Nat gas prices are already up 20% on the week and both rhetoric and actions between Russia, Ukraine, and the US are stepping up in the wake of Biden’s granting permission for long-range missile use.
Plus the fascinating story behind the newest member of the SP500.
Let’s take a look…
~Doug
What’s in this issue:
- Energy Market Recap
- TPL Who?
- Headlines
| Crude Oil (Jan) | $70.10 | +1.35 | +1.96% |
| Natural Gas (Dec) | $3.339 | +0.146 | +4.57% |
| Copper (Dec) | $4.1250 | -0.0305 | -0.73% |
| S&P 500 | 5,948.71 | +31.60 | +0.53% |
Energy Markets 🛢️Oil prices notched a 2% gain as the world continues to digest how Russia might react to the US allowing use of longer-range missile attacks by the Ukraine.Already, Russia appears to have used an intercontinental ballistic weapon on Ukraine, but it is a missile capable of traveling thousands of miles and carrying nuclear warheads. The war of words has also stepped up in relation to a newly installed US base in Poland, Russian Foreign Ministry spokesperson Maria Zakharova stating:”the missile defense base in Poland has long been included among the priority targets for potential neutralization.” SpreadsJan/Feb: +.33 🔥Natural gas prices were up another 4.5% yesterday and are already higher by 20% this week. While most analysts expected another week of small inventory builds, what the market got from the EIA was a draw of 3 bcf.Inventories are still high by historical standards, but the pick up in weather-related demand has been enough to send shorts scrambling to cover.  You can see on the chart that the $3.40 proved to be resistance in July, August, and October, so eyes will be on how prices react at that level. From a technical perspective, the next resistance after that looks to be around $4.00. |
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| TPL Who?Source: YahooFinance Judging by all of the news lately, you would be forgiven for thinking the stock chart above would be for some new AI company. But this sleepy, 100-year-old company, just happened to be sitting on a gold mine.Be sure to click on this post by Bloomberg oil analysts Javier Blas. The 10-part thread is worth a quick read.It’s a fascinating story about how Texas Pacific Land Corp ended up with millions of acres of “worthless” land (including mineral rights) in west Texas.What does this $35 billion company do now? It collects royalties.  Javier Blas @JavierBlasThe biggest “oil company” you probably never heard of was just included into the S&P 500 blue-chip index. It’s name is Texas Pacific Land Corp. and it’s worth ~$35 billion. It replaces Marathon Oil, which was sold to ConocoPhillips. https://www.spglobal.com/spdji/en/documents/indexnews/announcements/20241121-1475569/1475569_5-mro.pdf#OOTT 🧵Thread 1/10 |
| Headlines “How does Buffett do it? He’s betting on a simple principle, which is that valuations and future returns are inversely related. That is, when assets are expensive, future returns tend to be lower, and vice versa.” +Buffett’s $325 Billion Cash Hoard Is an Early Warning Signal – Bloomberg “Utilities “have to be a little more sensitive to the demands of customers in terms of reliability and tariffs,” he said. “We all realize that the status quo can’t prevail.” +Pakistan’s Surprise Solar Boom – Bloomberg ”This will be BP’s first ever carbon capture, utilisation and storage project. Production at the field is expected to start in 2028, the British major said on Thursday.” +BP greenlights $7bn Indonesia gas project – FT ”In those notes, Sagar Adani, nephew of the Indian conglomerate’s billionaire founder Gautam Adani, noted the amount of the bribe he offered, which government official had been offered the money and how much solar power the official’s region would buy in return.” +‘Bribe notes’ with per megawatt rates: filings detail Sagar Adani’s role in Indian scandal – Reuters “Northvolt said it has only enough cash to support operations for about a week and said it has secured $100 million in new financing for the bankruptcy process.” +Sweden’s Northvolt files for bankruptcy, in blow to Europe’s EV ambitions – Reuters |
| Economic Calendar Monday – Tuesday – Housing starts Wednesday – Weekly Crude Oil Storage Report, Nvidia reports Thursday – Weekly Natural Gas Storage Report, Jobless claims, Home sales Friday – Rig Count, PMI |
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