Newsletter No. 63
Hello,
It is Thursday, April 25, 2024. We have a jam-packed edition of oil and gas news, including insights into what is happening right here at King. So, join me as I go through some of the latest developments.
This Week’s Headlines
- Another Installment of The Rice Report
- Don’t Miss Our Upcoming Webinar
- U.S. Refiners Poised for Robust Q1 Earnings Despite Lower Russian Capacity
- Oil Prices Dip as U.S. Business Activity Slows, But Will it Last?
- Russian Oil and Gas Revenue to Double in April, Reuters Estimates
- U.S. Oil and Gas M&A Hits Record in Q1 2024, Led by Permian Basin Deals
- Petrobras Leads Investment Surge in Oil and Gas Industry
Happening at King
Another Installment of The Rice Report
King’s Chief Growth Officer Eric Rice presents the latest installment of The Rice Report and he is providing insights on the current economic landscape, banking sector, and geopolitics. You can watch it here.
Don’t Miss Our Upcoming Webinar
Another webinar on the future of energy, featuring King’s Chief Economist, John Mauldin, and Chief Growth Officer, Eric Rice, is on the horizon.
These webinars are designed for investors with a current net worth of $1 million (not including primary residence) or who have made $200,000 ($300,000 if filing jointly) in the last two years and expect to make the same this year. The next webinar is scheduled for Tuesday, April 30, 2024 at 1 p.m. CT. Register for it here.
GLOBAL OIL & GAS NEWS
U.S. Refiners Poised for Robust Q1 Earnings Despite Lower Russian Capacity
Analysts predict strong first-quarter earnings for American oil refiners, attributing the growth to disruptions in global oil product flows, sustained refining margins, and reduced U.S. refinery utilization. While profits may not match the highs of 2022, lower Russian refining capacity and planned/unplanned refinery outages, like BP’s Whiting facility closure, have buoyed margins. With fuel demand expected to surge in the summer, analysts anticipate further profit increases in the coming quarters.
Oil Prices Dip as U.S. Business Activity Slows, But Will it Last?
Oil prices declined as concerns over Middle East conflicts eased and U.S. business activity slowed. Brent crude futures fell by 0.45% to $88.02 a barrel, while U.S. West Texas Intermediate crude futures slipped by 0.66% to $82.81. Despite a fall in U.S. crude inventories, worries about conflict de-escalation between Iran and Israel contributed to the decline. Goldman Sachs analysts estimated a $90 per barrel ceiling on Brent. Additionally, U.S. central bank rate cuts expected this year could stimulate oil demand. You can see the up-to-date numbers here.
Russian Oil and Gas Revenue to Double in April, Reuters Estimates
According to Reuters calculations, Russia’s oil and gas revenues are expected to reach $14 billion this month, doubling from April last year. This surge is attributed to higher oil prices, marking a 30% increase compared to 2023. Despite Western sanctions, Russian oil finds buyers in China and India, while LNG shipments to Europe continue. The revenue influx highlights the challenges in disrupting Putin’s finances amid the Ukraine conflict.
U.S. Oil and Gas M&A Hits Record in Q1 2024, Led by Permian Basin Deals
According to Enverus, U.S. oil and gas deals surged to a record $51 billion in the first quarter, driven by activity in the Permian Basin. Companies like Diamondback Energy and Apache Corp were among the top acquirers. Despite regulatory hurdles, experts anticipate approval for major deals. While deal activity is high, analysts believe the pace may slow as strong oil prices encourage companies to hold onto assets.
MOVE TO WATCH
Petrobras Leads Investment Surge in Oil and Gas Industry
Petrobras (PBR), a major player in the global oil and gas sector, has significantly boosted its investment, nearly doubling it to $21.4 billion in 2023. The company’s strategic plan for 2024-2028 emphasizes growth and sustainability, with a focus on expanding offshore production through FPSO platforms and enhancing drilling operations. Despite its dominance, Petrobras is also committed to decarbonization initiatives. Investors seeking opportunities in the energy sector may consider stocks like Murphy USA Inc. (MUSA), SM Energy Company (SM), and Sunoco LP (SUN), each offering promising prospects in their respective niches.
If you’d like to talk to someone about King and are an accredited investor, you can fill out your information here or schedule a Zoom conversation with one of our SVPs here and someone will reach out.
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Recommended Reads
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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
