International Oil and a Book Recommendation

Don sent me a bunch of links. I have only two hours allotted for blogging so I will post the links, minimize the comments, and then come back to some of them.

North Dakota Rig Count: Some Rigs Moving to Montana

First, the number of rigs in North Dakota. This seems to be the histoire du jour. I only track active rigs in North Dakota, but the Bakken (and the Williston Basin) extends across man-made/jurisdictional boundaries. Had Lewis and Clark discovered the Bakken, the borders of North Dakota and Montana may have turned out a bit differently. But I digress. Part of the reason the total number of active rigs in North Dakota has decreased is because they've been moved across the state line into Montana. I can almost guarantee that operators are not moving new rigs to the Bakken, when they have more than enough in North Dakota and can move them across the border.  The average number of active rigs in Montana in February and April was 18; it jumped to 22 by May 25th.  Baker Hughes provides that data.

Okay, so enough of that for the moment.

Let's Study Enbridge Pipelines To Death

I'm really not interested in reading this entire article a third time, so if there is something in it I missed, let me know. The first few paragraphs and the comments tell me all I (think I) need to know. How long as the Keystone XL been studied? Four years and now we're studying it again. If was left up to lawyers, faux environmentalists, and newspaper reporters, one could make a case for studying the proposed Enbridge pipelines for 23 years. In case the link breaks, this has to do with complaints that the Canadian government is inadquately studying the proposed Enbridge pipeline from the interior to the coast. Thank goodness for the internet, the Drudge Report, and the Wall Street Journal.

Saudi Arabia Producing At Levels Not Seen For Thirty Years

I've lost the bubble on this: the price of Brent. My fuzzy recollection is that Brent has been rising, back to the $120 range (I see Bloomberg has it at $115); that the Brent-WTI price points are widening; and the WTI-Bakken price points are narrowing. But don't hold me to that. But I do believe Brent has been creeping up. All that to say this:

Saudi Arabia pumped crude at the highest level in more than three decades in June, overtaking Russia as the world’s largest oil producer during the month, according to the Joint Organization Data Initiative.

The desert kingdom’s output rose 3 percent to 10.1 million barrels a day in June from May as it exported the most in a month since November 2005, according to statistics the government submitted to OPEC and posted on JODI’s website today. 

The question is why? Maybe later, "we" can discuss that.  Down below I will state that 3 percent is not a huge number but then one has to consider: a) even if Saudi oil production had not increased, they were still producing at very high levels at a time when the Chinese economy is said to be cooling, and the US economy doesn't look all that hot; and, b) this is the highest level in more than three decades. And it the past thirty years there have been some very, very robust periods of growth.

I think Saudi's increased production has to do with declining production globally, and Saudi/Russia are making up the slack. For all the talk about the Bakken and the Eagle Ford, EOG doesn't think that production will have a material effect on global production/demands.

In the big scheme of things, three (3) percent is not a lot of oil, 300,000 bbls. From "glossary":

Ultra Large Crude Carrier (ULCC): can carry in excess of 320,000 DWT of petroleum, or about 3 million bbls of crude oil. Also referred to as a "supertanker."

Very Large Crude Carrier (VLCC): generally have a capacity of over 200,000 DWT of petroleum; or approximately 2 - 2.5 million bbls of oil. Also referred to as a "supertanker." 

I know when I fill up my car, I sometimes "top off" the last little bit (not legal to do so in some states); it looks like 300,000 bbls in a supertanker amounts to "topping off." (A bit of a stretch; don't write me, please.)

Mexico's Big Oil Problem

And finally, we come to a story on Mexican oil: "Mexico's big oil problem." Oh, I see. I have already posted this link/story earlier, back on March 7, 2012. (At that same link I wrote: Then this story that just popped up on Drudge Report: IMF says oil could spike 30%. ) But "Mexico's big oil problem fits into the Saudi story above, very nicely, where I wrote:

I think Saudi's increased production has to do with declining production globally, and Saudi/Russia are making up the slack. For all the talk about the Bakken and the Eagle Ford, EOG doesn't think that production will have a material effect on global production/demands.

Nothing more, nothing less. Even the much-vaunted offshore Brazilian oil fields may turn out to be a bit of a near-term bust.  Search "Petrobras" or "Brazil" at this blog to see why I say that.

Book Recommendation: Nothing To Do With Oil

Now, for the best part of the day: a book recommendation.  Nothing to do with oil. For those who place The Double Helix by Jim Watson, on the discovery of the structure of DNA, as one of their top ten books to read -- you know, I have never done that, put up a list of top ten books -- wow, that would be difficult -- but I digress.

Anyway, I never thought about it, but The Double Helix was just the beginning.  What happened next? And who did what next? I never really thought about. It was a quantum leap from The Double Helix to Biology 101, Augustana College, Sioux Falls, South Dakota. The discovery was made in 1953. The Double Helix was published in 1968.  I was taking biology 101 as a freshman in 1969 - 1970. I was fascinated by molecular biology. Interestingly enough, I never thought to ask who the father of "molecular biology" was. Jonathan Weiner's Time, Love, Memory, c. 1999, which received the National Book Critics Circle Award, tells that story. Fascinating story. The importance of a prepared mind. Think Harold Hamm. [All Bakken, All The Time.]

I would not recommend this book if you have not read The Double Helix, but other than that, no other prerequisites.

If you want a book recommendation for a book about oil: The Prize: The Epic Quest for Oil, Power, and Money, by Daniel Yergin, c. 1991, with a new epilogue (2008, which I have not read; I have the 1991 edition) is at the side of my bed and has been there for years.

Forget About Romney's Taxes
I Want To See Mine ... Go Down

I have to chuckle. "Everyone" wants to see Romney's tax statements for the past 12 years. I could care less what Romney paid in taxes. I just want to see my own taxes go down. On a related note: I see that folks are still reminding us that the President was in the first helicopter and Michelle was in the second helicopter. And, yes, interestingly enough, the second link takes you to a "Bakken" post. Smile. [Okay, some of that might not be true; I've not seen the movie of Seal Team 6.]

That's All Folks

This post has not been proofread; I assume there are typographical errors.