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Amos Global waits for United States license to broaden in Venezuela's shallow waters
Houstonbased investment fund Amos Global Energy is waiting on a license from the U.S. Treasury Department to finish the purchase of Chinese Sinopec's stake in a shallowwater oil and gas project in Venezuela, the business stated on Tuesday. Washington last month did not to restore a broad license that had permitted Venezuela to easily export its oil and take in new financial investment following Venezuela's failure to fulfill a pact for a. competitive election. The U.S. rather has actually begun issuing. specific authorizations to business wishing to resume or. start operations in the South American country. The U.S. recently gave France's Maurel & & Senior prom. and Spain's Repsol licenses to continue and broaden oil. and gas jobs in Venezuela. More than 20 other firms are. waiting for thumbs-up. Business willing to do business in the approved country's. energy market need the licenses for specific transactions,. consisting of financial investments. Amos, which in 2022 formed a joint endeavor with an unit of. Venezuela's engineering firm Inelectra to gain access to. minority stakes in the Petroguiria and Petroparia projects in. Venezuela's promising Paria Gulf location, is now aiming to broaden. its influence there. If its proposition to buy Sinopec's 32% in Petroparia is. finished and cleared by the U.S., Amos and its partners would. control 40% of that task and 16% of neighboring Petroguiria,. said Ali Moshiri, Amos' chief executive. We got the license a year and a half earlier, and we. are hopeful that will get it in the coming weeks, Moshiri told. . Amos has made preliminary contact with Italy's Eni to. negotiate its possible involvement in a 3rd job in. Paria, Petrosucre. All of the company's targeted private sector. transactions in Venezuela are expected to be backed by the U.S. license. The 3 projects should be developed together, the. executive stated. Unrefined output is prepared to be a top priority, but. gas has a large capacity, he said. Petrosucre is the only active task in Paria, but crude. production there has dwindled to less than 3,000 barrels per day. ( bpd) given that U.S. sanctions in 2019 froze the joint venture's. exports to the United States. Crude and associated gas reserves have actually been shown in Paria,. however Moshiri - a former Chevron magnate in Venezuela -. believes the shallow-water area can anchor a large gas task. Financiers taking a look at Venezuela now are more delighted with. the possibility of putting money for gas, particularly for. liquefied gas (LNG), he stated, explaining that gas well. productivity is high and the country does not have major. transportation concerns. Venezuela has about 30 trillion cubic feet of non associated. gas reserves, which stay mainly undeveloped due to absence of. investment, and more just recently US sanctions. The nation's technique has actually moved to focus on the. possibility of processing the gas at Trinidad and Tobago's LNG. facilities, but Venezuela has gas enough of its own for a LNG. advancement, Moshiri said.
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Nasdaq exceeds 17,000 on boost from Nvidia; inflation information awaited
The Nasdaq rose past the 17,000 level on Tuesday for the first time ever as AI leader Nvidia struck a record high, while investors waited for U.S. inflation data today that might sway expectations for Federal Reserve rate cuts. The Dow and S&P 500 slipped, with the S&P 500 pressured by decreases in healthcare, industrials and financials. The U.S. core Personal Consumption Expenditures Price Index report for April is due later today. The Fed's. preferred inflation barometer is expected to hold constant on a. monthly basis. Nvidia shares gained more than 6% and raised other chip. stocks, with the Philadelphia Semiconductor Index up 1.7%. as traders returned from a holiday-extended weekend. In terms of today's cost action, it's all about. technology and the winners continue to be the winners,. specifically Nvidia. Today's tape is a function of favorable. stories having some stock specific effect, but in general, as you. can see from the Dow being down around 200 points, it's a. normally sloppy general market session, stated Michael James,. handling director of equity trading at Wedbush Securities in Los. Angeles. The Dow Jones Industrial Average fell 278.04. points, or 0.71%, to 38,791.55, the S&P 500 lost 4.37. points, or 0.08%, to 5,300.35 and the Nasdaq Composite. gotten 81.68 points, or 0.48%, to 17,002.47. Wall Street has actually been hitting records recently as investors. bet the U.S. central bank could start interest-rate cuts this. year. Expectations for the timing of rate cuts have actually see-sawed,. with policymakers wary as information still reflects sticky inflation. Chances of a rate reduction of a minimum of 25 basis points stand. above the 50% mark only for the months of November and December. this year, according to the CME FedWatch Tool. The odds of a. September rate cut was up to around 46% from over 50% a week ago. The retail sector will likewise be in focus today, with. a number of merchants like Dollar General, Advance Auto Components. and Best Buy reporting profits. U.S. trading relocate to a much shorter settlement on Tuesday, which. regulators hope will decrease danger and enhance effectiveness, but is. expected to temporarily increase transaction failures for. investors. Hess investors authorized the $53 billion merger with Chevron. Hess shares. were last down 0.9%, while Chevron shares were up 0.5% and Exxon. Mobil shares were up 0.8%. Apple shares increased 0.2% after iPhone sales in China. surged 52% in April from a year earlier, estimations. based upon market data revealed. GameStop shot up 21.5%. Late on Friday, the. videogame seller said it had actually raised $933 million by selling 45. million shares as part of an at-the-market offering. Declining problems outnumbered advancers by a 1.6-to-1. ratio on the NYSE and by a 1.38-to-1 ratio on the Nasdaq. The S&P 500 posted 23 new 52-week highs and 9 new lows,. while the Nasdaq Composite taped 82 brand-new highs and 87 brand-new. lows.
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Global equity index dips as investors await inflation prints
An international equities gauge fell slightly on Tuesday while U.S. indexes were a mixed bag and the benchmark Treasury yield was higher as investors awaited inflation data due later in the week for potential hints about the outlook for U.S. rate of interest. U.S. Treasury yields rose after a weak auction. They had already acquired some steam earlier in the day, given U.S. customer confidence all of a sudden improved in May amidst optimism about the labor market after degrading for 3 successive months, a survey showed. Likewise, U.S. home price development slowed dramatically in March, most likely as increasing home mortgage rates weighed on need. But equity financiers were most focused on waiting for price information that isn't due out up until Friday. The Federal Reserve's. chosen inflation barometer, the U.S. core Personal. Consumption Expenses Cost Index report, is expected to hold. stable on a regular monthly basis for April. It's a vacation shortened week so volume is likely to be. quite low all week. That's combined with the truth that markets. are concentrated on one key information point due out Friday, stated Gene. Goldman, chief investment officer at Cetera Investment. Management in El Segundo, California, describing Monday's U.S. Memorial Day vacation. The market is anxiously resting on the sidelines. waiting to get confirmation that inflation is slowing towards. the Fed's target, he stated. On Tuesday at 2 p.m. MSCI's gauge of stocks across the. world was down 2.06 points, or 0.26%, at 791.29. The Dow Jones Industrial Average fell 282.72. points, or 0.72%, to 38,786.87, the S&P 500 lost 8.17. points, or 0.15%, to 5,296.55 and the Nasdaq Composite. gained 63.43 points, or 0.37%, to 16,984.22. Earlier Europe's STOXX 600 index closed down. 0.6%. In Treasuries, yields initially slipped after the house. rate data however restored some ground after the customer. confidence survey release. Then 5-year and 10-year yields strike. their highest levels considering that early May after 2-year and 5-year. notes auctions. The yield on benchmark U.S. 10-year notes. rose 6.7 basis indicate 4.54%, from 4.473% late on Friday while. the 30-year bond yield increased 7.6 basis points to. 4.6531%. The 2-year note yield, which normally relocates. action with interest rate expectations, increased 2.5 basis indicate. 4.9785%, from 4.953%. In currencies, the dollar index was hardly greater. ahead of the inflation data, which is expected to impact. expectations for significant reserve bank monetary policies. The index, which measures the greenback versus a basket of. currencies consisting of the yen and the euro, acquired 0.01% at. 104.57, with the euro up 0.06% at $1.0864. Versus the Japanese yen, the dollar reinforced. 0.15% at 157.1. Oil rates increased on the expectation that OPEC+ will maintain. unrefined supply curbs at its June 2 meeting, while a weaker U.S. dollar made the product more appealing to holders of other. currencies. U.S. crude gained 2.55% to $79.69 a barrel and Brent. rose to $84.06 per barrel, up 1.16% on the day. Gold prices rose somewhat as investors waited for the. crucial U.S. inflation information. Spot gold included 0.26% to $2,356.82 an ounce. U.S. gold futures got 1.17% to $2,359.70 an ounce.
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Glenfarne looks for five more years till 2029 to construct Texas LNG export plant
U.S. energy business Glenfarne Group LLC has actually asked federal energy regulators for five more years until November 2029 to put its proposed Texas LNG export plant in Texas into service, according to a filing offered on Tuesday. Texas LNG is one of more than three lots LNG export plants being established in the U.S., Mexico and Canada, some of which have actually been under advancement for several years. The U.S. Federal Energy Regulatory Commission (FERC). approved building and construction of Texas LNG in November 2019. That order. offered the business 5 years till November 2024 to build the. center and location it into service. Officials at Glenfarne were not instantly offered for. comment on when the company prepares to make a last investment. choice (FID) to build the task, or how much it may cost. Typically, it costs about $800-$ 1,000 per tonne to construct an. LNG export plant, so the Texas LNG task would likely cost. between $3.2 billion and $4 billion. Glenfarne said in its FERC filing that the job was. delayed due to extenuating situations beyond Texas LNG's. control, consisting of litigation by the Sierra Club environmental. group difficult FERC's orders authorizing the task and. other fights over state licenses. Glenfarne wants to build two liquefaction trains at Texas. LNG that together would be able turn about 0.5 billion cubic. feet per day (bcfd) of gas into about 4 million tonnes. per year (MTPA) of LNG. One billion cubic feet of gas suffices to provide. about 5 million U.S. homes for a day. The U.S. is the most significant global LNG exporter and presently. has the capability to produce around 104.6 MTPA of LNG. In addition to producing LNG for its own power plants,. Glenfarne has stated it also wishes to offer LNG to other companies. to assist fund its tasks. Glenfarne already has non-binding LNG supply agreements with. units of Swiss products trader Gunvor and U.S. energy business. EQT, the greatest U.S. gas producer, according to its. FERC filing. Glenfarne is likewise establishing the 8.8-MTPA Magnolia LNG. export plant in Louisiana.
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Hess investors authorize merger with Chevron
Hess Corp on Tuesday authorized the business's $53 billion merger with the No. 2 U.S. oil company Chevron, according to preliminary outcomes of the vote. The merger required a majority vote to approve the deal by a. bulk of Hess' 308 million shares impressive to pass. The. company did not immediately provide the vote tally. Chevron used to obtain Hess last October in a relocate to. get a foothold in oil-rich Guyana's rewarding overseas fields. The deal has actually been stalled by a continuous evaluation by the U.S. Federal Trade Commission and clouded by an arbitration claim. filed by Hess' partner in Guyana, Exxon Mobil and CNOOC . The outcome is a win for Hess CEO John Hess and lays to rest. claims by some investors who wanted additional settlement. for the hold-up in closing the sale. Exxon's arbitration could. push the deal's closing into 2025. Assuming Chevron wins the arbitration from Exxon or discovers a. settlement, the transaction is now going to happen, stated Mark. Kelly, an expert with monetary company MKP Advisors.
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BHP and Anglo dig in even as takeover talks due date nears, sources state
BHP was struggling to discover common ground with Anglo American on Tuesday in talks over its takeover offer, without any brand-new concessions as a due date nears for the world's biggest miner to send a binding deal, five sources stated. Anglo gave its bigger rival a one week extension up until 1600 GMT on Wednesday to its initial May 22 deadline to submit a binding offer, after declining a third takeover proposal that had actually been dismissed as tough to carry out. It agreed to hold talks with BHP to settle contentious concerns over the structure of the deal. The latest BHP deal worths Anglo at 29.34 pounds per share or 38.6 billion pounds ($ 49.38 billion) and is contingent on Anglo unbundling its South African platinum and iron ore possessions - Anglo American Platinum and Kumba Iron Ore. . spoke with five of Anglo's top 20 investors who had calls with BHP after its third offer was rejected. The financiers said that BHP at present is maintaining that it would not be changing the value and structure of the deal. Anglo is adhering to its position that the offer isn't. compelling sufficient which BHP's proposed structure is difficult. to implement and deteriorates value, the sources said. Anglo is talking with BHP however I am uncertain if it's simply. going through the movements so it can state it attempted, or genuinely. attempted to get somewhere, Ian Woodley, a portfolio manager at Old. Mutual said. BHP stated it won't change its structure and that it. can't or will not take control of Anglo as it is because the unbundling. of Amplats and Kumba just gets too complicated then. BHP and Anglo decreased to comment. Anglo has itself described a strategy to divest its less. profitable coal, nickel, diamond and platinum units to concentrate on. broadening copper output to more than 1 million heaps in a years. Anglo shares in London closed down 2.1% at 25.58 pounds, a. discount of about 15% to BHP's last deal. Some financiers have stated they would have chosen a choice. where BHP offered to buy the entire company and spin off the. assets it doesn't want afterwards. We asked BHP, if you think it's that simple (to demerge the. South African possessions), why do not you purchase the business in full,. one financier stated. They can't truly answer that, they just state. it is not lined up with their technique. Another financier stated they asked BHP CEO Mike Henry if he. isn't concerned about risking the offer over the rejection to yield. on the South African possessions, which would represent less than 10%. of its entire portfolio, if the deal succeeds. Henry responded that he was also thinking about feedback from. his investors who have actually cautioned him versus changing the. structure, or raising the deal again. A source knowledgeable about the matter said that Anglo isn't. going to extract any more concessions from BHP. BHP sees its offer as very generous, particularly if you. envision there are a lot of synergies, the source added. Another source stated that Anglo could extend the deadline for. BHP to submit its deal if there was a shift in positions on. either side.
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Mexico's electrical energy need hits record amid extreme heat and water lacks
Mexico has actually been taking in record quantities of electrical power and occasionally more than its energy facilities can produce and transfer, official information revealed, as scorching heat raises the likelihood of power interruptions. In the late afternoon on Monday, Mexico taken in 51,595 megawatts of electrical energy across the country, grid operator CENACE taped. When need goes beyond supply, the nation ends up being a lot more susceptible to outages. With some prevalent interruptions up until now this year and hotter days ahead, resolving this problem will be one of the primary challenges for the next president, who will be chosen on Sunday. State-owned energy CFE, a near-monopoly that produces 99.47% of Mexico's electricity, and state-owned grid operator CENACE are suffering from aging and inadequate facilities in addition to insufficient efforts to update and buy eco-friendly source of power. There have actually been a lot of years now where demand was growing however there was an underinvestment in electrical power generation and transmission, stated Paul Alejandro Sanchez, an independent energy consultant. The obstacle isn't the typical need. It's. when demand spikes to such extremes. Heat has driven electricity intake by both households. and industries, but Mexico likewise keeps growing. Increasing supply is hard, and hydroelectric plants in. particular have been struck by extreme water lacks. Over the previous 6 years, energy nationalist President Andres. Manuel Lopez Obrador has actually prioritized CFE, which mostly burns. fuel oil to produce electrical energy. He likewise reduced development of. independently owned generators, much of whom have actually seen their. renewable energy plans stymied. Lopez Obrador is barred from running for a second term in. Sunday's election. But the three candidates have all pledged to. tap the country's large solar, wind and water capacity to. create more electrical power. Claudia Sheinbaum of Lopez Obrador's ruling Morena party,. who is leading the polls, and her closest challenger, Xochitl. Galvez, have said that they would concentrate on renewable energy to. boost sustainability. The National Autonomous University of Mexico forecasts brand-new. heat records in some states will cause a boost in energy. demand, bad air quality and forest fires..
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BHP and Anglo dig in even as takeover talks due date nears, sources state,
BHP was having a hard time to discover commonalities with Anglo American on Tuesday in talks over its takeover offer, without any new concessions as a due date nears for the world's most significant miner to send a binding deal, five sources said. Anglo granted its bigger competitor a one week extension up until 1600 GMT on Wednesday to its original May 22 deadline to submit a binding offer, after declining a 3rd takeover proposition that had actually been dismissed as challenging to carry out. It agreed to hold talks with BHP to settle contentious concerns over the structure of the offer. The latest BHP deal worths Anglo at 29.34 pounds per share or 38.6 billion pounds ($ 49.38 billion) and is contingent on Anglo unbundling its South African platinum and iron ore properties - Anglo American Platinum and Kumba Iron Ore. . spoke to five of Anglo's top 20 financiers who had calls with BHP after its 3rd deal was turned down. The financiers said that BHP at present is maintaining that it would not be amending the value and structure of the deal. Anglo is staying with its position that the offer isn't. compelling adequate and that BHP's proposed structure is tough. to carry out and deteriorates value, the sources stated. Anglo is talking with BHP but I am uncertain if it's just. going through the movements so it can state it attempted, or genuinely. attempted to get somewhere, Ian Woodley, a portfolio manager at Old. Mutual said. BHP stated it won't alter its structure and that it. can't or won't take control of Anglo as it is since the unbundling. of Amplats and Kumba just gets too complicated then. BHP and Anglo declined to comment. Anglo has itself outlined a plan to divest its less. profitable coal, nickel, diamond and platinum systems to concentrate on. expanding copper output to more than 1 million lots in a decade. Anglo shares in London shut down 2.1% at 25.58 pounds, a. discount of about 15% to BHP's last deal. Some investors have stated they would have chosen a choice. whereby BHP offered to purchase the whole company and spin off the. assets it does not want later on. We asked BHP, if you think it's that easy (to demerge the. South African assets), why don't you buy the company completely,. one financier said. They can't actually respond to that, they simply say. it is not lined up with their strategy. Another investor said they asked BHP CEO Mike Henry if he. isn't concerned about risking the deal over the rejection to yield. on the South African possessions, which would represent less than 10%. of its whole portfolio, if the transaction is successful. Henry reacted that he was likewise considering feedback from. his investors who have cautioned him versus changing the. structure, or raising the offer again. A source knowledgeable about the matter stated that Anglo isn't. going to extract any more concessions from BHP. BHP sees its offer as extremely generous, especially if you. think of there are a great deal of synergies, the source added. Another source stated that Anglo might extend the deadline for. BHP to send its deal if there was a shift in positions on. either side.
Europe gets lucky with a moderate, windy winter season: Kemp
With just a couple of more weeks left in the heating season, Europe is on course to end the winter with a record quantity of gas in storage, sending out prices sliding and resolving worries about energy security.
Before policymakers congratulate themselves on successfully managing the crisis triggered by Russia's invasion of Ukraine, they must acknowledge they have been exceptionally lucky with the weather condition.
Back-to-back moderate winter seasons in 2022/23 and again in 2023/24 have minimized heating need for both gas and electrical energy and enabled the region to generate record gas stocks.
The most recent winter has been primarily mild, wet and windy throughout Northwest Europe, slashing heating demand while triggering a rise in wind farm generation, a double conserving on gas.
Chartbook: Europe's weather and gas stocks
There have actually been fairly couple of episodes of dunkelflaute,. the German word explaining cloudy, windless and very cold. weather condition, which zero-out solar and wind generation, forcing the. grid to rely on gas to keep satisfy need.
There is no warranty the area's luck will last; next. winter could be significantly chillier with less wind generation,. resulting in a double dive in gas consumption.
The more comprehensive issue is that increasing reliance on variable. wind and solar, driven by medium and brief term weather. patterns, is inducing increased variability in winter season need for. gas and gas-fired generation.
During the winter season of 2023/24, wind considerably lowered. stress on the electricity and gas products-- but it might simply. quickly contribute to the stress on both systems in future.
NAO FORECASTING
The North Atlantic Oscillation (NAO) is the single most. important element for year to year changes in the seasonal. climate around the Atlantic Basin, according to scientists at. the Hadley Centre in Britain. ¹ Irregularity in the NAO describes the state of the Atlantic. jet stream and is straight related to near-surface winds and. Winter season temperature levels ... across North America, Europe, and. other areas around the Atlantic Basin.
At its most basic, the NAO explains the state of the. atmospheric pressure differential in between Greenland-Iceland. ( generally a location of relatively low pressure) and the. Azores-Bermuda (usually a location of high pressure).
When the pressure difference is greater than average, the. NAO is said to be favorable, and strong westerly winds are. directed across Northwest Europe, bringing great deals of warm, wet. air from across the ocean.
When the pressure distinction is below average, the NAO is. stated to be unfavorable, and westerly winds are directed across. Southern Europe, while Northwest Europe experiences less windy. and drier conditions. ² The NAO is a lot more variable and unstable in the short and. medium term than the more familiar El Niño -La Niña cycle in the. Pacific.
In recent years, however, researchers have actually made development in. successfully forecasting the NAO for several months ahead, which. is the basis for seasonal winter season weather forecasts.
The NAO can be forecast based upon the state of El Niño -La . Niña, the level of ice cover in the Kara Sea location of the Arctic. Ocean and a number of other variables.
It is now possible to anticipate the course of NAO and average. winter season weather with some success as early as November, according. to the U.K. Meteorological Office.
WINDY and mild
The NAO was incredibly favorable in December 2023, and to. lower extent in February 2024, directing lots of warm damp. westerly winds across Northwest Europe in both months.
In Frankfurt in Germany, temperature levels were well above the. long-term seasonal average in December (+2.8 ° C )and again in. February (+5.8 ° C), which dramatically minimized heating demand.
In London, temperature levels were likewise well above average in. December (+2.3 ° C )and February (+3.3 ° C), cutting the need for. both gas-fired main heating and gas-fired electrical heating.
At the exact same time, wind speeds throughout Northwest Europe were. faster than typical, improving generation from onshore and. offshore wind farms.
Increases in wind farm capability and greater average wind. speeds combined to create a rise in wind generation.
Germany's wind generation soared to 19.5 terawatt-hours. ( TWh) in December 2023 from 12.2 TWh in December 2022.
Britain's wind generation reached 9.7 TWh in December. 2023 from 7.4 TWh in the very same month a year previously.
In Germany, the boost in wind output (+7.3 TWh) primarily. lowered generation from coal (-5.1 TWh) and gas (-1.0 billion. TWh).
In the UK, increased wind output (+2.3 TWh). primarily reduced generation from gas (-3.0 TWh).
CONSERVING GAS
The result has been a much smaller sized exhaustion of gas. stocks than normal considering that the start of winter season 2023/24, with. When the NAO, the impact focused in December and February. was highly favorable.
Stocks across the European Union and the United Kingdom. diminished by an average of simply 3.2 TWh per day in December. compared with an average of 4.1 TWh per day over the previous. ten years.
The depletion was the tiniest because December 2019 and. before that December 2015, both of which were characterised by a. strongly favorable NAO.
Stocks diminished by an average of 3.0 TWh per day in. February 2024, compared with a previous ten-year seasonal average. of 4.8 TWh, and the slowest considering that February 2014.
As a result, stocks were 279 TWh (+67% or +2.16 standard. discrepancies) above the prior ten-year seasonal average on March. 10.
The surplus had actually swelled from 167 TWh (+18% or +1.70 requirement. discrepancies) at the start of the winter heating season on October. 1.
Most of the increases took place in December (+29 TWh) and. February (+57 TWh), with a smaller increase in November (+19 TWh),. and the surplus really tightened somewhat in January (-8 TWh).
POLICY LESSONS
Luck with the winter in 2022/23 and again in 2023/24 has. played the most significant role improving gas supply security in Europe,. and was most likely more crucial than policy measures to promote. gas conservation.
Two moderate winter seasons have actually enhanced stocks to a record seasonal. high and pushed prices back to levels dominating before 2021. once inflation is taken into consideration.
Europe's leaders would be ill-advised to rely on being fortunate. a third time. Policymakers and energy market need to consider how. they would cope if next winter was characterised by a. predominantly negative NAO, greater heating need and less wind. generation.
Recommendations:
¹ The North Atlantic Oscillation (U.K. Meteorological. Workplace)
² Experienced Long-Range Forecast of European and North. America Winters (Scaife et al, 2014)
Associated columns:
- Europe's mild winter season leaves gas stocks at record high. ( March 7, 2024)
- Europe's swollen gas stocks drive rates lower (February. 13, 2024)
John Kemp is a market analyst. The views revealed. are his own. Follow his commentary on X https://twitter.com/JKempEnergy.