Sunday, November 26, 2017

Week 47: November 19, 2017 - November 25, 2017

This was a short week due to Thanksgiving. Numbers coming in from Wednesday through Saturday suggest this was a record weekend for sales, and suggest that the economy is hitting on all cylinders. It is Donald Trump's first Thanksgiving as president. See this post also. And the WSJ suggests this is only the beginning (or the continuation).

Most of the talk regarding energy this past week revolved around OPEC's upcoming decision whether to extend production cuts. But shale is confounding "everyone' according to Bloomberg. Their advice: forget about trying to forecast US shale production and just get on with making the decision. More important for me: the discussion has finally moved away from "swing producer" to "most responsive producer." By that measure, US shale has OPEC beat hands down, as they say.

Completion strategies are driving incredible US shale production as noted in the graph from an article by Mike Filloon today.

Gasoline demand appears to be hitting new records for this time of the year, and the divergence from 2016 is remarkable and WTI is approaching $60. Unfortunately, the upward trend is not due to increased demand, but rather due to a one-time event: the closure of the north leg of the Canadian Keystone pipeline. Once that is sorted out, we'll see where WTI heads -- but the tea leaves suggest getting the Keystone pipeline started again could take longer than first expected. I'm now betting it takes a year. See this map of Canadian pipelines.

Nebraska regulators vote "no" with a 3-2 "yes" vote to approve the Keystone XL.

I thought Prince Salman was to be crowned king this week, but didn't hear a thing. 

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Back To The Bakken

Operations
XTO has a great well -- again 
MRO has a huge DUC -- and no one even mentions it
the Brooklyn oil field is looking better than ever (and even surprising me)

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