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🛢️ Supermajors Place A Bet Against EVs
And the Fickle Fortunes of Oil Markets

Good morning; here's what the Oilman has for you today:
Supermajors Place Bet against EVs
From Stampede to Retreat: Oil Traders Caught in Market Jitters
Tweet of the Day

Chevron, Exxon Place Renewable Gas Bet against EVs
America’s supermajors are promoting renewable gasoline as an alternative to EVs, hoping to extend the life of the ICE car market.
According to Chevron and Exxon, renewable gasoline could successfully challenge the emission status of EVs.
It was about time
The amount of promotion EVs have been getting from everyone who’s anyone, including the auto industry, has been insane.
And it has worked up to a point.
Sales are much higher, true, but so are subsidies. They’re hard to resist.
Yet those millions of EVs on the roads from the visions of Elon Musk and R.J. Scaringe are still nowhere to be seen.
There are three simple reasons for that:
Range anxiety (also known as ‘Range reality’)
Charge times
Fire hazard.
EV makers have yet to solve these three problems, but internal combustion engines are in the crosshair of those who want them gone forever.
What’s an oil company to do?
Bet on new fuels.
The Europeans are talking about synthetic gasoline made from—I kid you not—carbon dioxide. Chevron and Exxon are thinking more along the lines of plant-based fuels.
"We really believe there have to be alternatives for the light-duty vehicle," a regional Chevron executive Andy Walz said.
"Electrification is not the only answer," he also said.
It sure is not. See those problems above.
The problem with the alternatives is that, as the oil majors admit, they need government support to make these fuels affordable.
It’s a case of “If EVs are getting incentives, we want some, too.”
Let’s see if governments will see the benefits of transport diversification or if they’ll stick with the “Electrification for all” mantra.

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From Stampede to Retreat: Oil Traders Caughter in Market Jitters
Oil’s about to end a turbulent two-week period that saw oil first soar above $80 per barrel and now deflate.
And nobody knows what happens next.
One week it’s all about supply, then you remember demand
Prices shot up after OPEC+ announced an additional production cut of over 1 million barrels per day.
This surprised precisely no one who follows its policy.
Apparently, a lot of people do not follow OPEC+ policy, so they got shocked and piled up in oil, sending prices higher.
Bankers helped, too. You can always count on bankers to help.
They started revising their price forecasts immediately to higher levels, assuming OPEC+ will remain the only big factor affecting price directions.
But a week later, everyone remembered inflation.
That’s still too high for comfort, and the Fed stands ready with more rate hikes all lined up nicely.
Even though inflation growth seems to be slowing down, and even though China has reported higher-than-expected GDP growth and record refinery runs, prices fell.
Why?
The fickle fortunes of oil markets
It’s classic herd mentality.

During the week after OPEC+’s cuts, everyone was focused on supply because the production cut was big news.
Everyone bought oil because, duh, when OPEC cuts, prices rise.
A week later, everyone is suddenly worrying about demand because U.S. inflation is high, and nobody cares that the EIA reported yet another significant drawdown in oil inventories.
Everyone sold oil because, duh, demand doesn’t look good.
That’s entertaining. But it doesn’t bode well for any semblance of stability in prices anytime soon.
If anything, the rollercoaster of unexpected price swings on a dime seems the surest thing in oil markets right now.
But who’s in oil & gas for the stability, right?

Around the Global Patch
🇸🇸 Sudan on the brink: Violent clashes erupt, leaving the nation in chaos.
🇵🇰 Pakistan's surprise move to buy Russian oil sparks speculation.
🇨🇳 China's push for EVs will actually increase coal use.

Tweet of the Day
Ops and BD discussing how the sales pitch went.
— Aubrey___K (@Aubrey___K)
2:47 PM • Apr 20, 2023

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