government.

    The company announced on Thursday that the size of the Powell Creek Solar Precinct planned for the Northern Territory to supply Darwin and Singapore would now be 17-20 gigawatts (GW) in capacity, up from the previous plan of 14GW. The associated storage system has also been lifted in size to 36-42 GW-hours from an earlier goal of 30GW-hours.

    [​IMG]
    Solar panels developed by Sydney-based 5B could be deployed in Sun Cable’s planned giant solar farm in the Northern Territory to supply Darwin and Singapore with low cost and zero-emissions electricity. Credit:Dominic Lorrimer

    In the process, the project’s estimated cost has also increased to about $30 billion, up from $22 billion.

    “It’s an important step forward. It’s all driven by some really positive developments from both customer demand and technological enhancements,” David Griffin, chief executive of Sun Cable, told the Herald and The Age, adding that both the solar farm and storage system “will obviously be the largest in the world”.

    The release of details about the larger project coincided with Sun Cable also announcing it had secured support from Indonesia for early work on preparing to lay the cable linking Darwin to Singapore to pass through the Indonesian archipelago.

    Luhut Binsar Panjaitain, Indonesia’s Co-ordinating Minister for Maritime Affairs and Investment welcomed Sun Cable’s operation in Indonesia and confirmed that his government had granted it a subsea survey permit and recommended the transmission route, according to a statement from Sun Cable.

    “Sun Cable is greatly appreciative of the support from the Indonesian government and looks forward to a long-term relationship with Indonesia,” it said.

    “As part of building the [Australia-Asia] PowerLink [between Darwin and Singapore], Sun Cable will drive investment and jobs in Indonesia, share knowledge, and support Indonesian manufacturing.”

    The project would aim to start supplying Darwin from 2026 and Singapore a year later, with full output reached by 2028.

    Sun Cable aims to supply as much as 15 per cent of Singapore’s electricity needs and could reduce Singapore’s emissions by six million tonnes of carbon dioxide-equivalent a year. That would match Singapore’s entire climate abatement gap in its 2030 reduction goals, the company said.

    [​IMG]
    Atlassian founder Mike Cannon-Brookes, along with fellow billionaire Andrew ‘Twiggy’ Forrest, is a major backer of the Sun Cable project.Credit:Renee Nowytarger

    The solar farm will continue to occupy a planned 12,000 hectares despite the increased capacity, including about 28 million solar panels.

    Its export capacity would be 2.2GW, or more than four times the current Basslink Interconnector linking Tasmania and mainland Australia. At 4200 kilometres, it would also be more than 10 times as long.

    Mr Griffin said more large solar farms were in the works, although the Australia-Asia Powerlink was the “marquee project”.

    “It’s the first of its kind, to be the first of many,” he said.

    “The learning rate for solar panels is relentless,” he said. “It is a long way from flattening out yet … It’s not a mature technology. There are still lots of efficiency gains to have.”

    Michael Gunner, Northern Territory Chief Minister, said Sun Cable had already employed more than a dozen Darwin firms for initial works. The project would inject some $8 billion into the Australian economy, much of it in the NT.

    Sun Cable expects the venture will produce as much as $2 billion a year in exports, create more than 1500 jobs in construction, 350 operational jobs, and 12,000 indirect jobs.
     
    #16     Sep 23, 2021
    fan27 likes this.
  7. themickey

    themickey

    https://www.bloomberg.com/news/arti...mic-shock-beyond-evergrande?srnd=premium-asia

    China’s Power Crunch Is Next Economic Shock Beyond Evergrande
    Bloomberg News 26 September 2021
    • Factories across nation ordered to curb activity or shut down
    • Beijing’s green goals coinciding with surging energy prices

    China may be diving head first into a power supply shock that could hit Asia’s largest economy hard just as the Evergrande crisis sends shockwaves through its financial system.

    The crackdown on power consumption is being driven by rising demand for electricity and surging coal and gas prices as well as strict targets from Beijing to cut emissions. It’s coming first to the country’s mammoth manufacturing industries: from aluminum smelters to textiles producers and soybean processing plants, factories are being ordered to curb activity or -- in some instances -- shut altogether.

    Almost half of China’s 23 provinces missed energy intensity targets set by Beijing and are now under pressure to curb power use. Among the worst hit are Jiangsu, Zhejiang and Guangdong -- a trio of industrial powerhouses that account for nearly a third of China’s economy.

    “With market attention now laser-focused on Evergrande and Beijing’s unprecedented curbs on the property sector, another major supply-side shock may have been underestimated or even missed,” Nomura Holding Inc. analysts including Ting Lu warned in a note, predicting China’s economy will shrink this quarter.

    The worsening power crunch in China -- perhaps overshadowed by the attention on whether Evergrande will default on its mammoth debts -- reflects extremely tight energy supply globally that’s already seen chaos engulf markets in Europe. The economic rebound from Covid lockdowns has boosted demand from households and businesses as lower investment by miners and drillers constrains production.

    But China’s energy crisis is partially of its own making as President Xi Jinping tries to ensure blue skies at the Winter Olympics in Beijing next February and show the international community he’s serious about de-carbonizing the economy.

    The economy is at risk of a severe shortage of coal and gas -- used to heat homes and power factories -- this winter. It’s had to ration power in the colder months before but it’s never had to do it with global prices of these fuels at the levels they are now.

    Eyewatering Prices
    China’s heating coal futures have more than quadrupled in the past month, smashing new records over and over as concerns over mine safety and pollution constrain domestic output while it continues to ban shipments from top supplier Australia. Meanwhile, natural gas prices from Europe to Asia have surged to seasonal highs as countries try outbid each other for fast-depleting supplies.

    In previous winter power surges in China, many have turned to diesel generators to plug the shortages of power from the electricity grid. The year, the danger is government policies have further limited the energy industry’s potential to increase production to meet the demand increase, said Zeng Hao, chief expert at consultancy Shanxi Jinzheng Energy.

    Yunnan Aluminum Co., a $9 billion producer of the metal used in everything from cars to soda cans, has curtailed output due to pressure from Beijing. The shock is also being felt in China’s giant food sector. Soybean crushers, which process the crop into edible oils and animal feed, were ordered to shut this week in the city of Tianjin.

    A number of smaller companies are also starting to inform the stock exchange they’ve been ordered to curb or halt activity. While they may be overlooked by major foreign investors that don’t cover these firms, the end result could be a shortage of everything from textiles to electronics components that could snarl supply chains and eat into the profits of a host of multinational companies.

    In Jiangsu, a province near Shanghai with an economy almost as big as Canada’s, steel mills have closed and some cities are turning off street lights. In nearby Zhejiang, about 160 energy-intensive companies including textiles firms were shuttered. While in Liaoning in the far north, 14 cities have ordered emergency power cuts that were blamed partly on the surging coal prices.

    “The power curbs will ripple through and impact global markets,” Nomura’s Ting said. “Very soon the global markets will feel the pinch of a shortage of supply from textiles, toys to machine parts.”

    The curtailments are a fresh threat for an economy facing multiple pressures after a V-shaped rebound in the past year. And as with Europe’s energy ructions, the squeeze poses a challenge for policy makers: how to pursue environmental goals without damaging still-fragile economies. Beijing is targeting full-year growth of 6% after expansion of 12.7% in the first half.

    “Policy makers seem to be willing to accept slower growth in the rest of this year in order to meet the carbon emissions target,” said Larry Hu, head of China economics at Macquarie Group. “The GDP goal of more than 6% is easily achievable, but emissions targets are not easy to hit given robust growth in the first half.”

    — With assistance by Martin Ritchie, Lin Zhu, Luz Ding, and Alfred Cang
     
    #17     Sep 26, 2021
  8. themickey

    themickey

    upload_2021-10-1_3-29-28.png
    signs of getting toppy?
     
    #18     Sep 30, 2021
  9. fan27

    fan27

    #19     Sep 30, 2021
    themickey likes this.
  10. themickey

    themickey

    My call is for NG to rest for a bit.
     
    #20     Sep 30, 2021
    fan27 likes this.