Newsletter No. 73
Good morning,
I’m back from the holiday weekend, ready to bring you up to speed on all the recent developments in the oil and gas sector. Here we go with the latest developments.
This Week’s Headlines
- Hedge Funds Seek Power Traders During Market Volatility
- Saudi Arabia’s Oil Exports Drop to 10-Year Low During Weak Asian Demand
- Oil Prices Rise on Strong U.S. Inventory Data Despite Minimal Hurricane Disruptions
- BP and OPEC Foresee Rising Oil Demand as Clean Energy Transition Slows
- Honeywell to Acquire Air Products’ LNG Technology for $1.8 Billion
- Devon Energy to Acquire Grayson Mill’s Williston Basin Assets for $5 Billion
- The Rice Report: Uncovering the Truth Behind Real Estate and Bitcoin
global oil & gas news
Hedge Funds Seek Power Traders During Market Volatility
Hedge funds are aggressively recruiting power traders from utilities and investment banks, offering lucrative paydays, profit-sharing deals, and lavish perks like chauffeurs. Despite subdued market conditions in 2024, hedge funds anticipate prolonged volatility in power markets driven by rising electricity demand from AI technologies and renewable energy integration. Analysts foresee continued opportunities in power and gas trading, emphasizing the role of data-driven strategies and new market entries amid unpredictable energy supply dynamics and shifting interest rates.
Saudi Arabia’s Oil Exports Drop to 10-Year Low During Weak Asian Demand
Saudi Arabia’s crude oil exports fell sharply in June to 5.42 million barrels per day, the lowest since at least 2013. This decline, mirrored by other OPEC+ members like Russia and Iraq, was driven by reduced Asian demand and increased domestic consumption in the Middle East. Middle Eastern crude flows hit a three-year low due to higher local use and limited availability of medium-density grades. Weak economic indicators in China and record-low Indian imports further dampened demand, contributing to softened prices for regional grades.
Oil Prices Rise on Strong U.S. Inventory Data Despite Minimal Hurricane Disruptions
Oil prices climbed on Wednesday, as U.S. refining activity led to a bigger-than-expected drop in gasoline and crude inventories. Brent crude rose 0.5% to $85.08 per barrel, and WTI crude increased 0.85% to $82.10 per barrel. The gains were driven by a 3.4 million-barrel decline in crude stocks and a 2 million-barrel drop in gasoline stocks. Minimal effects from Hurricane Beryl and hopes for U.S. interest rate cuts also supported prices. You can see the up-to-the-minute numbers here.
BP and OPEC Foresee Rising Oil Demand as Clean Energy Transition Slows
Both British Petroleum (BP) and OPEC are projecting increased global oil demand due to resilient economic growth and slower adoption of renewable energy. BP expects demand to reach 97.8 million barrels per day by 2035. That is 3% higher than BP’s prediction from last year for 2035, emphasizing continued reliance on oil. Similarly, OPEC predicts a 2.25 million barrels per day rise in 2024, driven by economic recovery and summer travel resurgence. Despite challenges like the U.S. Federal Reserve’s cautious policy, both entities remain optimistic about short-term economic stability and oil demand growth.
moves to watch
Honeywell to Acquire Air Products’ LNG Technology for $1.8 Billion
Honeywell has agreed to purchase Air Products’ LNG process technology and equipment business for $1.81 billion in cash. This acquisition will expand Honeywell’s energy transition capabilities, providing a complete solution for global customers. The deal, expected to close this year pending regulatory approvals, includes Air Products’ portfolio of coil-wound heat exchangers and related equipment. Honeywell anticipates the acquisition will enhance its earnings starting from the first year, supporting its growth strategy in automation and energy sectors amid increasing global energy demand.
Devon Energy to Acquire Grayson Mill’s Williston Basin Assets for $5 Billion
Devon Energy Corp. has agreed to purchase Grayson Mill Energy’s Williston Basin oil and gas assets for $5 billion. The transaction, set to close by the end of Q3, will be financed with $3.25 billion in cash and $1.75 billion in stock. This move aims to expand Devon’s production capabilities and secure future drilling opportunities.
macro-economic look
The Rice Report: Uncovering the Truth Behind Real Estate and Bitcoin
In the latest episode of The Rice Report, Eric Rice discusses the surprising resilience of Bitcoin and explores why home prices have skyrocketed since COVID-19. You can watch this and more episodes of The Rice Report on YouTube and Rumble.
Also, please let us know how we are doing at King Operating Corporation. Leave a review here.
Recommended Reads
Biden Drains Entire Northeast Gasoline Reserve In Bid To Lower Gas Prices
Shell Plans Major Work at Its Largest German Oil-Processing Complex
Will Iran President’s Death Affect Israel Conflict, Oil and Gas?
Thank you for your continued support, and if you have any questions for myself or any member of the King team, please don’t hesitate to reach out.
All the best,
Jay
