Friday, May 26, 2017

Quickies -- May 26, 2017

Mexican natural gas demand: No links but scrolling through Twitter suggests Mexico's demand for natural gas is going to significantly outpace domestic supply. Imports won't fill all the demands. That's why I'm following SRE.

Canadian pipeline: Kinder Morgan commits to pipe linking oil-sands crude to Asian markets. From Bloomberg: Kinder Morgan Inc. has committed to expanding a pipeline that will allow Canadian crude to be exported to Asia, a controversial C$7.4 billion ($5.5 billion) project that’s set to face revitalized opposition amid political upheaval in the nation’s Pacific Coast province. The Houston-based company announced its final investment decision for the Trans Mountain expansion project Thursday, saying it expects to secure enough financing from an initial public offering of its Canadian subsidiary to proceed with the project. It expects to raise C$1.75 billion from the IPO by May 31, according to a statement.

OPEC's production cut timeline (for the archives):

Q&A for the day:
Q: What is meant by Dated Brent? How is the Oil Official Selling Price (OSP) decided? What does OSP Premium signify?
A: Brent is a particular crude oil - all crudes are slightly different and therefore have a different value. The premium (or discount) adjusts for this difference. When the OSP is decided, normally they are assessing the premium. They will look at the amount of each product that can be produced from the oil, the value of each component and then assess the premium from the difference between their crude and Brent.
Dated Brent is a benchmark assessment of the price of physical, light North Sea crude oil. The term "Dated Brent" refers to physical cargoes of crude oil in the North Sea that have been assigned specific delivery dates. Each dated cargo of crude oil is often traded more than once as it makes its way to delivery to refineries -- where crude is transformed into products like gasoline, diesel, jet fuel, and more.
We'll see:
"Exports to the US will drop measurably " said AlFalih. Credibility of Saudi strategy in this sentence. Easily monitored. [One can start here.]
Reality sucks, from Business Insider, a realistic look at Ford vis-à-vis Tesla:
This last point is a nightmare scenario of sorts for Tesla. The Model 3 could become the car that eats the company. With current distribution, there have been some indications that annual sales of the Model S and Model X luxury vehicles could plateau at about 100,000.

Even if the figure were double that, Tesla would still need to sell 800,000 Model 3s and mass-market variants, such as the Model Y crossover and possibly a compact pickup truck. Production at that level would mean Tesla would need to build a new factory or set up assembly lines at its Nevada Gigafactory. The capital expenditure to pull this off would be staggering for a company that isn't making money.

Ford, by contrast, has made over $20 billion in the past two years.

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