Wednesday, February 13, 2019

Speaking Of A Wealth Tax -- February 13, 2019

Quick! A memo to Occasional-Cortex ...

From Chesto over at The Boston Globe today:
Mansion maven: Larry Ellison, the billionaire founder of software company Oracle, has purchased the Seacliff home on Bellevue Avenue in Newport for $11 million.
The acquisition means he owns all four properties between Rosecliff and Marble House, which are designated as Preservation Society of Newport County mansions.
According to the Daily News in Newport, Ellison’s central property in the city is the Astors’ Beechwood mansion at 580 Bellevue Ave., on which he has spent more than $100 million to renovate it for a planned Beechwood Art Museum.



This Is A Pretty Big MIlestone -- Great For Cocktail Chatter At This Weekend's Social Events -- February 13, 2019

A reader points out that the US is now producing upwards of 12 million bbls of crude oil per day. If/when it hits 12 million bopd that should be a fairly important milestone.

Today's EIA Weekly Petroleum Report, Comments, And Comments From A Reader -- February 13, 2019

I've been blogging since 2007. I've probably been following the API weekly petroleum report for five or six years. I don't recall a more interesting petroleum report in all those years that the one released today. I posted the summary of that report and my comments earlier. Later, I received a comment from a reader that knows this "stuff" much better than I do. His comments were quite fascinating and I posted them at the original post as an update.

I seldom do this, but the petroleum report was so interesting, and the reader had such interesting comments, I felt compelled to post all of this again so that it is not lost in the clutter.

In addition, see more at focus on fracking

So here is the re-post:

Updates

Later, 6:13 p.m. Central Time: from a reader, see comments.
A few quick notes...85.9% of capacity is the lowest capacity utilization rate in 16 months....the 15,768,000 barrels per day of oil that were refined this week was also the lowest in 16 months, 2.4% below the 16,162,000 barrels of crude per day that were being processed during the week ending February 9th, 2018, when US refineries were operating at 89.8% of capacity...
So I'd have to say Venezuela played a part in that, but there is a seasonal slowdown that typically begins at this time of year as well...
Imports were at a 22-year low (1st week of Jan 1997)...that's pretty amazing, considering hurricanes...however, that goes in the books with a double asterisk; first,Venezuela; second, the Keystone pipeline being shut down...btw, the Keystone was supposed to be supplying some of that heavy crude the refineries were looking for...
Lastly, production topped 12 million bpd this week but "they've been reading my blog" and saw I predicted 12.1 million bpd, and since they couldn't let me front run them, they left production unchanged..
Witness: imports - exports + production is 541,000 barrels per day short of oil refined + the storage addition...  
Original Post
 
WTI jumps almost 3% after EIA releases stunning report. WTI up almost $2.00 and now trading solidly above $54.

See this story.
Global oil prices extended gains Wednesday, taking Brent crude to a fresh three month high, after data indicating a steep rise in U.S. stockpiles followed steeper-than-expected production cuts from key OPEC+ members Saudi Arabia and Russia. The Energy Information Administration said domestic crude inventories rose by a much-larger-than-expected 3.68 million barrels last week, taking the total to 450.84 million, the highest since November 2017. The figures offset forecasts for weaker demand and record U.S. supply from the International Energy Agency earlier in the session and sent prices higher in market around the world.
EIA link here. Weekly petroleum report --
  • huge build and apparently completely unexpected
    • crude oil inventories increased by 3.6 million bbls
    • US crude oil inventories: 450.8 million bbls
    • US crude oil inventories: 6% above the five-year average and the five-year average, on a rolling basis, keeps going higher
  • refineries? operating at an incredibly low 85.9% capacity; I don't recall ever seeing refinery operating capacity this low, but I don't follow it closely
  • US crude oil imports dropped by almost a million bopd
    • over the past four weeks, crude oil imports averaged more than 11% less than the same four-week period last year
  • very, very interesting report
    • will be interesting to see what analysts have to say about this one
  • it's no longer business as usual 

Re-balancing? LOL:

Week
Date
Change w-o-w
In Storage
Weeks to RB to 350 Million Bbls
Week 0
November 21, 2018
4.9
446.9
N/A
Week 1
November 28, 2018
3.6
450.5
N/A
Week 2
December 6, 2018
-7.3
443.2
N/A
Week 3
December 12, 2018
-1.2
442.0
Never at this rate
Week 4
December 19, 2018
-0.5
441.5
Never at this rate
Week 5
December 28, 2018
0.0
441.4
Never at this rate
Week 6
January 4, 2019
0.0
441.4
Never at this rate
Week 7
January 9, 2019
-1.7
439.7
A long, long time
Week 8
January 16, 2019
-2.7
437.1
Won’t happen in my life time
Week 9
January 24, 2019
8.0
445.0
Won’t happen i my life time
Week 10
January 31, 2019
0.9
445.9
Won’t happen in my life time
Week 11
February 6, 2019
1.3
447.2
Won’t happen in my life time
Week 12
February 13, 2019
3.6
450.8
Won’t happen in my lifetime

Analysts: price of oil is being driven by OPEC's commitment to cutting production. If so, OPEC cuts are going to have to offset:
  • US shale production: light oil
  • Canadian western sands production: heavy oil
I don't see it happening.

NGLs Pipeline News -- February 13, 2019

I don't follow NGLs pipelines but a reader sent me a link to a press release regarding Targa / Williams today.

I may have this wrong, but if I am reading this correctly, this is what is going on:

1. Williams / ONEOK have a joint venture pipeline carrying NGLs from the Piceance/Powder River region in Wyoming to its (Williams) fractionator in Conway, Kansas: the Overland Pass pipeline.

2. Meanwhile, the largest gathering and processing company in the Permian is completing a pipeline from the Permian to its processing and export terminal in Mont Belvieu, east Texas, on the gulf: Grand Prix Mainline pipeline. The Grand Prix pipeline from west Texas (the Permian) to Mont Belvieu is expected to be on line sometime in 2Q19.

3. The gap: between northern Texas and Kansas lies another huge play the "STACK" in Oklahoma.

4. The press release today: Targa and Williams will "close" the gap. Williams will build a 188-mile pipeline, the newly named "Bluestone Pipeline," from its NGL hub in Conway, Kansas, to Kingfisher County in Oklahoma. Meanwhile, Targa will build a 110-mile extension from its Grand Prix NGL pipeline in north Texas to Kingfisher County in Oklahoma ("STACK").

5. The Williams "Bluestone" will interconnect with Targa's Grand Prix extension. Thus the gap will be breached: these two extensions, one from the north, and one from the south, will connect the entire midcontinent, north-to-south from the Bakken to the gulf coast; and west-to-east, from Wyoming to the gulf coast.

6. The good news: the pipelines and extensions are being completed through "oil-friendly" states.

7. Note: this is my understanding of the situation. I do not follow natural gas and NGL pipelines to any great extent. I looked at company presentations very quickly and may have misunderstood/misread something. I do not know much of the geography of the regions/states mentioned above.

8. If this information is important to you, go to the source. Some of the links or sources:

Seven New Permits -- February 13, 2019

Today, from Goldman Sachs over at oilprice:



Tomorrow, from Goldman Sachs: $20 WTI is more likely than $60 WTI. On the other hand, Saudi Arabia tried destroying US shale back in 2014. We saw how that worked out. Might as well try "shock and awe" OPEC cuts. But I will believe it when I see it.

 *********************************************
Back to the Bakken

Active rigs:

$54.002/13/201902/13/201802/13/201702/13/201602/13/2015
Active Rigs64583641137

Seven new permits:
  • Operators: Hess (6), Lime Rock
  • Fields: Blue Buttes (McKenzie), Murphy Creek (Dunn)
  • Comments: Hess has permits for a 6-well BB-Federal A-LS pad in section 16-151-95 in Blue Buttes oil field
Nine producing wells (DUCs) reported as completed:
  • 34000, 2,001, Hess, SC-1WX-152-99-0809H-2, Banks, t1/19; cum --;
  • 34084, 2,441, Equinor, Sjol 5-8f, 5H, Williston, t1/19; cum --;
  • 25955, 690, Equinor, Mark 4-9F, 6TFH, Williston, t1/19; cum --;
  • 32292, 2,387, Equinor, Mark 4-9F 7H, Williston, t1/19; cum --;
  • 34085, 1,328, Equinor, Sjol 5-8F, 6TFH, Williston, t1/19; cum--;
  • 35106, 699, Kraken Operating, Goodman LW 36-25 2H, Squires, t1/19; cum --;
  • 35105, 735, Kraken Operating, Goodman 36-25 3H, Squires, t1/19; cum --;
  • 35104, 785, Kraken Operating, Goodman 36-25 4H, Squires, t1/19; cum --;
  • 32293, 237, Equinor, Mark 4-9F, 8TFH, Williston, t1/19; cum --;

Section 9-153-91

Half of the long horizontals are in section 9-153-91:
  • 27231, 365, Whiting, Waldock Federal 14-4-3XH, t7/14; cum 378K 12/18;
  • 17158, 4,184, Whiting, Richardson Federal 11-9H, t10/08; cum 965K 12/18; original open-hole frack with 1.8 million lbs sand; tracked at "monster wells"
  • 22971, 1,103, Whiting, Rodney Olson Federal 42-8-2TFH, t1/13; cum 208K 12/18;
  • 17917, 1,782, Whiting, Olson Federal 42-8H, t5/10; cum 595K 12/18;
  • 25730, 939, Whiting, Locken 43-8XH, t10/13; cum 321K 12/18;

Facts No Longer Matter -- US Crude Oil Inventories Hit Levels Not Seen Since 2017 -- Reaction? Price Of Oil Surges

Updates

Later, 6:13 p.m. Central Time: from a reader, see comments.
A few quick notes...85.9% of capacity is the lowest capacity utilization rate in 16 months....the 15,768,000 barrels per day of oil that were refined this week was also the lowest in 16 months, 2.4% below the 16,162,000 barrels of crude per day that were being processed during the week ending February 9th, 2018, when US refineries were operating at 89.8% of capacity...
So I'd have to say Venezuela played a part in that, but there is a seasonal slowdown that typically begins at this time of year as well...
Imports were at a 22-year low (first week of January 1997)...that's pretty amazing, considering hurricanes...however, that goes in the books with a double asterisk; 1st Venezuela, 2nd the Keystone pipeline being shut down...btw, the Keystone was supposed to be supplying some of that heavy crude the refineries were looking for...
Lastly, production topped 12 million bpd this week but "they've been reading my blog" and saw I predicted 12.1 million bpd, and since they couldn't let me front run them, they left production unchanged..
Witness: imports - exports + production is 541,000 barrels per day short of oil refined + the storage addition...  
Original Post
 
WTI jumps almost 3% after EIA releases stunning report. WTI up almost $2.00 and now trading solidly above $54.

See this story.
Global oil prices extended gains Wednesday, taking Brent crude to a fresh three month high, after data indicating a steep rise in U.S. stockpiles followed steeper-than-expected production cuts from key OPEC+ members Saudi Arabia and Russia. The Energy Information Administration said domestic crude inventories rose by a much-larger-than-expected 3.68 million barrels last week, taking the total to 450.84 million, the highest since November 2017. The figures offset forecasts for weaker demand and record U.S. supply from the International Energy Agency earlier in the session and sent prices higher in market around the world.
EIA link here. Weekly petroleum report --
  • huge build and apparently completely unexpected
    • crude oil inventories increased by 3.6 million bbls
    • US crude oil inventories: 450.8 million bbls
    • US crude oil inventories: 6% above the five-year average and the five-year average, on a rolling basis, keeps going higher
  • refineries? operating at an incredibly low 85.9% capacity; I don't recall ever seeing refinery operating capacity this low, but I don't follow it closely
  • US crude oil imports dropped by almost a million bopd
    • over the past four weeks, crude oil imports averaged more than 11% less than the same four-week period last year
  • very, very interesting report
    • will be interesting to see what analysts have to say about this one
  • it's no longer business as usual 

Re-balancing? LOL:

Week
Date
Change w-o-w
In Storage
Weeks to RB to 350 Million Bbls
Week 0
November 21, 2018
4.9
446.9
N/A
Week 1
November 28, 2018
3.6
450.5
N/A
Week 2
December 6, 2018
-7.3
443.2
N/A
Week 3
December 12, 2018
-1.2
442.0
Never at this rate
Week 4
December 19, 2018
-0.5
441.5
Never at this rate
Week 5
December 28, 2018
0.0
441.4
Never at this rate
Week 6
January 4, 2019
0.0
441.4
Never at this rate
Week 7
January 9, 2019
-1.7
439.7
A long, long time
Week 8
January 16, 2019
-2.7
437.1
Won’t happen in my life time
Week 9
January 24, 2019
8.0
445.0
Won’t happen i my life time
Week 10
January 31, 2019
0.9
445.9
Won’t happen in my life time
Week 11
February 6, 2019
1.3
447.2
Won’t happen in my life time
Week 12
February 13, 2019
3.6
450.8
Won’t happen in my lifetime

Analysts: price of oil is being driven by OPEC's commitment to cutting production. If so, OPEC cuts are going to have to offset:
  • US shale production: light oil
  • Canadian western sands production: heavy oil
I don't see it happening.

*********************************
The Book Page

Murray Gell-Man. Brightest physicist / thinker since Einstein, Feynman?

From Genius: The Life and Science of Richard Feynman, James Gleick, c. 1992, page 208:
High school senior at age 14 at private school on the Upper West Side of New York City; enters Yale at age 14 or 15 as an undergraduate.

Murray did not find his way immediately to physics, talented as he was in so many subjects. When he applied to the Ivy League graduate schools, he was widely disappointed: Yale -- his alma mater -- would take him only in mathematics; Harvard would take him only if he paid full tuition; and, Princeton would not take him at all.

So he made a half-hearted application to MIT and heard directly back form Victor Weisskopf, whom he had not heard of. Gell-Mann decided to accept Weisskopf's offer, though grudgingly, MIT seemed as lumpen.

The joke he told ever after was that the alternatives did not commute: he could try MIT first and then suicide second, whereas the other ordering would not work.
*******************************
The Green New Deal

Some years ago -- not many -- there was another discussion among progressives. That discussion was not addressed by the Green New Deal formulated by Occasional-Cortex.

It will be interesting if anyone can think what that discussion from years ago did not show up in the GND.

Texas Led The Nation In Population Growth, 2018, Based On "Raw" Numbers; Will Gain Three Electoral Votes; New York To Lose Two, Rhode Island To Lose One -- February 13, 2019

The other day we were talking about "growth centers" in the US. Now this from the US census bureau: Nevada and Idaho are the nation's fastest growing states. See also this story.
Following Nevada and Idaho for the largest percentage increases in population were Utah (1.9 percent), Arizona (1.7 percent), and Florida and Washington (1.5 percent each).
Texas makes all three top-10 lists:
  • top 10 overall population (#2), California, #1
  • top 10 by numerical increase (#1); Florida, #2; and California, #3
  • top 10 by percentage growth (#8)
*********************************
What this means for the Electoral College

The following states are poised to gain seats:
  • Texas will gain three, from 36 to 39;
  • Florida will gain two, from 27 to 29;
  • Arizona will gain one, from nine to 10;
  • Colorado will gain one, from seven to eight;
  • Montana will gain one, from at-large to two;
  • North Carolina will gain one, from 13 to 14; and
  • Oregon will gain one, from five to 6.
These states are poised to lose seats:
  • New York will lose two, from 27 to 25;
  • Alabama will lose one, from seven to six;
  • California will lose one or remain even, from 53 to 52 or no change;
  • Michigan will lose one, from 14 to 13;
  • Minnesota will lose one or remain even, from eight to seven or no change;
  • Ohio will lose one, from 16 to 15;
  • Pennsylvania will lose one, from 18 to 17;
  • Rhode Island will lose one, from two to one; and
  • West Virginia will lose one, from three to two.
***********************************
The Original Post

Re-posting from the other day:

For the archives.

A great link for graphics.

Which word in this group of three does not belong: dilbit; railbit; rarebit. For answer, see this post.

*******************************
US Growth Centers

This happened to pop up in discussion with a reader, after stories of socialism in the US. We were discussing what regions, what cities would see an increase in population over the next twenty years. Here were my thoughts:
1. Atlanta, GA, surprises me. Continues to grow and grow and grow.
2. North Carolina is huge growth center.
3. New York wealthy migrate to Florida.
4. Texas: huge. I think that's the real sleeper but I am very, very biased. Mexico will be huge driver for Hispanic growth in Texas.
5. Utah will do very, very well.
Let's see what others have to say:
Spot on! See my list above and compare to map below:


********************************
Census

This is a really, really cool map.


When you click on the link, a black-and-white county map of the US will pop up. Across the top, the very last box (toggle US cities) is not highlighted. Be sure to highlight that one.

Put your cursor on any county, say Williams County, North Dakota, click and get the data for county migration. There are numerous ways to toggle; numerous boxes for additional data. 

To get a quick idea of what's going on:
  • put your cursor on Cass County (Fargo), ND
  • click on Cass County (Fargo), ND
  • you will notice that essentially the whole state is moving to Fargo! LOL!
  • and, in fact, practically the whole state of Minnesota is moving to Fargo
  • now you know why Fargo keeps growing 
  • but also look at the net migration from Fargo to Williston 
  • also, look at the net migration from Fargo, ND, to Phoenix!
  • this could go on all day 
New York City? The entire city is moving to Florida (but not to Miami).

Three Wells Coming Off The Confidential List Today -- February 13, 2019

Making America great:


Shale: top ten US shale portfolios. From the Rigzone staff -- The full top 10 list, as outlined by Rystad Energy:
  • Chevron - $72 billion
  • EOG Resources - $42 billion
  • Shell - $31 billion
  • Anadarko - $29 billion
  • ExxonMobil - $23 billion
  • Concho Resources - $22 billion
  • Oxy - $21 billion
  • Pioneer Natural Resources - $20 billion
  • Diamondback Energy - $19 billion
  • ConocoPhillips - $18 billion
From the article:
Chevron holds the most valuable U.S. shale portfolio in terms of total net present value (NPV).
The total NPV for Chevron’s U.S. shale portfolio is $72 billion, with the company’s acreage in the Permian Delaware alone standing at nearly $60 billion in NPV.
EOG Resources has the second most valuable U.S. shale portfolio in terms of total NPV, at $42 billion, and Shell holds the third most valuable U.S. shale portfolio with a total NPV of $31 billion.
I think this simply incredible considering shale was on nobody's radar scope ten years ago. The numbers could change significantly if we ever see the new USGS survey.
***********************************
Back to the Bakken

Wells coming off the confidential list today -- Wednesday, February 13, 2019: 49 wells for the month; 152 wells for the quarter
  • 34670, drl, Hess, GO-Bergstrom 156-98-2833H-4, Wheelock, no production data,
  • 33102, 1,713f CLR, Sakakawea Federal 9-19H2, Elm Tree, t1/19; cum --;
  • 32068, drl, XTO, Maddy Federal 24X-34H, North Fork, no production data,
Active rigs:

$53.682/13/201902/13/201802/13/201702/13/201602/13/2015
Active Rigs63583641137

RBN Energy: massive shift of US crude oil, natural gas and NGLs into global markets.
U.S. crude oil, NGL and gas markets have entered a new era. Exports now dominate the supply/demand equilibrium. These markets simply would not clear at today’s production levels, much less at the flow rates coming over the next few years, if not for access to global markets. This year, the U.S. may export 20-25% of domestic crude production, 15% of natural gas and 40% of NGLs from gas processing, and those percentages will continue to ramp up. What will this massive shift in energy flows mean for U.S. markets, and for that matter, for the rest of the world?