Energy Risk Unpacked with Steve Sinos: Hedging Energy's Volatility
ory dives deep into energy risk management with industry veteran Steve Sinos. Steve, with over 20 years of experience, explains how energy derivatives—from Futures and Options to CFDs—are crucial risk management tools designed to shift, not destroy, market risk. The episode frames this through the practical scenario of advising a regional airline on hedging its largest cost: fuel price exposure. Steve details the non-mechanical, iterative process of understanding controllable versus unknowable factors, emphasizing that effective risk management forces explicit trade-offs to achieve strategic goals. The discussion covers the diverse hedging approaches of airlines and E&P companies, focusing on product selection, instrument choice, and the critical challenge of basis risk. He shares insights on managing for quantifiable success over predicting "black swan" events, and the shift towards optimizing the "efficiency of a risk dollar" for specific cash flow targets. Listeners will also learn about interpreting complex market data like Commitment of Traders (COT) reports to avoid speculative biases and navigating unique market structures, such as the current "smiley curve" in crude futures. This episode underscores the risk manager's role as a "therapist," helping strategic leaders make informed decisions by understanding the sacrifices required to meet their objectives
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1:07:47
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1:07:47
The Policy Price Tag: Inside the Uneconomic World of Renewable Diesel
Rory speaks with Bloomberg expert Brett Gibbs about the Renewable Fuel Standard (RFS) and its profound impact across energy, agriculture, and gasoline prices. Brett highlights the market's policy-driven nature, contrasting stable ethanol volumes with the rapid, four-fold growth of renewable diesel, which now significantly displaces petroleum diesel. A key distinction is renewable diesel's chemical identity to petroleum diesel, allowing one-for-one substitution and no blend limits, unlike biodiesel. However, renewable diesel production remains uneconomic without crucial policy support like RFS RINs and tax credits, as feedstock costs (e.g., soybean oil at $4/gallon) vastly exceed petroleum diesel prices ($2.33/gallon). The conversation delves into the RFS's complex credit system and recent policy shifts favoring domestic feedstocks, such as the removal of indirect land use change penalties on US soybean oil, boosting its tax credit value. While roughly 50% of feedstocks are waste-based, scaling these is challenging, leading to reliance on virgin oils like soybean oil, which accounts for up to 50% of US soybean oil production now. Looking ahead, the US biofuel industry is expected to see a plateau in growth, with the administration aiming for stable 80% utilization to balance agricultural support with consumer fuel costs, while buying time for new technologies. Key indicators for tracking the market include the D4 RIN price and soybean oil prices
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1:08:23
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1:08:23
Price Sensitivities in US Shale and Breakeven Metrics: Brandon Myers on Forecasted Stability
In this conversation, Brandon Myers from Novi Labs discusses the intricacies of shale production, focusing on type curves, price sensitivity, and the evolving landscape of the US shale patch. He emphasizes the importance of understanding breakeven metrics and the impact of inventory dynamics on future production. The discussion also highlights the role of efficiency gains and technological advancements in drilling, as well as the influence of external factors such as tariffs and regulatory changes on operational costs. Myers provides insights into the future of US shale, addressing common misconceptions and the importance of human expertise in the industry.
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1:00:56
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1:00:56
Tariff Tensions: US-India Trade Under the Spotlight with Russia in the Shadows
In this episode of the Oil Ground Up podcast, host Rory Johnston delves into the complex dynamics of US-India trade relations, focusing on the recent imposition of secondary tariffs by President Trump in response to India's continued purchases of Russian oil. Joined by Gregory Brew, a senior analyst at Eurasia Group, the discussion explores whether these tariffs are a strategic move in broader trade negotiations or a direct response to the India-Russia oil trade. Tune in to understand the implications of these tariffs on global oil markets and the geopolitical landscape. #USIndiaTrade #Tariffs #OilMarket
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1:00:59
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1:00:59
Canadian Oil: Growth in the Duverney and Montney, and the Race for MEG
In this episode of "Oil Ground Up," host Rory Johnston delves into the dynamic landscape of the Western Canadian oil and gas sector with expert insights from Michael Spyker, Principal Analyst at HTM Energy Partners. The discussion navigates the complexities of the non-oil sands sector, focusing on the Montney and Duvernay plays, and explores the strategic implications of Strathcona's bid for MEG Energy. Tune in to understand the evolving trends, challenges, and opportunities within this pivotal industry. Don't miss this deep dive into the heart of Canada's energy frontier.
Rory Johnston navigates listeners through the financial market dynamics of the world's oil and gas sector. Get the latest fundamentals behind the price action and hear from industry experts from the field and from the corporate offices of the world's leading energy producers.
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