All Along The Watch Tower

Futures mean squat, but it is fascinating to watch events unfold.

We may be seeing another historic event unfold literally in front of our eyes in real time. I'm waiting for Christiane Amanpour to make the announcement.

Everything suggests that Baghdad will have a new government by this weekend. It's almost fait accompli based on stories being reported by The New York Times. Maliki saw this coming, asked for US support, was denied. At the same time the US was releasing the top five Taliban leaders from custody and sending them back to jihad. And in the middle of this, the Dow futures are up (at the moment) and the price of WTI oil and Brent crude oil inches up. It's a crazy world.

It's hard for the average person to follow what's going on in Iraq in real time, but the best proxy may be the Dow futures and oil futures. Money managers, speculators, movers and shakers, and Donald Trump have access to news of events that we don't.

So, we watch.

And "watch" seems to be the best word. It's the word being used by others, as in "The US watches as Iraq spirals out of control."

Set the table for three: POTUS, SecDef, and SecState. I don't have access to cable television so I am unaware of whether any of these three have made any speeches, but based on articles on the front page of The New York Times it almost sounds like POTUS, SecState, and SecDef have "pulled a Bergdahl." Disappeared.

From wiki:

Prepare the table, watch in the watchtower, eat, drink: arise ye princes, and prepare the shield./For thus hath the Lord said unto me, Go set a watchman, let him declare what he seeth./And he saw a chariot with a couple of horsemen, a chariot of asses, and a chariot of camels; and he hearkened diligently with much heed./...And, behold, here cometh a chariot of men, with a couple of horsemen. And he answered and said, Babylon is fallen, is fallen, and all the graven images of her gods he hath broken unto the ground.

I don't think there's any question that the marauders who took Mosul, Tikrit, and are now "sweeping" (a New York Times term) toward Baghdad did not have the backing of Iran and Syria. Bluntly: this whole thing is being choreographed by Syria and Iran. It's impossible to believe that Iran and Syria could have pulled this off without the covert aid from Russia, a long-time supporter of both Iran and Syria. It was pure serendipity that I posted my thoughts about all of this less than 72 hours ago. I was going to wait until the weekend; glad I didn't.

Iraq implodes. The president of the United States is planning his "closed-to-the-public-photo-op-trip" to a remote Indian reservation that straddles the border of North Dakota and South Dakota. Hillary is on a book tour. And Eric Cantor is asking "what just happened?"

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A reader sent me this story. I told him I couldn't post it this evening because my wi-fi connection was not working (reliably) but at the moment it seems to be working (sort of).

The Houston Business Journal is reporting:

The world's largest ethane export terminal is coming to the Houston Ship Channel.
Houston-based Enterprise Products Partners LP announced that it will construct a refrigerated ethane export facility in Houston to build off of the ongoing domestic shale boom.

Enterprise had previously narrowed down the location to the Texas Gulf Coast before deciding on the Houston Ship Channel.

The giant midstream company has signed a 30-year agreement with the Port of Houston Authority for use of facilities adjacent to Enterprise's existing Morgan’s Point terminal. Enterprise also plans to build a pipeline from its Mont Belvieu natural gas liquids fractionation and storage complex to provide direct access to the ethane supply.

The facility is expected to begin operations in the third quarter of 2016, according to Enterprise. The export terminal will be able to load fully refrigerated ethane at approximately 10,000 barrels per hour.

Disclaimer: this is not an investment site. Do not make any investment decisions based on what you read here or what you think you may have read here. 

Meanwhile, Don sent me this upbeat article on SandRidge, in a Seeking Alpha contribution by Richard Zeits, SandRidge Energy, A Strong Start to 2Q14:

The latest batch of initial production test data for SandRidge Energy's wells in Oklahoma shows continued strength in the average IP rates. Following a weak start in Q1, the company posted a turnaround in March. April well results were even stronger.

The fourteen wells that were brought on production in April and for which data is now available, on average tested with 510 barrels of oil and 1.8 MMcf of natural gas per day. The average oil IP test rate in April for these wells exceeded the average for the first quarter by a factor of two. The natural gas IP rate was also very strong. The result was boosted, to a significant degree, by three "monster" wells .

Of note, all the three "monster" wells were drilled as offsets to existing producers. This may indicate that SandRidge is becoming more effective in using its existing wells and subsurface data for identifying the most promising drilling locations. Also of note, the percentage of poorly performing wells, based on available data, declined dramatically in March and April relative to the previous months.

The fourteen wells with first production in April that have been reported so far is just a small portion of all the wells that the company plans to turn to sales during this quarter. However, in combination with the very strong March wells that will achieve peak production during Q2, the drilling results reported so far give some confidence that SandRidge will report a solid sequential production increase in Q2.

An aside/comment: I do not recall other "analysts" using the word "monster" very often in describing wells. I have had a full page devoted to "monster wells" from the very beginning.

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All Along The Watchtower, Bob Dylan