Daily Energy Standup Episode #275 – Wind Farm Challenges, Oil Price Forecasts, and Global Tensions Unveiled

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Another Offshore Wind Farm Hits the Dust

Highlights of the Podcast

00:00 – Intro
03:02 – Another Offshore Wind Farm Hits the Dust
05:46 – Analysts Say Oil Prices Unlikely To Hit $100 In 2024
09:23 – OPEC+ Enters 2024 With `Wait and Hope’ as Its Strategy
12:11 – Red Sea Tensions Threaten to Disrupt Diesel Market Stability
15:20 – EU countries get Russian oil exemption – Reuters
16:24 – Markets Update
20:01 – Outro

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Michael Tanner: [00:00:15] What is going on, everybody? Welcome to another edition of the Daily Energy News Beat standup here on this gorgeous Thursday, December 21st, 2023. As always, I’m your humble correspondent, Michael Tanner. How many from an undisclosed location here in Dallas, Texas, joined by the executive producer of the show, the purveyor of the show and the director and publisher of the world’s greatest website, EnergyNewsBeat.com Stuart Turley, My Man, How We Do It. [00:00:39][24.1]

Stuart Turley: [00:00:39] Today is a beautiful day in a neighborhood. And my grandson was playing with my mike and I think I got some drug across the mic here. Pretty nasty, Bob. [00:00:49][10.0]

Michael Tanner: [00:00:50] I keep a good fist distance from that. Nonetheless, you have an excellent show lined up for us. First up on the menu, another offshore wind farm project. It’s the dust. You know, it’s it’s kind of like clockwork here. [00:01:05][15.1]

Stuart Turley: [00:01:05] Now another one bites the dust. [00:01:07][1.5]

Michael Tanner: [00:01:08] Our next story in a shocking turn of events. Analysts say oil prices unlikely to hit $100 in 2024. Interesting. Interesting. Next up, Opec+ enters 2024 with, quote, weight in hope as its strategy. They interesting. Yeah. Worked out for Obama. We’ll see if it works out for OPEC. We’re still we still got hope I guess. Next up Red Sea tensions threaten to disrupt diesel market stability. I think this is a great article that highlights kind of as we talk about global shipping and oil flows. The diesel flows coming out of what’s going on in the Red Sea is interesting, is the stool dive into that. And then finally EU countries get Russian oil exemption. Via our friends at Router’s Stewart Then toss it over to me. I will quickly cover what happened in oil and gas finance. We saw markets tumble a decent amount today. Oil off session highs mainly on the back of some interesting EIA data which we will cover in the end. And then we’ll let you guys get out of here and finish up your gorgeous Thursday before we do all that guys, remember the news and analysis you are about to hear is brought to you by the world’s greatest website www.energynewsbeat.com the best place for all your energy and oil and gas news do in the team do an outstanding job of staying up to speed with everything that you need to know to be the tip of the spear when it comes to the energy business. You can check out the links below in the show description to see all the different links to the articles we are about to cover and timestamps so you can jump ahead, hear what OPEC has as they hear what analysts are saying. We’re not going to hit $100 oil. Shocking. It’s not Goldman Sachs, but you can also go ahead and check out by emailing the show [email protected] Dashboard.EnergyNewsBeat.com is our data news combo product looking to push that in in Q1 2024. So I’m going to let those to where do you want to begin. [00:03:00][112.3]

Stuart Turley: [00:03:01] It start with this one Another offshore wind hits the dusk. This one’s kind of sad because it is very systemic of more coming around the corner. The developer icebreaker, a small project in Lake Erie announcing it’s pulling at stakes on its six turbine product project. It received a $50 million grant under Obama bill along it is to get it to get the damage to the grid and the Energy Department has pulled the grant and taxpayers will only get $37 million back. So somebody made let me think. I want to ask you, how many millions did they spend on regulations measuring rocks to make sure that they get get these things up. [00:03:52][51.5]

Michael Tanner: [00:03:52] Over 60 turbines? I mean, what did that tower like? Barely power, anything? [00:03:58][5.8]

Stuart Turley: [00:03:59] No, I mean, you’re talking, you know, six wads. I mean, I’m kidding. Whatever. [00:04:05][5.5]

Michael Tanner: [00:04:05] I love this part. According to developer, icebreaker, became financially untenable after the Ohio Power sitting board in 2020 required the turbines to stop at night between March and November to reduce the risk of migratory birds and bats from hitting the turbine blades. [00:04:22][16.5]

Stuart Turley: [00:04:23] Oh, yeah. And it’s even funny. A large Dominion Energy, a large utility in Virginia, is moving ahead with IDs consisting of 176 and is spending 625 million on the first U.S. built ship capable of hauling more than 300 foot long blades. That’s a lot of money just to haul a blade out and put it up with duct tape. That’s just amazing to me. And here’s the conclusion. I thought this was really good. Another offshore wind is calling it quits as inflation, interest rates, supply chain issues and legal challenges are making it too expensive and difficult to exceed. Michael, we’ve seen that over the last six months. It is going to escalate and curtail wind. I still see solar here as having some wind. And I. I had lunch with Dr. Ed Ireland and Artie, here’s a great one. The young lady out of London came up with an idea for wind in subways. At first I was like, a great idea. They all create wind. Why not put a little turbine down there every time it goes through? You could make some really nice. I think it’d be kind of cool. Let’s go to the next one here, though. But another one bit. The dance did it. It didn’t do all right. Analysts say oil prices are unlikely to hit 100 in 2024. This brings up a bigger problem, Michael, but let’s go through the top three bullet points. Opec+ faces record breaking U.S. production and other supply issues. Barring a major geopolitical escalation resulting in a large supply outage, oil prices are unlikely to reach $100 a barrel. Paul Sankey. Record high U.S. oil production is a huge problem for OPEC. Plus, this is where I think it’s going to get a little bit dicey in it. Michael, we’ve had the hoodies and the blowfish lob and missiles all over, you know, out there. They they did 40 drones in the U.S.. Now, we have a consortium going out there and waving flags and everything, trying to slow down the booties from blowing something up. But we have BP moving all of its tankers. We have the supply chains going around and oil just went broke. What’s up with that? I don’t understand it, you know. [00:06:54][151.3]

Michael Tanner: [00:06:54] Well, it’s because what this article is pointing out is that the fundamentals, the supply demand balance of oil doesn’t look promising for higher oil prices. It actually looks fairly doom and gloom when you talk about the fact that we have, as this article mentions, record U.S. oil production supply is increasing from nations. Specifically, you’ve got Guyana, Brazil, who have really increased their offshore activity, which is one of the few areas offshore drilling where you can actually move the needle When it comes to worldwide oil production, you know, a vertical well in Mid-Continent, Anadarko is not going to move national oil production or worldwide oil production. But you know, the Star BLOCK walk over or the Liza project, our block in Guyana is going to move the needle when that thing’s doing three or four or 500,000 barrels a day, that will actually start moving. There’s a little bit. [00:07:44][49.9]

Stuart Turley: [00:07:45] There’s a quote in here. Warren Patterson, head of commodity strategy at IAG, wrote, Given the scale of cuts we’re seeing, OPEC is sitting on a substantial amount of spare capacity, and that’s somewhere around 5.5 million barrels per day. Here’s where I think that there is a miscommunication between, he said communication. I was pretty smart when you when you take a look at this or this article and you have Brazil saying the head of Petrobras saying we’re going to print every pump, everything we can. Then you have Iraq saying, hey, oh, by the way, we’re now at 3.4 million barrels a day. We’re going to pump everything we can. They’re selling in the dirt fleet. Rush is now up to 3.5% increase in their GDP. They’re going to sell everything they got. You know, the dark Fleet is chewing away. I’m going to have tomorrow or for our next show on Sunday what we’re or whenever it’ll be next, next week, some time. What we’re going to do is I’m going to have a chart with how much oil is coming out of production, out of the OPEC’s quotas into the dark Fleet, because that’s a lot of stuff. They’re pumping more and the demand for India and China is pulling that off the market. It’s a mess. Michael, I don’t I don’t know, but I. [00:09:15][90.8]

Michael Tanner: [00:09:16] Blame it on the dark fleet. I guess, though. [00:09:18][1.6]

Stuart Turley: [00:09:19] The dark side are Dark side. You are. Okay, let’s go to OPEC, Enters 2024, with Wait in Hope. This one kind of goes along with that. And bin Salman Prince bin Salman is keen on Alexandre Dumas. All wisdom is contained in these two words weight in. Oh, yeah. Okay. So the Saudis again, he has said we need $100 oil. And and so you have the paradigm between the ghost fleet and the nerd fleet or the dark ghostly. And then you have, you know, OPIC wanting money. Iran has got to fund Hamas. They’ve got to fund all these other things. And so the chart in here, it says high, but not. High enough so you can see that it’s at that 75. There was an article yesterday that also came out on Bloomberg and they were saying that Brant was going to go up immediately and it didn’t. So I don’t think anybody really knows what’s going on with oil pricing because the whole beautiful system that the Saudis and OPEC had in place has gone. [00:10:37][77.9]

Michael Tanner: [00:10:37] My opinion. Yeah. I mean, I think anybody telling you they know where oil prices is going is is lying to you. I tend to agree with the article we covered just in this last segment in terms of under $100. [00:10:47][10.2]

Stuart Turley: [00:10:48] Versus over. [00:10:49][0.5]

Michael Tanner: [00:10:49] $100. I know obviously, barring something political, it’s true that Saudi is sitting on a bunch of spare capacity. And the question is, what are they going to do with it? Are they going to choose to hold it back as this is, as this article that we’re reading now is intended to do in order to keep that Brant price what is hopefully 80 to 90 to what they hope to be $100, or is it more likely that they’re going to start pulling back on their cuts as maybe some of this maybe the weakness second half of 2024 comes out? I don’t know if if I’m OPEC, I’m I’m probably not adding to the market. I’m probably not cutting though $80 Brant is enough to sustain. We do know the Saudis are spending like crazy attempting to to go through a kind of a a de oil vacation in terms of their economy and ripping their economy from being. [00:11:38][48.4]

Stuart Turley: [00:11:38] Their billions on high oil. Yeah. [00:11:39][1.6]

Michael Tanner: [00:11:40] Being only reliant on oil. So maybe higher oil prices for them actually gives them the revenues to slowly wean themselves off oil. So it is maybe a little bit of a catch 22 In order to in order to make more money, they got to, you know, hold oil back so that they can continue the transition. So it’ll be interesting to see what happens. I don’t think any and again, anybody who tells you they know what’s coming is lying to you. But, you know, really, when we speak of what’s going on with oil prices, it’s what’s going on in the Red Sea right now. [00:12:07][27.0]

Stuart Turley: [00:12:07] Oh, absolutely. Now, here’s let’s go to the Red Sea tensions. But I’ll tell you, the warmonger. Oh, shit. What’s his name? Graham. Oh, Lindsey Graham. Oh, my gosh. He’s calling. He’s actually calling for us to bomb Iran’s oil field. Let’s no step away from the microphone, dude. [00:12:28][20.3]

Michael Tanner: [00:12:28] We are away from the nuclear weapons. [00:12:30][1.6]

Stuart Turley: [00:12:31] He says, No way. You do not have the football. Step away from Biden’s side. We do not need to do that. No. Okay. Let’s go to the here’s where Red Sea tensions threaten diesel market. Michael Yep. Here is a whole nother side of the hoodie is out there playing around with them drones. These are not your drones that your dad used to fly around. These are some serious kind of drones. The below average distillate stocks suggest an uptick in manufacturing construction next year. Iran has got another million barrels coming online, a million barrels per day, and then so does India and so does China. So, oh, yeah, guess who’s buying the diesel and gasoline and products from China? Dunkin Donuts in California. [00:13:27][56.6]

Michael Tanner: [00:13:29] As they say. No. [00:13:30][0.6]

Stuart Turley: [00:13:30] So and then, well, why did President Z show up and why was it clean? I don’t know. [00:13:36][6.1]

Michael Tanner: [00:13:37] He just wanted to meet our favorite governor. [00:13:38][1.3]

Stuart Turley: [00:13:38] I thought he wanted some hairstyle tips. But when we take a look at the it’s just it’s weird. On how diesel is now also they’re peeling some of the dark fleet off for diesel tankers. It’s weird. [00:13:53][14.4]

Michael Tanner: [00:13:53] Yeah. I think this is a this is a really niche problem that we we’ve had bad diesel prices right now. I mean if anybody remembers back in the in the early 2000 diesel was was always less than gasoline it’s that now market is now flip and where diesel is trading and for consumers at the pump much higher than gasoline which is why food inflation continues to stay high. We think that food inflation has to do with food commodity prices. It does, but it also has to do with transportation costs and with the majority of food being transported by truck. High diesel price is only going to inflate that supply chain a lot more. So anything any you know, the diesel market is already teetering. Anything that impacts that is going to be good. So I think while we won’t see a oil price freak out, what we might see is slight, almost food inflation or flight supply, slight supply chain inflation as we move forward. If I agree, diesel distillate problem becomes any stronger. [00:14:53][59.6]

Stuart Turley: [00:14:53] I couldn’t agree more. And the other side of that coin though, is is the number one user of what was our you like before our podcast. I was just flipping a coin. Michael was starting to do a hula, was. [00:15:06][12.2]

Michael Tanner: [00:15:06] Flipping a coin. [00:15:06][0.5]

Stuart Turley: [00:15:07] Oh, you’re oh, flipping a coin. Here we go. Heads or tails? Heads. [00:15:10][3.0]

Michael Tanner: [00:15:11] Heads. I win. Tells you lose. [00:15:12][1.0]

Stuart Turley: [00:15:12] It’s a. Of the table. Okay, so the the hula hoop dance threw me for a loop. Let’s go to the next story and I’ll get back on this. EU countries get Russian oil Exempt Exemption. Brussels allowed Slovakia to export fuel from the to the Czech Republic for another year. I’ll tell you, Ursula over there, our good buddy Ursula, who’s in front of the European Union, is just about like a dictator. It’s just. Lukoil has warned that in response to discriminatory laws and other unfair, biased political decisions regarding the refinery and big gas, it’s going to view of its business strategies. This getting involved in all of the countries stuff. The EU is facing some serious backlash from putting their finger in the pies that they shouldn’t be in. [00:16:10][58.0]

Michael Tanner: [00:16:11] And they continue to shoot themselves in the foot. [00:16:12][1.7]

Stuart Turley: [00:16:13] So Blatter is going to get the consumer is Blatter’s going to get the consumer. So what did they do? [00:16:20][6.9]

Michael Tanner: [00:16:20] What did they. So I will move over to finance here, guys. Markets do not react well today down, S&P down 1.5 percentage points. NASDAQ tumbles 1.5 percentage point, Bitcoin up 3.8 percentage points, currently trading $43,600. Crude oil initial initial strength during the day, if only because of some decent EIA of some decent EIA numbers. You know, that benchmark unfortunately did turn negative when we did hear of that EIA Brant let me go pull it up here I’m pretty sure it was a little bit it was a little bit negative. We didn’t necessarily cover the API numbers yesterday. You know, we saw from the Strategic Petroleum Reserve we did see a 2.9 million barrel build. So the strength we had early in the trading session and specifically coming from I think a lot of that Red Sea activity halted a little bit. That game, we were all the way up just a little bit above $75. EIA report drops specifically saying a 2.9 million barrel building. We saw some weakness heading into that afternoon session. We currently sit 7361 as we record this about 545 here on the 20th. Brant oil currently trading down about six and 6/10 of a percentage point 7141. But again, that’s from our 3 p.m. open. It was actually up on the day. Natural gas prices, $2.42. That’s about a 8/10 of a percentage point off session high. So, you know, as we move into the end of the year to a lot of the activity for oil and gas operators has kind of calmed down a little bit. I would be shocked if we saw a deal happen between now and the end of the year. But I think every you know, I highly recommend people go check out our deal spotlight that we’re releasing. I will be releasing episode two here shortly. We’ll probably do it Monday or something. I don’t know what we’ll do Monday at Christmas, So I don’t know what we’re going to end up doing here. We’ll probably release it at some point next week. You guys have plenty of time to watch it. Go check that out. You know, that’s going to kind of cover the latest M&A deal that happened. Otherwise, I think everything’s going to be fairly chilled to the end of the new year to where we’re coming up close here. This you know, I don’t think this is our last show for the year, but this is we’re going to have very little news heading between now and the end of the year. People are starting to wrap up a little bit. So it’s you know, we almost made it, folks. You got you got ten days left. [00:18:32][132.2]

Stuart Turley: [00:18:33] But you know what, Michael? We have about ten podcast. The kids have gotten getting ready to go out here. Oh, absolutely. [00:18:41][7.9]

Michael Tanner: [00:18:41] You have too much content you think you want. If there’s one thing if you’re looking for an excuse to avoid your in-laws, we’ve got plenty of excuses for you. We’ve got podcasts. [00:18:50][8.8]

Stuart Turley: [00:18:51] Or. [00:18:51][0.0]

Michael Tanner: [00:18:52] For you. [00:18:52][0.4]

Stuart Turley: [00:18:52] Yes. So we got some really good ones. Michael, I am interviewing a border expert tomorrow. He’s been on the border. He is law enforcement. He’s energy. He is one cool cat. It’s an hour. Okay. And then George McMillan will be live Friday. We’re going to go live to my LinkedIn on Friday and he’s going to be there. He’s got a war correspondent and another doctor that those guys were just on redacted this morning. So, I mean, this is a big deal. Energy is at stake with the invasion going on. No, absolutely. We’ve got so it’s Kyle Reese is one of them. We have Arenas La Paula Glover and Bradberry Ralph Rodriguez, John Farrell, co-founder of World Database. I mean, we got a packed set of stuff coming out for you to avoid your in-laws. [00:19:47][54.6]

Michael Tanner: [00:19:48] Yeah, so we got plenty of stuff when we want to avoid. Just just fire up the Introduce Me podcast. We’ll probably also drop a couple of year in review shows where we kind of cover maybe our top segments. We’ll get the team working on that. But with that, guys, we’re going to let you get out of here. Finish up your Thursday, you’ll hear, you’ll hear somebody tomorrow. Probably will drop somebody tomorrow. In terms of an interview podcast, you know, our weekly. On Saturday, and we will get you. We will not be coming to you on Monday. That is actually Christmas. I think our first show will probably be be Tuesday or Wednesday of next week, probably Wednesday. So, you know, keep keep with us, guys. We’ll keep you informed for Stuart Turley on Michael Tanner, We’ll see you next week, folks. Have a merry Christmas. [00:19:48][0.0][1149.2]

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