#Venezuela #Oil Production #OOTT

https://www.genscape.com/blog/venezuela-hide-and-seek-genscape%E2%80%99s-flare-signature-intelligence

Venezuela: Hide and Seek with Genscape's Flare-Signature Intelligence

Devin Geoghegan, Global Director, Supply & Demand Analytics
February 13, 2018

Deciphering Venezuelan oil is akin to searching for a rusted penny at night in a muddy pond with only starlight to illuminate – you are better off relying on a metal detector. To provide transparency into the current situation, Genscape decided to deploy its proprietary flare signature methodology on Venezuelan oil production after having had success with Libya. As discussed below, we believe the work shines needed light in near-real time on Petróleos de Venezuela S.A's ("PDVSA") oil and other liquids production. Notably, Genscape's work disagrees with and sometimes front-runs benchmark data at key inflection points.

As with Libya, Genscape built the monitor using government, regulatory, and company data by field-area, and we mapped it to our proprietary flare signature methodology across time. The results are showcased in Figure 1 below along with a few key annotations.

Figure 1: The blue line represents Genscape's daily total liquids production estimate; the black line is the rolling five-day average of the estimated production; the red, green, and yellow lines represent the IEA, PDVSA, and OPEC, respectively. Note: given that PDVSA and OPEC only provide oil production, their time series has been modified to include condensate and NGL volumes. Click to enlarge

As shown in Figure 1 above, the monitor markedly disagreed with the benchmark data five times since April 2013. Twice it is lower and thrice higher. During late 2013 through Q3 2015, the monitor did not detect signal degradation to corroborated production declines shown by the IEA and OPEC. By Q3 2015, the three time series (Genscape's Monitor, the IEA, and OPEC) converged as production estimates by the IEA and OPEC rose slightly and the monitor detected signal erosion. However, in Q4 2015 the monitor detected significant signal decay (followed by a brief recovery) and indicated that production was running into problems several months before the IEA and OPEC reflected a new period of sharp declines. 

Subsequently, the monitor and the benchmarks moved in-line with each other until May 2017 when the monitor again detected significant signal declines. Part of these declines were the cessation of flare signatures from facilities in the El Salto and San Cristobal field-areas, which indicated production was again facing substantial headwinds. From that point through November 2017, the monitor showed production falling faster than the benchmarks.

Grid cost parity is coming sooner than you think. How will #utilities react? #Renewables #batteries

Great report from @EY 

Utilities are on a countdown to reinvention

The energy industry has long known that radical transformation is coming. Revenues have been under pressure from the rise in renewables; in 2016, clean energy accounted for almost two-thirds of net new power capacity around the world.[1]

The maturing of renewable energy technologies, the proliferation of distributed energy resources, the falling cost of battery storage, and changing, more empowered consumer behavior are shifting how we produce, use, value and trade electricity.

Together these forces have put the energy sector on a path to three critical tipping points:

These dates will vary across global regions, because the trends driving change in the energy sector are different for different markets. But what is certain across all is that change is coming sooner than most of us previously expected. 

Grid cost parity is 2021 

1. Tipping point 1 – when off-grid energy reaches cost and performance parity with grid-delivered energy – will arrive as early as 2021 in Oceania.
2. Tipping point 2 – when electric vehicles (EVs) reach price and performance parity with combustion engine vehicles – will follow from 2025 across the globe. 
3. And tipping point 3 – when the cost of transporting electricity exceeds the cost of generating and storing it locally – will hit the US Northeast region first in 2039.

See the full report here:

https://betterworkingworld.ey.com/digital/energycountdownclock

#TSX Breaking Out to All Time Highs. Next Advance to be Driven by #Energy Sector $XEG

Weekly Quant & Technical Review

Paradigm Capital 

 TSX Composite Index: Breaking Out to All Time Highs

TSX Composite Breaking Out to All Time Highs, Positioned for Catch-Up Versus Global Markets

o   The TSX Composite broke out last week to all time highs, confirming the resumption of the primary bull market. The move reaffirms our view that the weakness through the first three quarters of 2017 has been a healthy correction to work-off overbought momentum following a 38% rally from the 2016 lows. Weekly momentum indicators support the breakout as weekly RSI reversed higher off 40 and MACD is trending on a buy signal above the 0 line. Conservative technical upside measures to 18,000.

o   Risk ratios in Canada continue to point to a risk-on environment. Three key ratios: Industrials vs. Utilities, Financials vs. REITs, and Discretionary vs. Staples ratios are all in a primary uptrend and breaking out to 52-week highs. The risk-on market structure supports further upside in the broader TSX.

o   The nine month period of relative underperformance of Canadian markets is reversing trend as the TSX Composite begins to carve out an uptrend versus the FTSE All World Index. The relative ratio broke out from a multi-month downtrend in September and has held uptrend support on each subsequent pullback. Combined with a bullish shift in momentum indicators, the TSX is positioned to play catch-up versus global markets.

TSX Energy Index: High Volume Breakout

 

 Energy Sector to Lead the Next Advance in the TSX

o   On Friday, the TSX Energy Index broke out from a month-long bullish flag on the highest volume day since December 2016. Adding significance to Friday's move is the fact that price action reversed directly off a retest of the rising 50-day moving average and neckline of the June to September double bottom. Combined with RSI holding 40, MACD curling higher off the 0 line, and Full Stochastics triggering a buy signal from oversold levels, the breakout confirms our view that the technical structure of the sector has shifted from bearish to bullish. Next level of resistance exists at $12.90 at the top of the February to May trading range.

o   Longer-term, we view the recent downtrend breakout as a bullish shift in trend within a larger inverse head and shoulders base that has been forming since 2015. The breakout is now forming the right shoulder after carving out a double bottom off a 2/3^rd retracement of the 2016 advance (the maximum expected correction within a bull market). Weekly RSI has reclaimed bullish territory and MACD is triggering a buy signal, signaling price is positioned for a rally back to the neckline of the basing pattern near $14.50.

o   Adding to our conviction in the energy sector is the relative uptrend the XEG has been carving out versus the TSX since July. The reversal off trendline support combined with momentum indicators reversing higher from oversold levels signal the resumption of the developing trend. As such, we maintain our overweight recommendation.    

 

TSX Energy Index: Carving Out Right Shoulder of Multi-Year Base

 

TSX Energy Index Carving Out Relative Uptrend vs TSX: Maintain Overweight Recommendation