Oil slides more than 1% as Chinese GDP dents demand hopes

https://www.reuters.com/business/energy/oil-slips-after-libya-resumes-output-china-data-eyed-2023-07-17

- GDP grew 6.3% year-on-year in the 2nd quarter, compared with analyst forecasts of 7.3%

- what analysts were forecasting such high growth?

- slow correction where expectations come back down to reality

China's June industrial output rises 4.4%, retail sales up 3.1%

https://finance.yahoo.com/news/chinas-june-industrial-output-rises-020809002.html

- China's industrial output grew 4.4% in June from a year earlier, unexpectedly accelerating from 3.5% seen in May

- Retail sales grew 3.1% in June, slowing from a 12.7% jump in May. Analysts had expected growth of 3.2%.

- Are the kind of okay numbers from China signals that the Chinese economy is actually much worse?

Chinese Oil Demand Doesn’t Make Sense

https://www.wsj.com/articles/chinese-oil-demand-doesnt-make-sense-cbc02a44

- "Either China’s economy will accelerate rapidly in the second half—a prospect that currently looks unlikely—or oil demand will revert to more regular patterns, dragging global consumption and, potentially, prices down with it." *** Really???***

- Could there be a mismatch between petroleum imports quotas and what they actually need.

- "China doesn’t regularly publish petroleum inventory data as the U.S. does, so it is difficult to say for sure how much diesel might be sitting in storage somewhere."

Oil Bulls are Getting it All Wrong, Wall Street Veteran Warns

https://finance.yahoo.com/news/oil-bulls-getting-wrong-wall-101242402.html

- “The bulls got it all wrong,” said Ed Morse, the bank’s veteran head of commodities research. “The world is still waiting for a real Chinese recovery, Europe is in recession and we still don’t know if the US will have a hard landing.”

- Citi's call for oil's summer average was $83/barrel. More realistic that the $97/barrel calls. But it's still off from $78...

Japan to Propose Global Natural Gas Reserve to Avoid Shortages

https://finance.yahoo.com/news/japan-propose-global-natural-gas-040004888.html

- Can see why indiv countries would want to do this, but will global natural gas supplies be helpful the same way global oil reserves are when natural gas isn't traded like oil is?

- Also, higher nat gas prices make Permian wells more valuable

- Regional natural gas storage frameworks make much more sense

Dirty and Sludgy Oil Runs Hot in Asia as Saudis Cut Supply Back

https://finance.yahoo.com/news/dirty-sludgy-oil-runs-hot-051227587.html

- Less light oil on the market from Saudi Arabia and UAE has made buyers look for heavy, sour crudes

- Urals price is now up close to price cap price

- Was this intentional by Saudis?

Biofuels are displacing petroleum-based distillate fuel oil consumption on the West Coasthttps://www.eia.gov/todayinenergy/detail.php?id=57040

- renewable diesel = diesel made from 

- biodiesel used as well

- petroleum distillate consumption down on west coast in 2022 but biodiesel consumption up

- unique to west coast

NATIONAL AVERAGE SEES LITTLE CHANGE, GASOLINE DEMAND PLUMMETS AFTER SURGING FOR JULY 4

- Gasoline demand soared on July 4 but declined since then

- Gasoline prices went down going into July 4 but have basically remained stable since then

- "Implied gasoline demand, a proxy for retail demand, unsurprisingly jumped to 9.6 million barrels as motorists hit the road for July 4."

- "gasoline inventories fell 2.5 million barrels" 

Oil dips on Chinese and U.S. data, but OPEC+ cuts limit fall

https://www.reuters.com/markets/commodities/oil-eases-ahead-china-us-data-opec-cuts-support-market-2023-07-10/

- Lots of Chinese data coming out later this week

- Will the market tighten in H2 2023? China's economy will turn around at some point, but will it be this year? 

- China's trade with US and Europe is down but is Russia really a replacement? Depends who you ask.

Iran Seizes Commercial Tanker in Persian Gulf

https://www.voanews.com/a/iran-seizes-commercial-tanker-in-persian-gulf-/7170938.html

- Military incident in Persian Gulf including US Navy firing on Iranian vessels did not cause oil market to jump at all

- Do people not care about tanker security in the Persian Gulf anymore?

Special Guest Kunal Patel from the Dallas Fed

Q2 Energy Survey

https://www.dallasfed.org/research/surveys/des/2023/2302

- price forecasts of producers are different from other industries. Think price will be in $80s by end of year

- credit conditions: 24% of small E&Ps said credit conditions are having a major impact. Large E&Ps have more sources of credit.

- costs in the oilfield: the larger the firm you are, the more pricing power you have, both with services and materials

- larger firms can take advantage to get lower costs but smaller E&Ps are still facing higher costs

- potential decreases in cost in H2

- Contracts with rigs and suppliers are the issue - if firms locked in contracts in 2022 then prices are higher even if prices are going down now. When the contracts were signed is driving the costs

- Oil producers in the US think that global oil consumption has slightly underperformed this year what they expected at the start of the year.