Sunday, May 17, 2020

Notes From All Over -- The Late Sunday Night Edition -- May 17, 2020

From oilprice this evening, link here. I wouldn't have bothered with the first banner headline but I have a link at the sidebar at the right, near the top, which links to a question I had when this all started: whether the Bakken or the Permian would be hit harder.

First item:

The second item is very, very interesting. Note the oil price rally (banner below). At least for now the price rally continues. It's fascinating but meaningless. It's meaningless because it's not predictable; it doesn't make sense; and, there is no way one can model it.
What interests me is the relative prices: comparing the various crude oils.
But what really, really interests me is the "OPEC Basket." This is the third time in about five days that I've brought this up. I assumed it was a mistake. Oilprice very, very, very rarely makes a mistake on their banner oil prices but it does happen. But if this was an error, certainly after 24 hours, or 48 hours, or even 72 hours, this error would have been corrected. But it hasn't changed. I don't get it. I still think that even if it's an error, it reflects "reality," whatever "reality" is these days.
Second item:


I checked the official OPEC site, and they show "OPEC Basket" rising but still below WTI. The OPEC site lags a bit; the most recent date is May 14, 2020 (I'm writing this on May 17, 2020), and the OPEC Basket is $24.93.

I still think things are too quiet in the Mideast which I first mentioned May 7, 2020 -- that's ten days ago. Wow, time flies.

How is the president doing with regard to the pandemic? Link here. Most recent results from the Rasmussen daily presidential poll:


Once folks get their next $2,000 check -- thank you, Ms Pelosi -- his polling numbers should rise again. What a great country.

Notes From All Over -- Late Sunday Afternoon Edition -- May 17, 2020

Bragging rights: NASCAR.
First major professional sport that "comes back" as the US begins to re-open during Wuhan flu outbreak. It is fitting that this "first" race is at Darlington, South Carolina. Pretty amazing.
It will be interesting to see the ratings. The only "live" sports prior to this was the national (?) "cornhole" championship which was held this past week. I can't make this stuff up.
[Later: Kevin Harvick wins. Nice job. Well deserved. It almost appears every race driver was on his best behavior. His 50th Monster Energy Series career win. Wow. Best news: Ryan Newman raced. He finished. And he finished in 15th place, a solid race. I assume his family is much relieved. He says he still has no memory of the Daytona crash.]
Next race: Wednesday, three nights from now, also at Darlington, a night race. What a great country. I guess the professional golfers are still afraid of the virus. LOL. 

Reality. Link here

I agree with the "overall" sentiment but I think the top 1% will do very, very well coming out of the Wuhan flu lock down, and the top 10% -- not just the top 1% -- will do "largely" fine.  
My hunch is that the gap between the top 10% and the middle class will widen.
Significantly.
I don't think the "middle class" will be smaller, unless they change the definitions. The middle class includes the lower middle class, the middle middle class, and the upper middle class. I think the middle class will stay about the same size but within the middle class things will shift to the left (left: less well off).

As usual, the investor class should do very, very well, compared to non-investors. In addition to everything else, and all things being equal, my hunch is that the Wuhan flu "lock down" affected the non-investor class a whole lot more than the investor class.

With regard to the "country being horrifically in debt," I think one needs to compare the economic debacle with the Great Depression, the global economy after World War, and the US and global economy after WWII, before using the word "horrifically." 
Paul Krugman is not concerned about the debt, nor are my sub-continent Indian neighbors. 
Amazon is back! Folks might remember that Amazon had to prioritize shipments during the height of the Wuhan flu panic.
Books were very, very low priority; masks were very, very high priority.
Yesterday, I ordered a book for our older daughter in Portland, OR -- yesterday, May 16, 2020. Today, May 17, 2020, less than 24 hours later, I get an e-mail from our daughter that the book has been delivered and she is already reading it. LOL.
Wow. Even if Barnes and Noble had been open I could not have gotten the book to her faster. Not only that, mailing was free (yes, I know --- I pay for Amazon Prime -- so, it's really not free) and get this: cash back from the Amazon credit card has grown to such a huge amount I'm not paying for much at Amazon. This book: $0.00. 
Speaking of "cash back" and loyalty cards: it's just amazing.
I order a fair amount of photograph enlargements from Walgreens. Walgreens always has coupons; sometimes one has to look for them on line but they are there. Generally, the coupons are 40% or 50% off. The prints I get back are spectacular. And then on top of that, I build up "cash" through the loyalty program. It's truly amazing. And, oh by the way, if I want to buy prints for a family member that lives elsewhere, I can have the photos printed at any Walgreens across the country and the family member can pick up photos at their nearby Walgreens.

This Headline Worth 10,000 Words -- May 17, 2020



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Bob Jones Park
Southlake, Texas

May 17, 2020

Notes From All Over, The Early Sunday Afternoon Edition -- May 17, 2020

Updates

RFG and crack spread: for help in understanding this, see comments below, including this:
RFG, reformulated gasoline. Lower vapor pressure for summer use by limiting the amount of butane in summer gasoline vs. winter gasoline. Plus special processing for low vapor gasoline with decent octane.

Crack spread. Start with a gallon of crude oil. For example you paid $1.00 a gallon. Refine it: gasoline, diesel, fuel oil, bunker fuel, jet fuel, etc. You sell all of the products, and you get $1.20 a gallon after selling all of the products. That gives you a crack spread of $0.20 a gallon with a blend of all of the products. Assuming that jet fuel and diesel are break even, making $$$ on gasoline.
Every time I see RFG, I think BFD, and every time I see "crack spread," I'm thinking some illicit drug. LOL. Seriously, the reader's explanation of "crack spread" was a huge help. Thank you.

Original Post

Perspective: it's all about one's perspective, isn't it? For example, much of the private land in North Dakota was handed down to current owners from original settlers three generations ago. Maybe four generations. Let's see: my grandfather -- my father -- me -- Sophia -- that's four generations. Sophia's counterpart in North Dakota who will inherit mineral rights isn't affected by current events at all except in the "derivative" sense. If Sophia's counterpart in North Dakota retains her mineral rights, she may be very, very happy that oil companies are taking this bruising now.
  • in Europe before the 19th century, wars were measured in terms of centuries (the Four Hundred Years' War, for example)
  • US Revolutionary War: 1775 - 1783
  • US Civil War: 1861 - 1865
  • WWI: 1914 - 1918
  • WWII: 1939 - 1945
  • The Korean War: 1950 - 1953, armistice, but no peace agreement -- so, 1950- 2020 ("frozen conflict")
  • Second Indochina War: 1955 - 1975
  • Afghanistan War: began in 2001; in 2014, the 13-year war had become the longest war fought by the US
  • Corona virus: may have been released in China as early as September, 2019; the US did not declare "war" until January 31, 2020 when international flights from China were banned: it's now been less than four months, and, there is already talk of an "armistice" (a gradual re-opening of the US; a peace treaty with the virus is likely never to be signed)
Winners and losers:
  • very, very difficult to make up for "lost time"
  • very difficult to make up for lost income
  • watching the evening news is thirty minutes one will never get back
Daily grocery store visit: I try to visit our neighborhood store once every day. During the "toilet paper crisis" I visited the store twice a day, not to buy anything, but to see how things were going. Sort of like a journalist might do. LOL. Whatever.
Now I go to the store once a day for three reasons:
  • to buy a fresh loaf of French bread which the oldest granddaughter likes for grilled cheese sandwiches and baguettes which the middle granddaughter and her dad like for snacking;
  • to buy three or four apples (two of the three granddaughters love them); Koru are their current favorites, but Fuji are an adequate substitute; never, never, never red delicious;
  • look for steak that has gone on sale (finding some incredible bargains)
At the same time, I am also going once a day to simply see how things are going. Right now, there are NO shortages of anything except French onion potato chip dip; three stores in our local area have been out of this item for five days now.
Observations today:
  • that perceived egg shortage reported by the WSJ a few weeks ago? Not here; coffins are overflowing with eggs, and a dozen large Grade A eggs are selling for $0.99;
  • paper goods aisle -- bathroom tissue and paper towels fill the shelves
  • a half gallon of premium ice cream selling for $7.99 last week is now back to $6.99/half gallon
About half of the customers are wearing face masks; few are actually following directions on the floor telling folks which way to walk down the aisles. It appears that masks great affect one's ability to see clearly and read the direction of 2-foot arrows painted on the floors. All employees are wearing masks and the shopping carts are spotless, and wiped down with disinfectant within seconds after being returned to the store.
In the local area, it almost appears that more people are wearing their masks outdoors even if no other human being is in sight, whereas in the very busy grocery store, about half are not wearing masks. And walking the wrong way down the aisles.

My favorite: drivers in POVs, driving with no passengers, wearing their masks.
Gasoline: most surprising -- how fast gasoline went from $1.09 to $1.55/gallon in our local area, when there is now an unprecedented 42-day supply of crude oil in this country. Why isn't the governor looking into this?

Koru apples
  • Koru apples are a modern New Zealand variety of Malus domestica. They are an accidental cross between Fuji (Japanese) and Braeburn (Motueka, New Zealand), with characteristics of each. Koru is a brand name for the apple cultivar Plumac.
Word for the day: bawn.

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Water Over The Bridge

After almost steady rain for the past 24 hours, we had water over the bridge at Parr Park, Grapevine, TX.

Parr Park

Super-Tankers Headed To China -- May 17, 2020

117 super-tankers filled with Mideast crude oil heading to China, Bloomberg, May 16, 2020.

Link here.

There are 117 of the industry’s largest crude carriers en route to ports in the Asian country, where there have been increasing signs of a pickup in oil demand following the outbreak of coronavirus. That’s the biggest number of the vessels since at least the start of 2017, and quite possibly ever. Assuming they have standard-sized cargoes on board, the ships are likely delivering at least 230 million barrels of cargo. 
The surge in flows is just another piece of evidence underpinning the idea that the country’s oil consumption is recovering at a time when many other nations are still struggling to ease lockdown measures as they combat Covid-19. China’s apparent oil demand surged by roughly 11% from March into April, and the nation’s independent refineries are processing at a record rates.
“Chinese purchases are done on geopolitical grounds and pricing ground,” said Peter Sand, the chief analyst at shipping trade group BIMCO. “The stars aligned for perfectly in 2nd half of April.”
Many of the shipments, due to arrive between now and mid-August, are likely to have been purchased last month, when oil prices briefly plunged toward zero because of a huge global overproduction of crude. U.S. barrels traded at negative prices last month amid concern about a lack of space to store supplies while, across the world, physical grades also became steeply discounted.
China’s apparent oil demand rose to 11.81 million barrels a day in April, up from 10.63 million in March, according to data compiled by Bloomberg. That means the vessels en route will deliver almost 20 days of supply.

The MRO L-O-T-V Pad And The MRO A-J-2K-S Pad In Reunion Bay -- May 17, 2020

The graphics:



The wells:
  • 36921, drl, MRO, Vickall USA 34-5H, Reunion Bay, t--; cum --;
  • 36922, drl, MRO, Lang USA 41-8TFH, Reunion Bay, t--; cum --;
  • 36923, drl, MRO, Thorson USA 34-5H, Reunion Bay, t--; cum --;
  • 37323, loc, MRO, Oscar Thorson USA 41-8TFH-2B, Reunion Bay, t--; cum --;

  • 36919, loc, MRO, Klemstead USA 44-5TFH, Reunion Bay, t--; cum --;
  • 36918, loc, MRO, Kolbo USA 34-5H, Reunion Bay, t--; cum --;
  • 18692, 781, MRO, Jasper L USA 34-5H Reunion Bay, t11/10; cum 368K 3/20;
  • 36920, loc, MRO, Adonijah USA 44-5TFH-2B, Reunion Bay, t--; cum --;
  • 18693, 560, MRO, Betty Shobe USA 41-8H, Reunion Bay, t9/10; cum 343K 3/20; off line 1/19; back on line 2/20;

MRO Action In Reunion Bay -- The P-R-S-4W Pad -- May 17, 2020

The graphics:



The wells:
  • 21630, IA/1,378, MRO, Waltom USA 43-8TFH, Reunion Bay, t9/12; cum 424K 1/20; off line 1/20; remains off line 4/20;
  • 21631, IA/1,463, MRO, Waljen USA 43-8H, Reunion Bay, t9/12; cum 467K 1/20; off line 1/20; remains off line 4/20;
  • 33945, ros/conf, MRO, Walcel USA 42-8H, Reunion Bay,
  • 33946, conf, MRO, Ranum USA 42-8TFH-2B, Reunion Bay,
  • 33947, conf, MRO, Prior USA 42-8TFH-2B, Reunion Bay, 
  • 37385, loc, MRO, Wallentinson USA 44-8H, Reunion Bay,
  • 37403, loc, MRO, Standfest USA 42-8H, Reunion Bay,

Continuing To Draw Tweets And Re-Tweets -- Kuwait / Saudi ArabiaTo Shut Shared Field Just Months After Re-Opening -- May 17, 2020

This story continues to draw tweets and re-tweets: Kuwait, Saudi Arabia to shut shared Al-Khafji field justmonths after re-start.
The shutdown comes just months after both countries agreed to resume production at the Neutral Zone. Total production at the Neutral Zone, which comprises the offshore Al-Khafji and onshore Wafra fields, was 260,000 b/d in April, with each country sharing output 50-50. Kuwait's share of the Wafra field was 60,000 b/d at the time and the Al-Khafji share was about 70,000 b/d, signaling the shut down will remove about 140,000 b/d from the market.
"There are simply no buyers. This is why everybody is volunteering cuts," the source said.

Initial Production Data For Wells Coming Off The Confidential List This Next Week -- May 17, 2020

The wells:
  • 36963, conf, WPX, Meadowlark 6-34HW, Heart Butte
  • 36211, conf, XTO, FBIR Baker 34X-25G,  Heart Butte,
  • 36964, conf, WPX, Meadowlark 6-34HB, Heart Butte,
  • 36792, conf, Sinclair, Harris Federal 3-32H, Lone Butte,
  • 36598, conf, Whiting, Erickson 14-23-3H, Glass Bluff,
DateOil RunsMCF Sold
3-2020161130
2-202015866456
1-2020154862710
12-2019244032924
11-201945715
  • 36358, conf, Slawson, Gunslinger Federal 2-12-1H, Sand Creek, 
  • 34259, conf, Crescent Point Energy, CPEUSC Tami 6-8-5-157N-99W-LL TFH, Lone Tree Lake,
  • 36597, conf, Whiting, Erickson 44-35HU, Glass Bluff,
DateOil RunsMCF Sold
3-2020155420
2-202015725656
1-2020192602660
12-2019238703916
11-2019653277
  • 36357, conf, Slawson, Gunslinger Federal 9-12-1TFH, Sand Creek, 
  • 36132, conf, Whiting, Ed TTT Federal 43-4H, Sanish,
DateOil RunsMCF Sold
3-20202346320475
2-20202572118240
1-20202935512094
12-20192510311218
11-201968520
  • 34258, conf, Crescent Point Energy, CPEUSC Tami 2-8-5-157N-99W MBH, Lone Tree Lake,
  • 36356, conf, Slawson, Gunslinger Federal 3-12-1H, Sand Creek, 
  • 36156, conf, Nine Point Energy, S Missouri 152-103-9-11-11H, Eightmile,
DateOil RunsMCF Sold
3-2020225380
2-2020103040
1-2020206610
12-2019259210
11-201969500
  • 35929, conf, XTO, Mandal Federal 41X-29H, Haystack Butte,  
  • 35665, conf, Zavanna, Stranger 28-21 1TFH, Poe,
DateOil RunsMCF Sold
3-20201551913219
2-20201880620561
1-2020178015111
12-2019116061496
11-2019460
  • 35232, conf, Nine Point Energy, Helling 150-101-7-6-6H, Pronghorn,
DateOil RunsMCF Sold
3-2020182420
2-2020159250
1-2020164030
12-2019279600
11-201951440

  • 34257, conf, Crescent Point Energy, CPEUSC Tami 7-8-5-157N-99W TFH, Lone Tree Lake,
  • 35930, conf, XTO, Mandal Federal 41X-29DXA, Haystack Butte,
  • 35231, conf, Nine Point Energy, Helling 150-101-7-6-6H, Pronghorn,
DateOil RunsMCF Sold
3-2020242620
2-2020215820
1-2020144100
12-2019293290
11-201979620
  • 35448, conf, Hess, BB-Federal B-151-95-2122H-11, Blue Buttes, 
  • 35931, conf, XTO, Hovet Federal 41X-29E, Haystack Butte, 
  • 34727, conf, Hess, BB-Federal B-151-95-2122H-5, Blue Buttes,   
  • 34255, conf, Crescent Point Energy, CPEUSC Tami 8-8-5-157N-99W TFH, Lone Tree Lake,
  • 33024, conf, BR, Renegade 24-10 TFH, Sand Creek, 
  • 35932, conf, XTO, Hovet Federal 41X-29G, Haystack Butte, 
  • 34728, conf, Hess, BB-Federal B-151-95-2122H-4, Blue Buttes, 
  • 35622, conf, CLR, Palmer Federal 13-25HSL1, Haystack Butte,
DateOil RunsMCF Sold
3-20201498324960
  • 34729, conf, Hess, BB-Federal B-151-95-2122H-2, Blue Buttes, 
  • 35933, drl, XTO, Hovet Federal 41X-29D, Haystack Butte, 
  • 35621, SI/A, CLR, Palmer Federal 12-25HSL,  Haystack Butte, over 30 days, 30,325 bbls in 24 days extrapolates to 37,906 bbls:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN3-20202430325302473566358506549703536
BAKKEN2-20200000000
BAKKEN1-20200000000
BAKKEN12-20190000000
BAKKEN11-201938738733420137701377
  • 34730, loc/drl, Hess, BB-Federal B-151-95-2122H-2, Blue Buttes, 
  • 35747, SI/NC, Zavanna, Usher 28-21 3H, Poe, t--; cum 94K over 4 months;a 45K month;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN3-2020221132410238138601295912386245
BAKKEN2-20202935125303042885626418211594827
BAKKEN1-20203145183398244260465435654658427
BAKKEN12-2019324792296311541132773791
BAKKEN11-20193521297104350391
  • 35669, SI/NC, Zavanna, Stranger 28-21 5TFH, Poe, t--; cum 98K over four months; over 30 days, 32,295 bbls extrapolates to 33,408 bbls;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
BAKKEN3-2020312005717787268821795716524971
BAKKEN2-2020281842716175279501699616084495
BAKKEN1-202031225092032736192359551078924704
BAKKEN12-20192932295305035456259628421454982
BAKKEN11-201974720440414936433604232

Wells Coming Off The Confidential List This Next Week -- May 17, 2020

Monday, May 25, 2020: 81for the month; 131 for the quarter, 358 for the year:
36963, conf, WPX, Meadowlark 6-34HW,
36211, conf, XTO, FBIR Baker 34X-25G, 

Sunday, May 24, 2020: 79 for the month; 129 for the quarter, 356 for the year:
36964, conf, WPX, Meadowlark 6-34HB, 
36792, conf, Sinclair, Harris Federal 3-32H, 
36598, conf, Whiting, Erickson 14-23-3H, 
36358, conf, Slawson, Gunslinger Federal 2-12-1H, 
34259, conf, Crescent Point Energy, CPEUSC Tami 6-8-5-157N-99W-LL TFH,

Saturday, May 23, 2020: 74 for the month; 124 for the quarter, 351 for the year:
36597, conf, Whiting, Erickson 44-35HU, 
36357, conf, Slawson, Gunslinger Federal 9-12-1TFH
36132, conf, Whiting, Ed TTT Federal 43-4H, 
34258, conf, Crescent Point Energy, CPEUSC Tami 2-8-5-157N-99W MBH, 

Friday, May 22, 2020: 70 for the month; 120 for the quarter, 347 for the year:
36356, conf, Slawson, Gunslinger Federal 3-12-1H, 
36156, conf, Nine Point Energy, S Missouri 152-103-9-11-11H,
35929, conf, XTO, Mandal Federal 41X-29H, 
35665, conf, Zavanna, Stranger 28-21 1TFH, 
35232, conf, Nine Point Energy, Helling 150-101-7-6-6H, 
34257, conf, Crescent Point Energy, CPEUSC Tami 7-8-5-157N-99W TFH

Thursday, May 21, 2020: 64 for the month; 114 for the quarter, 341 for the year:
35930, conf, XTO, Mandal Federal 41X-29DXA, 
35231, conf, Nine Point Energy, Helling 150-101-7-6-6H,
35448, conf, Hess, BB-Federal B-151-95-2122H-11,

Wednesday, May 20, 2020: 61 for the month; 111 for the quarter, 338 for the year:
35931, conf, XTO, Hovet Federal 41X-29E,
34727, conf, Hess, BB-Federal B-151-95-2122H-5, 
34255, conf, Crescent Point Energy, CPEUSC Tami 8-8-5-157N-99W TFH
33024, conf, BR, Renegade 24-10 TFH

Tuesday, May 19, 2020: 57 for the month; 107 for the quarter, 334 for the year:
35932, conf, XTO, Hovet Federal 41X-29G,
34728, conf, Hess, BB-Federal B-151-95-2122H-4,

Monday, May 18, 2020: 55 for the month; 105 for the quarter, 332 for the year:
35622, conf, CLR, Palmer Federal 13-25HSL1
34729, conf, Hess, BB-Federal B-151-95-2122H-2,

Sunday, May 17, 2020: 53 for the month; 103 for the quarter, 330 for the year:
35933, conf, XTO, Hovet Federal 41X-29D,
35621, conf, CLR, Palmer Federal 12-25HSL, 
34730, conf, Hess, BB-Federal B-151-95-2122H-2, 

Saturday, May 16, 2020: 50 for the month; 100 for the quarter, 327 for the year:

  • 35747, SI/NC, Zavanna, Usher 28-21 3H, Poe, t--; cum 94K over 4 months;a 45K month;
  • 35669, SI/NC, Zavanna, Stranger 28-21 5TFH, Poe, t--; cum 98K over four months;

Week 20: May 10, 2020 -- May 16, 2020

Top of the list: Bakken oil to Belarus; departs on Syttende Mai;
 
Top story of the week: Saudi Arabia

Top energy story of the week: Saudi Arabia / Kuwait to stop Al-Khafji field production;

Favorite video:

Best news all week:
Biggest non-story of the entire week:

Top international non-energy story:
Top international energy story:
Top national non-energy story:
Top national energy story:
Top North Dakota non-energy story:

Top North Dakota energy story:
Geoff Simon's top ND stories (does not include stories posted elsewhere on this page):
  • ND wins CBR case with Washington state;
  • PSC approves Williams County gas plant; the B. Sanderson Gas Processing Plant; 
  • Williston D1 to accest D8 students this fall;
  • ND airline boardings plummet to record low;
  • Federal judge: handing DAPL a setback (?); judge rules that new pipelines crossing streams need more review;
  • Dickinson airport moves to next phase in bidding multi-phase project;
  • ND State Fair canceled
  • US was energy independent in 2019 for first time since 1957;
Operations:
Operators:
Advantaged oil:
Fracking:

Natural gas:
Bakken economy:

Commentary: