Goldman Sachs: Oil @ 30 bbl by March 2009

The continued deterioration in global oil demand has
compelled us to again lower our oil price outlook for
2009 to an average of $45/bbl from $75/bbl previously,
though we see a growing number of signs that oil
markets have entered the bottoming phase of the cycle.

Despite our lowered oil price deck, this is not a call
that we are incrementally more bearish on Energy
equities. Our global energy team is, however,
continuing to stick to a defensive posture within the
Energy sector in terms of our top picks, though we
have gained comfort in recommending select higher-beta
stocks that we might call
“offensive defensive” ideas (primarily hedged E&Ps
with transformational growth opportunities) .

We think a move back to high-beta names that would
benefit from a future rally in oil prices is still
several months away, pending greater confidence that
demand is no longer deteriorating and supply is
on-track to decline sharply. The latter we think
requires a longer period
of oil around $40/bbl (or lower) than we have
currently seen; demand globally also shows no signs of
improving.

We think that the sharp and sudden collapse in global
oil demand exceeds OPEC’s ability to, on its own,
balance markets,
and necessitates sharply lower non-OPEC crude oil
supply.

Unlike OPEC, we believe non-OPEC producers will reduce
production
and sharply cut capital spending only if cash flow is
sufficiently weak, which we believe is the case at oil
prices in the $40-$50/bbl
range.

However, because there is a lag between capital
spending cuts and evidence of lower production—and
demand is incredibly
weak right now—oil prices may need to fall further to
levels that stimulate non-OPEC producers to accelerate
activity declines and
possibly even shut in production, which we think will
occur at oil prices around $30/bbl.

While global oil demand is very weak and the duration
of demand weakness is unclear at this time, we believe
oil supply will
collapse if prices remain below $40/bbl for an
extended period of time (6-12 months or longer)
suggesting we are likely to have entered the bottoming
phase of the cycle.

• Oil prices are now meaningfully below the $60/bbl
level at which the average company earns a
cost-of-capital return on longterm
investments based on current costs; capital spending
reductions have begun.

• Oil prices have traded near the $40/bbl level below
which we think short-cycle activity will be sharply
curtailed, which should
accelerate near-term declines in supply.

• Industry returns on capital are near historic trough
levels at a $45/bbl WTI oil price.

• The WTI forward curve is in “super contango” that
historically has coincided with the weakest portion of
the cycle.

What is not clear yet is how long the bottoming phase
will last. Global economic conditions are the weakest
the world has seen since at least the early 1980s and
global oil demand is declining at an accelerating
rate. In our view, the duration and depth of the
downturn will be decided by the interplay of global
oil demand weakness and non-OPEC supply declines.

Global oil demand has weakened to the point that OPEC
cuts alone are unlikely to return the market to
balance, with greater declines in non-
OPEC supply now required.

In terms of gaining confidence that a bottom is at
hand and a recovery possible, we would need to see the
following:

• Demand: A deceleration in the rate of global oil
demand declines is critical (no signs yet).

• Non-OPEC supply: A sharp reduction in short- and
long-term capital projects is required (early signs
emerging).

• OPEC supply: It will be important for OPEC to
announce additional cuts at its December 17, 2008
meeting in Oran, Algeria in order to gain confidence
that OPEC’s “Big 3” of Saudi Arabia, Kuwait, and UAE
are on-track to reduce production by the 2 mn bbls per
day.

Goldman Sachs: Oil @ 30 bbl by March 2009

The continued deterioration in global oil demand has
compelled us to again lower our oil price outlook for
2009 to an average of $45/bbl from $75/bbl previously,
though we see a growing number of signs that oil
markets have entered the bottoming phase of the cycle.

Despite our lowered oil price deck, this is not a call
that we are incrementally more bearish on Energy
equities. Our global energy team is, however,
continuing to stick to a defensive posture within the
Energy sector in terms of our top picks, though we
have gained comfort in recommending select higher-beta
stocks that we might call
“offensive defensive” ideas (primarily hedged E&Ps
with transformational growth opportunities) .

We think a move back to high-beta names that would
benefit from a future rally in oil prices is still
several months away, pending greater confidence that
demand is no longer deteriorating and supply is
on-track to decline sharply. The latter we think
requires a longer period
of oil around $40/bbl (or lower) than we have
currently seen; demand globally also shows no signs of
improving.

We think that the sharp and sudden collapse in global
oil demand exceeds OPEC’s ability to, on its own,
balance markets,
and necessitates sharply lower non-OPEC crude oil
supply.

Unlike OPEC, we believe non-OPEC producers will reduce
production
and sharply cut capital spending only if cash flow is
sufficiently weak, which we believe is the case at oil
prices in the $40-$50/bbl
range.

However, because there is a lag between capital
spending cuts and evidence of lower production—and
demand is incredibly
weak right now—oil prices may need to fall further to
levels that stimulate non-OPEC producers to accelerate
activity declines and
possibly even shut in production, which we think will
occur at oil prices around $30/bbl.

While global oil demand is very weak and the duration
of demand weakness is unclear at this time, we believe
oil supply will
collapse if prices remain below $40/bbl for an
extended period of time (6-12 months or longer)
suggesting we are likely to have entered the bottoming
phase of the cycle.

• Oil prices are now meaningfully below the $60/bbl
level at which the average company earns a
cost-of-capital return on longterm
investments based on current costs; capital spending
reductions have begun.

• Oil prices have traded near the $40/bbl level below
which we think short-cycle activity will be sharply
curtailed, which should
accelerate near-term declines in supply.

• Industry returns on capital are near historic trough
levels at a $45/bbl WTI oil price.

• The WTI forward curve is in “super contango” that
historically has coincided with the weakest portion of
the cycle.

What is not clear yet is how long the bottoming phase
will last. Global economic conditions are the weakest
the world has seen since at least the early 1980s and
global oil demand is declining at an accelerating
rate. In our view, the duration and depth of the
downturn will be decided by the interplay of global
oil demand weakness and non-OPEC supply declines.

Global oil demand has weakened to the point that OPEC
cuts alone are unlikely to return the market to
balance, with greater declines in non-
OPEC supply now required.

In terms of gaining confidence that a bottom is at
hand and a recovery possible, we would need to see the
following:

• Demand: A deceleration in the rate of global oil
demand declines is critical (no signs yet).

• Non-OPEC supply: A sharp reduction in short- and
long-term capital projects is required (early signs
emerging).

• OPEC supply: It will be important for OPEC to
announce additional cuts at its December 17, 2008
meeting in Oran, Algeria in order to gain confidence
that OPEC’s “Big 3” of Saudi Arabia, Kuwait, and UAE
are on-track to reduce production by the 2 mn bbls per
day.

RIL petrochem prices slide by up to 60% as demand slows

Tracking a multi-year low in global petrochemical pric es, Reliance Industries Ltd, or RIL, has reduced the prices of at least 10 key petrochemical products over the past two months, some by at least 60%, according to analysts tracking the company and wholesale suppliers in Mumbai’s bulk chemicals market.

RIL, India’s most valuable company, had cut prices of benzene, di-ethylene glycol (DEG) and other products used in making plastics that go into the manufacture of toys to pipes, cellphones to kitchenware by 34-42% between October and November, according to a November note by Mumbai-based brokerage Networth Stock Broking Ltd. The report added that RIL had further cut “the forward booking prices of most of the chemicals by 15-20%”.

RIL did not respond to a detailed questionnaire emailed on Thursday.

Brokers and suppliers in Mumbai’s Vadgadi chemicals market, operating out of narrow, serpentine lanes in the congested commercial hub of Masjid Bunder in south Mumbai, confirmed that RIL, headed by billionaire businessman Mukesh Ambani, had continued reducing prices of these chemicals for December as well (see graphic).

Analysts and traders at the Vadgadi market linked the price cuts in RIL’s petrochemical portfolio to both declining demand as the slowing global economy as well as huge inventory pile-ups.

“Some inventory pile-up has to be there as most of the industries consuming these products, be it automobile makers, construction companies or textile manufacturers, have all slowed. The offtake has reduced and discounts were bound to follow,” said an analyst with a domestic brokerage firm, who did not want his or his employer’s name to be taken as he is not authorized to speak to the media.

“When the basic feedstock price (crude) is facing a steady erosion every day, the forward prices of all the corresponding downstream products are bound to decline,” said another bulk chemicals supplier in the Vadgadi market who also did not want to be named because he has business dealings with RIL.

Petrochemicals contribute a small percentage of the company’s operating profits, but RIL’s deep discounts on product prices in response to the global fall in demand for petrochemicals—benzene prices are down to 1980s levels—have seen at least one brokerage, a local unit of Merrill Lynch and Co., lowering late November the target price it had on the company’s shares by some 5.4% over shrunk petrochemical margins.

Some 48% of RIL’s Ebitda (short for earnings before interest, tax, depreciation and amortization, a measure of operational profitability) is contributed by its oil refining businesses, which, too, are under margin pressure, and 38% by exploration and production of oil, estimates Credit Suisse Securities (India) Pvt. Ltd.

Still, the petrochemical price cuts could impact RIL revenues and profits in the October-December quarter, but analysts stopped short of putting a figure to it, saying they would conclude their forecasts only at the end of this month.

For the quarter to September, RIL, which has a 13.5% weightage on the Bombay Stock Exchange’s benchmark Sensex index, reported revenue of Rs46,113 crore and net profit of Rs4,122 crore, flat over the preceding quarter.

While state-owned petroleum firms such as Bharat Pe troleum Corp. Ltd have also reduced prices for products such as benzene and toluene, among others, RIL is a dominant entity in many chemical segments and has had to slash prices across a bigger portfolio of products.

According to media reports, RIL has been trying to cut back production in order to align it with the reduced demand, which the company denied.

In a news report last week, the Business Line newspaper reported that RIL had put on hold operations at four units at its Vadodara petrochemical facility. RIL did not respond to a Mint query on this either.

On 27 October, the company had said in a statement that it was carrying out “a planned shutdown of its polypropylene plant at the Jamnagar refinery complex” over four weeks, with “the objective of improving product swing capability and increasing propylene yield”.

Also, one analyst, who didn’t want to be named, pointed to the increasing cost of servicing Japanese currency debt at RIL because the yen has appreciat ed 17% against the rupee since October. The exact amount of this debt was not immediately available.

Another analyst cited the fall in gross refining margins, a measure of profit derived from refining crude oil and selling its derivatives such as petrol and diesel, at RIL.

According to Merrill Lynch data, the average gross refining margin in November was a negative $4.35 per barrel for simple refineries and $3.26 per barrel for the complex refineries, down from $0.96 and $11.08, respectively, a year ago.

Complex refineries refer to technologically superior machinery that can refine socalled heavy oil, improving re alizable revenues from oil, while simple refining involves distillation of crude into easily separated petrol, jet fuel, diesel or residual fuel oil.

Vidyadhar Ginde, sector analyst with DSP Merrill Lynch (India) Ltd, lowered RIL’s refining margins forecast by 37% and 21% to $6.3 per barrel and $7.8 per barrel for fiscal 2010 and the following year in a 3 December report. Ginde still has a “buy” rating on the company’s shares with a target price of Rs1,555 each.

Shares of RIL closed at Rs1,117.6 each, shedding 3.58% in value on Friday. That price is closer to its 52-week low of Rs1,019.50 recorded on 24 October than its year’s high of Rs2,347.25 on 12 August.

RIL petrochem prices slide by up to 60% as demand slows

Tracking a multi-year low in global petrochemical pric es, Reliance Industries Ltd, or RIL, has reduced the prices of at least 10 key petrochemical products over the past two months, some by at least 60%, according to analysts tracking the company and wholesale suppliers in Mumbai’s bulk chemicals market.

RIL, India’s most valuable company, had cut prices of benzene, di-ethylene glycol (DEG) and other products used in making plastics that go into the manufacture of toys to pipes, cellphones to kitchenware by 34-42% between October and November, according to a November note by Mumbai-based brokerage Networth Stock Broking Ltd. The report added that RIL had further cut “the forward booking prices of most of the chemicals by 15-20%”.

RIL did not respond to a detailed questionnaire emailed on Thursday.

Brokers and suppliers in Mumbai’s Vadgadi chemicals market, operating out of narrow, serpentine lanes in the congested commercial hub of Masjid Bunder in south Mumbai, confirmed that RIL, headed by billionaire businessman Mukesh Ambani, had continued reducing prices of these chemicals for December as well (see graphic).

Analysts and traders at the Vadgadi market linked the price cuts in RIL’s petrochemical portfolio to both declining demand as the slowing global economy as well as huge inventory pile-ups.

“Some inventory pile-up has to be there as most of the industries consuming these products, be it automobile makers, construction companies or textile manufacturers, have all slowed. The offtake has reduced and discounts were bound to follow,” said an analyst with a domestic brokerage firm, who did not want his or his employer’s name to be taken as he is not authorized to speak to the media.

“When the basic feedstock price (crude) is facing a steady erosion every day, the forward prices of all the corresponding downstream products are bound to decline,” said another bulk chemicals supplier in the Vadgadi market who also did not want to be named because he has business dealings with RIL.

Petrochemicals contribute a small percentage of the company’s operating profits, but RIL’s deep discounts on product prices in response to the global fall in demand for petrochemicals—benzene prices are down to 1980s levels—have seen at least one brokerage, a local unit of Merrill Lynch and Co., lowering late November the target price it had on the company’s shares by some 5.4% over shrunk petrochemical margins.

Some 48% of RIL’s Ebitda (short for earnings before interest, tax, depreciation and amortization, a measure of operational profitability) is contributed by its oil refining businesses, which, too, are under margin pressure, and 38% by exploration and production of oil, estimates Credit Suisse Securities (India) Pvt. Ltd.

Still, the petrochemical price cuts could impact RIL revenues and profits in the October-December quarter, but analysts stopped short of putting a figure to it, saying they would conclude their forecasts only at the end of this month.

For the quarter to September, RIL, which has a 13.5% weightage on the Bombay Stock Exchange’s benchmark Sensex index, reported revenue of Rs46,113 crore and net profit of Rs4,122 crore, flat over the preceding quarter.

While state-owned petroleum firms such as Bharat Pe troleum Corp. Ltd have also reduced prices for products such as benzene and toluene, among others, RIL is a dominant entity in many chemical segments and has had to slash prices across a bigger portfolio of products.

According to media reports, RIL has been trying to cut back production in order to align it with the reduced demand, which the company denied.

In a news report last week, the Business Line newspaper reported that RIL had put on hold operations at four units at its Vadodara petrochemical facility. RIL did not respond to a Mint query on this either.

On 27 October, the company had said in a statement that it was carrying out “a planned shutdown of its polypropylene plant at the Jamnagar refinery complex” over four weeks, with “the objective of improving product swing capability and increasing propylene yield”.

Also, one analyst, who didn’t want to be named, pointed to the increasing cost of servicing Japanese currency debt at RIL because the yen has appreciat ed 17% against the rupee since October. The exact amount of this debt was not immediately available.

Another analyst cited the fall in gross refining margins, a measure of profit derived from refining crude oil and selling its derivatives such as petrol and diesel, at RIL.

According to Merrill Lynch data, the average gross refining margin in November was a negative $4.35 per barrel for simple refineries and $3.26 per barrel for the complex refineries, down from $0.96 and $11.08, respectively, a year ago.

Complex refineries refer to technologically superior machinery that can refine socalled heavy oil, improving re alizable revenues from oil, while simple refining involves distillation of crude into easily separated petrol, jet fuel, diesel or residual fuel oil.

Vidyadhar Ginde, sector analyst with DSP Merrill Lynch (India) Ltd, lowered RIL’s refining margins forecast by 37% and 21% to $6.3 per barrel and $7.8 per barrel for fiscal 2010 and the following year in a 3 December report. Ginde still has a “buy” rating on the company’s shares with a target price of Rs1,555 each.

Shares of RIL closed at Rs1,117.6 each, shedding 3.58% in value on Friday. That price is closer to its 52-week low of Rs1,019.50 recorded on 24 October than its year’s high of Rs2,347.25 on 12 August.

COMBUSTIBLE FACTORS - Slide in crude oil set to leave a dark trail

Already in free fall, the price of oil could soon push much lower as the effects of a global recession take hold.

Crude fell $3.12 (Rs155), or 6.7%, to settle at $43.67 a barrel on the New York Mercantile Exchange (Nymex) on Thursday. Many oil industry insiders and traders now say prices could slump much lower, into the $30s, before supply cuts push prices back up, perhaps much later into next year. The changes come from a combustible mix of factors—a rise in inventories, shifts in the quality of oil used by refiners and severely deteriorating demand.

“I don’t think we’re through with the drop. I don’t know where it stops, but I don’t think we’re through,” said Steve Chazen, president and chief financial officer of Los Angelesbased Occidental Petroleum Corp.

Lower oil prices are a shortterm gain for consumers and businesses, from carpooling parents to households using heating oil to airlines. But a sustained decline in the price of oil also has painful downsides. Energy-driven economies—in areas from Texas and Alaska to Venezuela and Russia—can face huge busts.

Sinking oil prices also reduce the political will to push ahead with costly renewable energy projects, and reduce the urgency to prioritize energy policy debates on topics ranging from auto efficiency to offshore drilling. The danger is that when demand does bounce back, prices will boomerang far higher because the supply cushion has shrunk.

The swift decline in prices— crude hit an intraday high this summer of $147 a barrel—is hurting industry players, who have less cash to spend on projects as lower prices hurt their revenues.

They also have less incentive to invest as their margins get crushed. On Wednesday, Schlumberger Ltd, the world’s largest oil field services firm by market capitalization, said its 2008 earnings will miss analysts’ estimates as oil and gas production slows worldwide.

Industry drilling rig counts have begun falling sharply.

Research firm Sanford C.

Bernstein and Co. puts the oil industry’s average break-even cost zone at $35-40 a barrel, though the figure can vary by project and based on other factors. Thursday’s closing price is well below the $70-75 marginal cost at which producers this year could earn an expected return of roughly 9% on new drilling projects.

Projects that revived long dormant wells in Oklahoma, used new technologies to salvage old West Texas oil fields or extracted oil from tar sands in Canada require prices above current levels, in some cases far above, unless costs also fall.

Some deepwater projects in the Gulf of Mexico or the North Sea would be imperilled if prices fell below $40 for an extended period.

Occidental’s Chazen says even announced production cuts may be months from taking place, adding to the glut.

A further collapse in prices could be forestalled by unexpected supply disruptions.

Producers are still struggling long-term to keep pace with global consumption trends.

The price drop could stiffen the resolve of the Organization of the Petroleum Exporting Countries (Opec) to slash production when members meet on 17 December in Algeria. King Abdullah of Saudi Arabia, the world’s largest oil exporter, recently was quoted as saying $75 a barrel is the “fair price” of oil. If anything, unpredictability is the only certainty in today’s volatile oil markets.

But a growing number of industry insiders say conditions are now ripe to test the market’s lows. A sea of excess inventory is building from Cushing, Oklahoma, to Singapore.

Even in China, one of the few growing markets around the globe, stockpiles are rising.

One of the most striking short-term pulls on oil prices is a futures market condition called contango. Simply put, oil is vastly cheaper to lay hands on now than it is for delivery months or years in advance. Thursday’s settlement for January delivery, $43.67, is roughly $14 cheaper than delivery a year from now, $23 cheaper than two years from now, and a whopping $39 cheaper than delivery in 2016.

Contango incentivizes those who can afford to hold oil to hold on to it. Storage fills up, and that causes the spot price to fall because people need to unload oil. The debt crisis is one reason for the imbalance, since inventories tie up scarce working capital.

It isn’t just financial manoeuvres threatening the price of oil. The premium that the market gave light, sweet crude oil, which is well suited for making diesel, has dwindled as diesel demand has shrunk.

Deutsche Bank AG analyst Adam Sieminski expects further weakness in the widely quoted Nymex and London light, sweet oil benchmarks “that generate pricing headlines” because substantial new refining capacity is starting up in India and China, designed to make products from lower quality crude.

For example, Reliance Industries Ltd’s Jamnagar refinery complex in India, set to become the world’s largest single location refinery with a major new expansion, is expected to start full operations in the first quarter of 2009.

On top of this are stark demand statistics. Despite a drop by more than half in the price of petrol, consumption until last week remained listless, and only jumped slightly.

A popular research note brimmed with pessimism from energy executives at the end of Thanksgiving week, when Houston research firm Tudor, Pickering, Holt and Co. Securities Inc. invited clients to help write its morning missive. One unnamed exploration and production (E&P) executive wrote in: “Is E&P, where the banking sector was six months ago—recognizing the fundamentals have deteriorated, but not yet seeing the cliff we’re headed for?” wsj@livemint.com

COMBUSTIBLE FACTORS - Slide in crude oil set to leave a dark trail

Already in free fall, the price of oil could soon push much lower as the effects of a global recession take hold.

Crude fell $3.12 (Rs155), or 6.7%, to settle at $43.67 a barrel on the New York Mercantile Exchange (Nymex) on Thursday. Many oil industry insiders and traders now say prices could slump much lower, into the $30s, before supply cuts push prices back up, perhaps much later into next year. The changes come from a combustible mix of factors—a rise in inventories, shifts in the quality of oil used by refiners and severely deteriorating demand.

“I don’t think we’re through with the drop. I don’t know where it stops, but I don’t think we’re through,” said Steve Chazen, president and chief financial officer of Los Angelesbased Occidental Petroleum Corp.

Lower oil prices are a shortterm gain for consumers and businesses, from carpooling parents to households using heating oil to airlines. But a sustained decline in the price of oil also has painful downsides. Energy-driven economies—in areas from Texas and Alaska to Venezuela and Russia—can face huge busts.

Sinking oil prices also reduce the political will to push ahead with costly renewable energy projects, and reduce the urgency to prioritize energy policy debates on topics ranging from auto efficiency to offshore drilling. The danger is that when demand does bounce back, prices will boomerang far higher because the supply cushion has shrunk.

The swift decline in prices— crude hit an intraday high this summer of $147 a barrel—is hurting industry players, who have less cash to spend on projects as lower prices hurt their revenues.

They also have less incentive to invest as their margins get crushed. On Wednesday, Schlumberger Ltd, the world’s largest oil field services firm by market capitalization, said its 2008 earnings will miss analysts’ estimates as oil and gas production slows worldwide.

Industry drilling rig counts have begun falling sharply.

Research firm Sanford C.

Bernstein and Co. puts the oil industry’s average break-even cost zone at $35-40 a barrel, though the figure can vary by project and based on other factors. Thursday’s closing price is well below the $70-75 marginal cost at which producers this year could earn an expected return of roughly 9% on new drilling projects.

Projects that revived long dormant wells in Oklahoma, used new technologies to salvage old West Texas oil fields or extracted oil from tar sands in Canada require prices above current levels, in some cases far above, unless costs also fall.

Some deepwater projects in the Gulf of Mexico or the North Sea would be imperilled if prices fell below $40 for an extended period.

Occidental’s Chazen says even announced production cuts may be months from taking place, adding to the glut.

A further collapse in prices could be forestalled by unexpected supply disruptions.

Producers are still struggling long-term to keep pace with global consumption trends.

The price drop could stiffen the resolve of the Organization of the Petroleum Exporting Countries (Opec) to slash production when members meet on 17 December in Algeria. King Abdullah of Saudi Arabia, the world’s largest oil exporter, recently was quoted as saying $75 a barrel is the “fair price” of oil. If anything, unpredictability is the only certainty in today’s volatile oil markets.

But a growing number of industry insiders say conditions are now ripe to test the market’s lows. A sea of excess inventory is building from Cushing, Oklahoma, to Singapore.

Even in China, one of the few growing markets around the globe, stockpiles are rising.

One of the most striking short-term pulls on oil prices is a futures market condition called contango. Simply put, oil is vastly cheaper to lay hands on now than it is for delivery months or years in advance. Thursday’s settlement for January delivery, $43.67, is roughly $14 cheaper than delivery a year from now, $23 cheaper than two years from now, and a whopping $39 cheaper than delivery in 2016.

Contango incentivizes those who can afford to hold oil to hold on to it. Storage fills up, and that causes the spot price to fall because people need to unload oil. The debt crisis is one reason for the imbalance, since inventories tie up scarce working capital.

It isn’t just financial manoeuvres threatening the price of oil. The premium that the market gave light, sweet crude oil, which is well suited for making diesel, has dwindled as diesel demand has shrunk.

Deutsche Bank AG analyst Adam Sieminski expects further weakness in the widely quoted Nymex and London light, sweet oil benchmarks “that generate pricing headlines” because substantial new refining capacity is starting up in India and China, designed to make products from lower quality crude.

For example, Reliance Industries Ltd’s Jamnagar refinery complex in India, set to become the world’s largest single location refinery with a major new expansion, is expected to start full operations in the first quarter of 2009.

On top of this are stark demand statistics. Despite a drop by more than half in the price of petrol, consumption until last week remained listless, and only jumped slightly.

A popular research note brimmed with pessimism from energy executives at the end of Thanksgiving week, when Houston research firm Tudor, Pickering, Holt and Co. Securities Inc. invited clients to help write its morning missive. One unnamed exploration and production (E&P) executive wrote in: “Is E&P, where the banking sector was six months ago—recognizing the fundamentals have deteriorated, but not yet seeing the cliff we’re headed for?” wsj@livemint.com