Oil & Gas Earnings Expectations Are Collapsing

Tyler Durden's picture

Much of the recent ebulient narrative about equity markets has been based on the promise of an earnings rebound - due to beneficial comps in the oil & gas sector. That narrative just hit a wall...

As Bloomberg notes, analysts haven’t rushed to upgrade their outlook on earnings per share at Europe’s biggest energy companies, even as Royal Dutch Shell Plc, Total SA and Statoil ASA beat estimates for a second straight quarter.

With crude below $50 a barrel, analysts cut their EPS predictions to the lowest since November.

Concerns that rising global production will continue to weigh on oil prices are keeping those numbers in check, according to MPPM EK and Saxo Bank A/S.

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Tsunami Wave's picture

Until Saudi and company gets into a hot war with Qatar

GUS100CORRINA's picture


Thomas W. Swift's picture

Tom Swift’s Radiant Energy Lessons

Lesson #1: Definitions

ENTROPY: a thermodynamic quantity indicating disorder of a system.
FOSSIL FUEL: an outdated energy source, widely used from the 19th century until the early 21st century, when RADIANT ENERGY became widely known.
RADIANT ENERGY: a different form of electricity, discovered by Nikola Tesla in the 1890’s. See PHASE CONJUGATION.
OVERUNITY: a COP exceeding unity (1). In accordance with conservation of energy (see FIRST LAW OF THERMODYNAMICS), only possible if an outside energy source supplies some of the output energy. Examples of overunity include conventional renewables such as solar panels and wind turbines.
COEFFICIENT OF PERFORMANCE (COP): an engineering measure of an energy device, the ratio of its output energy to its input energy.
FIRST LAW OF THERMODYNAMICS: the law of conservation of energy (extended to the law of conservation of mass-energy by Einstein). Energy cannot be created or destroyed, it can only change forms.
SECOND LAW OF THERMODYNAMICS: whenever energy changes forms, some of it is always lost to unrecoverable forms because disorder (entropy) must increase for the universe as a whole. Only applies to closed systems, can be violated in open systems.
TIME REVERSAL: in physics, most of the fundamental physical laws do not have a preferred direction of time. Events can unfold equivalently whether time moves forward or backwards to our normal macroscopic sense. See “CPT symmetry” for a stronger symmetry principle.
PHASE CONJUGATION: in physics, particles can be reflected in a normal sense or in a “phase conjugate” sense, where the outgoing particles have their wave functions conjugated with respect to the incoming particles. In many respects this is equivalent to a time reversal and the outgoing particles act in some ways as if they are moving backwards in time. When put through a transformer, phase conjugate electricity produces OVERUNITY.

GUS100CORRINA's picture

Thomas Swift said the following ...

FOSSIL FUEL: an outdated energy source, widely used from the 19th century until the early 21st century, when RADIANT ENERGY became widely known.

My Response: BULLSHIT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

You missed the key concept: ENERGY DENSITY. 

Thomas W. Swift's picture

There is enough energy inside the space in this empty cup to boil all the oceans of the world. This is a fact well known to the scientific community, and was, for example, a favorite quote of Nobel Prize winning physicist Richard Feynman.

Two Nobel prizes were awarded in 1957 to Lee and Yang for substantiating the extraction process for this energy.

— Tom Bearden
referring to "Broken Symmetry"

Since the archaic old Electrical Engineering model was formed in the 1880s and 1890s, modern physics—including special and general relativity, quantum mechanics, quantum electrodynamics, gauge field theory, quantum field theory, and particle physics—has been born and developed. Physics has made a century of progress since the old EE model was “frozen” in 1892. Modern physics assures us that the vacuum/spacetime has enormous energy, and that it continually interacts with every charge in a circuit, system, and the universe, continually exchanging enormous—even mind-boggling—energy with it. Indeed, all forces in all our systems are produced by the interaction and exchange of virtual particles of the vacuum.

To correct the horribly flawed EE problem, the escalating world energy problem, physicists in several disciplines—not just EEs and environmental scientists—must be directly involved. Trying to use electrical engineers to solve the problem—that their own discipline and model create in the first place—is utterly useless.

NoWayJose's picture

'Filler' article from a hedge fund that was caught 'short oil' - just as Goldman jumped in 'long' on oil with both feet. Hedgie is scrambling to cover and is trying to shake loose some sellers.

Expect oil to push higher through Labor Day. There is a reason oil charts usually go back to the previous October (both good and bad charts)!

adolphz's picture

Goldman Sachs not true. Shepwave analysts left

NoWayJose's picture

Dueling articles - more recent is the pro-oil 'electric cars no threat' article. Whomever is doing it has enough 'free money' to push oil down, buy up a lot, then push oil back up. This particular article looks quickly done with little substance - like it was rushed out the door to help an oil short cover!

adolphz's picture

Shepwave analysts called this one too 

Great trades today in stocks thanks guys. 


silverer's picture

It's become dangerous to leave your house. Cops will confiscate your money without cause. One drink will get you a DUI. Muslims will swing at you with a machete. Women libtards will yell at you for just about anything. Going out to eat can give you the shits. Best to take the terminal off your battery and stay inside for a month or so at a time.

ClownBaby's picture

Sounds like someone needs a hug.

DuneCreature's picture

Is Putin sticking it to the Deep State Oily Gawkers in Venezuela?

Aaah, poor Exxon/Mobile CIA schmucks.

It couldn't happen to a more deserving batch of assholes.


Live Hard, What's Wrong Langley, Got Your Hands Full With A Regime Change In The Syria For Bibi And Let The Oil In Your Own Back Yard Get Sucked Away By Vlad And The Russian Rough Necks, Die Free

~ DC v7.4

sinbad2's picture

Such quick thinkers, it only took 2 years to work out the price has dropped.

adr's picture

When refiners, who are owned by the majors, have record margins never making more off a barrel of oil, how can earnings go down? 

Sapere aude's picture

Of course earnings are down. U.S. drillers have been paid in kind, with oil from the SPR and Fed buying their junk bonds....now the chickens come home to roost. Shale is a ponzi. Same as the non existent oil glut.

Shale had one use, it was known it could not be viable under $100 oil, but it wasn't done on a profit basis, it was weaponised to give the illusion of a world oil glut, but with 4,000,000bbls a day being produced at massive losses.

Take that out of the current world production and you immediately have a 3,000,000bbls a day deficit and that's not even accounting for the false Saudi oil production figures, and the other ME allies, in the fight against Russia perpetrated by lowering the oil price at any cost.

Don't think this is conspiracy theory, as its the same tactic that created the original decline of the Soviet Empire...its now being revisited, but it won't work, as the petrodollar is declining and the dollar will also.

Doesn't matter how much paper gold, silver or crude....the shite hits the fan when its found that the Emperor has no clothes, and the paper is for non existent resources.

Then take the decline rates on oil wells, on average 8-12% on conventional. You have around 98,000,000bbls a day world requirements, and that includes all the energy from existing renewables in the system, so you add EV's etc. etc., and you will need twice as much renewables as you have at present and there is only finite resources for that, let alone the stupidity of multiple energy transitions via battery, inverter etc. etc. to and from inverters to and from the grid.

So take shale out, and you have just 92,000,000bopd produced and that includes tar sands, and a massive shortage in what is required. So effectively this oil glut scheme artificially kept the U.S. imports of 8,000,000bopd nice and cheap too, especially if you buy it and say its in storage, as then inventory is used to knock the price lower...which is nonsense as if you didn't need it, you don't have to buy it in the first place.

Now that 92,000,000bopd, then loses approximately 9,200,000bopd in depletion too, and with low oil price no one will expend the capex to make that up, so suddenly you have a 12,200,000bopd deficit, plus of course another 1,600,000bopd of expected increased demand, let alone the demand that would be there if the war torn countries cease fighting and rebuild.

Then it comes home to roost the problem wasn't a glut, it was a pending nightmare shortage of oil.

Half the world needs rebuilding. Try doing that with EV's? What's going to supply 24/7 water pumping in the multiple nations that require water. What's going to supply power 24/7 in all the countries where you are lucky to get intermittent supplies 4 hours a day, or the queues for petrol etc., in some Middle Eastern Countries?

What's going to supply the silver, the lithium, the steel, the aluminium, the graphite and the manufacturing power etc. etc., to produce these resources in ever larger numbers? It won't be the already heavily subsidised EV's. It can only be done with large commercial diesels.

What happens if you have to carry the subsidies Musk style, with a double whammy of subsidy to the EV and massive losses to treasurys in hydrocarbon taxes.

So if you don't give the subsidy people stop buying the EV's as they are not viable without it. If you do, you have to have masses of resources, masses of new Solar cells and turbines, costing again masses of resources.....and the loss of revenue to already effectively bankrupt countries

its already cheaper to run a back up generator than it is to pay for Solar storage.

In the UK we had the farce of Government boasting the other day about first time ever 51 per cent energy was produced by renewables, although they included nuclear, and even wood fired burners in that....They then boasted about the effect it had on electricity prices....They dropped to a minus figure, to minus 1.9p per KWhour, and of course the government got on the bandwagon about saving taxpayers money...

The only thing they forgot to mention was that all the Solar, all the turbines had been subsidised up to 48p a unit guaranteed, and index linked for the next 25 years!

Sad thing is they even have Elon Musk advising them! Not surprising then to hear their striving for EV's by 2040! More subsidy to the musk machine? NO CONFLICT OF INTEREST THERE THEN!!! 

When will the penny drop and people realise this was all a con. The world could not sustain increased oil production with super giant oilfields in terminal decline, so it had to be hit full pelt with the media fake news about climate change, devil diesels, fusion imminent (it always is), EV's etc. etc., when the fact is the roll out of EV and solar was to soften the blow of massively declining oil supplies for the future

The U.S. can do much better than a worn out policy that worked once, but won't work again. Technology is where its at, and that includes space program. He who controls space controls the world, and likewise the U.S. can be the breadbasket of the world, rather than being seen to be the headcase of the world.

We need a strong USA back to work, pushing technology, pushing space. it has the skills, it has the workforce it just needs someone to stop these bloody ridiculous mind games and fake news.