2024's a wrap

It’s not easy being a proud oil man in the UK over Christmas.

Large swathes of the country are still afflicted by a nasty bout of what a former boss likes to call eco-jihadism. His words, not mine.

The festive season forces you out of the warm embrace of your own echo chamber and into chilling close contact with those distant family members you only have to see every 12 months, if you’re lucky.

One cousin spent the summer working for Greenpeace. Another brought along his own carton of oat-based cream to have with the flaming Christmas pud. All read the Guardian.

So here I am, avoiding the temptation of a vibe-ruining debate by hiding away for an hour or so to write this brief year-end missive to the Both Barrels crew.

Let’s take a look back at the big themes of 2024 in oil, gas, and energy, and a sneaky glance forward at what might be in store for the year ahead.

Oh, and happy new year! Normal service of the morning updates will restart next week. Most likely Wednesday.

📈 BEHIND THE SCENES AT BOTH BARRELS

I started Both Barrels back in August 2023 as a little side project (which it still is), with the objective of keeping readers up to speed, and occasionally amused, on everything that’s going on in the most important and exciting industry on God’s green earth.

In the spirit of “build in public” and in case anyone’s interested, here are some numbers of where things are today:

• 1,107 energy aficionados subscribed

• 50.5% average open rate

• 117 editions sent in 2024

I’m way too hooked on checking open rates and subscriber counts so, if you’re reading this, a huge thanks for feeding that addiction.

Please keep reading, sharing, and giving feedback so that I can make this fledgling newsletter as interesting and as useful as possible for you.

🗞️ 2024 IN ENERGY

Part of the reason I love the oil and gas sector is that it has more layers than a drag queen’s make up routine.

It’s about macro economics, engineering, geopolitics, physics, climate science, corporate finance, sociology, geology, geography, and fortune (in both senses of the word) to name a few.

Mix all that together, and you can never be bored.

This past year was no different. Here’s a quick reminder of what went down:

• ⚔️ OPEC battling for control. The cartel struggled to support oil prices and had to keep delaying production increases, while maintaining a wildly different 2024 oil demand growth forecast than the IEA. Time will soon tell who was correct.
  

• 📈 Never bet against US shale. US oil production kept climbing despite forecasts at the start of the year that it would flatline. With Donny T and his “drill baby, drill” mantra soon to be in the Oval Office the future is still very bright.
  

• 🐲 All eyes on China. Oil demand in China, the key growth engine of demand over the past two decades, may have peaked thanks to a rapid shift to EVs and LNG in trucks. Slowing economic growth in the country is also cause for concern.

• 🔥 Gas keeps booming. Despite Biden’s attempt to block new LNG terminals in the US, the global LNG industry continued to boom with new facilities coming onstream and large supply contracts being signed all over the shop.
  

• 🤡 The green house of cards. O&G majors and investors started retreating from value incinerating, ineffective “renewable” projects. The emperor has no clothes and 2024 marked the year when people finally started noticing.

• 😬 That was close. Iran and Israel reached the brink, and thankfully stepped back, after a series of tit for tat attacks.

• ⚛️ Nuclear’s time. Nuclear power well and truly announced its renaissance with a flood of high profile deals to provide tech companies with reliable low carbon power for their data centers.

• 🏭 Deindustrialization in Europe. European politicians continue to mistake decarbonisation for deindustrialisation and its people are starting to pay the price. Scores of heavy industrial companies in Europe announced major job cuts and factory closures in 2024 due to the insufferable burden of high energy prices and suffocating regulation.

What did I miss?

🛢️ WHAT NEXT?

The regular readers among you will know that I shy away from making too many predictions in an a sector as volatile as ours but, hey, why not.

• Oil markets. Barring some geopolitical shock, it’s hard to see much upside in oil prices in the near future. OPEC+ have nearly 6 mmb/d of spare capacity, and new volumes keep hitting the market elsewhere in Brazil, Guyana, Angola etc. Demand is the known unknown.

• Gas markets. The big question here is whether Trump can end the war in Ukraine and if piped Russian gas flows to Europe then restart. I’d bet on the former but not the latter. Yes, Europe is being battered by high energy prices without cheap Russian gas but its current crop of politicians are too ideologically opposed to Russia that it’s hard to see them agreeing to restart buying large volumes of Russian gas anytime soon. This is good news for LNG exporters like the US. Either way, LNG will keep going from strength to strength as it unlocks near endless global gas resources.

• Wind and solar. After years of brainless pursuit of expensive wind and solar projects, it’s encouraging to see that businesses (not politicians, yet) are finally waking up to the reality of economics and physics. I expect this continue and more oil & gas companies to go back to their core business of producing and moving hydrocarbons.

• Nuclear power. China is surging ahead and building dozens of new reactors at breakneck speed. Meanwhile, in Europe, the tide is slowly turning but regulation is still getting in the way of a much needed build out. If Germany finally relents in 2025 and restarts its reactors then this will truly be a watershed moment.

From a Both Barrels point of view, I’ll just keep dropping in your inbox 3x a week with the key headlines from across the sector. Let’s see where that takes us.

Ok. I’ve been hiding away long enough.

Better get back to the charades.

Wish me luck.

🛢️🛢️

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