On Tap Today -- November 6, 2014; North Dakota's Wind Energy Continues To Grow

It's on! Who wins the price war? OPEC or Harold Hamm? Poll at sidebar at the right.

Harold Hamm goes out on a limb: scraps oil hedges 

In so doing, Hamm, who last month called OPEC a "toothless tiger", appears to be bracing for a price war with the world's biggest exporter, Saudi Arabia. The OPEC-leader and other key members of the oil exporter group have so far shown no real sign of moving to cut production to lift prices.

Conventional wisdom among oil analysts is that Saudi Arabia, frustrated by a global supply glut caused by soaring output in the United States, is prepared to let prices fall to squeeze U.S. shale oil producers out of the market.

Magnum Hunter: comments on Saudi price war. 

"The future of oil and gas in the U.S. is natural gas," says Gary Evans, Magnum Hunter Resources CEO, discussing what the low cost of shale means to the industry and U.S. economy.

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Coming off confidential list today:

• 26612, 1,507, Newfield, Hoffman 149-98-14-23-2H, Pembroke, t8/14; cum 37K 9/14;
• 26716, 113, XTO, Hansen 34X-10C, Temple, t9/14; cum --
• 27161, drl, Hess, GN-Tom Jen-157-97-0409H-2, Ray,
• 27247, 586, Petro-Hunt, North Tioga, t8/14; cum 32K 9/14;
• 27302, drl, Zavanna, Husky 33-28 4TFH,
• 27607, drl, BR, Bullrush 34-10TFH-B, Elidah,
• 27698, drl, BR, Haymaker 31-15TFH-B, Elidah, Three Forks B1, 
• 27744, drl, XTO, Brandvik Federal 44X-13H,
• 28011, SI, Denbury, CHSU 11-27 15, South Red River,

Out-of-town family guests; blogging at a minimum; mostly reminders of things for me to watch later today. Remember, this is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. 

Trading at new 52-week highs today:BRK.A, DIS, EW, SRE, UNP, UPS. UNP is up almost 2% -- incredible. BRK-B is also up slightly and within 2 pennies of a new high.  

Earnings coming out today per Yahoo!Finance:

• Crescent Point Energy (CPG.TO); before market open: 42 cents; adjusted profit rises 10%;
• Wendys (WEN); before market open, 9 cents; turnaround in jeopardy; misses on earnings;
• Windstream (WIN), before market open; 4 cents; misses by 1 cent;
• Bonanza Creek Energy (BCEI); after market close; 53 cents;
• KOG, after market close; 20 cents (Zacks); 15 cents; misses;
• NOG, after market close; 26 cents; in-line; beats on revs;
• RIG, after market close; 82 cents;

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Jobs

Upbeat report on unemployment numbers; expectations that employers added as many as 240,000 jobs in October (report comes out tomorrow);
Initial unemployment claims: expectation - 285,000. The report is here:

In the week ending November 1, the advance figure for seasonally adjusted initial claims was 278,000, a decrease of 10,000 from the previous week's revised level.

The previous week's level was revised up by 1,000 from 287,000 to 288,000.

The 4-week moving average was 279,000, a decrease of 2,250 from the previous week's revised average. This is the lowest level for this average since April 29, 2000 when it was 273,000. The previous week's average was revised up by 250 from 281,000 to 281,250.

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Natural Gas Fill 

Natural gas fill rate: 91 Bcf.  For background, see this post.

Working gas in storage was 3,571 Bcf as of Friday, October 31, 2014, according to EIA estimates. This represents a net increase of 91 Bcf from the previous week. Stocks were 238 Bcf less than last year at this time and 261 Bcf below the 5-year average of 3,832 Bcf. 

It appears the curve should start to plateau next week and in the next couple of week should start to turn negative.

Wild ride for natural gas this winter (2014 - 2015):

Natural gas futures swung wildly before closing lower for the first time in 10 sessions, signaling a volatile winter ahead for the commodity. The December natural gas futures contract closed at $4.255 per million British thermal unit, down 3.6 percent, after shooting up to $4.544 in overnight trading.

Natural gas had been up more than 25 percent from its October low.Traders said midday reports that temperatures may not be as severe as expected in a cold snap expected across the U.S. weighed on prices. "It's not going to go as far south, and it's not going be pure Arctic air by the time it gets to the East Coast," said John Kilduff of Again Capital.

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Miscellaneous

Harold Hamm goes out on a limb: scraps oil hedges 

In so doing, Hamm, who last month called OPEC a "toothless tiger", appears to be bracing for a price war with the world's biggest exporter, Saudi Arabia. The OPEC-leader and other key members of the oil exporter group have so far shown no real sign of moving to cut production to lift prices.

Conventional wisdom among oil analysts is that Saudi Arabia, frustrated by a global supply glut caused by soaring output in the United States, is prepared to let prices fall to squeeze U.S. shale oil producers out of the market.

Confident US shale producers think they can outlast OPEC moves

Saudi Arabia's rivals in the shale fields from North Dakota to Texas aren't flinching as the Persian Gulf kingdom wages a price war to reclaim market share and chill competition.

he U.S. companies believe they have a lot more staying power than many of Saudi Arabia's partners in the Organization of Petroleum Exporting Countries, or OPEC. Several producers plan on increasing production.  

Executives at several large U.S. shale producers, including Chesapeake and EOG Resources Inc. (EOG), have vowed to maintain -- and even raise -- production as they reported earnings this week. They say their success in bringing down costs means they can make money even if prices slump further.

Oklahoma to pass Alaska in oil production -- Harold Hamm; dots to connect:

• California is an island when it comes to oil; there are no oil pipelines into California
• California's sources for oil: a) state; b) Alaska; c) OPEC; d) rail/barge 
• the US "bans" crude oil exports
• Saudi Arabia cuts prices to maintain market share

Something going on here? Target closing another 11 stores.

Wind: The Bismarck Tribune is reporting:

Basin Electric Power Cooperative will double its power derived from wind energy by 2016.

Basin is expecting its load to grow by more than 1,883 megawatts by 2035, CEO Paul Sukut told members at the cooperative’s annual meeting on Wednesday. About 1,600 megawatts of that new demand will be coming from the Williston Basin.

“While it’s daunting to think about all the additional generation we have to bring on, we do have a very solid plan in place,” Sukut said.

By the end of the year, Basin will be generating or purchasing 5,478 megawatts of power. With the projected increase in demand, that will be above 7,000 megawatts per hour in 20 years.

Sukut said the cooperative continues to grow 3 percent per year while many providers’ growth is closer to .6 percent.

Compare these numbers with data coming out of other states.