Wednesday, May 9, 2018

Five New Permits; Two DUCs Completed -- Wednesday, May 9, 2018

Active rigs:

Active Rigs61492884192

Five new permits:
  • Operator: Hess
  • Fields: Antelope (McKenzie)
  • Comments: Hess has permits for a 5-well AN-Norby well in Lot 3, section 4-152-94; Antelope-Sanish is turning out to be one of the busies fields in the Bakken right now
Three permits canceled:
  • EOG: three Burke permits in Mountrail County
No permits renewed.

Two producing wells (DUCs) reported as completed:
  • 30964, 3,049, CLR, Uhlman Federal 3-7H, Banks, t4/18; cum --
  • 30966, 2,466, CLR, Pittsburgh 3-7H, Banks, t4/18; cum --

US Crude Oil Inventories Decline By 2.2 Million Bbls -- EIA -- The Market, Energy, And Political Page, Part 2, T+1 -- Wednesday, May 9, 2018

Weekly petroleum report:
  • US crude oil inventories decreased by 2.2 million bbls; currently at 433.8 million bbls; remain in the lower half of the average range for this time of year
  • gasoline, distillate fuel production changes: ho-hum
  • refinery operating at 90% capacity (working to keep gasoline prices high, apparently)
  • in big scheme of things, not much has changed over the past year with regard to US crude oil inventories; gasoline and distillate fuel production
  • not mentioned in this report, but reported elsewhere, the significantly increase in US production of crude oil over the past two years
Link over at --

Something To Talk About

Apparently they did not learn the first time.

Saudi Arabia looks prepared to make their second trillion-dollar mistake.

Something Else To Talk About

Some say the White House is disorganized, not getting anything done.

I don't know. Maybe it's just me but it seems there is more happening, more going on under the Trump administration (one year) than what went on during the previous eight years. I literally cannot keep up. But again, it may just be me. Regardless of where you stand politically, there just seems to be more going on.

John Kemp, Reuters London-based oil analyst, seems to have also noticed.

It would be nice to see a similar list of disputes between the White House and the Washington, DC, bureaucracy. And the changes that are occurring.

No One Knows -- May 9, 2018

Before the announcement, CNBC said Iran would take, at most, only 500,000 bopd off the global market, not the 1.5 million bopd that Obama's sanctions took off the market.

From the May 7, 2018, post:
From CNBC:
Iran sanctions seen having limited impact on oil market if Trump scraps nuclear deal. Summary (note: one of the four bullets below was not written by CNBC, as far as I know):
  • President Donald Trump may restore sanctions on Iran later this week, putting the fate of the Iran nuclear deal in peril
  • however, analysts say the sanctions will only have a limited impact on the oil market because some importers like China and India will refuse to cut shipments
  • many analysts believe Trump can shrink Iranian shipments by 300,000 to 500,000 barrels a day, compared with the 1 million to 1.5 million barrels the Obama administration achieved
  • < Trump says he has no plans to send Iran $400 million in unmarked $100 bills over the weekend
Now, after Trump announces his decision, at least one analyst, over at Bloomberg, says 1.5 million bopd will be taken off the global market.

Scott Adams: "facts don't matter."

Having said that, my comments remain unchanged:
At the end of the day, no one really knows how much oil Iran is producing or selling.  Our own API and EIA can't even get the same numbers for weekly US crude inventories, released one day apart. Does one truly think anyone outside of Allah knows how much crude oil Iran is producing, consuming, exporting? LOL.

And whether it is 1.5 million OBAMA barrels or 300,000 TRUMP bbls, neither number has any effect on a global market of 100 million bbls production. Shutting down the DAPL would pretty much shut down much of North Dakota and the world would notice that either.
North Korea Has Released Americans From Prison

I assume MSNBC is reporting that the "legwork" for setting this in motion was done by Rodman and the Obama administration, and it's taken Trump another full year to get this done when he could have gotten it done during his first month, had he not been so distracted.


Something To Talk About
Timeline For The Archives

Timeline: some weeks ago, Germany's Merkel and France's Merkel came to the US to talk to President Trump about Iran; obviously, by the time they left, they would have known his position.

Some days before Trump made his announcement, it was obvious Trump had made up his mind, assuming one was paying attention.

During the 24 hours leading up to the announcement and on the day of the announcement, it was noted that SecState Pompeo was not alongside the president when the announcement was going to be made and when the announcement was made.  

The NYT called Pompeo AWOL for one of the most important announcements ever.

In fact, Pompeo was in North Korea for at least two reasons: a) Pompeo successfully closed the deal on the release of three American prisoners and is accompanying them home to Washington, DC (they arrive "tonight" at 2:00 a.m.); and, to "finalize" the date and location of the summit between Kim Jong-Un and President Trump -- which I think is even more noteworthy and newsworthy than the Iran announcement.  

Fox News broke the story but the google app won't "take" links for Fox News.

The Market, Energy, And Political Page, T+1 -- Wednesday, May 9, 2018

Congress overturns Obama-era auto-loan rule; measure advances to president who is expected to sign it into law -- WSJ. Link here. Eleven US House Democrats must be up for re-election.
The House voted largely along party lines Tuesday to kill an Obama-era regulation designed to curb racial discrimination in auto financing, using a newly expanded legislative tool that could allow lawmakers to roll back government rules in place for years.
The legislation was approved 234-175, with 11 Democrats joining Republicans. The move by the House came weeks after the Senate approved the measure. It now advances to President Donald Trump, who is expected to sign it into law.
Republicans targeted a 2013 Consumer Financial Protection Bureau regulation that curbed common lending practices at auto dealerships and was one of the most controversial policies implemented by the agency’s previous leadership. The measure was issued in the form of guidance rather than a formal rule.
GOP lawmakers and the auto industry have long sought to roll back the guidance, which they see as an example of government overreach, criticizing the agency’s attempt to regulate auto dealers. While the CFPB has authority over auto lenders, the 2010 Dodd-Frank Act specifically excluded auto dealers from the bureau’s jurisdiction. Critics also questioned the methodology used to pinpoint alleged discrimination. The government used borrowers’ last names and locations to make educated guesses about their race.
The "specific" story is less important than the "general" story.

Trucking: freight demand pushes truck-order backlog to near record level -- WSJ. Link here. By the way, personal communication reveals truck manufacturing -- particularly "specialty" truck manufacturing -- is also surging due to .... drum roll ... the Permian.

Wednesday, May 9, 2018

US crude oil output to hit 12 million bopd in late 2019 -- EIA. Link here.
U.S. crude oil production is expected to rise more than previously expected to 12 million barrels per day by the fourth quarter of 2019, the U.S. Energy Information Administration said on Tuesday in a monthly report.
The agency forecast that U.S. crude oil output will rise by 1.14 million barrels per day (bpd) to 11.86 million bpd on average next year, according to the short term energy outlook. Last month, it expected a 750,00-bpd year-over-year increase to 11.44 million bpd. Overall, the agency's forecast has increased by more than 1 million bpd since January.
The forecast projects that U.S. crude output could reach 12 million bpd by the fourth quarter of 2019, nearly 500,000 bpd above previous estimates for production in that quarter.
The agency lifted its 2018 production estimate to 10.72 million bpd, expecting growth of 1.37 million bpd, according to the report.
Unfortunately it's the wrong kind of oil.

Morocco gas discovery "significantly exceeds" estimates -- Rigzone. Link here
North Africa focused oil and gas company, SDX Energy Inc, has made a conventional natural gas discovery at its LMS-1 exploration well on the Lalla Mimouna permit in Morocco.
LMS-1 was drilled to a total depth of 3,799 feet and encountered 54 feet of net conventional gas pay sands. The well is now being completed as a conventional natural gas producer and will be perforated and tested approximately 30 days after the drilling rig has left the site.
The latest discovery on Lalla Mimouna follows SDX’s previous conventional natural gas find on the permit, which was announced on April 20. This discovery was made at the company’s LNB-1 well, which was drilled to a total depth of 6,105 feet and encountered 984 feet of gas bearing horizons.
Shell to sell stake in Canadian Natural for about $3.3 billion -- Reuters. Link here.

Will WTI Go Over $71 Today? -- May 9, 2018


Later, four minutes later after posting the original post: just after asking / suggesting whether WTI would hit $71 today, it did.

Original Post

Flirting with $71 shortly before the market opens:

Dow futures: up 124 points. I would assume higher oil prices could hurt the overall market for all kinds of reasons, but it's very possible, some of the oil-related Dow components will more than make up for that "risk." By the way, one would think a) the trade war -- Trump tariffs; b) the Iran deal -- Trump tantrum; c) and the Mueller investigation -- Trump follies -- would be pulling the market down, but apparently not. This is quite fascinating. Almost a once-in-a-lifetime gift.

John Kemp, Reuters London-based analyst, and regular contributor to Twitter, has noted that Trump is directly involved in no less than six (6) international "conflicts."

Market: it should be noted that CVX has been surging, and it will jump again today, and yet CVX is not even close to it's all-time high which was charted only a few weeks ago. From US News & World Report:
Chevron stock has rallied more than 17 percent in the past year, outpacing the company's rival Exxon Mobil Corp. ( XOM), which is down 6.3 percent. One of the biggest reasons for Chevron's rally has been rising oil prices. Analysts say Chevron's fate is more closely tied to oil prices than is the case for its major oil company peers.

"With CVX one of the most leveraged of the major oils to changes in oil prices, we view the balance of risk as favorable, albeit the recent recovery has recaptured half of the loss in value since the share price dislocation that took place after [Chevron's fourth-quarter earnings report]," Bank of America analyst Doug Leggate says.

Leggate says rising oil prices helped put Chevron in a position to potentially restart its share buyback program in the second half of the year so that its 3.6 percent dividend can continue to grow.
Back to the Bakken
Where $71-Oil Is Like, "Oh, Yeah"

Active rigs:

Active Rigs61492884192

RBN Energy: economic justification for new Permian crude pipelines, part 5.