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July 13th, 2020

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Oil Market Update...
Clive Maund  Mar 14  

Oil Market Update...
Clive Maund  Dec 12  

Oil Market Update - consequences of Saudi attacks...
Clive Maund  Sep 18  

Oil Market Update
Clive Maund  Jul 30  

Evaluating US Nuclear Competitiveness and its Future as a Carbon–Free Clean Energy Source
Keith W. Rabin  Jul 25  

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expert analysis & newsletter briefs

NexGen Energy Ltd.

"My top pick for 2016 is NexGen Energy Ltd. . . Arrow is an emerging world-class deposit that is still in the early stages of discovery. The state—it being so early in the delineation and development process—means a lot of upside still remains. . .the company just closed a $21M financing, which means the company has enough cash to carry through 2016 and beyond." (12/23/15) - Gwen Preston, Resource Maven

NexGen Energy Ltd.

"My top pick for 2016 is NexGen Energy Ltd. . . Arrow is an emerging world-class deposit that is still in the early stages of discovery. The state—it being so early in the delineation and development process—means a lot of upside still remains. . .the company just closed a $21M financing, which means the company has enough cash to carry through 2016 and beyond." (12/23/15) - Gwen Preston, Resource Maven

Fission Uranium Corp.

"Fission Uranium Corp. announced it entered into a binding letter of intent with China's CGN Mining, a subsidiary of nuclear giant China General Nuclear Power Group, to acquire 19.99% of Fission as part of an CA$82M strategic investment, along with a potential future offtake agreement on production from Patterson Lake South (PLS). . .we urge investors to bolster positions in Fission as the deal derisks development financing, and in the interim, should fund PLS through full feasibility and permitting." (12/22/15) - David Sadowski,

Energy Fuels Inc.

"Energy Fuels Inc. is the only conventional uranium producer in the U.S. and the second-largest producer overall. It has the potential become #1, given the projects and mines it has on standby or that are close to being in development. At full ramp-up we expect the company to be able to produce 5–7 Mlb/year, in a country currently producing 4–5 Mlb/year. The U.S. consumes 55 Mlb/year, but only about 10% is supplied domestically. U.S. utilities seeking security of supply will greatly prefer U.S. producers over those from Kazakhstan, Russia or Africa. This company is well positioned to benefit from higher uranium prices. We have a Buy rating with a target price of $11.85/share." (12/22/15) - The Energy Report Interview with Rob Chang

Fission Uranium Corp.

"Fission Uranium Corp. announced it entered into a binding letter of intent with China's CGN Mining, a subsidiary of nuclear giant China General Nuclear Power Group, to acquire 19.99% of Fission as part of an CA$82M strategic investment, along with a potential future offtake agreement on production from Patterson Lake South (PLS). . .we urge investors to bolster positions in Fission as the deal derisks development financing, and in the interim, should fund PLS through full feasibility and permitting." (12/22/15) - David Sadowski,


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The Energy Report

Phil Flynn
http://www.pricegroup.com/
pflynn@pricegroup.com


The Road Back. The Energy Report 07/13/2020

As global oil demand starts to recover, OPEC plus has a problem. How do they increase production to maintain market share and at the same time, not crash the market in a sea of oversupply? The Wall Street Journal, in an exclusive, suggests that OPEC plus is getting ready to raise output by 2.0 million barrel of oil a day in August. Bloomberg News says that they want to do this in a way that does not create a taper tantrum. Talk of an increase in production is seeing oil dip on this talk.

Bloomberg writes that, "Saudi Oil Minister Prince Abdulaziz bin Salman likes the idea of OPEC+ acting as the central bank of oil. And he expresses admiration for Alan Greenspan, former chairman of the U.S. Federal Reserve. The challenge now confronting the oil producers' club is one that's all too familiar to the Fed: how to avoid a "taper tantrum," the market panic that ensued when the institution proposed tightening monetary policy in 2013. OPEC, as I have written many times before, fancies itself as the central bank of oil. The reality is they have proven to be a less than credible steward as proven with Saudi Arabia starting a price war in the throes of the global covid 19 pandemic. Regardless, the worries of the taper tantrum is a real concern for a cartel that wants to have its cake and eat it to. In a market that has seen oil demand recover faster than almost every major reporting agency and analyst has predicted, could still be at risk with the rising cases on Covid 19.

Yet in the big picture from an economic perspective, Covid 19 is no match for the amount of global economic stimulus that is over 9.0 trillion dollars. China is promising more stimulus. China's Premier Li said that China will ramp up credit supply and lower financing costs. This has led oil away from the depths of total demand devastation to a trajectory that is getting oil demand almost back to normal despite the fact that the global economy is not back to normal. So talk of a production rise is a threat to the market at least psychologically.

The sell off in oil on the return of Libyan oil was perhaps a bit too optimistic. Reuters reports that, "Libya's National Oil Corp (NOC) on Sunday accused the United Arab Emirates of instructing eastern forces in Libya's civil war to reimpose a blockade of oil exports after the departure of a first tanker in six months. The UAE, along with Russia and Egypt, supports the eastern-based Libyan National Army (LNA) of Khalifa Haftar, which on Saturday said the blockade would continue despite it having let a tanker load with oil from storage. "NOC has been informed that the instructions to shut down production were given to (the LNA) by the United Arab Emirates," it said in a statement, resuming force majeure on all oil exports. There was no immediate comment on NOC's accusation from either the LNA or the UAE.

The rig count is continuing to fall but that can't takeaway the fact that the U.S. produced a record amount of natural gas in 2019. Baker Hughes, BKR, on Friday reported that the number of active U.S. rigs drilling for oil edged down by 4 to 181 this week. That followed a decline of 3 oil rigs a week earlier. The number of oil rigs has not seen an increase since the week ended March 13. The total active U.S. rig count, meanwhile, fell by 5 to 258, according to Baker Hughes and Market Watch. The Energy Information Administration reports, "Natural gas is one of the main sources of energy in the United States. In 2019, U.S. production of dry natural gas increased to almost 34 trillion cubic feet (Tcf) and consumption increased to 31 Tcf—both values were records. The U.S. Energy Information Administration's (EIA) U.S. natural gas flow diagram shows the magnitude of U.S. natural gas supply (production, imports, and withdrawals from storage) and disposition (consumption, exports, and additions to storage) in 2019.

U.S. natural gas production has increased in the past decade because the widespread adoption of horizontal drilling and hydraulic fracturing techniques has allowed operators to more economically produce natural gas from shale formations. In each year since 2017, on an annual basis, production of dry natural gas has exceeded consumption within the United States.

In 2019, gross U.S. withdrawals of natural gas and other compounds extracted at the wellhead totaled nearly 41 Tcf, and most came from shale natural gas wells. Marketed natural gas production, which excludes natural gas used for repressuring wells, vented and flared gas, and non-hydrocarbon gases, totaled more than 36 Tcf. U.S. marketed natural gas was further processed into about 34 Tcf of dry natural gas and about 3 Tcf of natural gas plant liquids, such as ethane and propane.

As natural gas production has increased in the United States, exports of natural gas have also increased, surpassing natural gas imports in 2017 for the first time since 1957. In 2019, the U.S. exported a record of nearly 5 Tcf of natural gas, mostly by pipeline to Mexico and Canada or shipped overseas as liquefied natural gas (LNG). Natural gas imports in 2019 were less than 3 Tcf, the lowest level since 2015. Most U.S. natural gas imports originate in Canada.

In the United States, significant amounts of natural gas are also added to or withdrawn from underground storage throughout the year. Natural gas is added, or injected, to storage during periods of low consumption, typically during the spring and fall, and is withdrawn from storage during periods of high consumption, typically in the winter and summer. While gasoline demand is coming back, prices in many parts of the country are at around the lowest level for July since 2004. Still Rbob futures are bottoming and we should be buying breaks.

There is a substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. PFGBEST, its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Phil is one of the world's leading energy market analysts, providing individual investors, professional traders and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline and energy markets. Phil's market commentary, fundamental and technical analysis, and long-term forecasts are sought by industry executives, investors and media worldwide.

PLACING CONTINGENT ORDERS SUCH AS "STOP LOSS" OR "STOP LIMIT" ORDERS WILL NOT NECESSARILY LIMIT YOUR LOSSES TO THE INTENDED AMOUNTS. SINCE MARKET CONDITIONS MAY MAKE IT IMPOSSIBLE TO EXECUTE SUCH ORDERS.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Alaron Trading Corp. its officers and directors may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

Contact Phil at 1-888-264-5665 or pflynn@pricegroup.com.



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July 13th, 2020

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