Monday, 1/24/2022
Several energy markets could face immense volatility on geopolitical volatility emanating from Russia and Iran. While U.S. natural gas markets are expected to be much more stable than last year and are relatively insulated from the outside world, world crude and LNG markets could see severe volatility amid Western-Russia tensions and Omicron-related lockdowns in China. We discuss these developments in the latest edition of the newsletter, as well as domestic and international natural gas trends.
1) California’s “Duck Curve” and Natural Gas
2) U.S. LNG: 2021, and 2022, and Asian coal-to-gas switching
3) Commodity Outlook
Wednesday, 11/03/2021
We expect significant price volatility for all commodities as the world tries (struggles?) to find its post-COVID footing. There are some initial signs of slightly stronger U.S. domestic crude production, but we’re skeptical that volumes will significantly expand.
In this edition of the newsletter we discuss how the stars may be aligning for natural gas storage assets; why crude withdrawal from SPR would (likely) have only limited impacts on oil prices; Permian consolidation; and ERCOT coal’s twilight years. We also discuss some new LNG developments. Cheers, and thanks for reading.
1) Natural Gas Storage Assets – Coming Back to Life?
2) Implications of an SPR Withdrawal
3) Permian Entities Consolidate
4) Coal in ERCOT: Which Plants are at Highest Closure Risk?
Bonus Article: New Chinese LNG contracts, and Will European Offtakers Pull U.S. LNG Projects Across the Finish Line?
Monday, 10/11/2021
A combination of supply-chain shortages, persistent underinvestment in hydrocarbon production, lower wind production, hot summer temperatures, and robust macroeconomic demand are all pushing energy prices higher. Brent and WTI crude prices are trading near 3 and 6-year highs, respectively, while LNG price markers such as JKM and TTF are trading at or near historical highs.
We continue to regard the probability of triple-digit crude prices as low, particularly since high prices could produce severe demand destruction risks. Natural gas prices could see significant volatility in overwinter temperatures and wind production. We expect very high utilization rates to continue for the O&G complex and the broader energy sector.
In this edition of the newsletter, we discuss our crude outlook, a brighter outlook for greenfield North American LNG projects, ERCOT’s surprising summer wind generation, and a special report of new jet passenger travel patterns,
1) Why There (Probably) Won’t be an Oil Crisis
2) Brighter Skies for Greenfield North American LNG Projects
3) ERCOT Summer Wind Generation: What Happened?
4) Special Report: New Jet Passenger Travel Patterns
Tuesday, 07/27/2021
The “Delta” COVID variant and vaccine hesitancy are weighing on U.S. commodity demand. Still, we think the macroeconomic recovery will continue, albeit at a slower pace than previously hoped. Barring the emergence of a new variant that escapes vaccine protections, 4Q2021 should be much better than the same period last year.
In this edition of the newsletter, we delve into the weeds a bit, as we take a deeper look at U.S. East Coast refineries, EU methane emission regulations and their impact on U.S. LNG exports, and important developments in battery storage.
1) Refiners’ Delight: 2021 Looking Good
2) EU Methane Standards and U.S. LNG Exports
3) CAISO Curtailment Falling on Batteries?
Thursday, 06/10/2021
It’s been a surprisingly tumultuous month for the U.S. O&G complex, as ESG trends shift from the abstract to the concrete. In this edition of the newsletter we discuss how crude supply is increasingly uncertain, coal’s declining fortunes in ERCOT, and our assessment of Driftwood LNG’s ability to take FID in 2021:
1) Volatility: Shifting from Crude Demand to Supply
2) Coal Begins to Exit ERCOT; Renewables Rise
3) Will Driftwood LNG Take FID This Year?
Tuesday, 05/19/2021
The shale boom has driven U.S. ethane exports to historic levels. Find out what we think is next for this evolving industry
Monday, 04/20/2021
In this newsletter we assess fractionation balances at Mont Belvieu/Sweeny, Corpus Christi’s role in crude oil exports, and select topics in natural gas, coal, and electricity markets:
1) Is Mont Belvieu NGL Fractionation Overbuilt?
2) Good Times for Corpus Christi and Moda Midstream: Crude Export Terminal Roundup
3) Coal is Back, But for How Long?
4) NGPL Gets a New Partner
5) Bonus Short Article: ERCOT Summer
We were very alarmed in April 2020. Take a look for yourself at our very first newsletter and evaluate for yourself how our analysis held up. A year later, we are much more optimistic. Barring the emergence of a new variant or some other exogenous event, overall energy demand will get better before it gets even better. This is the one-year anniversary of our Monthly Newsletter. We’re very grateful for your continued support: your readership, comments, and questions mean a lot to us.
Tuesday, 03/23/2021
In our March newsletter, we discuss potential uncertainty surrounding 2021-22 U.S. Propane exports, changing NGL/olefins storage dynamics at Mont Belvieu and growing importance of ESG in LNG. Let us know what you think!
Thursday, 03/05/2021
What a month. The Enkon Team was shut down for almost a week on electricity and water outages, and (just for fun) some burst pipes. We’re happy to say that we’re back to normal operations again, but we’ve been forced to delay the Newsletter for a week. We hope that you were as safe and well as could be during Winter Storm Uri.
For this month’s articles, we’re discussing Uri’s implications, as well as some medium and long-term trends in the industry.
1) Winter Storm Uri: commodity implications
2) LNG, Seasonality, and Natural Gas Price Volatility
3) Three Scenarios for 2021 Oil Markets
4) The Infrastructure Bill: What to Watch
Monday, 1/04/2021
Happy New Year! Check out the monthly newsletter for January 2021
Tuesday, 12/22/2020
In this abridged version of the newsletter, we discuss four key topics: news that a more transmissible COVID variant is spreading in Europe (and probably elsewhere), vaccine development, a spotlight on LNG, and our 90-day commodity outlook.
Bloomberg reports that some LNG cargoes may face cancellations in early 2021 due to a lack of available vessels. Shipping capacity constraints could potentially emerge next year for all O&G products, not just LNG. We will be watching maritime shipping markets very closely in 2021.
We wish you and your family a wonderful holiday season and new year. Here’s to 2021, may it be better for us all.
Monday, 11/30/2020
We are happy to report some bona fide good news. The U.S. appears set to receive at least two vaccines for COVID, with potentially more on the way. Our initial read is that the U.S. could have manageable COVID caseloads by June – and potentially even sooner. By this time next year, life in the U.S. could approximate “normal” conditions, again, with little to no constraints on mobility – or energy demand.
Our monthly newsletter consists of four deep-dive thought pieces, as well as commodity specific critical insights and news. This month, we’ve included a special feature on U.S. LNG’s competitiveness compared to Qatar and Australia.
1) Good tidings of great joy: COVID vaccines inbound
2) U.S. LNG exports to China and India, and international coal uptake;
3) Oil demand, autos, EVs: A California case study
4) Engie scraps its agreement with NextDecade over methane emissions
Monday, 10/19/2020
We hope you are safe and well. COVID cases are surging in Europe and parts of the United States. While there is little appetite for additional lockdowns, COVID is expected to be especially brutal this winter, which could lead to economic/energy curtailments. We will be following COVID developments very closely, including on our Insights page.
Our monthly newsletter consists of four deep-dive thought pieces, as well as commodity specific critical insights and news. This month, we’ve included a special feature on COVID and winter petroleum products demand.
1) U.S. Ethane Prices in for an uptick?;
2) Winter is Coming: COVID and Petroleum Products Demand;
3) U.S. LNG: Looking Ahead to Next Summer… and Beyond;
4) A post-Coal U.S. is in sight
Monday, 09/21/2020
We hope you are safe and well. COVID cases appear to be rising across most of the United States and Europe as the Northern Hemisphere exits summer. Another COVID wave would pose a real risk to commodity demand, and we will be following COVID developments very closely. Tropical Storm Beta seems like it will spare the U.S. O&G complex, as of this writing. If warranted, we will post a market update on Beta’s effects on our Insights page.
Our monthly newsletter consists of four deep-dive thought pieces, as well as commodity-specific critical insights and news. This month, we’ve included a special feature on the Appalachian Basis.
1) Propane is in for a Tough Time
2) Will U.S. Natural Gas Exports Balance Henry Hub?
3) U.S. Crude Exports are Just OK, For Now;
4) Appalachian Basis: Pipeline Capacity Likely Sufficient;
Tuesday, 08/25/2020
This edition of our monthly newsletter contains key insights on crude oil, natural gas, LNG, and NGLs. Each newsletter consists of three deep-dive thought pieces, as well as commodity specific critical insights and news. This month, we’ve included a special feature on fractionation rates and some initial thoughts on the hurricanes threatening Houston, New Orleans, and other areas in the U.S. Gulf Coast.
1) Is U.S. production coming back at $40/barrel?
2) Fractionation Rates Crash Ahead?
3) South Texas Natural Gas Fundamentals and Corpus Christi LNG;
4) European Storage and U.S. LNG: Cautious Optimism
Tuesday, 07/28/2020
This fourth edition of our monthly newsletter contains key insights on crude oil, natural gas, LNG, and NGLs. Each newsletter consists of three deep-dive thought pieces, as well as commodity-specific critical insights and news. This month, we’ve included a special feature on U.S. crude exports.
1) Crude products demand: hard ceiling, soft(er) floor, narrowing range;
2) Benchmarking Bakken NGLs and Midstream Infrastructure;
3) 50,000 feet view of LNG; and
4) Natural Gas Storage & Downside Risks
Wednesday, 06/17/2020
This third edition of our monthly newsletter contains key insights on crude oil, natural gas, LNG, and NGLs. Each newsletter consists of three deep-dive thought pieces, as well as commodity-specific critical insights and news. This month, we’ve included a special feature on U.S. crude exports.
1) U.S. LNG exports: A Rough Patch, or a Bleak Future?;
2) Special Feature: U.S. Crude Exports/VLCC Check-In;
3) Update on Appalachian NGLs; and
4) OGEC: An Idea Whose Time Many Never Come
Wednesday, 05/13/2020
This second edition of our monthly newsletter contains key insights on crude oil, natural gas, LNG, and NGLs. Each newsletter consists of three deep-dive thought pieces, as well as commodity-specific critical insights and news. This month, we’ve included a special feature on Permian NGLs.
1) 2020: The Year of Shut-ins – Will Gasoline Save the Day?;
2) A Special Feature: Benchmarking Permian NGLs;
3) LNG at 50,000 feet; and
4) Reports of Coal’s Demise – Greatly Under-exaggerated?
Friday, 04/10/2020
This first edition of our monthly newsletter contains key insights on crude oil, natural gas, LNG, and NGLs. Each newsletter consists of three deep-dive thought pieces, as well as commodity-specific critical insights and news.
1) OPEC+ and the Coronavirus;
2) Corpus Christi Oil Exports; and
3) U.S. – China trade tensions and LNG
…. Read more