Proposed Directors of Tirupati Graphite explain why they have requisitioned an GM. Watch the video here.
Morning all
All we are witnessing is a technical sell off of oil. In a world where the oil paper market ( financial trading ) for oil is 30 to 50 times bigger than the physical oil market - and 65% of traded paper barrels are by algos and cmputer systems that operate on technical triggers rather to make traders money rather than on inventory balances on physical supply and demand - there will be days when oil price movement is not supported by fundamentals. This price movement will trigger equity algos and all of a sudden attitudes and narratives turn negative.
Physical supply and demand are healthy.
Opec+'decision is being viewed incorrectly in my opinion.
You could see Opecs decision to roll out the cuts as, be it cautiously, as a negative and a trigger for over supply concerns and the sell off but Opec are not incompetent.
I believe that its a positive sign that they see the global physical demand for oil healthy and the roll out of cuts will coincide with demand growth as the months progress.
I expect healthy inventory data overvghe next few days with trigger a reversal in the oil and equities falls.
This is just a few of those days.
Mark
Morning meoryou.
As well as the increased aviation fuel, sustainable aviation fuel that BP are at the cutting edge and market leader of and already producing, all be it limited, at present. Demand for SAF massively exceeds supply and will only grow over next decade with BP set to benefit.
Natural gas prices collapsed after the highs of 2022/23, I sure you remember the chant of the dependent class ' heat or eat '. Here's another interesting future growth story that could see gas rocket.
AI revolution will be boon for natural gas, say fossil fuel bosses
AI data centres’ need for reliable power supply set to soar
The growth of AI is expected to be good news for America’s shale sector. AI revolution will be boon for natural gas, say fossil fuel bosses.
A surge in demand for electricity to feed data centres and to power an artificial intelligence revolution will usher in a golden era for natural gas, producers say.
AI’s soaring energy needs will rise well beyond what renewable energy and batteries can deliver, executives argue, making more planet-warming fossil fuel supplies crucial even as governments vow to slash their use.
https://www.ft.com/content/1f93b9b2-b264-44e2-87cc-83c04d8f1e2b
Looks extremely positive going forward.
Mark
Hi Spights
Thank you have a marvellous weekend.
Many stalls and false dawns with BP over recent years but we are certainly out of the darkness. With dividend compensation every quarter for the psychological, emotional roller coaster, or counselling, vindication and treasure is just over the horizon. Staying the course now is essential. The markets will move towards our position sooner or later and then....Onwards and upwards.
Recent Venezuela / BP comments were negative. Here is a positive update.....
BP ($BP) received a two-year license from the US Treasury Department to develop gas fields in Venezuela alongside Trinidad and Tobago's state energy gorup NGC, Reuters reported Wednesday, citing Trinidad's Energy Minister Stuart Young.
The license allows the companies to negotiate and develop the Cocuina-Manakin gas fields in the sanctioned country. British oil and gas giant BP had previously suspended negotiations for the fields pending US authorization.
The US has been issuing individual authorizations to companies after it did not renew a wider license allowing Venezuela to export its oil and receive investments.
Price (GBP): £489.10, Change: £+2.10, Percent Change: +0.43%
Onwards and upwards.
Mark
Thanks meoryou
Absolutely right you never know. Murray did give his opinion at Q1 results. BP is not looking to re-list primarily in the US following Sawan's announcement at Shell to consider relisting if the value gap is not closing by year end '25. Total TTE are going through a consultation process on the same, to report back to their shareholders in September.
My opinion, for what it is worth, is while It is true that the valuation gap between European and US peers clearly exists. I don't believe a simple primary re-listing will make much difference to this gap as both BP and Shell are already available to US investors now with ADR shares.
So apart from increased market liquidity from the broken ftse, what would attract US funds to rush to invest in either BP, Shell or Total when you currently do not. ?
The valuation gap, in my opinion, has a lot more to do with the mind set of US energy investors. They see US peers prioritising oil and gas - with some investment into alternatives - and European companies being a mishmash of investments into unproven high cost, gambles. While this may be unfair and prove to be good investments, the higher investment in renewables and "green energy" projects complicates the understanding of European O&G companies.
The fact that the managements intend on attempting to close the valuation gap a priority is good to hear. What may change this is if Labour removes the tax incentive benefits of rebates for investment under their EPL and by becoming domiciled in the US opens up US tax advantages then as you say. Never say never.
Chat next week post Opec. Hope you have a great weekend.
Mark
Hi meoryou
I hope all's well. The RD in RDS must of meant something too. I believe that Stammers EPL will be more bark than bite. At the commencement of the EPL, BP reveiwed all their plans for the £18Billion North Sea centred investment programme until 2030.
Looney, then saidthat none of BP’s planned £18bn UK investments would be mothballed if a windfall tax were introduced but times and leadership have changed.
I expect Exxon, Chevron and Shell's decision to exit the North Sea after 55 years will give the Socialists - that's the Labour Socialists not the Tory Socialists - something to consider like not biting the hands that feed you.
The B in BP may have some value but it's not priceless and neither are the north sea investment or the UK renewable energy projects compulsory.
Political talk is cheap though.
Mark
Morning Spights and all
I hope you are well. Thank you for the interesting Opec article. US crude production in 2023 reached record levels. This will not be increased or maintained this year, for a number of reasons. Last year, US increased production would have undermined the effectiveness of any cuts by increasing US market share. We are now at a level where the Opec+"cartel are in control. With demand set to seasonally fall Q3, they are positioning themselves to be an agile, proactive, nimble organisation that with monitor the market and make adjustments as and when needed to control supply and price as long as they stay united.
Opec have modernised. They are no longer the old staid, monolithic organisation. Slow to agree and slower to act. There is an oil supply crisis coming over the next 2 - 3 years and under MBS they are positioning themselves to take full control and advantage. Oil equities, such as BP, will also be the winners. ££££
Have a great day.
Mark
You are so welcome meoryou.
Below is an elloboration of my post and some meat on the bines. For clarity, figures quoted are not recent.
Why do API and EIA data sometimes differ so much from each other?
Thr. U.S. crude oil inventory data released by the API was + 5.32 million barrels, while the OVERNIGHT EIA data was + 1.64 million barrels, a difference of 3.68 million barrels. Both THE API and EIA measure U.S. oil inventories, and both are very authoritative agencies, but why are the API and EIA data sometimes so different?
Chu Liang, a senior crude oil analyst at futures brokerage Schwab Intime, said the main reasons are the following:
First, the statistical sample is different. EIA is the commercial crude oil inventory of all U.S. companies, while API is the crude oil inventory data of all API members and some non-members. EIA's statistical scope is larger than API's.
Second, API is a private organization, and the extraction of statistical data is submitted (or not submitted) by member initiative resources. According to the U.S. Department of Energy, all companies holding 1,000 barrels of crude oil are required to submit inventory changes. Failure to do so will result in a penalty of nearly $3,000 per day.
Third, the import and export data of the US are lagging behind, which may or may not be included in the inventory. If there is a large import and export flow in the current period, it may cause a large deviation.
From the above three reasons, we can find that there may be deviations in the short term (weekly), but in the long term (a month), the data between the two may be very close, and there may be no difference between the two in the long term (a quarter).
However, the API official explanation for the above differences is not due to the above reasons, but because the weekly inventory survey data can only be accurate to 90% (EIA is the same), the other 10% need to be estimated, the reason for the difference is EIA and API estimates.
Just for information. Nothing to add.
Mark
Evening meoryou
An excellent question and one that had me scratching my head for a long while before my nerdism compulsed me to dig deeper.
We know that both the American Petroleum Institute (API) and the U.S. Energy Information Administration (EIA) both provide weekly crude oil inventory reports. Both weekly oil inventory reports are just estimates and indicators of the supply and demand for oil which as we see can move the price of oil. At best it is limited date estimates but the questionable data can control global prices. It is ridiculous and anexample of how the US and the $ used to rule the world. It still influences the oil financial market but this will come to a natural end sooner or later.
The API is a trade association whereas the EIA is a governmental agency both are meant to be impartial but in reality probably as inpartial as the BBC !!!
The
The EIA is apparently an independent, impartial organization that "collects, analyzes, and disseminates energy information in the U.S to promote sound policymaking.
The API is an industry group that represents American companies involved in producing, refining, and distributing petroleum and petroleum products. Its report is available only to members and it currently has over 600 members, which consist of companies in all facets of the oil industry, from exploration and production to marketing and supply.
Both only cover 90% of the industry. One could imagine policymaking reasons to be interested in the data published. As well as the trade agencies reasons.
In conclusion the data is just an incomplete estimated snap shot of US demand / supply/import / exports.The financial oil markets know in advance the data. The whole regime is distorted and manipulated to make money.
Lies, damn lies and statistics. I focus on global data to get a more reliable picture and I see strong demand and restricted supply probably by 2026.
Nothing is certain, just a view.
Take care mate.
Mark
Hi all,
Finance editor Forbes. comments. 1st choice Shell, 2nd choice BP.....
Many investors are jittery about BP—formerly known as the British Petroleum Company. BP missed analysts’ expectations for third-quarter earnings, due in part to falling gas prices. Investors have also been concerned about BP’s aggressive transition to green energy—although BP has slowed its timetable for decreasing carbon emissions—and about BP’s corner office turnover. So what’s to like about BP?
It is smaller than Shell but still ranks as one of the most dominant energy stocks in the world. It also stands out because of its qualitative strength, not just its size.
BP provides nearly three times the dividend yield of the S&P 500 index, as measured by popular S&P 500 Index tracking fund Vanguard 500 Index (VFIAX). And BP has a rock-bottom price-to-earnings ratio, which makes it a real bargain right now.
Not to mention, last summer BP announced a $1.5 billion stock buyback and raised its dividend. These factors do not make BP a slam dunk, but they hint that the current valuation is at worst fair and that investors won’t be overpaying.
Omalley wish you the best. meoryou's suggestion is sensible. Timing the market is very difficult.
Morning all
' BIG DRAWS BACK' but whether Diane Abbott can stand in as a candidate is another question.
API inventory moves
crude oil -6.490 million
gasoline -452,000
distillates +2.045 million
cushing -1.706 million
A pleasant surprise as I thought maybe this would need a further week to show in the data for as this is week ending 22/05. Economists were predicting a draw of 1.9m so 6.5m is very bullish. Cautiously waiting today for the EIA to report similar data - not guaranteed - The EIA are the official government agency who have a track record under reporting estimated demand and then making adjustments on physical data through incompetence or by political expediency, who knows, but they currently have 7 million crude underestimate to " adjust' back into the data at a time of there choosing. Either way, this weeks data should be the start of some strong demand and inventory draws weeks certainly through to August.
Then on to the stage this weekend we have Opec+. Concensus and the market expectations is for a roll over of the cuts which makes sense to me. Why roll out the cuts into a balanced market. Best to wait until the market/price demands the extra production and that will come. Opec+ are cautious, disciplined and in full control and will not want to throw out a surprise decision. US production is running at maximum so no serious threat that they could not fill any gap in the market .
On the share price, it must be disappointing to see how sticky and depressed the sp has been over recent times especially if you need to sell. For those fortunate to be able to hold - through to at least end '25 for me - patience will be rewarded.
In the words of D.Ream " things can only get better " financially if not politically.
I'm off now to read Diane Abbott's My political gaffes. Volume seven.
Have a great day
Mark
Just to add.
After $18 Trillion of global government subsidies to the renewable industries since 2026.
Due to this eye watering excellent use of our money, global fossil fuel demand has reduced substantially from 81% in 2016 to ....................
80% today.
Hi Jaker
I hope all's good with you.
Starmer is being coy about detail on the EPL. I do think that he will increase the EPL by 3% to 78% - in line with Norway who massively subsidise the O&G industry through investment tax incentives - and he will., on paper, end fossil fuel investment relief.
What I expect he will do in my opinion is move the investment relief, in full if not enhanced ,to renewable investment and the relief will be returned to the same fossil fuel industry who are investing in the transition i.e BP
This way he fools the gullible. Without investment relief there will be no investment. His wet dream on the Great British Energy Company will remain that a soggy pair of y-fronts. The tail certainly does not wag the dog in this instance.
Opposition is easy , being in power is more complicated and he knows this of
They have committed to stop new oil and gas licences but not cancel licences that could take 10 years or more to produce,However, what we don’t have is a detailed plan for the phase-out of existing oil and gas overall.
Labour’s recent document on energy insists that thet are committed to north Sea oil and gas for decades to come so square that circle.
I expect BP has been given the not not to worry and as a shareholder I'm doing the same.
I am quite excited by the data I can access. The Financial oil market correction is coming to an end in my opinion.
Shorts are closing positions in oil. The change in sentiment msy take another eeek or so but the physical market signals are bullish. Reduced summer volumes will play its part but all ducks are moving into line. Brent is resilient, Opec+ are in control. BP is primed to sprout legs. Miss it, miss out.
One thing readers should always count on in the oil market is that "price changes sentiment," and in this case, the recent pullback has not only seen financial speculators exit in unison, but investors also turning cautious.
But if you follow the data, you will know that the bottoming signals are here. And based on everything I'm seeing, we should be able to hold $77 to $78 WTI.
There are many reasons why we believe this to be the case. One of them is the global oil inventory draws we see on the horizon.
I'm calling this the bottom but it will take to see wi8th he benefit hindsight. Energy stocks are cyclical but this is different this time. Minor E&P over the past decade. Multi year oil bull market on supply limitations late '25 onwards. This is not a gamble. Energy stocks will outperform the market over the next 12 - 36 months. Relax, have patience, bank the dividend, sit back and enjoy the journey.
Morning meoryou
I was just reading an article along the same lines. A pepper corn payment to release them from rehabilitation and any future iliability. BP also has big expansion plans for SA, so hopefully some good will as well as 4p.
Feeling positive about this week. I expect inventory draws this week, Gas buddy data reporting gasoline demand breaching 9 million barrels for memorial weekend and the cherry will, hopefully, be Opec+ meeting. The meetings will take place virtually on the 2nd of June. The expectation is that the 8 states that offered voluntary cuts will extend them, with a possibility of further action to support the market.
Have a great Bank Holiday.
Good morning all
Welcome back Spights.
Meoryou. I dont think we will be getting a special dividend from this sale. The state-owned Central Energy Fund (CEF) announced on Saturday that it had concluded the two-year-long discussions to purchase the Sapref refinery from oil majors Shell and BP for R1 = 0.04p. Question is, why two years of negotiations.
Mark