Energy Sector

[Dinar]

54 minutes ago, SharperDingaan said:

Nobody knows how this will go, but most would expect variations of the below;

• Gaza/Egyptian border opened, managed by Egypt/UN; water/fuel/food/medicine in, people out, and held in camps on the Egyptian side. 2M people live in Gaza, they have nowhere to go, they cannot get out, and per the UN charter; collective punishment is illegal. The people living in Gaza are not animals.
• Israel is too far in to avoid a mass invasion of Gaza. Record body counts and atrocities on both sides quickly sour support, and create future generations of armed conflict. Israeli coalition government collapses, Hamas and Hezbollah disrupted, but continue to exist.
• The US cannot support both Israel, Ukraine, stay under its spending cap, and keep all the balls in the air without a new house leader, and quickly. Hot wars burn through munitions at an incredible rate, and US disruption fears are inevitable.
• US/Saudi/Iran/Israel deals collapse. Oil prices rise, and there is no longer a cap (Saudi supply flood) on how high prices can go. Somebody hits Iranian facilities, they hit Saudi facilities, and oil prices are ....

Most would expect an overall downward market bias, and a strong upward bias on the price of o/g companies. Add a significant push for windfall taxes on the o/g majors (Exxon, etc), and the weapons suppliers; as they will be seen as war profiteering. Less of a push in Canada as an on-time completion of the TMP expansion is 'salvation'.

 

Sh1tty way of making a buck, but pretty hard to find a better place than the WCSB.

 

May we all do well.

 

SD

 

I disagree.  Why would Israel bail out people whose brothers/sons/cousins/fathers murdered a thousand of their compatriots, mostly civilians in cold blood?  Who cares what the UN charter says, Lebanon does not follow it, Iran does not follow, Hamas does not follow it, China and Russia do not follow it, why would Israel?  How many divisions does UN have?

It is in Israel's interest end this once and for all, otherwise what we saw on Saturday will occur time and time again.

 Iranian rulers have been very rational in the past, and so has Hezbollah, assuming they continue to be and do not miscalculate the war will not widen.  

Assuming Israeli leaders are smart, they will NOT do a ground invasion, but just use a tactic that is millennia old - starve out your opponent.  No horrible pictures on TV/Internet, no bombings, nothing.  Until Hamas unconditionally surrenders, and voila, you have minimized your casualties.  Then take your time thinking about what to do.  

[SharperDingaan]

Most of those in Gaza are not Hamas or Hezbollah, they are Palestinian, and have little to do with it; they are simply seeking a land of their own, just as Israel is. Sealing the exits, deliberately cutting off supplies to starve them out, and vowing to 'end it once and for all' (via invasion/disease) is attempted genocide. Something that Jewish people have been very familiar with, for centuries.

 

Israel cannot expect everyone else to act rationally, when it doesn't do the same. When the US had 9/11, the result was the hunt for and eradication of Osama Bin Laden, not the elimination of the various populations that he was hiding in. Were Israel similarly rational, it would take a similar approach, as it has in past Nazi hunts. Mossad is very good at what it does.

 

Bar fights happen, but if someone insists on getting into a gun fight, there is little their friends can do. Best solution is knock out their friend as rapidly as possible (saving their life), after that its just try to minimise the body count. Israel is that hot-head insisting on a gun fight.

 

O/G price escalation is a bet on Israel doing something stupid.

Hopefully cooler heads prevail.

 

SD  

[Castanza]

4 hours ago, rkbabang said:

 

 

As far as I can tell this reporter Nicole Zedek is the only source for the 40 babies beheaded claim and there is no photo or video evidence of it.  Remember that war time propaganda can get extreme on both sides and isn't always factual.

 

I believe the claim was 40 women children and babies with some beheaded babies. 
 

But this really should t even be shocking. It’s not difficult to find videos of ISIS, Hezbollah, Boko Haram doing this and much worse things. I have seen photos first hand from people who were in Mosul that showed women and children’s heads on sticks outside of an school ISIS decided to target. I’m not sure people understand the evil that exists out there. Things that happen on a daily basis that make a SAW movie look like a Disney movie…..what the media never will show.
 

Could it be a lie? Yeah possibly….but Hamas is fully capable and likely to do something like this. 

[Dinar]

24 minutes ago, SharperDingaan said:

Most of those in Gaza are not Hamas or Hezbollah, they are Palestinian, and have little to do with it; they are simply seeking a land of their own, just as Israel is. Sealing the exits, deliberately cutting off supplies to starve them out, and vowing to 'end it once and for all' (via invasion/disease) is attempted genocide. Something that Jewish people have been very familiar with, for centuries.

 

Israel cannot expect everyone else to act rationally, when it doesn't do the same. When the US had 9/11, the result was the hunt for and eradication of Osama Bin Laden, not the elimination of the various populations that he was hiding in. Were Israel similarly rational, it would take a similar approach, as it has in past Nazi hunts. Mossad is very good at what it does.

 

Bar fights happen, but if someone insists on getting into a gun fight, there is little their friends can do. Best solution is knock out their friend as rapidly as possible (saving their life), after that its just try to minimise the body count. Israel is that hot-head insisting on a gun fight.

 

O/G price escalation is a bet on Israel doing something stupid.

Hopefully cooler heads prevail.

 

SD  

Really?  Arabs have land in Gaza.  Hamas was democratically elected, there are tens of thousands of armed members of Hamas, and hundreds of thousands of their family members.  

Hot headed would be to invade Gaza.  How does Israel's refusal to do the ground invasion is not rational?  In your opinion, what is the rational thing for Israel to do?

[Xerxes]

Simple Israeli domestic politics dictates that Israel needs to launch a full ground invasion of Gaza. Bibi’ own political survival may depend on that forcefulness given some extremists in his own government with some very extreme points of views. 
 

In fact, as someone who campaigned so hard on security issue, he is got to go Gaza or he is got to go (fired)
 

The civilians in Gaza will be trapped as always. The Israeli civilian captured or otherwise will be trapped as always. And Hamas wins even if it looses, for it accomplished two things (1) MBS was going to leave them behind, no more (2) they shattered the myth behind IDF. 

 

It took decades to build that, and it took 24 hours to lose it. 

 

PS: in one of the podcast I posted below, the commentator says this is not 9/11 nor Pearl Habour, it is rather Tet 1968 all over again

 

 

 

 

 

 

Edited October 11, 2023 by Xerxes

[Xerxes]

there two podcast episodes I like to share, they provide good assessment IMHO. The first one with the Israeli journalist is very on point.  

https://podcasts.apple.com/ca/podcast/defense-aerospace-report/id1228868129?i=1000630692175

 

https://podcasts.apple.com/ca/podcast/war-on-the-rocks/id682478916?i=1000630732302

Edited October 11, 2023 by Xerxes

[Dinar]

25 minutes ago, Xerxes said:

Simple Israeli domestic politics dictates that Israel needs to launch a full ground invasion of Gaza. Bibi’ own political survival may depend on that forcefulness given some extremists in his own government with some very extreme points of views. 
 

In fact, as someone who campaigned so hard on security issue, he is got to go Gaza or he is got to go (fired)
 

The civilians in Gaza will be trapped as always. The Israeli civilian captured or otherwise will be trapped as always. And Hamas wins even if it looses, for it accomplished two things (1) MBS was going to leave them behind, no more (2) they shattered the myth behind IDF. 

 

It took decades to build that, and it took 24 hours to lose it. 

 

PS: in one of the podcast I posted below, the commentator says this is not 9/11 nor Pearl Habour, it is rather Tet 1968 all over again

 

 

 

 

 

 

You are probably right, and I wish it would not happen.  A ground invasion would be a bloodbath.  

[rkbabang]

1 hour ago, Castanza said:

I believe the claim was 40 women children and babies with some beheaded babies. 
 

But this really should t even be shocking. It’s not difficult to find videos of ISIS, Hezbollah, Boko Haram doing this and much worse things. I have seen photos first hand from people who were in Mosul that showed women and children’s heads on sticks outside of an school ISIS decided to target. I’m not sure people understand the evil that exists out there. Things that happen on a daily basis that make a SAW movie look like a Disney movie…..what the media never will show.
 

Could it be a lie? Yeah possibly….but Hamas is fully capable and likely to do something like this. 

 

True, but how many children did Bush and Obama kill?  How many will Israeli bombs kill?  I know the western view is that civilized people slaughter children with bombs not with swords, but the two are morally equivalent in my opinion. 

 

[Castanza]

4 minutes ago, rkbabang said:

 

True, but how many children did Bush and Obama kill?  How many will Israeli bombs kill?  I know the western view is that civilized people slaughter children with bombs not with swords, but the two are morally equivalent in my opinion. 

 

Whaaaa Obama won a Nobel Peace Prize! Forget about all those drone strikes  

 

But in all seriousness I don’t disagree with you. I think war is complicated and decisions are not binary. War is Hell and that’s why it’s best avoided….imperfect decisions in and imperfect world result in imperfect outcomes. There is so much to this topic and things and stories I could share that I learned from friends with first had experience but I won’t. In short the ME is one F&$ked up place. It seems this topic is drifting and not wanted since the other thread was deleted. 
 

 

[NnnnotSoSmart]

Haven't heard about this in our media yet:

 

https://www.timesofisrael.com/egypt-intelligence-official-says-israel-ignored-repeated-warnings-of-something-big/

 

Egypt Warned Israel Days Before Hamas Attack:

 

 

Viewer Comment: "Intelligence failure" You're assuming it was a failure and not intentionally allowed to happen in order to give them the political leeway to do a full invasion of Gaza."

Edited October 11, 2023 by NnnnotSoSmart

[NnnnotSoSmart]

Deja vu' all over again?  Potentially same thing happened before the Yom Kippur War?

 

From an Israeli paper...

 

Mossad Reveals New Details About Key Egyptian Spy Who Warned Israel That Yom Kippur War Was Imminent

 

https://www.haaretz.com/israel-news/2023-09-07/ty-article-magazine/.premium/mossad-reveals-new-details-about-egyptian-spy-who-warned-yom-kippur-war-was-imminent/0000018a-6fce-dd96-ab8b-ffce59530000

 

Article attached.

 

 

Mossad Reveals New Details About Key Egyptian Spy Who Warned Israel That Yom Kippur War Was Imminent.pdf

[Spekulatius]

Guys, keep it topic. Oil up or down is the question. Iran has oil, but there is none in the Gaza Strip.

[Castanza]

4 hours ago, Spekulatius said:

Guys, keep it topic. Oil up or down is the question. Iran has oil, but there is none in the Gaza Strip.

So far this just seems like standard bananas market volatility. Nothing substantial to suggest oil supply will be constrained at this point imo. 

[NnnnotSoSmart]

8 hours ago, Spekulatius said:

Guys, keep it topic. Oil up or down is the question. Iran has oil, but there is none in the Gaza Strip.

In that spirit, I recommend listening to this morning's  XOM/PXD merger webcast.  

Darren Woods goes into quite a bit of details on the technology that they plan to deploy in the Permian.  

 

https://event.webcasts.com/viewer/event.jsp?ei=1639028&tp_key=f993bbd804

[Sweet]

 

[SharperDingaan]

The EIA is blowing smoke. Courtesy of blondeBond and coolreit

https://www.investorvillage.com/groups.asp?mb=19168&mn=526030&pt=msg&mid=24427626

 

SD

[Sweet]

I’m not convinced they are blowing smoke, again and again the shale bros just keep breaking records.  Despite the recent adjustment issues and data quality, the EIA have proven to be far more accurate than the Twitter commentators when it comes to predicting US production volumes.  The latest 914 report for July has US production just under 12.99 million barrels, I have no problem believing it’s at 13.2 million barrels currently.

 

Edited October 12, 2023 by Sweet

[Spekulatius]

4 hours ago, SharperDingaan said:

The EIA is blowing smoke. Courtesy of blondeBond and coolreit

https://www.investorvillage.com/groups.asp?mb=19168&mn=526030&pt=msg&mid=24427626

 

SD

Investorvillage - what a blast from the past. I used to be there too,  it this board became an echo chamber during COVID. Totally useless for investing. It‘s just grumpy guys ranting at this point.

Edited October 12, 2023 by Spekulatius

[Viking]

I don’t think the middle east is de-escalating. The ante keeps getting raised. What if neither side is bluffing?

—————

Israel Orders More Than 1 Million People to Leave Northern Gaza
 

Gazan officials told Palestinians not to comply. The U.N. said the order to relocate about 1.1 million people would lead to “devastating humanitarian consequences.”

 

https://www.nytimes.com/live/2023/10/13/world/israel-gaza-war-hamas

—————

Iran Says New Front Possible If ‘Israeli War Crimes’ Continue

 

Iran-backed militants could open a new front in Israel’s war against Hamas if the blockade of Gaza and “war crimes” there continue, Iran’s Foreign Minister said, signaling a potential expansion of the conflict.

 

https://www.bloomberg.com/news/articles/2023-10-13/iran-says-new-front-possible-if-israeli-war-crimes-continue

[Spekulatius]

Note how all the Arabian countries of significance (Egypt, Saudi Arabia, Gulf states) have been quiet about this. Ok, Iran makes some noise, but they have no common border with Israel. Some skirmishes with Hisbollah won’t make much of a difference. Anything can happen in this region, but my bet is that there will be no escalation. Invasion of the Israel in Gaza is a given, because the IDF is collected there and ready to go - it is now or never.

 

My guess is that crude prices go up somewhat perhaps when the ground invasion starts because of the traders and then fade. The whole thing is not exactly bullish for the  world economy either, which puts pressure on energy prices in the medium and long term.

 

The whole thing could change if Iran gets more involved and then gets sanctioned on oil sales. That would causes spike in crude prices similar to what we have seen in the Ukraine war in 2022. It may not last either though. Anyways the key is to watch Iran, what they do and what they don’t do.

[SharperDingaan]

EIA thing. The EIA has had such screwed up weekly numbers, for so long (years of high/volatile weekly 'adjustment factor'), that many just don't see the EIA as credible. The weekly report still moves markets, but the organisation is increasingly seen as 'captive' to the desires of the US administration; OPEC+ is a lot more blunt about it. The source quoted knows his stuff, particularly developments in the NA small/medium o/g producers.

 

The only way US production rises is if there is 1) new off-shore production, or 2) the major shale fields enter 'manufacturing' mode. Agreed, the majors are consolidating in the fields, and scaling up to improve production efficiencies; but higher net production is going to take a lot longer to achieve than 1 year, simply 'cause it's hard to grow against 20%+ annual depletion. Our own view is that it is 1) EIA is treating some of Canada's TMP expansion as US; 590,000 bpd x 36% US ownership (by share weighting) = 210,000 bpd incremental production.

 

WTI. It seems pretty clear that OPEC+ has a USD 90 minimum in mind, is acting to enforce it, and doesn't want the price to go over some upper target (100?); hence the Saudi/US/Israel deal. Tighter sanctions enforcement (Russia/Iran) reducing illegal supply, that offsets declining Chinese/Asian demand. The west gets to demonstrate that sanctions are working; Russia/Iran earn enough from the higher price on existing supply to offset foregone income. Everybody wins.

 

All the WCSB producers do very well under USD 90 oil, lower differentials, and tight supply of heavy. Today's supreme court ruling is also a game changer, that will mitigate against the possibility of windfall taxes. We would also suggest that CO2 release from the globes wild fires, and methane release from melting permafrost, were not part of the Kyoto climate models; and as the model predictions are materially wrong, the Kyoto agreements are mute. Almost certainly, not what the environmentalists had in mind.

https://www.cbc.ca/news/canada/calgary/supreme-court-richard-wagner-impact-assessment-act-1.6993720

 

Again ... it's pretty hard to see a better place than the WCSB for the next few months.

 

SD

 

    

Edited October 13, 2023 by SharperDingaan

[Dinar]

On 10/10/2023 at 7:04 PM, SharperDingaan said:

Most of those in Gaza are not Hamas or Hezbollah, they are Palestinian, and have little to do with it; they are simply seeking a land of their own, just as Israel is. Sealing the exits, deliberately cutting off supplies to starve them out, and vowing to 'end it once and for all' (via invasion/disease) is attempted genocide. Something that Jewish people have been very familiar with, for centuries.

 

Israel cannot expect everyone else to act rationally, when it doesn't do the same. When the US had 9/11, the result was the hunt for and eradication of Osama Bin Laden, not the elimination of the various populations that he was hiding in. Were Israel similarly rational, it would take a similar approach, as it has in past Nazi hunts. Mossad is very good at what it does.

 

Bar fights happen, but if someone insists on getting into a gun fight, there is little their friends can do. Best solution is knock out their friend as rapidly as possible (saving their life), after that its just try to minimise the body count. Israel is that hot-head insisting on a gun fight.

 

O/G price escalation is a bet on Israel doing something stupid.

Hopefully cooler heads prevail.

 

SD  

SD, that's just not true.   If you listen to the interviews of people from Gaza or West Bank, they do not want to live in peace in Gaza or the West Bank.  They state that the entire state of Israel should not exist and the entire Holy Land is Palestinian Land, conveniently omitting the fact that Arabs are in fact invaders who came to the Holy Land in the seventh century AD and continued Jewish presence preceded Arab presence by nearly two millennia.  

Arabs massacred Jews throughout history, whether in Spain, North Africa, Iraq (where Jews have lived for millennia), Arabian peninsula, and the list goes on.  In the Holy Land, there were massacres of Jews in Hebron, Safed, and attempts in Tel Aviv and Jerusalem in the 1920s.  Post 1948, there were constant attacks by Arab fedayeen from Gaza and the West Bank on Israel, with frequent killings of civilians.  Jews by the way were not allowed to worship at the Wailing Wall.  

Israel left Gaza in 2005 and what happened?  Hamas (whose charter calls for wiping Israel from the face of the earth) won elections.  Rocket fire started from Gaza into Israel.  

So to say that all people in Gaza want is to be left alone is neither in accordance with what they say they want nor with how they act. 

[Sweet]

The EIA weekly is a modelled figure, it’s been wildly out recently but the EIA are changing their methodology.

 

There was a lot of complaining about the ‘adjustment’ getting out of control and conspiracy theories flying around about government fiddling the statistics - there is no evidence it ever did, it’s for the birds.
 

The head of the EIA addressed these issues and said the adjustment was actually under reported crude as a result of the compositional change in US oil production due to shale.  See here:

 

 

Summary: there was a lot condensate not being counted as production by the EIA weekly but which was making its way into inventory because it was being blended with other grades of oil.

 

The EIA 914 monthly report by contrast is not modelled, its production statistics by oil companies which are required by law to file.  In July of this year production was 12.99 mb a day.  US production had a tendency to accelerate in the second half of the year:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

 

I have no problems believe it’s at 13.2 given recent history.

[Xerxes]

@Dinar

 

What Arabs did or did not centuries ago is irrelevant to the situation to Gaza. If I were to follow your logic then there should be no white men left alive in South Africa. Because that is not their land. How do you square that ? 
 

I hope you don’t think Arab are also responsible for Spanish Inquisition. 
 

Hamas is a terrorist organization that feeds on chaos. But whether a Gazaian person who has been bottled up for decades in Gaza has some sympathy for Gaza, as the entity that gives the middle finger, while the rest of Arab world have “moved on” does not mean that person is a Hamas terrorist. No different than an Israeli, who has had it with Arabs and Muslims, who may feel a great sense of excitement and joy seeing the Arabs humiliated. 
 

One thing is clear, the attack was so outrageous and so over-the-top that it was meant to be like throwing a grenade in a middle of a party, aimed at getting a significant reaction. 
 

The war will not expand. Hezbollah might fire a few firecrackers in sympathy, and the American will blow their horn from their aircraft carrier in sympathy. 
 

Every player in the Middle East, whether they are state or non-state actors have a lot of levers. But each of those levers are always major “step change”. Hamas has used its one-time lever, knowing that it would be a “step change” and that it can do that only once. 
 

Hizbollah is not going to use any levers (I don’t think) because Lebanon and its base of power is not threaten. 

[SharperDingaan]

18 hours ago, Sweet said:

 

The EIA 914 monthly report by contrast is not modelled, its production statistics by oil companies which are required by law to file.  In July of this year production was 12.99 mb a day.  US production had a tendency to accelerate in the second half of the year:

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

 

I hear you .... but do a quick sniff test.

The US rig count has been slowly falling for quite some time (1y, 3y chart), and most of the remaining rock is no longer top tier. How exactly, does more production arise when there have long been fewer rigs drilling? It can only occur if new rigs are drilling very prolific longer laterals, more bores from the same pad (manufacturing), and old bores are being used for water flood injection in top tier prospects (fewer rigs on site for longer). This is of course occurring; but it's real questionable whether that 'super production'  from the relatively few monsters, is enough to more than compensate for the decline in all the US fields together, and whether it is sustainable when much of the best rock has already been drilled. Hopefully we're wrong, but .... https://oilprice.com/rig-count

 

Agreed the EIA numbers should be credible, and sh1te happens. Thing is that when modelling errors go unfixed for some time, and reports don't tie against comparative independent reports (API), people will fill in the blanks - rightly or wrongly. Fail to correct the misinterpretation, the inference is that it is not wrong, and the entity reaps what it sows. US production is probably going higher, but whether there's another 10-15% of sustainable production over the next 1-2 years ???

 

EIA may well be 'right' ... problem is it's the EIA reporting them!

 

SD