John White at Roth Capital - June 4

[dan_s]

John sends me a weekly update. Below are comments from Roth Capital's Energy Sector report. John is their top energy sector analyst.
John has BUY ratings on: CPE, EPM, ESTE, FANG, GDP, HK, LONE and REI
John has NEUTRAL ratings on: RSPP and SRCI

On 5/31/2018, Reuters reported OPEC oil output fell to a 13-month low in May due to declining Venezuelan production, Nigerian outages and strong compliance with a supply-cutting deal, a Reuters survey found. OPEC pumped 32.0 million b/d in May, the survey found, down 70,000 b/d from April's figure. The May total is the lowest since April 2017, according to Reuters surveys. With the supply glut largely cleared and oil topping $80/bbl this month for the first time since 2014, OPEC and Russia are now shifting policy and discussing pumping more, although analysts expect any boost to be cautious.

The biggest decrease in supply came from Nigeria due to unplanned outages. Royal Dutch Shell's (RDS-NC) Nigerian venture declared force majeure on Bonny Light crude exports, while loadings of another crude, Forcados, are facing delays. The second-biggest decline came from Venezuela, where the oil industry is starved of funds because of economic crisis. Output dropped to 1.45 million b/d in May, the survey found, a new long-term low. Production in Libya, which remains unstable due to unrest, edged lower because AGOCO, an eastern Libyan producer, had to curb output as unusually hot weather led to power problems. Iranian output, expected to decline as the U.S. re-imposition of sanctions discourages companies from buying the country's oil, edged lower in May but there was no evidence yet of a sizeable drop, sources in the survey said. OPEC's two largest producers, Saudi Arabia and Iraq, both pumped slightly more in May but not enough to offset the declines elsewhere.

On 6/1/2018, Reuters reported commodities traders have been waiting more than a week for China to release overdue monthly import-export data, frustrating many market watchers and fueling speculation about reasons for the delay. The prolonged wait for final April commodities trade statistics from the world's top buyer of oil, metals and grains comes as negotiators from Washington gather in Beijing for a round of talks aimed at avoiding an all-out trade war. The April data, initially due on May 23, is expected to show the scale of market disruptions since Washington and Beijing embarked on escalating tit-for-tat tariff threats, roiling flows of commodities such as soybeans, sorghum and corn.

Traders were hoping to glean from the final April data signs that China had stopped buying American agricultural goods, or started to switch to buying more from other countries, such as Brazil, Russia and Australia. The company which collates and sells the data, China Cuslink Co Ltd, which is operated by customs, was ordered to delay publication indefinitely due to technical reasons, three officials at the company told Reuters. One said the instructions came from customs, while another said it was from another government agency. The officials, who declined to be identified, gave no further details. A spokesman for General Administration of Customs confirmed the suspension, but gave no reason.