Notes From All Over -- The UNP Note -- October 25, 2021

S&P 500 hits another record. Whoo-hoo!

Tesla: hits $1 trillion valuation. That 100,000-vehicle deal with Hertz is ... staggering. Eighteen years to hit $1 trillion. Simply incredible. That is a record for how fast a company hit $1 trillion market value. Amazon took 21 years; Apple took 42 years. Another winner? Cathy Wood and ARKK. It's amazing how many "pros" lost money on this stock (TSLA) due to emotion. Why is TSLA here, at this price?

• Elon Musk can raise prices and still sell every car coming off the assembly line;
• charging infrastructure keeps getting better and better; just wait until the infrastructure bill is passed;
• when you hit $1 trillion market, there's no looking back

Apple TV vs Amazon Fire Stick: link here. I might talk about this later. But Amazon Fire Stick is the winner. Period. Dot. 

UNP: top shelf. Hits a new record. Wow. 

WTI: not only did WTI drop below $85, it dropped below $84.

******************************
Cushing

It's important to remember the new "US crude oil contract" introduced this past summer.

Right now there is a lot of press about the empty storage tanks at Cushing. What most of those articles fail to mention is the new Midland WTI American Gulf Coast contract (ICE: HOU) established by Magellan, Enterprise and ICE. Source/Hart Energy.

This is way beyond my headlights, but for the sake of discussion one wonders if Magellan and Enterprise are exporting as much oil as they possibly can every day, oil that would otherwise be going to Cushing to be stored. 

I don't know. But something is going on and my hunch is that within the year, by mid-2022, we'll start to get a better analysis in the mainstream press of exactly where all the US crude oil is going and where it's stored. If Cushing is as empty as these reports suggest, WTI should be a lot higher than $85. Anyway, there seems we need an explanation why WTI is only $85 when "Cushing" is running on empty.

I could be way wrong on this. Just idle rambling.

Notes From All Over -- We Start With Retirement Update -- October 25, 2021

Link here.

Data points:

• the average monthly benefit for retirees in 2020 is $1,503, or $18,036 a year;
• if you start collecting at the earliest opportunity, at age 62, you won’t receive your full benefits;
• in fact, you’ll only receive about 70% of your benefits

Example:

• non-working spouse who starts collecting at age 62 years of age:
• $1,503 * 0.70 * 0.50 = $525 / month
• that may or may not be accurate but we can start there. 

************************************
Labor Shortage: A Short History

Labor shortage? Was the labor shortage a long time coming? Did the roots of the labor shortage begin with President Trump?

Highlights from the 2020 data: 

In 2020, the share of the U.S. civilian labor force that is foreign born was 17.0 percent, down from 17.4 percent in 2019. 

From 2019 to 2020, the overall labor force declined by 2.8 million; the foreign born accounted for 1.1 million of this decline, or 38.4 percent. -- May 18, 2021

I don't have the data for 2016 - 2020, but folks might remember there was a huge effort to downsize the foreign-born segment of the work force during the Trump administration. To help the American worker. Okay.

*******************************
Tesla

Tesla raises prices by about 5% over the weekend. These are $100,000 cars. I would have to see price changes of Porsche, Lamborghini, etc, to put this in perspective.

• Lamborghini:
• the topless Aventador (Lamborghini): $577,661 - over $643,000, July 12, 2020
• other sources: the average price of a Lambo sits around $300,000 to $320,000
• other sources: the typical Lambo goes for about $200,000
• Porsche, various sources:
• 2022 Macan: from $55,000
• 2022 Cayenne: from $69,000
• 2021 Cayman: $59,900 - $100,200
• 2021 Porsche 911: $99,200 - $216,300

Bottom line: Tesla price increases --

• simply keeping pace with "transitory" inflation;
• demonstrates continued demand outstripping supply;
• for the elite who already have two or three other ICEs;
• yes, I know there are exceptions -- for some Tesla owners, it's their only vehicle, or perhaps a second vehicle
• did not change my mind on whether to order a Tesla one way or the other

*************************
Picture Perfect

Out Of Control -- October 25, 2021

DWAC: whacks the market again. Up another 15%. Trading over $105. Trading temporarily stopped, but back to trading now. 

*****************************
Geology 101

Words for the day:

• gabbro
• mafic: rich in magnesium (ma) and iron (f)
  
• intrusive
• plutonic equivalent

This site should help.

Note how recently this site was updated / refreshed (October 16, 2021) -- don't tell me geology is dead. LOL. 

This is so cool. Igneous rocks:

• Intrusive rocks / Plutonic rocks: magma that never reaches the surface of the earth, in ascending order of silica content):
• gabbro
• diorite
• granite
• pegmatite
  

• Extrusive rocks / volcanic rocks: magma that reaches the surface of the earth, in ascending order of silica content):
• basalt
• andesites
• dacites
• rhyolite
• pumice
• obsidian

 Pluto? a bit of spin?

The earlier name for the god was Hades, which became more common as the name of the underworld itself. In ancient Greek religion and mythology, Pluto represents a more positive concept of the god who presides over the afterlife.

Obviously the origin of the concept of intensely burning hell. 

Jargon Confused? October 25, 2021

Jargon confusion? This should help.

• how to calculate volatility with spot and strip prices, Motley Fool, May 10, 2017.
• how to calculate annualized volatility, Motley Fool, October 20, 2016.
• roll yield defined, Investopedia, July 9, 2021 (note how recent this article was posted). 

Jargon revolution -- the Bakken revolution. 

Let's Go, Brandon -- October 25, 2021

 

Link here. 

Just in time for Halloween. Scary.

*******************************
Jargon

Jargon confusion? This should help.

• how to calculate volatility with spot and strip prices, Motley Fool, May 10, 2017.
• how to calculate annualized volatility, Motley Fool, October 20, 2016.
• roll yield defined, Investopedia, July 9, 2021 (note how recent this article was posted).

Five Wells Coming Off Confidentail List -- October 25, 2021

Covid-19: from a couple of days ago, average new Covid cases per capita in Florida are now the lowest of any state in the continental US. Some suggest Florida has no political coercion or mandates. Look at the source for that factoid: The New York Times. Source. 

Books on Broadway, Wiliston, ND: new audiobooks platform lets you listen while supporting your hometown bookstore. Link to The Williston Herald.

Saved by the SPAC: DWAC could make him rich again. Link to Bloomberg via Yahoo!Finance. At $10 when it first hit the news waves a few days ago, up another 12% in pre-market trading, up about $11; trading at $104.

The sound bite just doesn't work: "It's not a wealth tax, but a tax on unrealized capital gains of exceptional wealthy individuals." Targets 700 of the wealthiest individuals in the US. My hunch: John Kerry is just below the cut line. Warren Buffett will have to re-think his buy-and-hold strategy; re-think capital gains vs dividends. Source. 

CBS: in news, both morning and evening, #3 of three. Changes coming? Norah O'Donnell looking vulnerable. Not a pretty picture. Source. 

No thanks: Denver airport jobs fair had hoped for 5,000 visitors. Only one hundred showed up. 

Reflationary environment, a different investing environment. Morgan Stanley.

UK: no plan B. Source. 

Coal generated less than 2% of electricity in the U.K. in 2020, according to International Energy Agency data, compared with a fifth in the U.S., a quarter in Germany and almost a third in Japan. Surviving U.K. coal power stations have orders to close by late 2024.

Mr. Johnson has said the drive to cut emissions could rejuvenate the economy, particularly in struggling towns such as Blyth that were Labour Party strongholds until he flipped them Conservative in 2019.

The evidence is mixed. Blyth, just north of Newcastle, is home to a growing number of companies in the renewable and battery industries, but thousands of secure jobs lost when coal mines closed are yet to be replaced. Unemployment here is higher than in the U.K. overall and the town’s main drag is peppered with closed shops and discount stores.

Hertz/Tesla: Hertz orders 100,000 Teslas. TSLA, pre-market: up 4.4%. Announcement comes just after Tesla announces increase in prices. Morgan Stanley upgrades, from $900 to $1200 target price. Tesla will open at new high. Hertz deal said to be $4 billion = $40,000 / vehicle. Hertz will roll out its own charging network at airports. With deal, Tesla market cap goes over $50 billion.

Jargon confusion? This should help.

• how to calculate volatility with spot and strip prices, Motley Fool, May 10, 2017.
• how to calculate annualized volatility, Motley Fool, October 20, 2016.
• roll yield defined, Investopedia, July 9, 2021 (note how recent this article was posted).

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

Active rigs:

$84.63	10/25/2021	10/25/2020	10/25/2019	10/25/2018	10/25/2017
Active Rigs	29	14	57	68	54

Five wells coming off confidential list:

Monday, October 25, 2021: 21 for the month, 21 for the quarter, 244 for the year:

• 36928, conf, Rimrock, FBIR Guyblackhawk 24X-27D, Heart Butte, HUGE WELL, 74K 8/21; first production, 7/21; t--; cum 78K 8/21;
• 36917, conf, Whiting, Satterthwaite 14-35HU, Robinson Lake, first production, 5/21; t--; cum 45K 8/21;
• 36065, conf, Enerplus, Obsidian 147-93-16B-21H-TF, Moccasin Creek, first production, 4/21; t--; cum 40K 8/21;
  

Sunday, October 24, 2021: 18 for the month, 18 for the quarter, 241 for the year:

• 37977, conf, Hess, EN-Joyce-LE-156-94-1721H-6, Manitou, 51K in 5/21, a huge well, first production, 4/21; t--; cum 121K 8/21;
• 36769, conf, Hess, CA-Russell Smith-155-96-2425H-10, Capa; first production, 4/21; t--; cum 55K 8/21;

Saturday, October 23, 2021: 16 for the month, 16 for the quarter, 239 for the year:

• None.

RBN Energy: producing, transporting, liquefying, and buying responsibly sourced natural gas, part 2. 

It seems that hardly a week goes by without another announcement on responsibly sourced natural gas. Either in response to rising interest among electricity generators, gas-distribution utilities, and gas-consuming industrials in procuring RSG or as proactive moves to boost their own ESG cred, a number of players in the gas sector — from producers to pipeline companies to LNG exporters — have been working to qualify their natural gas, their long-haul pipes, or their liquefaction plants for RSG status. 

A few producers have also been reaching deals to supply independently verified RSG to the market, with the expectation that at least a subset of gas/LNG buyers will be willing to pay the price premium involved. But all this is relatively new, and there’s still a lot that needs to be sorted out on the RSG front. In today’s RBN blog, we continue our series on RSG with a look at recent announcements and the associated challenges when selling RSG.

Maria Mondolia -- September 11, 2021

Yes Sir, I Can Boogie, Baccara

The Media Is Primed To Report A Cold, Harsh Winter Even If Winter Is Not Out Of The Ordinary This Year -- October 24, 2021

Updates

October 25, 2021: right on cue, CNBC is now talking about a "warmer" winter. LOL. When I was growing up in North Dakota, it was difficult to tell the difference between -40°F and -42°F during the month of February.

Original Post 

Sophia and I are tracking the global energy crisis, 2021 - 2022, at this site. 

News tonight: a colder winter threatens to worse Asia's energy crisis. 

Right now, there is a segment of the media that is primed to talk about the energy crisis this winter. "Everyone" agrees that if this winter is "colder than normal," there will be a crisis of historic proportions. 

I think that's all wrong.

The facts are:

• winters are cold. Period. Dot. Cold. Some winters are worse than others, but all winters are cold.
• there is already an energy deficit and prices are already high. And, according to my calendar, winter has not even begun. 

So, I think it's all wrong to suggest / imply that only if we have a colder winter than usual there will be a crisis of historic proportions.

Just "having winter" will be enough to cause huge problems. I guess the only question is when do the problems "really" begin? In November, or December? Or in January or  February?

The Farmers' Almanac, by the way, doesn't see a particularly unusual winter.  I suppose, looking at the map, The Farmers' Almanac suggests the winter in general will be typically cold, perhaps worse than usual over the Great Plains, extending into Texas. But nowhere does the Almanac suggest warmer than usual.

On top of that, as noted above, the media is primed to start reporting those stories, so even typical winter events, typical winter temperatures are likely to result in "the sky is falling" reporting. And unlike really hot weather, really cold weather -- especially with lots of snow -- provides great video for the evening network news programs.

Already, as noted above, we have China, Japan and South Korea already anticipating colder weather sooner. 

I think this will be fascinating to watch.

If there is no new Covid-19 surge, one might see "ice age" stories take Covid-19 off the front page. 

*****************************
The Day Of The Dead

One of the fastest-growing -- perhaps the fastest-growing -- fiestas in the United States right now. 

"I Told You So" -- October 24, 2021

There's a lot of "I told you so" in the graphics at this Powerline blog tonight. I'm sure everyone can find at least one graphic that says "I told you so."

The Bakken Never Ceases To Amaze Me -- Production Data For Two Incredible CLR Wells -- October 24, 2021

The wells: 

• 37988, conf, CLR, Harms Federal 18-33H, Antelope, huge well, first production, 6/21, t--; cum 128K 8/21:

Date	Oil Runs	MCF Sold
8-2021	39038	39827
7-2021	46760	48736
6-2021	39593	3810

• 37989, conf, CLR, Harms Federal 17-33H1, Antelope, first production, 6/21; t--; cum 115K 8/21;

Date	Oil Runs	MCF Sold
8-2021	31740	32511
7-2021	52978	54981
6-2021	30326	31054
5-2021	705	0