David Hay on Energy Markets
https://youtu.be/iY-thKFXXR8?si=kYecsyO3wqIuSO3m
David Hay Energy insights
Re: David Hay Energy insights
Great interview you should all listen to carefully.
My notes from his talk:
> Overall energy demand will surge now that we've moved past the non-stop fear mongering of a recession.
> IEA is a political organization that continues to under-estimate energy demand growth, especially from 3rd world countries. BTW 3rd world countries cannot afford wind and solar projects, so their demand will be met by fossil fuels.
> There has been no significant supply impact from the sanctions against Russia or the war in the Middle East. < My take on this is that there is pressure building to reinstate sanctions against Iran.
> A lot has been said about the oil supply growth in the U.S. (Permian Basin), but it has taken 4 years just to get back to where U.S. oil production was at the end of 2019. Also, the Drilled but UnCompleted ("DUC") inventory is now depleted, so that source of new supply is out of the equation.
> The active drilling rig count in the U.S. is too low. In a few months EIA will report that U.S. oil production declined from Q4 2023 to Q1 2024. Partly due to weather, but we are also not completing enough new wells to offset depletion.
> There is political pressure to keep oil prices low. There are Big Players in the oil & gas futures markets that can (for a short time) keep oil prices lower than what the fundamentals are telling us they should be.
MY TAKES:
> Supply / Demand fundamentals will win out in the end. OECD Petroleum Inventories are lower than normal, indicating that Brent oil should be over $90/bbl today.
> Overall demand for energy is RELENTLESS because it is tied to population growth & all people want a higher standard of living, which can only be met by reliable and affordable energy.
> "Green Energy" isn't going to meet demand. It is not green, and it is not cheap, nor is it reliable enough to run a modern economy on.
> Oil demand is seasonal. Global demand for transportation fuels will be ramping up starting in March, while gasoline and diesel inventories are lower than normal.
My notes from his talk:
> Overall energy demand will surge now that we've moved past the non-stop fear mongering of a recession.
> IEA is a political organization that continues to under-estimate energy demand growth, especially from 3rd world countries. BTW 3rd world countries cannot afford wind and solar projects, so their demand will be met by fossil fuels.
> There has been no significant supply impact from the sanctions against Russia or the war in the Middle East. < My take on this is that there is pressure building to reinstate sanctions against Iran.
> A lot has been said about the oil supply growth in the U.S. (Permian Basin), but it has taken 4 years just to get back to where U.S. oil production was at the end of 2019. Also, the Drilled but UnCompleted ("DUC") inventory is now depleted, so that source of new supply is out of the equation.
> The active drilling rig count in the U.S. is too low. In a few months EIA will report that U.S. oil production declined from Q4 2023 to Q1 2024. Partly due to weather, but we are also not completing enough new wells to offset depletion.
> There is political pressure to keep oil prices low. There are Big Players in the oil & gas futures markets that can (for a short time) keep oil prices lower than what the fundamentals are telling us they should be.
MY TAKES:
> Supply / Demand fundamentals will win out in the end. OECD Petroleum Inventories are lower than normal, indicating that Brent oil should be over $90/bbl today.
> Overall demand for energy is RELENTLESS because it is tied to population growth & all people want a higher standard of living, which can only be met by reliable and affordable energy.
> "Green Energy" isn't going to meet demand. It is not green, and it is not cheap, nor is it reliable enough to run a modern economy on.
> Oil demand is seasonal. Global demand for transportation fuels will be ramping up starting in March, while gasoline and diesel inventories are lower than normal.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group