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LONDON/DUBAI, Jan 2 (Reuters) – OPEC+ plans to hold a meeting of its Joint Ministerial Monitoring Committee (JMMC) in early February, though an exact has not been decided, three sources from the alliance said.

OPEC+, which comprises the Organization of the Petroleum Exporting Countries and allies led by Russia, usually holds such meetings every two months to monitor the implementation of its production agreements.

The committee brings together leading countries within the alliance, including Saudi Arabia, Russia and the United Arab Emirates.

At its last full ministerial meeting on Nov. 30, OPEC+ agreed to voluntary output cuts totalling about 2.2 million barrels per day (bpd) during the current quarter, led by Saudi Arabia rolling over its current voluntary cut.

The JMMC meeting is expected to assess the deal’s implementation in January, one of the sources said.

Last month, OPEC member Angola quit the group because it was unhappy with the production quota it was given.

(Reporting by Ahmad Ghaddar and Alex Lawler in London, Maha El Dahan in Dubai Editing by Barbara Lewis)

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HOUSTON (Reuters) -Oil prices dipped during the first session of 2024, with economic headwinds from interest rate jitters unraveling gains from worries that tensions in the Red Sea could disrupt supplies.

Brent crude was down 62 cents, or 0.8%, to $76.42 a barrel at 12:01 p.m. ET (17:01 GMT). U.S. West Texas Intermediate crude was down 72 cents, or 1%, at $70.93.

Prices rose briefly in early trade after attacks on vessels in the Red Sea by Houthi rebels over the weekend. Both benchmarks rose around $2 before retreating.

“The reality is there are no material supplies of crude oil at risk and no supply has been disrupted. To the extent of vessels transiting around the horn of Africa, it adds to costs but we are not losing supply”, said John Kilduff, partner with Again Capital LLC.

U.S. helicopters on Sunday repelled an attack by Iran-backed Houthi forces on a container vessel operated by Danish shipper Maersk in the Red Sea. An Iranian warship had entered the Red Sea on Monday, according to the semi-official Tasnim news agency.

Denmark’s Maersk and German rival Hapag-Lloyd said their container ships would keep avoiding the Red Sea route that gives access to the Suez Canal.

A wider conflict could close crucial waterways for oil transportation.

Meanwhile, traders tempered expectations around interest-rate cuts, which pressured oil prices along with a stronger dollar and softer equity markets.

Stock prices slipped as the yield on 10-year U.S. Treasury notes, the benchmark for global borrowing costs, briefly reached a two-week high, indicating falling demand for Treasury bonds.

A Reuters survey of economists and analysts predicted Brent crude would average $82.56 a barrel this year, up slightly from the 2023 average of $82.17, with weak global growth expected to cap demand. Geopolitical tensions, however, could support prices.

In China, investor expectations of economic stimulus measures rose after manufacturing activity shrank in December for a third month, government data showed on Sunday.

Any such stimulus could boost oil demand and support crude prices.

(Reporting by Georgina McCartney and Noah BrowningAdditional reporting by Florence Tan and Sudarshan VaradhanEditing by David Goodman, Mark Potter, Barbara Lewis and David Gregorio)

 

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Jan 2 (Reuters) – Chevron CVX.N said on Tuesday it would take non-cash writedowns on U.S. oil and gas production, primarily in California, and for securing abandoned wells and pipelines in the U.S. Gulf of Mexico that had been previously sold.

The U.S. oil major expects to take non-cash, after-tax charges of between $3.5 billion and $4 billion in its fourth quarter 2023 results, it said in a securities filing.

The filing did not break out the allocations of writedowns between the two areas. The loss recognized against its former offshore Gulf of Mexico properties are related to abandonment and decommissioning obligations.

The company and others have contested claims requiring they pay to secure wells, pipelines and platforms that were sold to Fieldwood Energy and others. Fieldwood filed for Chapter 11 bankruptcy in 2020 and its restructuring plan left costs for abandoning the offshore properties on their former owners.

“We believe it is now probable and estimable that a portion of these obligations will revert to the company (Chevron),” the oil major added in the filing. It expects to undertake the decommissioning activities on these assets over the next decade.

The impairment of California assets was due to what it called continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans.

“California’s policies have made Chevron’s investments in its home state riskier than investing in other states,” Andy Walz, Chevron’s president of Americas products, wrote to state officials in November. “In the past year, we have cancelled several projects due to permitting challenges.”

The company, however, expects to continue operating the affected assets for many years to come, the filing said. Chevron produces about 75,000 barrels of oil and gas per day in fields in Central California, the company’s website said.

Wall Street analysts have trimmed their fourth-quarter earnings estimates for Chevron as a series of operational setbacks are poised to bleed into 2024.

Before Tuesday’s filing, Chevron was expected to report a lower fourth quarter profit of $6.68 billion, or $3.27 a share, according to financial firm LSEG. That compares to a profit of $7.85 billion, or $4.09 a share, in the same quarter a year ago.

(Reporting by Arunima Kumar in Bengaluru; additional reporting by Gary McWilliams in Houston; Editing by Krishna Chandra Eluri and Jonathan Oatis)

 

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Interest payments threatening to eat up half the tax receipts may be the only disciplinary force left to deal with Congress.

By Wolf Richter for WOLF STREET.

The total US national debt spiked by $1.0 trillion in 15 weeks since September 15, to $34.0 trillion, according to the Treasury Department’s figures this afternoon. In the seven months since the debt ceiling was lifted, the national debt spiked by $2.5 trillion.

These are huge gigantic numbers that are piling up as a result of the incredible hard-to-fathom daredevil reckless shake-your-head deficit spending by Congress. Congratulations, America! We made it, $34 trillion!

Since the beginning of 2016, the total debt has spiked by $15 trillion, or by 80%! This stuff is just breathtaking.

The total debt of $34 trillion is composed of two types of securities: $26.9 trillion in marketable securities that are traded in the Treasury market and held by investors around the world; and $7.1 trillion of nonmarketable securities that are held by US government pension funds, the Social Security Trust Fund (my discussion of the Trust Fund, income, outgo, and deficit in fiscal 2023), and individual investors with “I bonds” and “EE savings bonds.”

Marketable securities: $26.9 trillion, up by $2.24 trillion in the seven months since the debt ceiling. They’re held and traded by the global public, from regular folks diving into T-bills to money market funds, bond funds, banks – oh lordy – insurance companies, other financial and nonfinancial outfits, including Apple and central banks.

The Fed’s holdings of Treasury securities are now down to $4.8 trillion, after having unloaded about $1 trillion of them under QT.

Foreign investors are holding on to what they have had in dollar-terms, about $7.6 trillion. But the mix of countries is changing, with China and a few others unloading, while the big financial centers and a few other countries are loading up. But their share of the incredibly ballooning debt has plunged from over 32% in 2015 to just 22% now.

Nonmarketable Treasury securities: $7.1 trillion, up by $300 billion in the seven months since the debt ceiling. They’re not traded in the market; they’re held by US government pension funds, the Social Security Trust Fund, etc. A portion of these nonmarketable securities are the I-bonds and EE savings bonds that are held by American individual investors.

Interest payments as percent of tax receipts is the crucial metric that depicts the burden of this debt. In other words, to what extent do interest payments eat up tax receipts, and what’s left to pay for other stuff?

The measure of tax receipts used in the metric is total tax receipts minus contributions to social insurance and some other factors. It’s what’s available to pay for regular government expenditures, including interest expense. The ratio  of interest payments to tax receipts spiked to 35.7% in Q3.

History shows that when interest payments eat up close to half of the tax receipts, the rest of the world gets very nervous about the US debt, and then finally Congress gets more serious about dealing with this issue, but not until then.

Ultimately, interest payments threatening to eat up everything else appear to be the only disciplinary force left that is able to pressure Congress to do something beyond grandstanding, but obviously not yet.

 

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OPEC’s Influence on Oil Prices To Remain Significant In 2024

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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 in to the first episode of 2024 here on the Daily Energy News beat. Standup. It is a gorgeous as I mentioned, Wednesday, January 3rd, 2024 out have never it’s going it’s hard get used to say that’s due but great to be with this guys I’m your humble correspondent Michael Tanner coming to you from an undisclosed location here in Dallas, Texas. Joined by the executive producer of the show, the purveyor of the show and the director, publisher of the world’s greatest website, EnergyNewsBeat.com. We’re backstage. Have a good break. [00:00:47][31.7]

Stuart Turley: [00:00:47] Oh, it was unbelievable. That spends time with my grandson, my daughter, my son and my spouse. [00:00:53][6.0]

Michael Tanner: [00:00:54] EJ and I got a little bit of a son in Florida, One of the last places you could still get sun this time of year is interesting. I’ve never done a Christmas in Florida, but definitely would like to do it again. [00:01:03][9.8]

Stuart Turley: [00:01:04] So we’re going to have a fantastic year. Buckle up. It’s going to be energy in there tainment. [00:01:10][6.3]

Michael Tanner: [00:01:11] It’s going to be absolutely unbelievable. We have an absolutely great menu lined up OPEC. We’re going to keep it a little more general today. Markets are sort of, you know, as we record this on on Tuesday, the second things are still kind of warming up for the new year. We do have markets open a little bit, but, you know, tomorrow is really going to kind of be the big day when everything starts rolling out. So today’s stories a little more general. We’ll start out with OPEC’s influence on oil prices to remain significant in 2024. Next up, Qatar Energy. ExxonMobil moving forward, global pass, LNG work, and then finally, energy market outlook. What can we expect in 2024 still? Then talk me out quickly, cover what’s going on in the oil and gas markets, what we’ve seen kind of over the past week and a half, and then quickly discuss the Willow project. That was kind of the big finance news that got announced recently. ConocoPhillips announcing their final investment decision to go ahead and move forward with that project. So we’ll opine on that a bit and then we’ll let you guys get out of here, get your new year started. Right, guys, Again, as always, we appreciate you checking us out and all the news and analysis you are about to hear analysis in quotes. But so for what it’s worth, you can find that all energy news, but not in the best play. [00:02:24][73.6]

Stuart Turley: [00:02:25] entertainment. [00:02:25][0.0]

Michael Tanner: [00:02:26] Or energy and oil and gas news doing 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 we are gearing up for Nate. We will be there live. Recording Podcast February 2nd. No. What is it? Sixth, seventh, eighth and ninth. Come check us out. We’re going to be there going to multiple podcast. Good morning. If you’d like to be on the podcast, reach out to us Nape at Sandstone, or we’ll have the other description below who will get everybody access to that. You can. We’ll have a little form, you will do it. We’ll do it form style. So we, we just, we come up with this stuff live. We love it. So we’ll have a little form. Check that out. If you want to be on the podcast, it’ll be great. We’re going to have it. It’s going to be 24 seven. Run it, guys. You know it’s going to be unbelievable. Check us out, Nate. You can also find us this podcast. Wherever you get your podcast, you can visit the website Energy News, BET.com to also see all of the show notes. You can check out the description below to see timestamps, links to the articles, everything that you need to know about the episode. You can check us out. Also on YouTube, we’re going to push YouTube in 2024 so dashboard that energy news become. That’s our oil and gas data platform. A lot of good stuff upcoming on that so we’ll be ready to see but I’m going to Brett those too. Where do you want to begin? [00:03:44][78.0]

Stuart Turley: [00:03:44] Hey, let’s start off with our buddies over there at OPEC, and I want to give a shout out to the Irene Slav. What I absolutely love Irene is she is an absolute hoot. Arena slam it substack dot com. OPEC’s influence on oil prices to remain significant in 2024. Mike, I just want to read these three bullet points real quick. Fears lower demand and rising non-OPEC supply threatens the OPEC cuts. Bullet point number two U.S. oil producers took everyone by surprise this year, adding 1 million barrels in daily output. Though U.S. oil, OPEC’s share in the global total may have fallen because of the cuts, but it’s still pretty solid at 27% of the total. This is going to be the only time that I quite honestly may disagree a little bit with Irena. No, I’m going to talk to her next Monday on the international show with our Mayan calendar. And it is a great group. But David Blackmon and everybody else, damn it, Nina, here’s where I disagree a little bit. Oh, pick is losing the ability to manipulate prices because of the Dark Fleet and BRICS. BRICS is now really trading outside of the. Petrodollars. And there’s nothing in this next year that’s really going to show that BRICS is going to have their pricing matrices priced into the dollar, that you’re going to see the demise of the U.S. dollar kicking in with the pricing matrices stabilizing out under BRICS, That’s still yet to be determined, but they don’t have that handled yet. [00:05:39][114.3]

Michael Tanner: [00:05:41] Yeah, I mean, obviously the dynamics of OPEC plus have have stumbled a little bit with the addition of BRICS, if only because of the fact that there seem to be different. I love what I mean A does here is points out that, you know, the non-OPEC that first bullet point, non-OPEC supply threats are almost more important than the cuts happening elsewhere of OPEC. Now, you have to take us off the table. As she aptly points out, we’ve done incredible job of adding barrels to the market, a little over 1 million barrels per day added back to the market. That’s one thing you won’t hear Joe Biden talk about on the campaign trail. You know, he’ll he’ll he’ll leave that convenient fact out that he was responsible for adding 1 million barrels of oil to the U.S. market. Kind of crazy. [00:06:26][45.3]

Stuart Turley: [00:06:27] It is crazy. But let’s give a shout out to our great oil and gas industry because the regulatory legislation, through regulatory actions taken by this administration have been horrific and the consumers getting it in the drive thru track, they’re getting hit in the back of the head with a shovel so hard by this administration’s regulatory actions, their price for energy is gone through the roof and they get hit in the back of the head with the shovel. They’ve got to put their eyes back in their head, go around. [00:06:55][28.7]

Michael Tanner: [00:06:56] It’s a horrifying I say it tongue in cheek because the cost of energy has also then risen, even though oil And we even though we’ve added 1 million barrels to the market, energy costs for everybody have risen. So it’s you know, I’m you know, we can thank Hinds 57 for that. So I think OPEC’s you know, opec+ is. [00:07:15][18.9]

Stuart Turley: [00:07:16] Large is a mud. [00:07:16][0.6]

Michael Tanner: [00:07:18] OPEC plus I think is really in an interesting position. They can continue to cut, cut, cut, cut, cut. And as we sit here right now, oil’s 70 bucks, not even some I mean, not even a fool. But, I mean, the only thing that me and I hate to say this, the only thing it’s going to save oil prices. And what I mean, save I mean, get it back to the 90, $100, $120 oil prediction that everybody had. I mean, let’s be very clear here. Everybody, you know, quarter three of 2023, every talking head was saying 90 to $100 oil. As we stand today, in 2024, oil is 70 bucks. And the only thing that can possibly get us there is a full blown Lindsey Graham style war with Iran, which nobody wants and we should avoid at low cost. [00:07:59][41.1]

Stuart Turley: [00:08:00] That man needs to be run out of town. [00:08:02][2.0]

Michael Tanner: [00:08:03] He’s been lobotomized. He’s been. [00:08:05][1.9]

Stuart Turley: [00:08:05] Lobotomized. What a chatter had. Lindsey Graham being a Republican is absolutely a chatter head. And Lindsey Graham, if you’re listening to this show, you’re invited to come on this podcast. I will fly out and talk to you. I want to find out what you’re thinking. I want to look under your toupee and find out. [00:08:24][18.8]

Michael Tanner: [00:08:24] I’d prefer to talk to his stunt double. I mean, he’s been lobotomized, but that’s beside the point. Point is, outside of that horrific thought of war with Iraq, direct conflict with Iran. [00:08:33][9.2]

Stuart Turley: [00:08:34] But Iran. Iran had their destroyer go into the Red Sea and oil burned for 12 hours. And so now you and I have talked about this last year. You can see wars break out and it really does not impact it. Here’s where I’m going to say it does impacted if Lindsey Graham gets his way because the I Iran is shipping everything that they can not in U.S. dollars you eliminate their man oil and then have. Are you raising your hand? [00:09:10][36.1]

Michael Tanner: [00:09:10] I’m with you. No I’m just saying I’m with no point of the matter is I’m you know, all that being said do markets open today at at, you know, six, 7 a.m. this morning markets open 730. What happened or excuse me, 830 hour time? We’ve seen an absolute tumble from 7 a.m. up at 70, a little north of 7350 all the way to currently trading here. I mean, it’s about 11:30 a.m. here on Tuesday, 7064. [00:09:36][25.4]

Stuart Turley: [00:09:38] And hang on, I think this is some of the politicians they’re doing some insider trading in. They called up and they had the stock market reduce it so they can short the market. [00:09:50][12.8]

Michael Tanner: [00:09:51] I mean markets are down significantly. Don’t don’t get me wrong and come on you you they’re all just excellent traders. Oh, all right. Very interesting. We love I read to go check this one out. What’s next? [00:10:04][12.8]

Stuart Turley: [00:10:05] Let’s go to guitar ExxonMobil moving forward with Golden Pass LNG. We’re. This is huge. I always love seeing guitar and other foreign countries buying our great assets. Japan has bought a lot of the LNG facility so they can nail down theirs. They just announced that last month as well too. Then you have total energy buying enough for two nuclear reactors. They have bought in the ERCOT, but you’re not going to see that. I’ve got a bet with you right now. We’re going to write this down. I bet you can’t find it in their earnings report coming up. But it’s going to be interesting to see where they bury that. Now, let’s go to this article. State owned Qatar owns 70% stake in the Golden Pass project with capacity more than 18 M TPA and offtake 70% in the capacity on long term contracts. 30% is only what ExxonMobil do. You know that that is horrific for energy security for the U.S.? [00:11:19][74.0]

Michael Tanner: [00:11:20] Yeah. No, it’s it’s it’s one of the few areas where I agree with our favorite Senator, John Fetterman. I mean, he’s he was all over the U.S., the the Nippon Steel taking over U.S. Steel. He was all over. I mean, he he’s obviously come out of whatever sickness he had. And he’s like he’s like thinking it’s crazy. [00:11:37][16.8]

Stuart Turley: [00:11:37] Hey, do you think on a conspiracy theory he actually signed up for the chip for me? LONG No, I’m kidding. But I don’t know. I mean, wow, where did this come from? [00:11:47][9.8]

Michael Tanner: [00:11:47] You’re on the chip. If anyone’s on the chip, it’s you. [00:11:50][2.7]

Stuart Turley: [00:11:50] Thank you. Thank you. Thank you. [00:11:52][1.1]

Michael Tanner: [00:11:52] Very little we could point to. About six months ago, Duke got the chip involved. It’s been off the rails since, but no, it’s. It’s very fascinating. And the government and specifically the Federal Trade Commission is going to have the they’ve got a they’ve got their hands full right now. I’ve heard rumblings that they don’t like this Permian consolidation going on and that the Exxon Pioneer deal, the Chevron Hess deal and all of these other ones are going to get a huge scrutiny. Look, from from the FTC from the standpoint of is this to do they think this is too much consolidation? I do believe it is, but we can discuss that in another look. The point is the problem is they’re too busy worrying about if Chevron should buy has to American companies. When you’ve got Japan coming in, buying up all our stuff. I mean, we like Japan. I got nothing against Japan, but we should be owning U.S. Steel. You’ve got Qatar energy coming in, swooping up. You know, one of our Sabine Pass is one of our most important infrastructure, transit for natural gas. And now we’re going to take the biggest export terminal available near that. And we’re going to hand it over to Qatar because, oh, yeah, they’ve got our best interests at heart for sure. I know guitar has never been there, but. [00:13:02][70.8]

Stuart Turley: [00:13:03] I’m going to keep my passport updated so I can move there. Here’s one of the things that please. [00:13:07][4.2]

Michael Tanner: [00:13:08] Oh, yeah. Shooting this show at midnight. [00:13:10][1.6]

Stuart Turley: [00:13:10] Yeah, we’ll see. We’re off and running, baby. Hey, one of the things, though, is the Venezuela and Ghana item going off because that impacts Chevron and it has big time and it’s not being covered in the main news. It’s like, ho hum. I mean, Venezuela, come on. It’s overtaking all of our American oil companies that are out there drilling in Guyana, some of the largest areas in the world. [00:13:43][32.4]

Michael Tanner: [00:13:43] Yeah. And I don’t think we’ll that’ll actually I mean, it’s more you know, they still I’m not too worried about the Venezuela call. [00:13:51][7.3]

Stuart Turley: [00:13:51] Maybe he’s meeting with Russia. He’s signed the deal he’s done some more things. So you’re gonna. [00:13:59][8.1]

Michael Tanner: [00:13:59] Coordinate that meeting between Putin and Mastro. [00:14:02][2.4]

Stuart Turley: [00:14:03] Actually is kind of funny you mention that because Armando asked me this morning if I was on the plane with the Venezuelan and Brazilian presidents and Putin. And I didn’t say, by the way, if it did happen, Putin would have said that the US sanctions don’t matter because he doesn’t mind. It’s mind over matter. [00:14:22][19.2]

Michael Tanner: [00:14:22] Maybe mind over matter. All right. What’s next? [00:14:24][1.9]

Stuart Turley: [00:14:25] Okay, let’s go to the last one, the energy market. I love this one. From what logic? What logic did an outstanding job of this article is outstanding from reassessing the energy economics around the world. COP 28 really threw in some ahead busting going around in there. The world is waking up. The natural gas is going to be needed. I did talk to Hugo Kruger. That podcast is coming out. He’s out. He was in Paris when I interviewed him and he’s out of South Africa. South Africa is almost all coal, so King Coal is back in big. We’re going to see a resurgence of nuclear. Everywhere except in the U.S. you’re seeing the big interconnect between Denmark and England that has now come in. England is now importing big amounts of energy from France. And nuclear. Nuclear resurgence is coming back into France. They are now rebuilding some of their. They’re only at 50% capacity on their nuclear fleet. So you’re also going to see a huge just like you’re seeing with those other energy thread that we had running in today show the natural gas rolling back in into being very, very important to the global market. China this morning had just put out that they have gone from 20 billion in their export in their capacity for natural gas to 50 billion. I have to go through the numbers again, but it’s incredible. Took them 20 years to get to 30. Took them three years to get to 40. And they’re going to be there in a year to get to the 50. Unbelievable amount of natural gas China is putting out now. [00:16:25][120.1]

Michael Tanner: [00:16:25] I mean, I agree with everything you said. I think it’s going to be a real interesting year for energy to be a great year for energy. I think we’re going to see again and we’re going to see natural gas continue to win is the fuel of the future despite everybody’s you know, despite all the cops, you know, where’s COP 30 this year or next year? [00:16:43][17.8]

Stuart Turley: [00:16:43] Don’t know and don’t care. I don’t know that it’ll actually happen. And I’ll go into that in a different podcast. But there’s a lot of things happening on that numbering that and that’s a teaser. You heard it here second know anyway. [00:16:59][15.2]

Michael Tanner: [00:16:59] Now absolutely love it. Well, you got anything else? [00:17:01][2.3]

Stuart Turley: [00:17:02] Oh, no. We’re going to have a great year. Michael. I want to give everybody a shout out for a thank you for everyone that gave us great feedback. Michael, I want to give you a shout out because your deal spotlight is finally coming to fruition and our feedback on your expertise is phenomenal. Great job. [00:17:23][20.8]

Michael Tanner: [00:17:24] I don’t know who you’re talking about, but. [00:17:25][1.4]

Stuart Turley: [00:17:26] It’s your dog. [00:17:26][0.3]

Michael Tanner: [00:17:27] Nice job if you really need it. Sandy over there. But no, I appreciate it. Great stuff coming out. We’ve got some some cool new sponsors. We’re excited to announce some awesome projects within it. And if you are looking to do any sort of content marketing, if you guys are needing to push whatever company you got, give us a call, guys. Questions and energy Newsweek.com. And one. [00:17:47][20.5]

Stuart Turley: [00:17:47] Last thing. [00:17:48][0.3]

Michael Tanner: [00:17:48] Well, we’ll help you up. What do you got? We got finance up next. [00:17:51][2.4]

Stuart Turley: [00:17:51] Oh, yeah. But Nate is where deals happen and energy News Beat is where Rich happens. [00:17:57][5.6]

Michael Tanner: [00:17:58] Oh, man, you love, right? [00:17:59][1.4]

Stuart Turley: [00:18:00] I love that one. Even if I am their money. After you. [00:18:03][3.5]

Michael Tanner: [00:18:04] All right, Billy, I think there’s you know, as we mentioned, we’re recording this about 1130 here on the second we we’ve seen markets specifically S&P 500 drop about a half a percentage point. NASDAQ tumbling about 1.4 percentage points, mainly off the back of what was an insanely strong 2023. I think everybody saw recession coming, yet we finished 2023 visibility last week, very close to market highs. You know, we’re a little off that today. We’ve seen ten year yields rise by about two percentage points. Dollar index up about three or four quarters of a percentage point. We’ve seen Bitcoin now crossing 45,000. That’s up 1.9 percentage points as a result of all that market strength. We’ve seen crude oil, as we mentioned overnight, weakness or overnight strength mainly on the back of of the Iran U.S. shadow conflict going on right now in the Red Sea. But all that seem to be wiped away with with the strong dollar. Oil now currently down about 1.6 percentage points from that opening here on the second 7081 as we currently trade Brant oil only down about a half a percentage point, 7781. Natural gas actually trading up a little bit relative to where it opened or relative to the close yesterday, but still down overall on the day, $2.56 currently. So they do see natural gas slightly pop a little bit. I thought there was two things that were interesting to do. One, well, we heard over what was really a quiet, you know, last week, to be honest, we would have come live if there was anything crazy that happened. Really, the only thing that I saw that drops to was was the ConocoPhillips announces the final investment decision as a go for as a go for the Willow Project, which is located on Alaska’s North Slope, that this is following the approval Biden of the NEPA Trans or the NEPA submission done and by the state legislature and federal government kind of approving this permit. There’s a there’s a couple interesting. You know, we had I you know, both senators, Dan Sullivan and Lisa murkowski who were excited and they say they’re grateful for the Supreme Court for being able to spend that out. You know, this is. Estimated to do at peaks do 180,000 barrels of crude oil per day. They’re estimating somewhere between eight and 17 billion, a new revenue for the federal government, state of Alaska and the state in Alaska, Native communities. You want to talk about that, that you you want to talk about UBI. Alaska has been giving oil checks out for a while. They’re about to go up because talk is going to come in. This is one of the you know, they’re you know, we could talk maybe in another podcast about some of the last untouched. Just huge amount of reserves that are available is pretty much we found it all. I mean, not that we didn’t know it was here but there’s we’re running out of these type of locations. This is one of them. The Ninth Circuit appeals going ahead and denying that plaintiff’s request for an injunction. So they’re able to go ahead and say, let’s move forward. That’s going to be a big projects. Do we know you’re you’re you’re sensitive and you love the North Slope up there? [00:21:01][176.7]

Stuart Turley: [00:21:01] I do. My granddad, he’s one of the chief geologists that discovered it up there. And I got some really cool pictures of him stepping off the old helicopters. And I love me some Alaska. [00:21:12][10.8]

Michael Tanner: [00:21:13] Like, one of these days you’ll be bear country will literally be Alaska. Right now it’s not. [00:21:18][4.3]

Stuart Turley: [00:21:20] Got an overpopulation of bears hanging around. [00:21:22][2.3]

Michael Tanner: [00:21:22] Yeah. No, absolutely. So what else you got, Stu? [00:21:25][2.4]

Stuart Turley: [00:21:26] Oh, it’s just going to be a fantastic year, dude. [00:21:27][1.8]

Michael Tanner: [00:21:28] It’s going to be great. We appreciate everybody staying with us. We’re excited for 2024. We’re back. Lots of energy. We’re ready to go. We’ll be with you all through the craziness in 2024, guys. With that, we’ll let you get out of here, get back to work. Have a great week, guys. We’ll see you tomorrow, folks. [00:21:28][0.0][1235.5]

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Tesla has always been willfully lousy in reporting delivery details. Today it made the obfuscation worse.

By Wolf Richter for WOLF STREET.

Tesla’s global deliveries in 2023 jumped by 38% to about 1.81 million vehicles, a new record and exceeding its guidance of 1.8 million vehicles. Deliveries in Q4 jumped by 11% from the prior quarter, and by 20% year-over-year, to 484,507 vehicles, a new quarterly record.

Tesla has always been willfully lousy in reporting delivery details. It only reports global deliveries, not US deliveries, and it lumps its models together into two categories: formerly “Model S/X” and “Model 3/Y.” All other automakers report deliveries for the US and by model.

For Q4, Tesla made that situation even worse by changing the category Model S/X to “Other Models,” and including the Cybertruck in it, along with the Model S and the Model X.

Tesla’s delivery obfuscation is particularly infuriating these days because everyone wants to know how Cybertruck production and deliveries are coming along. And Tesla said nothing.

Nevertheless: “Other Models” deliveries in Q4 (Model S, Model X, and Cybertruck), jumped by 44% from the prior quarter, and by 32% year over year, to 22,969 vehicles in Q4. By contrast, for the whole year, deliveries rose only 3% to 68,874 “other models.” So the Cybertruck has begun to move the needle in that category at the end of the year.

Tesla just started delivering the Cybertruck in November, and production ramp-up will remain tough according to Musk himself, so not a lot of Cybertrucks were produced and delivered in Q4. But Model S and Model X are slow sellers, so any surge in deliveries in that category would mostly be due to the Cybertruck.

Model 3/Y deliveries jumped by 39% in 2023, to 1.74 million vehicles. In Q4, deliveries rose 10% from the prior quarter and by 14% year-over-year, to a record 461,538 vehicles. The Model Y has become the #2 bestselling vehicle model in the US in 2023, by registrations, behind the Ford F-150 pickup truck.

Globally, China’s BYD powered past Tesla for the first time in Q4, reporting deliveries of 526,000 battery electric vehicles globally in Q4, dethroning Tesla as the #1 EV maker.

But for the whole year, BYD still lagged behind Tesla with 1.6 million battery electric vehicles (BYD also sells hybrids, which are not included here). BYD sells EVs in China and other parts of the world, including Europe, but is not yet selling them in the US (it has been assembling and selling electric buses in the US for years).

Rivian’s deliveries in Q4 jumped by 73% year-over-year to 13,972 (down a bit from the blowout Q3 numbers); for the full year, deliveries jumped by 146% to 50,122 vehicles, spread across the R1T pickup, the R1S SUV, and the EDV electric delivery van.

Rivian, the startup, outsells Ford’s electric pickup truck by a wide margin: through Q3, Ford delivered only 12,260 Lightning trucks through Q3 (Q4 results coming this week) as it is struggling with a revolt by its anti-EV dealers.

Meanwhile, US legacy automakers are fighting revolts by their anti-EV dealers.

Ford disclosed just before the holidays that about half of its dealers refused to make the investments to sell and service Ford’s EVs and cannot sell EVs and won’t sell EVs in 2024 though 2026; they’ll stick to selling only Ford’s ICE models, according to the Detroit Free Press.

A year earlier, Ford said it had enrolled 1,920 of its nearly 3,000 dealers in the EV program for the initial certification period of 2024 through 2026, but some dealers have since then backed out of the program, and the total is now down to about 1,550 dealer. The next certification period will be in 2027.

Ford said that, despite this refusal of half of its dealers, about 86% of the US population lives within 20 miles of a dealer that can sell EVs.

This is an outright revolt by Ford dealers against EVs, they’d rather not invest anything and just sell ICE pickup trucks at big-fat profit margins.

GM has run into the same type of anti-EV dealer revolt but it cracked down – rather than giving its dealers that kind of leeway; it has used buyouts to get rid of its anti-EV dealers.

Half its Buick dealers have agreed to be bought out by GM after they’d refused to get in the EV program; they gave up their Buick franchise and won’t be able to sell Buicks anymore at all, leaving GM with just 1,000 Buick dealers. GM said that nearly 90% of the US population will live within 25 miles of a Buick dealer.

GM had already bought out about 20% of its Cadillac dealers in 2020 because they refused to make the investments to sell and service its EVs.

Ford and GM have made big investments in EVs. Ford has the Mustang Mach-E and the F-150 Lightning. GM has several new EV models now entering the market or scheduled to enter the market in 2024, after ending production of the old Bolt and Bolt SUV in 2023. Stellantis dropped the ball and doesn’t really have anything on the market in terms of EVs – just announcements.

But the investments in EVs that Ford and GM have made are hard to translate into sales if their dealers refuse to sell them. Even dealers that are part of the EV programs are dogged by sales staff that are not always into selling EVs; some of them would rather sell ICE trucks and SUVs because they’re familiar with them and have confidence in selling them, and they shift customers that way.

Ford and GM are limited by state franchise laws; they must sell all their vehicles through their dealers; they cannot sell directly to consumers. They can let consumers “order” vehicles online, but the deal must ultimately go through a franchised dealer. And in terms of the classic way of selling, where the dealer is handling it from beginning to end: If dealers or their staff don’t feel like selling EVs, Ford and GM cannot sell EVs. This is an unimaginably messy problem.

Tesla was able to get exemptions franchise laws in many states, back when it was a nothing and when franchised dealers, who are a powerful lobby at the state level, still knew that EVs would never work and would never amount to anything, and that Tesla would never be a competitive threat. So Tesla can sell directly to consumers in most states, and it does not have dealers, and doesn’t have to mess with a dealer revolt.

Even Tesla cannot sell directly to consumers in about a dozen states, though it can have showrooms. In those states, Tesla has to sell vehicles from a location outside the state, such as completing the deal and delivering the vehicle in a neighboring state, or at its stores on tribal land. Not having to mess with franchised dealers has turned into another strategic advantage for Tesla.

The high supply figures of EVs that have been touted in the media as proof of the slowdown of EVs are strictly for the legacy automakers. And the examples of Ford and GM show what kinds of problems they face trying to sell EVs through their dealers. But Tesla, Rivian, and Polestar don’t have dealers, and don’t report inventories; and they’re the majority of the EV market – Tesla alone has 57% of the EV market by registrations. So “EVs piling up on dealer lots” only applies to a minority of EVs, those sold by the legacy automakers.

In terms of the stocks, Tesla and Rivian have both made it into my pantheon of Imploded Stocks, where they belong because Tesla is still hugely overvalued, and because Rivian is a huge cash-burner that will need lots of new funding, and if it doesn’t get new funding, it might not make it.

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(WO) – Eni announced the introduction of gas into the Tango Floating Liquefied Natural Gas (FLNG) facility moored in Congolese waters.

Gas introduction has been achieved in record time– only twelve months after the final investment decision. This is a key milestone for the Congo LNG project, which encompasses the adoption of new technologies and a strong synergy with existing producing assets. Following completion of the commissioning phase, Tango FLNG will produce its first LNG cargo by the first quarter of 2024, placing the Republic of Congo on the list of LNG-producing countries.

The Tango FLNG facility has a liquefaction capacity of about 1 Bcm per year and is moored alongside the Excalibur Floating Storage Unit (FSU), using an innovative configuration called “split mooring,” implemented here for the first time in a floating LNG terminal.

Congo LNG will enhance the gas resources of the Marine XII permit and achieve approximately 4.5 Bcm per year of plateau gas liquefaction capacity through phased development and with a target of zero routine gas flaring. A second FLNG facility with a capacity of about 3.5 Bcm per year is currently under construction and will begin production in 2025. The entire volume of LNG produced will be marketed by Eni.

Eni has been operating in Congo for 55 years and is the only company active in the development of the country’s gas resources. Eni currently supplies gas to the Centrale Électrique du Congo (CEC), which provides 70% of the country’s power generation capacity.

Source: Worldoil.com

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Maersk has paused shipping through the Red Sea until further notice after one of its vessels came under attack from Houthi militants over the weekend.
The decision by the Danish shipping giant extends a 48-hour pause implemented in the immediate aftermath of the assault.
Repeated attacks by Houthi militants on vessels in the Red Sea have raised concerns about disruptions to global trade through the key waterway.

Maersk will pause all shipping through the Red Sea and Gulf of Aden until further notice after one of its vessels came under attack from militants over the weekend, the company announced Tuesday.

The decision by the Danish shipping giant extends a 48-hour pause implemented on Sunday in the immediate aftermath of the attack.

“We have made the decision to pause all transits through the Red Sea / Gulf of Aden until further notice,” the company said in an update to customers.

Oil prices were volatile Tuesday, jumping more than 2% earlier in the day on Red Sea tensions but later giving up those gains. U.S. crude was last down 82 cents, or 1.14%, to trade at $70.83 a barrel. Brent lost 68 cents, or 0.88%, to trade at $76.36 a barrel.

Helima Croft, head of global commodity strategy at RBC Capital Markets, said oil prices do not reflect the increase in tensions because traders are not convinced that a major supply disruption is on the horizon.

“The market is basically saying ‘we will wait and see until something happens,’” Croft told CNBC on Tuesday. “But it’s really getting much more serious every day,” she said of tensions in the region.

The container ship Maersk Hangzhou came under attack over the weekend by four small boats crewed by Houthi militants, who are based in Yemen and backed by Iran.

U.S. Navy helicopters responded to a distress call from the Maersk Hangzhou and fired on the militants after coming under attack, sinking three boats and killing the crews, according to the U.S. Central Command.

“An investigation into the incident is ongoing and we will continue to pause all cargo movement through the area while we further assess the constantly evolving situation,” Maersk said in its Tuesday update.

Vessels will be rerouted and continue their journey around the Cape of Good Hope in Africa in cases where this makes sense, the company said.

Houthi militants have repeatedly attacked vessels in the Red Sea in recent weeks in response to the war in Gaza. The attacks have raised concern about disruptions to global trade through the crucial waterway.

Some 12% of global trade and about 3 million barrels of crude oil pass through the Red Sea per day, according to RBC Capital Markets.

Source: Cnbc.com

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(Bloomberg) – Russia’s biggest liquefied natural gas (LNG) producer began production at its Arctic LNG 2 project — despite U.S. sanctions — in a move that could provide some relief to the tight global market for the fuel.

The first train of the Novatek PJSC-led Arctic LNG 2 project “has actually started operating,” Russia’s Deputy Prime Minister Alexander Novak said in an interview with state-run Rossiya 24 TV channel on Wednesday. “We’re expecting the first shipments from this project in the first quarter of next year.”

The facility, located on the Gydan peninsula above the Arctic Circle, is Novatek’s second large-scale project and is crucial for Russia’s goal to more than triple its LNG production to 100 million tons by the end of the decade.

U.S. sanctions imposed on the project’s operator in November put that ambitious goal at risk. Novatek sent force majeure notices to some LNG buyers earlier this month. Foreign partners of the project declared force majeure on their participation in the venture as well, Kommersant newspaper reported earlier this week, citing unidentified people in the Russian government.

Novatek holds a 60% stake in the operator of the Arctic facility. TotalEnergies SE, China’s CNPC and Cnooc, and a consortium of Japanese trading house Mitsui & Co. and Jogmec each hold a 10% stake.

Exports from Arctic LNG 2 could add to the total pool of supply as the world — and Europe in particular — becomes increasingly dependent on the super-chilled fuel to meet its energy needs. Europe still imports significant amounts of Russian LNG, even though pipeline flows have largely ceased.

Arctic LNG 2 will have three production trains, with the ability to produce 19.8 million tons per year in total. The first is expected to reach its design capacity of 6.6 million tons in the first quarter of 2024, while the second and third production lines are expected to start in 2024 and 2026 respectively.

Shipping constraints. The force majeure doesn’t necessarily mean that there will be no shipments from Arctic LNG 2, according to Energy Aspects Ltd.

Exports will depend on the extent to which Novatek or another Russian entity can deliver volumes from the project with the limited pool of potential buyers willing to ignore U.S. sanctions, said Jake Horlsen, a senior LNG analyst at Energy Aspects in London. “Freight is therefore likely to be the limiting factor for Arctic LNG 2 exports,” he wrote in an emailed note last week.

There were 21 ice-class tankers ordered for the project, including six vessels at South Korea’s Hanwha Ocean Co., formerly known as Daewoo Shipbuilding & Marine Engineering, and 15 LNG carriers at Russia’s shipyard Zvezda. The latter delayed the completion of the first five vessels amid Western sanctions that banned some tanker equipment supplies to Russia. Novatek expects to receive those tankers in 2024 instead of 2023.

Three other ice-breaking LNG carriers built by Hanwha Ocean and chartered by Japan’s MOL were also scheduled for delivery in 2023, but it wasn’t clear whether Arctic LNG 2 received them. The remaining three vessels due to be built by Hanwha Ocean were ordered by Russia’s leading shipping company Sovcomflot, but the contract was terminated amid sanctions.

In June, Novatek Chief Executive Officer Leonid Mikhelson said the contract with Hanwha Ocean was being transferred to another owner. Tankers “are under construction, the issue was with Sovcomflot,” he said, according to a report in the Kommersant newspaper.

Source: Worldoil.com

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