Huge Natural Gas Pipeline Changes In Texas On The Horizon; Prince Salman's Plan Is A Joke -- Observer -- November 23, 2016

From twitter: 

U.S. commercial crude oil inventories for week ending 11/18/16 DOWN 1.3 MMbbl, refinery utilization= 90.8% http://go.usa.gov/x8XeR

US Ambassador to the UN: Governor of South Carolina.

Trump rally / MSNBC: long discussion at MSNBC on Dow hitting all-time record; hitting 19,000 yesterday. And get this: both Dow 30 and WTI slightly up in pre-market futures. Markets will be closed tomorrow.

Trump rally: Warren Buffett sees $7 $8 $11 billion bump on Donald Trump win. Make America great. Buffett, as you may recall, was very, very dismissive of Donald Trump and of a Trump presidency.

Trump / media: journalists seem to be falling all over themselves reporting how Trump seems "so much better" than what they saw in the campaign.

Update on Kurdistan: update here.

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The Honeymoon Is Over

Saudi Arabia: honeymoon is over for new Saudi leader as reform pain kicks in.  

The kingdom ison the brink of its first non-oil sector recession in three decades.

Under, Mohammed bin Salman, the 31-year-old’s stewardship, the Middle East’s largest economy has plunged to the brink of its first non-oil sector recession for three decades. Unpaid government invoices have savaged business confidence; cuts to public sector workers’ benefits have hit consumer spending; and Saudi Arabia’s expensive intervention in Yemen has cost lives and triggered international opprobrium.

The honeymoon is over for Prince Salman.

More:

The government this month set aside $27bn to settle some of its debts to private sector companies, belatedly responding to the fact that delayed payments have made it hard for contractors such as Binladin Group and Oger, large construction companies, to pay staff and creditors on time. Officials privately acknowledge it was a mistake to withhold payments given the knock-on effect it has on a state dependent companies that have been starved of new contracts.

The Prince Salman plan:

The sense of drift in the economic reform plan comes amid rising popular disapproval of the foreign consultants — such as McKinsey, Boston Consulting Group and PwC — that have been drafted in to reshape the country.

“Vision 2030 is a joke,” says one veteran Saudi observer. “When people attack McKinsey, that’s a proxy attack on the man who brought them,” he says, referring to Prince Mohammed.

McKinsey responded to the criticism last week in a rare statement in Arabic in which it denied it had produced the Vision 2030 document.

The transformation plan identifies 543 initiatives across 24 ministries and government bodies to implement this year that will cost Riyadh $72bn. But government advisers say the plan’s budget is likely to be slashed by around 30 to 40 per cent.

One ministerial employee who submitted a budget for his initiative in March has been asked to submit alternative plans with cuts of up to 50 per cent. He is still waiting for the final allocation, pushing implementation way into 2017.

“I don’t think I will hang around, time to go back to the private sector,” he says.

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Back to the Bakken

Active rigs:

	11/23/2016	11/23/2015	11/23/2014	11/23/2013	11/23/2012
Active Rigs	36	65	191	185	183

RBN Energy: what happens when Texas becomes a net natural gas demand region.

Some 3.2 Bcf/d of new LNG export capacity will be coming online along Texas’s Gulf Coast over the next two and a half years, and 8 Bcf/d of new natural gas pipeline capacity is under development to transport vast quantities of gas through Texas to the Mexican border.

But while gas-export opportunities abound, Texas gas production is down, mostly due to a big fall-off in Eagle Ford output, so exporters will need to pull gas from as far away as the Marcellus/Utica to meet their fast-growing requirements.

That will flip Texas from a net producing region to a net demand region once when you factor in exports that will flow through the state. This profound shift will put extraordinary pressure on Texas’s unusually complex network of interstate and intrastate pipeline systems, which will need to be reworked and expanded to deal with the new gas-flow patterns.

It also will have a significant effect on regional gas pricing––putting a premium on Texas prices.

One thing that U.S. natural gas producers have to be thankful for this week––and likely for many years into the future ––are the prospects for growing foreign demand for U.S. gas supplies. The potential for piping additional billions of cubic feet a day of Texas, Marcellus/Utica and other gas to Mexico and shipping increasing volumes of super-cooled gas as LNG to South America, Europe, and Asia is good news for gas producers, who need new demand sources to gobble up their product… well, enough Thanksgiving and turkey references­­––you get the idea.

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Outside the Monet exhibit at the Kimball Museum in Ft Worth, Texas.