Russia Oil Rev DOUBLES`

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OPEC to increase oil production from July, International Monetary Fund predicts

Highlights of the Podcast

00:00 – Intro

01:24 – OPEC to increase oil production from July, International Monetary Fund predicts

04:21 – Reuters Estimates: Russian Oil and Gas Revenue to Double in April

05:53 – Mountain Valley Pipeline largely completed, company says

09:08 – Markets Update

10:24 – Tesla shares jump 13% after Musk says company aims to start production of affordable new EV by early 2025

11:44 – 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’s going on, everybody? Welcome into the April 25th, 2024 edition of the Daily Energy News Beat stand up. Here are today’s top headlines. First up OPEC to increase oil production from July. This is according to the International Monetary Fund. Interesting. Interesting. Interesting. Next up Reuters estimates Russian oil and gas revenues to double in April. Absolutely incredible story. Then we will kick to Mountain Valley pipeline largely completed. This according to recent statement. We’ll dive into that. I will then quickly cover what happened in the oil and gas markets. We did see oil prices fairly steady over the day, mainly due to a couple conflicting notes. We did get the EIA crude oil inventory numbers. And, I have to talk a little bit about Tesla shares actually jumping 13% after reporting 9%, decrease in revenue and really forecasting pretty terrible guidance. We will dive into all that and a bag of chips, guys. As always, I am Michael Tanner. Stu is out on assignment, so I’m holding down a solo show. We’ll go ahead and kick it off here. [00:01:24][68.8]

Michael Tanner: [00:01:24] OPEC to increase, oil production from July. International Monetary Funds predicts. Reading straight from the article here, the International Monetary Fund fully expects OPEC and its partners to start increasing oil production gradually from, July. A transition that’s set to catapult Saudi Arabia back into the ranks of the world’s fastest growing economies next year. Here’s a quote from Amy Marty, the lender’s mission chief to the kingdom, that she said in an interview with Washington. We are assuming the full reversal of cuts is happening at the beginning of 2025, which is super interesting. This view sort of explains why the IMF has been extremely bullish on Saudi Arabia, if only because the more oil they pump, the more oil they make. They go on to say under the latest outlook revealed the IMF improved next year’s growth estimate for the world’s biggest crude export exporter, that being Saudi Arabia, 5.5% to 6%, second only to India among major economies in an upswing that would be among the kingdom’s fastest over the past decade, the fund projects Saudi oil production will reach 9 million barrels of oil per day by early 2025, up from where it is currently, which is about 9 million barrels, which is about the lower end of their rung. We do know that Saudi Arabia has stated they have production capacity somewhere around 12 million barrels a day, and they’ve rarely ever been at levels that they are right now. You’re part of the reason they feel like they’re going to continue to increase is because they’re spending hundreds of billions of dollars right now to diversify their economy that, you know, mainly accounts for about, you know, according to this article, 90% of its exports. The nice part is, U.S. monetary policy won’t end our meeting again directly in the article, respected U.S. monetary policy won’t necessarily be a drag on Saudi Arabia, but usually moves in lockstep with the Federal Reserve to protect its currency peg to the dollar. So the IMF thinks OPEC cuts are going away. That’s going to be very interesting. Oil prices. We all know that the spare capacity, debates surrounding Saudi Arabia has been way up in the air. They claim 12 other people claim not. Who knows really the answer. The point is, if they do plan on increasing oil production to fund all of this stuff that’s going on right now, you are going to see that reflected in lower oil prices. And part of the reason, as I’ve mentioned in prior, shows, why I think they’re cutting and cutting and cutting is mainly to put the short squeeze on Biden. I think, again, they were making progress under the Trump administration in some of the foreign policy aspects that they were hoping to do with President Biden. Some of that is taking a step back. We’ve seen some of the geopolitical instability right now. I firmly believe what we’re seeing is the short squeeze on Biden. So if they do start increasing oil production, it’ll be interesting to see what that happens. From an economics standpoint, you know, Bloomberg Economics is predicting an expansion about 1.1 in 2024, for Saudi, which is fairly interesting. But again, I think this is, you know, the IMF, saying that the cuts may go away. I don’t know if they have a source, but they must, because that’s a very bold claim. So we’ll be watching what happens with OPEC very quickly. [00:04:20][176.2]

Michael Tanner: [00:04:21] We’ll move on. Now. Reuters estimates Russian oil and gas revenue to double in April. Top three bullet points here Russia is expected to pocket 14 billion in April from oil and gas. Russia’s oil and gas revenues have slumped by about 23% last year compared to 2022. But Reuters is also estimating that Russian revenues in the oil and gas in 2024 are going to be 30% higher, or 50% higher than 2022, compared to 2023. So absolutely incredible right now. This month, Russia, again, reading from the article, is estimated to, pocket about $14 billion, and that’s about double where it was last year from about $7 billion. You know, it’s pretty interesting. You know, Reuters estimates that, again, that 30% increase between 2023 and 2024, would be kind of record. Mounts for Russia. And I give this as stu. If stew was on this, he would say this is again evidence of the sanctions aren’t working. We know that Russian crude is banned by the West, but they’ve been able to find buyers like China, India and now more recently, Russian LNG, which had begun arriving in a bunch of different European ports, has continued to flow. They’ve been able to basically decolonize their economy and continue to sell, clearly sell their product on the open market by making these direct trades. So this is again proof that sanctions don’t necessarily work. And you have to think about the second order effects as we continue to roll this out. [00:05:52][91.5]

Michael Tanner: [00:05:53] Next up mountain Valley Pipeline largely completed says company today in a statement. This has been a six year battle, but the Mountain Valley pipeline is largely completed, the company said Monday in requesting federal approval for it to be placed into service, though there is a little bit of work left to remains. In a quote from the company, they asked the Federal Energy Regulatory Commission or for an order by May 23rd that would allow it to begin operations. The quote from Matt Fingerling, deputy general counsel for the joint venture Building the natural gas pipeline, was quoted in that letter filed late Monday to the Ferc docket, quote, Mountain Valley Pipeline has completed all the water body and wetland crossing project wide, which is absolutely unbelievable. As I mentioned, this ends a near six year battle to get this project approved, where has been completely marred in controversy, lawsuits and in multiple parts of really what came down to in this environmental impact study that took place. Russell Chill home, he’s the co-director of the Protect Our Water Heritage Rights Coalition. Very interesting. You know, they’re appalled. We are watching our worst nightmare unfold in real time. Yes. Your worst nightmare. Lower energy prices. So just remember that, we, you know, to put us back what happened six months ago. Congress ended up passing, a law declaring that it would basically be of natural interest, which ended up got this out of this litigation spark that it was in, remember, you know, for years there was things like the Sierra Club, the, The peoe, W, H, R and R and again, the that’s the Protect Our Water Heritage Rights Coalition. Everybody was litigating against this mountain that about last springs not six months ago I believe about ten months ago congresswoman passed a law declaring the Mountain Valley pipeline in natural interest. And basically what that law did was basically limit any future legal action and fast track to completion of what’s going to be about a 303 mile ferry pipeline. Awesome. For the people of West Virginia and Southwest Virginia. You know, pipelines are something we need. We can’t continue to ship things by rail. We have to find other ways. And mainly pipelines are the safest way to transport this type of material. It’s going to bring a little bit lower prices to the region, which we like. Another quote here before we move on the Mountain Valley pipeline is critical infrastructure project that is essential for our nation’s energy security, consumer affordability and ability to effectively transition to a lower carbon future. And we look forward to bringing this carbon, project into service. Great for the Mountain Valley pipeline. We absolutely love it. [00:08:16][143.3]

Michael Tanner: [00:08:16] We’ll go ahead and move over to finance quickly, but we’ll go ahead and ahead and pay the bills. Guys, as always, thank you for checking us out. World’s greatest website Energy News. Become the best place for all your energy and oil and gas news. All the news and analysis that you are hearing and will hear is brought to you by that website. We appreciate, Stu in the team making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gas business. Check us out. Again in the description below you can find links to all of the different timestamps, articles, everything you need to know, to keep up if you want to jump ahead and see how Tesla did jump behind, see, you know, go back and listen to Russian episode. You could do all of that. You can also check us out online dashboard.EnergyNewsBeat.com the best place for all of your data and energy news combo. Again, we have a lot of stuff coming down the pipeline, so we appreciate everybody there. [00:09:08][51.4]

Michael Tanner: [00:09:08] Let’s move into oil prices now. We got oil settles lower as U.S business activity cools and concerns over the Middle East. It’s a little bit of a misnomer. Oil did actually settle fairly flat. We were actually Amy was a little we were about a half a percentage low. Excuse me, as we trade today, but we were a little bit all over the place, really. What happened was the EIA crude oil inventory numbers. And we can throw that up on the screen right now. 6.4 million barrel draw from the Strategic Petroleum Reserve. That really set a floor on prices. Mainly over the fact that a lot of what’s going on the Middle East has settled down a little bit. So super fascinating there. As again, we look at what happened on the EIA number 6.4 million barrel draw from the crude oil reserves, we did see about 800,000 barrels purchased for the Strategic petroleum Reserve. We did see total motor gasoline drop about 600,000 barrels. We did see distillate down by 1.3 or, excuse me, up 1.6 million barrels. And we did see total stocks, including the SPR, down 3 million barrels. Domestic production continues to sit at 3.1 million barrels per day, which is up about 900,000. In barrels from a year ago and flat week over week. So yeah. Yeah, kind of sets that sets that price floor with that big draw. And we will continue to kind of see as things roll up. All right. [00:10:24][76.0]

Michael Tanner: [00:10:24] So let’s go to the last one here. Tesla shares jumped 13% after Musk says company aims to start production of affordable new EVs by early 2025. I had to bring this up because we spent a lot of time on yesterday’s show talking about kind of a terrible earnings report that Tesla had. They reported a 9% drop in quarterly revenue. They also predicted in their, plans to shareholders that it’s not going to be great. They’ve kind of re, iterated this pessimistic outlook for 2024. Yet today, we’ve seen a 13% increase in the overall stock price, mainly due to the fact that they’ve announced that they’re going to really go after the affordable care market, which is going to is something that’s going to be absolutely, fascinating to watch out as, again, we talked about China coming in and, and really kind of being a race to the bottom in terms of price for the EV markets. Tesla is going to enter that game. If I’m again, as I mentioned yesterday, if I’m going to bet on anybody, it’s going to be Elon Musk. But they are pushing hard for that. And the stock has moved upwards in that. So, you know it was down 40% to over the year. We’ve gotten a little bit of that back today. So very interesting for Tesla. they continue don’t bet against Elon as much as you know I think people love to bet against him. I wouldn’t bet against him if only because he’s proven time and time again to do this. So if there’s going to be a race to the bottom on price with China, I vote Tesla. [00:11:43][78.8]

Michael Tanner: [00:11:44] That’s really all I’ve got, guys. I went ahead and then held it down these last two days. We’ll see Stu back in the chair on Monday. Don’t you worry. We appreciate everybody who’s check this out. Again just check us out. Dot energy newsbeat.com. But with that, I’ll let everybody get out of here. Get back to work. Finish your Thursday. We will be off tomorrow. Go ahead and check out our latest deal spotlight with Jeff Cremo. Great. We covered the champion x Schlumberger roll up. So super fascinating. We love Jeff. Appreciate him on the show. Go check out him at Jeff Cremo esg.com. Otherwise guys we’ll let you get out of here. Have a great Thursday. We will see you back in the chair on Monday. [00:11:44][0.0][685.8]

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