Nvidia sold a lot of new AI chips over the past 18 months and is forecast to grow its unit sales aggressively.

But does everybody understand what such forecast would mean for electricity demand in the West?

A 🧵

1/n #AI Step by step:

The average Swiss household consumes 4000-5000kWh of power pa. It is similar for most Western HH.

Let’s assume a 4-person household consumes 5000kWh per annum.

That translates into 570 Watt per hour (5000 x 1000 / 365 days / 24h)…

2/n

India likes a "GOOD" deal - also in crude oil - and is about to teach Russia a lesson what that means.

Spoiler 1: it's not a pretty one!
Spoiler 2: China & Turkey will learn quickly..!

Let's look at the Indian-Russo crude oil bromance.

1/x Thread Before the invasion in Feb 2022, Russia exported some 2.8mbpd (55%) of its 5.5mbpd crude to Europe by way of pipeline (Druzhba) & sea transportation (seaborne).

But not just crude oil...

2/x

For now, Red Sea disruptions due to Houthi attacking commercial vessels randomly remains a ton-mile story, not a crude oil story.

Within different shipping segments the picture of diverting cargo around the Suez Canal remains a Container Vessel story, to a less extent also a Product Tanker & Crude Oil tanker story.

1/5 Some high frequency data...!

https://x.com/BurggrabenH/status/1746159260742844911?s=20

Container Vessels owners have been the most consequent in diverting cargo.

Since Nov, the number of container vessels crossing the Suez Canal has collapsed by 80% in both directions.

2/n

Brazil is is an interesting microcosm to study in the oil industry.

It's a large, growing consumer of petroleum products. It's the 8th largest producer of crude oil in Dec 2023 as well as a large producer & consumer of biofuels.

Most importantly, it's energy agency reports the data in detail & timely (unlike most countries globally).

1/n Brazil's resource wealth (mainly offshore) is well documented but it struggled for years to follow through.

Finally, it does with an exit rate of 3.9mbpd of oil production in 2023. Only the US, SA, RUS, CAD, IRQ, CN & IRN (incl condi; in this order) produced more that month. That's 50% growth since Jan 2018!

2/n

Shall we look at the European NatGas market together?

Will Europe have to freeze this winter, after much mild weather luck last winter?
Will TTF drag coal prices up as last winter?

Thread
1/n Our rolling forecast upfront for those of you with a little ADD:

Best-estimate today, Europe will exit the winter 23/24 in March at or around 40% storage levels (red line) which suggests TTF doesn't have to spike, ceteris paribus. Is it a bear? Neither.

Let me explain.

2/n

Are you monitoring Chinese gasoline consumption, metals demand or Battery Electric Vehicles sales?

I don't care, pay close attention to what @BYDCompany is doing. They are the real thing. Charlie & Buffett explained it many years ago.

1/n A thread
x.com/BYDCompany/sta… In 2023, BYD will sell some 3 million passanger cars, of which 1.5m will likely be Battery Electric Vehicles (BEV) & the rest Plug-in Hybrids (PHEV). At least that is what we see coming from tracking monthly figures.

2/n Note: table incomplete due to poor company breakouts

Let's take a closer look at who is the lair, shall we?

After all, the chap has some followers and what's to save the planet from "anti-greenwashers".

Well, let us find out from whom humanity needs to be saved.

1/n

https://twitter.com/KetanJ0/status/1660262870863446016

First, let's look at my original tweet in which I made a specific statement:

"20 years of 🇩🇪 Energiewende has systematically starved the largest grid in Europe of excess electricity while tripling prices for consumers."

I showed May as an example

2/n

https://twitter.com/BurggrabenH/status/1659986924113899520?s=20

Let's talk Realpolitik, the West and China.

My view: unless the West get its decarbonisation targets & deadlines in line with China (& India), reducing CO2 is 100% risk and 0% reward.

A thread...!

1/n @INArteCarloDoss

https://twitter.com/BurggrabenH/status/1655545244983623682?s=20

What drives policy?

In short: @IPCC_CH. Scientists there believe an increase of 1.5C is the “safe limit” for global warming while higher temperatures may change the environment and, perhaps, transform our way of life.

2/n

Asian refinery margins are getting weaker over last few weeks. Asian diesel premium over Dubai crude for one suggests the refinery party over as new capacity is finally coming online.

1/n Singapore Hydrocracking margin over Dubai seems near zero now. That's bad business.

2/n

Goldman estimates the debt racked up by China’s provincial governments at $23 trillion — 126% of gross domestic product — if their off-budget borrowing is included. So here comes the first province, Guizhou, that tries to avoid a default…!

#China @foxglobalinvest Some context

DNO & other Kurdish oil producers such as Gulf Keystone have been instructed by the Kurdistan Regional Gov to temporarily cease deliveries of oil to the Iraq-Turkey BOTAS pipeline for export.

1/3 Green pipe below It follows an arbitration ruling in favor of Iraq against Turkey-state owned pipeline operator BOTAS for transporting Kurdish oil without prior approval from Baghdad. Not sure what it means. Likely some future fee sharing after months of negotiation? Any view @AzizSapphire?

2/2

An observation on gold.

In the below thread from November 2020 I explained a few basics on gold and that the marginal buyer of gold are gold-backed ETFs (not central banks or physical retail buyers in Asia).

1/n

https://twitter.com/burggrabenh/status/1332810525760172033

Gold-backed ETFs get inflows on the basis of real rates, i.e. the difference of nominal yields and inflation expectations (same duration).

They buy more (have higher inflows) the more negative real rates become, as seen post covid, and sell as real yields increase.

2/n

I got a little excited about the S&P500 going up each day lately.

I feel like I’m missing out, a guess like a @agnostoxxx’s monkeys.

So I consider buying some here. But what is it worth? I don’t know and nobody on CNBC wants to tell me.

1/n #SPX So I decided to look at SPX like a giant American Corporation (let me call it “ACo”) with a market cap of US$33 trillion - genius, isn’t it?

2/n

In my X-mas tweet I told you that China was already open from a crude buying perspective and that China will slow down imports as it risks hitting product tank-tops. Was I right?

Let us look into this 4 weeks more data.

1/n @UrbanKaoboy @kittysquiddy

https://twitter.com/BurggrabenH/status/1606459855170060288?s=20&t=zkGN8iKBEzXG0ALU6dgRHw

First, some argued that "China re-opening is bullish oil". Few had data and some looked at them the wrong way on top.

Yes, China discharged 11.075mbpd crude & condi in Dec, the highest discharge in all of 2022 & one of the highest numbers ever. My "China IS OPEN" pitch!

2/n

Let me address the Tailwind Energy acquisition as proposed by @SericaEnergyplc management @MitchFleggCEO, given we are days away from submitting our vote on it.

For full disclosure, Burggraben holds 3.4m shares (1.2%) of $SQZ.

1/n Upfront, is the acquisition accretive or not?

Answer: yes it is.

Using the same assumptions (price deck; FX; etc), SQZ's intrinsic value on a standalone basis is 310p per share (NAV table on left) vs 449p post acquisition. That is a value increase of 45%.

2/n

We warned you on Pantheon Resources a long time ago. When bad geology meets spin doctoring management, it‘s the bad geology that wins each time.

$PANR @AIMhonesty @Josh_Young_1 We warned u here the first time

$PANR

https://twitter.com/burggrabenh/status/1529463177884360706

An interest article on the coordination of Western military equipment supplies into Ukraine by the secretive US/UK/NATO commando based in Wiesbaden, Germany: the little known International Donor Coordination Center (IDCC).

1/n Some highlights below…
nzz.ch/international/… The West “approved” roughy $40bn in military equipment aid so far to Ukraine. Not surprisingly, the US makes up 2/3 of that…

2/n

I just listened to Jeff Currie's bullish oil talk for 2023.

Below is the pitch and the real data!

Consider it a X-mas gift to my followers. Merry Christmas to you all.

1/n @UrbanKaoboy @simon_ree Jeff: "China will re-open and demand will jump."

Well, China's consumption in Dec matches 2021 levels and is near an ATH ALREADY while it will have to digest the largest property bubble in history of mankind in the coming years.

My view: China went ex crude growth in 2021

2/

By now, most of our followers know the word "Dunkelflaute", the kind of weather with little wind or sunshine to power their respective power installations.

Northern Europe is still in one. Let's briefly look what that means for the German's Energiewende...

1/n In the last 30 days, this is how the German grid produced electricity.

During this period, RES produced little despite GER having some 146GW of installed RES (wind; solar; waste; biomass; hydro).

2/n RES = Renewable Energy Sources

This interview with General Valery Zaluzhny, head of Ukraine’s armed forces, will help you understand: „The Russians are preparing some 200,000 fresh troops. I have no doubt they will have another go at Kyiv.“

economist.com/zaluzhny-trans… from @TheEconomist economist.com/zaluzhny-trans… @kittysquiddy @agnostoxxx @DrastikThomas @noclador @ElenaNeroba

How much crude did India, China or Turkey buy from Russia in Nov and how does it look for December intakes?

Here is my original theory. Does it hold up so far?

1/n @UrbanKaoboy @kittysquiddy

https://twitter.com/BurggrabenH/status/1587246382687178756?s=20&t=vJXn3t0UXJ2ZGdsQrO9yyQ

India surprised a little to the upside vs theory and will import 1.4mbpd or 32% of all imports from Russia in December 2022.

Remember however, India likes cheap. At this stage, it is fair to assume this will hold up into Q1 2023.

Note: the numbers remain preliminary.

2/n