Good morning, this is the Oil Patch. We're the Carlton Banks to your Fresh Prince of Bel-Air:

Here's what the Oilman has for you today:

• Turbulent Wind Turbine Business Blows Another Hole in Profits

• Big Fish Dominate M&A Market in 2022

• Will Oil Reach $90 or Stall Out?

• Tweet of the Day

Turbulent Wind Turbine Business Blows Another Hole in Profits

The wind is blowing the wrong way Siemens Energy's Spanish wind turbine business.

Just when they thought they were turning a profit, more product quality issues have come to light, causing them to expect a 2023 net loss at around last year's level.

That's a pretty big gust, considering they've been in the red for the past four years, totaling around €3.7 billion.

Ouch.

But it gets worse.

A review of Gamesa's existing wind turbines found a higher likelihood of faults than previously expected.

So, not only are they dealing with the hefty deficit, but now they have to fork over more money for service and warranty costs.

The faults were found in both onshore and offshore turbines, which just adds insult to injury.

It's not just Siemens Energy though, other wind power manufacturers like Vestas Wind Systems have also been hit hard with steep losses as costs for materials like steel have soared and supply chain disruptions have caused delays.

But, Siemens Energy sees a light at the end of the tunnel and expects positive pre-tax free cash flow for fiscal 2023.

Yeah. Okay.

Let's hope that by then, they'll have smoothed out all the wrinkles in their wind turbine business.

Big Fish Dominate Upstream M&A Market in 2022

The upstream M&A market in the United States hit rock bottom in 2022, with only the big fish biting on the choicest assets, according to a new report by Enverus Intelligence Research (EIR).

The number of M&A deals in the U.S. upstream segment fell to levels not seen since the days of flip phones and MySpace.

Cool...

And...the value of the deals dropped 13% year over year to $58 billion.

Public companies, such as Diamondback Energy and Marathon Oil, went on a feeding frenzy for top-tier assets from private sellers.

The trend is expected to continue in 2023 as public companies race to acquire more high-quality drilling inventory, leaving small fish firms with low equity valuations struggling to survive in a big-fish pond.

Today's Edition is Brought to You By Connection Crüe

Are you ready to power up your professional network?

Look no further than Connection Crüe - your ultimate destination for connecting with industry leaders in the Oil & Gas energy sector.

Connection Crüe doesn't just stop there - they're also committed to investing in the future of the industry through Kids Crüe events.

Reach out to JP Warren or Monika Warren today and get plugged in to Connection Crüe. They're committed to helping you grow and succeed in the energy industry.

Will Oil Reach $90 or Stall Out?

Oil prices are steadily grinding up that steep mountain towards the $100+/bbl summit.

But don't get too excited, because according to Standard Chartered's analysts, we're not going to see oil reach the peak of $100 per barrel.

But hey, at least the fundamentals are strong enough to hike above $90 per barrel for a while.

The rally started on January 5th and has been supported by positive speculative sentiment, with the largest week on week improvement since the price lows of April 2020.

The analysts at Macquarie Bank also weighed in, stating that bullish demand is beginning to drive increasing net length and open interest in WTI and Brent.

And it's all thanks to China's reopening, as the large increase in Chinese purchases have tightened core Brent markets including West Africa and the North Sea.

But, like all good things, this rally may not last forever.

The analysts at Macquarie expect supply growth to reverse the rally in March or April.

Enjoy the ride while it lasts folks.

Tweet of the Day

Thanks for reading!

If you enjoyed today's Oil Patch, please share with a friend, and be sure to subscribe.