Heidar Engebret

@econ_713 I agree on the overall financial positioning reset. But in isolation, why would HFs inflation hedge short rates with long crude? Aren't both positions directionally same way?

Today’s #oil move lower was all about *rates*, not oil or macro per se. HFs got smoked on their 2-yr note Shorts, stopped out en masse & forced to exit inflation hedges like crude. This is technical rather than fundamental & net-net, lower rates will *buoy* crude. #OOTT #Energy

@markfny @Big_Orrin @TraderCommo Both Argus and Platts peg Saudi prod ~80-140kb/d below March quota w/ no prod increase from Feb. Acc to Vortexa Saudi/UAE exports have stagnated since Oct-21. I put little weight on it until there are more data points, but there is maybe an alt explanation for the OSP strategy.

@Big_Orrin @TraderCommo Maybe they thought the Brent-Dubai spread was going to stay north of $10 longer? Everytime I try to look at their move all I can come up with is they didn't want to sell crude.

Yes thank you. See physical trading as a labyrinth of opportunities: some regions and spec are full of products, others are near the shortage point, that's where it gets interesting with arbitrage regarding geography and spec.

@TraderCommo Very interesting! Can you elaborate on that? Why that date specifically?

No trading house is dealing with Russia starting 15 May

@energy_blogger Thanks for the share, do you have the original Bloomberg source/article-link the graph is pulled from?

Twisted Logic: Russia has lowest storage capacity vs US or EU. So if storages reach near full due to difficulties in exports then production has to come down. Russia can very well say we ban exports to EU but in reality they may not have storage space to produce. #OOTT #Oil

@Rory_Johnston Their +630kb/d Q422/Q421 Russian production forecast also seems on the high side given Russian communication. Looks like EIA Q421-Q122 est is already beyond actual output.

EIA STEO expects oil markets to be oversupplied by an average of 600 kbpd in 2023, too, but again assuming: - 800 kbpd US supply growth - 300 more from LatAm (Brazil/Guyana) - 200 more from Norway - still supportive OPEC+ base effects yield 500 y/y (& high compliance) #oott #eft

@markfny @SPGlobalPlatts @SPGlobal Thank you, will be interesting to follow going forward. I saw the Enverus founder commenting on it here, although not providing a conclusive answer: linkedin.com/pulse/drilling…

@heidenge @SPGlobalPlatts @SPGlobal I think it is the way they extrapolate on their internal algorithms. I also believe that Enverus looks at the market on Wed while Baker looks on a different day. So between algo differences and activity on a given day could create a skew between the 2 numbers.

We got a great shoutout/ quote in S&P from our insights and the frac spread show. Thanks @SPGlobalPlatts @SPGlobal spglobal.com/platts/en/mark…

@lh_barstad Thx! Makes sense to use the >20Y fleet as a proxy, as you say, with adjustments.

@heidenge Due to the nature of this trade, this is hard to gauge, but 9% of the VLCC fleet is now above 20 years, and 12% of the Suezmax fleet... virtually no serious charterer of tankers accepts ships older than 20 years....

This is a major challenge to the compliant #tanker market and a serious risk to the environment. A large number of VLCC and Suezmax tankers carry sanctioned #Oil without approvals, insurance and no one knows who owns the cargo.. nor the vessel. $FRO #OOTT bloomberg.com/news/articles/…

@HFI_Research Very interesting. If the adjustment factor is "replaced" by a too high production estimate, the accounting problem at least partially remains. Do you have an idea of the cause? Could it be related to plant condensate blending, like in 2019, as natgas production has increased?

US oil production is not at 11.7 million b/d today. It's closer to 11.5 million b/d. Also another reason why the adjustment factor has been moving lower over the past few weeks just as EIA revises higher weekly US oil production. Lower adjustment = lower "real" production.

@RobertClarke_WM @WoodMackenzie Interesting, thank you. How much of those 2.1mboed will be gas equivalent and how much actual oil?

US GoM will reach record levels of >2.1 million boe/d as 10 projects are expected to come online in 2022. Risk of delay for some, no doubt. But growth underpinned by two greenfield projects w/ strong likelihood of first oil by Q3. H/T @WoodMackenzie

@Samir_Madani @anasalhajji Great color. Are those ~1.4mb/d (?) of current exports crude only, or including products? I've seen others pegging crude exports closer to ~1.0mb/d.

If Iran's nuclear negotiations completely fail, & the Biden Admisntration enforces Trump's sanctions in an UNPRECEDENTED way, Venezuela's oil exports will decline drastically. Oil exports of both countries will decline. Confused enough: Biden, Trump, Iran, & #Venezuela? Welcome!

@markfny Much appreciated! I can't help but feel that the call-on-shale exit to exit in 22 will be higher than 0.7-0.8mb/d. So very interesting insights on the OFS activity increase required to achieve that, given the bottlenecks you mention. Time will tell.

@heidenge That is factoring in additional increases in frac spreads and activity. Roughly speaking (haven't run the numbers yet) but should get to about 325 max. The limitation remains labor/parts with Q1 fairly stable with the increases starting Q2.

We don't have the frac spread count show today, but the national number came in at 274. This will likely be the peak as activity slows heading into Christmas. At the beginning of the year, my target was 275 by the middle of Nov.

@markfny Thank you! That makes sense. To follow up, is that ~12.3mb/d exit-22 estimate based on the same 275 frac spread count staying constant, or does that need to grow further? If so, to what level aprox?

@heidenge Thanks! I think we have an exit this year around 11.65M with a slow grind higher to get an exit rate next year at around 12.3M.

@crudegusher They (KOC) wrote in their own annual report that their sustainable capacity per 31.march was 2.579mb/d, as I understand it excluding the NZ. Surprisingly transparent imo. Even including their share of NZ at max cap, still ~2.85mb/d vs ~2.96mb/d quota from May 22.

Sunday Sankey slide: Bloomberg lists Kuwait’s oil production capacity as 3.08mb/d. The authoritative MEES, Friday reports Kuwait’s production capacity has dropped by more than 500,000 b/d over the past three years to just 2.63mn b/d for 2020-21.

@yesar @Jamie__Ingram @Amena__Bakr Thank you for the clarification. Very interesting.

#Kuwait crude oil capacity continues to decline. KOC production capacity for 2020/21 fell by 180,000 b/d from the previous year's 10-year low to 2.63mn b/d #oott

@Amena__Bakr Does this include all production within the Kuwait sphere? Or is it excluding for example NZ output?

Keep your eyes on this: Kuwait Oil Co. (KOC) has reported a third straight year of decline in its sustainable crude oil production capacity, which now stands at 2.579 million bpd. #OOTT #Opec

@ACIPartnerhship @mintzmyer Thank you!

@heidenge @mintzmyer Per company Q2 report. Company reports Q3 this week so we will get an update shortly.

With $TGP now going private with Stonepeak, this marks the 4th major LNG transaction of the past year after $GLOG went to Blackrock, $HLNG went with Morgan Stanley, and $GMLP + $HYGO was acquired by $NFE. There is only *one* major firm now public: Golar LNG $GLNG. #BUY #shipping