Thursday, June 12, 2014

Non-Iraqi Stories

Non-Iraqi articles -- yes, there is still some other news out there. Some of these stories have been reported elsewhere. Some of these stories were originally sent to me by readers but I never had a chance to get them posted. The stories start with those from Rigzone.

First, Mexico doesn't sound a whole lot better off than Iraq. Reuters via Rigzone is reporting:
To grasp the difficulties Mexico faces in capitalizing on a North American shale boom, just wander into the dusty landscape due south of the U.S. border.
On one side of the fence, thousands of wells work around the clock in Texas to produce record volumes of shale oil and gas, transforming towns like Carrizo Springs in a modern-day gold rush.
On the other side, violent drug cartels roam above untapped shale riches, leaving behind a trail of blood. The relatively few conventional wells operated by state oil giant Pemex and its contractors close down overnight as a security precaution. But surging crime, while dramatic, is just one of many obstacles thwarting a Mexican shale boom that is seen as years off at best.
"Organized crime is an additional operating cost companies will be keeping a close eye on," said Alberto Islas, head of Mexico City-based consultancy firm Risk Evaluation.
Bullet-riddled corpses are piling up in and around the city of Reynosa in the heart of one of Mexico's richest shale deposits, a major flashpoint of gang wars where hundreds of troops have deployed in recent weeks.
Since April, there have been dozens of murders in Reynosa, a city of 600,000, as the Gulf Cartel battles the infamous Zetas. The dead include a top Tamaulipas state intelligence officer. The head bodyguard to the state governor has been implicated in the crime.
The article goes on for five internet pages.

Next up: Reuters via Rigzone is reporting that Norway will cut back on oil and gas CAPEX in 2015, and it will affect the state's economy:
Norway's oil and gas investments, a key economic growth factor, will fall sharply in 2015, an official survey showed on Thursday, increasing chances that the central bank will keep interest rates low for an extended period.
Investments in the Norwegian continental shelf were expected to come in at $30.39 billion in 2015, a 12 percent drop compared with the initial estimate for 2014, published in June last year, and the lowest comparable level since 2012. The preliminary figures, compiled from oil firms by Statistics Norway, are expected to grow somewhat as companies update their plans later, but the analysts said they were already pointing to lower economic growth.
"This is a significant draw-down on Norwegian growth and suggests a lower interest rate path," Nordea Markets economist Joachim Bernhardsen said of the 2015 investment plans.
Next, for investors, Reuters is reporting via Rigzone:
Consol Energy Inc and Noble Energy Inc said on Thursday they would form a master limited partnership (MLP) for pipeline operations they control in Pennsylvania's Marcellus shale region.
The move will give both companies cash to drill wells in the natural gas-rich Marcellus region and also give investors higher yields, though the MLP governance structure has been criticized by some as weaker and more confusing for investors than those of corporations.
Consol and Noble have confidentially filed paperwork for the MLP to launch an initial public offering. The confidential filing, made possible by a 2012 U.S. law designed to shield small companies from a media frenzy, enables the Securities and Exchange Commission to privately review the IPO documents before they are made public.
Global Warming: Glacier National Park, Montana

This little snippet from the crew plowing snow off the "Going-To-The-Sun-Road" (probably a dynamic link):
On Wednesday, June 11th, the West Lakes Road Crew plowed to the Big Drift where they started initial work on. Although there was not a depth estimate, the Road Crew thought it was a lot bigger than it has been in years past. They started blowing out the parking lot at Logan Pass, installed guard rails, and performed road clean up.
Perhaps the Kennedy clan can get their children and grandchildren out there to see snow in June.

WTI Crude Oil Just Went Up Another Dollar/Bbl; Active Rigs In North Dakota Down To 185

Active rigs: in North Dakota, down to 185 --

Active Rigs185187211169125

Later, 9:39 p.m. CDT: wow, Fox is full of Iraqi stories and yet there is almost nothing on Amazing. still has the "near-miss in 1961" story. 

Later, 8:40 p.m. CDT: is it over? Is the war over in Iraq? The Iraq story is no long the headline story. The headline story is about a near-miss back in 1961. The next story if "five surprising facts about the JFK assassination." I can't make this stuff up. Stories related to the Iraqi "drama' suggest that it is all over but the celebratory shooting. Deep in the sidebar at there is story / headline that is almost lost: Russian tanks enter the Ukraine. And the top story in is about a near-miss back in 1961? This is the network that couldn't get enough of the lost Malaysian jet, and already the Iraqi story is old news?

Original Post

I don't  have access to cable television so I don't know what's going on, but Drudge Report says "Baghdad falling."

I have not gone to the link and I have not read the story but if that's true, my comments earlier about regime change by the weekend seem prescient. I believe I was the first Bakken blogger with no ads who said that.

If regular readers have not already bookmarked a site for oil futures, you might want to start tonight. It's getting exciting.

WTI oil has just jumped a dollar and has breached/breeched $107. I track oil futures at various sites, but Bloomberg seems most dependable:

Memo to self: check Merriam-Websters on breached/breeched.

I personally thought the "oil speculators" were slow off the starting block. For the first 24 hours of ISIS shock and awe in northern Iraq there was hardly any movement in the price of WTI or Brent.

In hindsight, the surprise factor of ISIS will compare with American's own day that will live in infamy, December 7, 1941. Remember, how the US telegraphed for months the coming Iraqi invasion. From what I can tell, no one was more surprised than the White House with how fast ISIS moved. I'm impressed. Look at the size of that army sweeping (the word used by The New York Times) down from Mosul -- that's an Army the size of Patton's 3rd Army without the tanks. Obviously all those vehicles had to have been staged somewhere. They all had to be filled with gasoline or diesel. They all had to have drivers. They all had to have had a D-Day/H-Hour plan. And all of that had to have been seen by NSA / NRO satellites. If the NSA did not know where to look, Mr Maliki told them where to look.  I don't think the press has caught on to how big this surprise attack was. This was not a bunch of rag-tags from Syria. This has a lot of professional Army War College written all over it. As in Russian Army War College. [Apparently Iran had nothing to do with this. Iran has reportedly offered to send in its elite troops to help the Baghdad government.]

But I digress. I had not planned to go down that road but then I just checked the news.  Back to where I was originally headed.

There is a second story here. The price of crude oil since this story began has had three legs (so far):
  • the first leg was the first 24 hours; almost no movement; everyone caught by surprise
  • the second leg was the second 24 hours; it started to sink in, but then the price seemed to level off
  • now, the third leg, the third 24 hours, and the price of oil is starting to surge.
The question is why did the price of oil level off and then surge again. Why was there not a surge, going to high, and then dropping back a bit? Again, what explains what happened between/during the second stage and the third stage?

The answer? It has to do with the comments that Mr Obama made at the White House regarding the Iraqi situation. Those comments were released at 1:27 EDT on The price of oil was surging at that time but then leveled off; Mr Obama was speaking on the issue and "speculators" thought the US was ready to act.

But, the words were incredibly empty. "Speculators" were waiting to see how ISIS/Syria/Iran/Russia would react to Mr Obama's comments. "Speculators" assumed that once the President of the United States spoke, the insurgents would stop. Even the White House said -- and they used that word -- hoped that the insurgents would slow down their sweep toward Baghdad.

Now that the president's comments have been translated and discussed among ISIS/Syria/Iran/Russia, it's almost as if the marauders have been given the green light. It looks like Mr Obama is about ready to form an international committee to study the situation. I assume John Kerry will be dispatched to Germany. Chuck Hagel will be dispatched to an undisclosed location. Joe Biden will be asked to not say anything.

We know a couple of things. Like Mr Obama's "all of the above" energy policy that does not include coal or nuclear energy, his "all of the above" Iraqi policy does not include boots on the ground and did not include pre-emptive airstrikes. The insurgents especially liked the idea about "no boots on the ground."

The only thing that disappointed me in his remarks, was that he did not draw a "red line in the sand." I really don't know where he intends to stop the marauders.

Maybe that's why WTI crude oil just jumped another dollar: "speculators" noted the president did not say anything about a red line.

I'm still waiting for Christiane Amanpour to appear on Al-Jazeera reporting from the Baghdad Hilton-ISIS headquarters.

By the time Mr Obama speaks again, it could be all over for Mr Maliki.

The third story: if Mr Obama does not change his plans, and does not remain in the situation room in Washington, DC, he a) will be telegraphing the world he really doesn't care; b) knows that ISIS Iraq is fair accompli; or, c) he has no strategy to respond and his legacy is being written as I write.

Let's See How Merriam-Webster Spells It; Starbucks And La Boulange

Market Watch is reporting:
Merriam-Webster’s Collegiate Dictionary came out with its 2014 list of new dictionary words on Monday, which included a word derived from a technique to extract oil and gas from rock first devised in the late 1940s. [News to Mr Obama. Of course, he's just learning about the ISIS Army.]
Side by side with the new crop of mostly digital-era words — including ‘selfie,’ ‘catfish,’ and ‘hashtag’ — the list of bona-fide dictionary words includes ‘fracking,’ the shorthand for hydraulic fracturing.
Fracking and its companion technique, horizontal drilling, which was developed later, are often credited with kickstarting the North American oil boom. They allow the extraction of oil and gas from porous shale rock, and took off in the late 1990s.
The Merriam-Webster’s Collegiate Dictionary is the favorite source of The Chicago Manual of Style, widely used in publishing and academia.
Here’s the definition of fracking according to the dictionary:
The injection of fluid into shale beds at high pressure in order to free up petroleum resources (such as oil and natural gas). Origin: by shortening & alteration from (hydraulic) fracturing. First known use: 1953.

Global Warming: A Godsend For Historically Dry North Dakota

I can't make this up: global warming has brought more water and more places to fish to North Dakota than ever before. The Dickinson Press is reporting this fascinating story.

A Note For The Granddaughters

I really enjoy observing the strategy of various companies. For example, I personally think Apple made a brilliant move when it bought Beats. Absolutely brilliant.

Regular readers know that on my cross-country travels I am constantly on the lookout for wi-fi friendly coffee shops and restaurants. McDonald's is ubiquitous with free wi-fi but seldom has electrical outlets (that is changing).

Starbucks is the best: not only do they always have wi-fi, it is incredibly fast (generally) and management encourages folks to log on and re-charge. There are always more than enough electrical outlets.

Last winter (February, 2014, to be exactly) while traveling cross-county, I noted that every Starbucks along I-70 west of Denver had a new pastry menu. It turns out that Starbucks had partnered with/bought a new pastry concession: La Boulange.

Over the past year, many of us at the Starbucks on Glade and US Highway 121 in Grapevine, TX, have talked about the "need" for Starbucks to sell wine and premium beer at some locations. We mentioned that to the manager who told us that Starbucks was trying that, even as we spoke, in select markets.

Today my wife sent me this note (she's out in California):
Starbucks has opened its first restaurant in LA -- all day menu, including beer & wine!  Called La Boulange.
Another brilliant move.

The La Boulange story as told by Starbucks.

The LA Times is reporting:
Coffee purveyor Starbucks Corp. is venturing further into the food business by opening a branch of its La Boulange café chain in Los Angeles.
The restaurant, opening June 12, will cater to both a day and night crowd with sandwiches, build-your-own burgers and alcoholic offerings, including wine and cocktails, according to a statement from La Boulange.
Situated on La Brea Boulevard in the Mid-Wilshire area, the eatery will stay open until 10 p.m. every day.
Starbucks acquired the established Bay Area bakery brand for about $100 million in cash in 2012. At the time, Chief Executive Howard Schultz said the purchase was an investment in Starbucks’ growing food business.
The La Brea location is La Boulange’s first eatery outside of the San Francisco area. Along with burgers and beer, the restaurant’s menu will include items with local and sustainably sourced ingredients, said La Boulange spokeswoman Holly Hart Shafer.
Absolutely brilliant. 

I love the La Boulange selection.

What I like best about this story is the history behind the location. La Brea Boulevard in the mid-Wilshire area is my "vision" of what Los Angeles is all about.

Eleven (11) New Permits In North Dakota; Iraqi Updates Continue

WTI oil currently 4 cents shy of $107/bbl; not having the Keystone XL North in place certainly helps the Bakken mineral owners; whoo-ah! Brent just took a huge jump of more than $3.00 an dis just above $113/bbl. The spread: about $6. 

Remember: high oil prices can hurt earnings for Bakken operators who have hedged for lower ceilings.

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

Permitted for re-entry:
Wells coming off confidential list when Mr Obama is in North Dakota:
  • 24756, drl, Statoil, Melissa 31-30 4H, East Fork, no production data,
  • 25108, drl, CLR, Bonney 5-3H1, Jim Creek, no production data,
  • 25394, see below, Oasis, Baxter 5200 11-28T, Camp, a big well,
  • 25552, drl, Zavanna, Bear Cat 333-28 3TFH, Williston, no production data,
  • 25710, 556, OXY USA, State Kary 3-19-18H-144-96, Murphy Creek, t11/13; cum 45K 4/14;
  • 25847, 2,701, Oasis, Ceynar 5200 11-28B, Murphy Creek, t12/13; cum 66K 4/14;
  • 26383, 302, Oasis, Delia 5992 14-30H, Cottonwood, t4/14; cum 5K 4/14;
  • 26869, drl, XTO, Cindy Blikre 41X-2D, Lindahl, no production data,
  • 27049, 1,189, CLR, Putnam 1-25H, East Fork, t3/14; cum 45K 4/14;
25394, see above, Oasis, Baxter 5200 11-28T, Camp:

DateOil RunsMCF Sold

 27049, see below, CLR, Putnam 1-25H, East Fork:

DateOil RunsMCF Sold

Eleven (11) new permits --
  • Operators: EOG (3), Whiting (3), CLR (2), Newfield (2), Hunt,
  • Fields: Parshall (Mountrail), Sanish (Mountrail), Banks (McKenzie), Siverston (McKenzie), Zahl (Williams
  • Comments:
Wells coming off the confidential list today were posted earlier see sidebar at the right.

Four (4) producing wells completed:
  • 25023, 131, Sinclair, Martens 4-4TFH, Sanish, one-section spacing; t5/14; cum --
  • 25798, 349, CLR, Lannister 1-23H1, Leaf Mountain, spacing ICO, t6/14; cum --
  • 25799, 487, CLR, Vibe 1-26H1, Leaf Mountain, 2-section spacing, t5/14; cum --
  • 26258, 795, CLR, Oneil 1-28H1, Stoneview, t6/14; cum --
Headlines: The Week Iraq Fell

From numerous sources, including CNN
  • Obama says Iraq is going to need more help -- this was at 1:27 p.m EDT, June 12, 2014, after the 2nd largest city fell; a third city fell, and the Sunnis were "sweeping" toward Baghdad
  • Iraq: one of Obama's greatest achievements -- VP Joe Biden, June 12, 2014
  • White House has difficulty coming up with any foreign policy achievements, June 11, 2013
  • CNN's Wolf Blitzer says White House was caught completely off guard
  • If one looks at the photograph at Drudge, one will see this is one heck of a coordinated attack;
  • Waiting for SecState to tell us this was in response to a video shown by Michael Moore
  • Obama says he rules out nothing (except "no boots on ground" and no airstrikes; he's talking to his admirals now
  • Iraq anarchy spiral
  • Terrorists are a "full-blown" army
  • Medieval Sharia law imposed
  • Maliki Army collapses
  • Prime Minister asks USA for air strikes; US refuses; Obama considers drawing a "red line" on the map
  • Iran deploys forces
  • Americans evacuated
  • Germany calls on citizens to leave immediately 
  • Vets in Congress: "What was point of all that?"
  • Oil soars
  • Illegal aliens: the future of America -- President Obama, say what?
From the linked CNN story above:
"So my [Obama] team is working around the clock to identify how we can provide the most effective assistance to them," Obama said. "I don't rule out anything because we do have a stake in making sure that these jihadists are not getting a permanent foothold in either Iraq or Syria, for that matter."
However, a senior administration official followed up by saying the use of American ground forces is not under consideration.
"No boots on the ground. Not being considered," the official said.
Earlier he ruled out air strikes, so that pretty much leaves the "sea." He's probably talking to his admirals now. I assume Chuck Hagel is in way over his head. 

For Investors Only

Trading at 52-week highs on Thursday during the week Iraq fell: APA, BP, Baytex, CLR, CP, CHK, COP, CPG, DVN, EOG, ECA, HAL, HK, HES, MRO, MPO, OXY, PXD, SN, SLB, WLL.

Economy: Reuters is reporting:
U.S. business inventories recorded their biggest increase in six months in April and picked up excluding automobiles, supporting expectations of a sharp rebound in growth in the second quarter. [Comment: I honestly don't get it, and the comments at the linked site suggest the same. I don't see how rising inventories are a sign of an improving economy. It makes sense that rising inventories improve the GDP if the rising inventories are in anticipation of rising sales, but if inventories simply build up in warehouses -- well, the good news: inflation will stay down.]
Early morning trading. Let's see what the oil companies are doing as oil starts to spike --
  • XOM: up almost 1%
  • COP: up over 1%; trading at a new 52-week high
  • CVX: up a bit
  • CHK: up over 2.5%; trading at a new high
  • CLR: up over 1.5%; trading at a new high; and this is on top of some big gains earlier
  • WLL: up over 1.6%; trading at a new high; and this is on top of a new high yesterday
  • OAS: up 2.5%
  • KOG: up over 2.6%
  • HES: up over 1%; at a new high
  • SD: up almost 3%
  • TPLM: down about a percent
  • UNP: down a buck
  • GDP: up over 3% (only because it's in the news; I really don't follow GDP)
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.

Short term: oil company shares may surge in early trading, but could pull back significantly if they follow the general market which is currently trending down. Some folks may start locking in their profits. Shorts are going to be squeezed "big time."

The Bakken companies may or may not do all that well with the surge in oil prices because many of them are hedged. If they can't get to market what they promise to bring to market, they have to buy oil on the spot market and right now it's very, very expensive. The majors won't have that problem. Mineral owners will do well regardless.

The best news for oil bulls: yesterday $105.30 was the ceiling for "speculators." We've broken through that ceiling. Today will determine the "new norm" or the new trading range for oil. The longer the drama in Iraq lasts and/or if Baghdad falls to Syria/Iran/ISIS/Russia, the price of oil will continue to move up. Without North American shale, the price would have surged by now; the "Bakken success" has helped minimize volatility in the price of oil. Had the Keystone XL North been in place that would have been even better for US energy security, but that's water under the bridge.

By the way, this is surprising: the market is down (except for energy) and TGT is up. The company, yesterday, announced it is increasing its dividend by 21%.

Iraq "Drama" Catches US Off-Guard -- WSJ; Obama's Katrina

Déjà vu all over again, from a comment sent in to the New York Times:
In 1975 as the North Vietnamese Army was storming towards Saigon, US air support was withheld. And what the NVA thought would be a 1-2 year fight was over. The South Vietnamese Army (ARVN) mostly laid down their weapons and walked away. This was after 10 years, thousands of US lives, and billions of US dollars. I spent 1967 and 1968 in Vietnam with the US Army, believing that we were doing something important.
"Those who cannot remember the past are condemned to repeat it." -- Santayana

"Only the dead have seen the end of war." -- Santayana

"Chuck, you've got it. I'm going golfing. Call me when it's over." -- President Obama


Look at the war video at the link. Wow, when you look at those vehicles driving down the road -- those are high-tech vehicles -- this is not simply some rag-tag army. This is a professional army. There is no question that Iran/Syria is behind this, but the real question is this: how much are the Russians/Putin doing? This army is moving faster than the US Army did in 2003. 
The Wall Street Journal is reporting that the US was caught off-guard with regard to the "drama" in Iraq:
The quickly unfolding drama prompted a White House meeting Wednesday of top policy makers and military leaders who were caught off guard by the swift collapse of Iraqi security forces, officials acknowledged.
State Department and Pentagon officials have long warned about ISIS's desire to create an Islamic state based in the Sunni-dominated parts of Iraq and Syria. Now, current and former officials say Washington's options for helping the Iraqi army fight back are limited—both because the threat in Iraq is so entrenched and because the U.S. hasn't invested in building up moderate allies on the Syrian side of the border.
U.S. military leaders said they had thought that Iraqi security forces' efforts would be enough to slow ISIS's advance. But those assumptions were proven wrong when Iraqi troops largely abandoned their posts. 
I spent several years in the Mideast. Troops "largely" abandoning their posts does not surprise me. It's hard to believe it surprised Chuck Hagel. LOL. Shoot, even top leaders in Washington (DC) abandoned their posts on the night Beghazi fell. It's in their nature.

I can't decide.


The only question is whether Russia/Syria/Iran/ISIS stop short of Baghdad (ala George I) or move on to take Baghdad (ala George II).

I think Mr Obama sees his legacy being written this weekend. It will be on his mind, I'm sure, when he takes a selfie at SRIR. My hunch: he cancels his trip to North Dakota.  

The Trend Is Not Your Friend -- Weekly Jobs Report

Boiler plate: US jobless claims ________________ this past week holding ___________ this year’s average and signaling sustained progress in the labor market.

For the past two years that has been the opening line, or a variation thereof, of every weekly jobs report, no matter how bad. Today, I cannot make this up, the lead paragraph in Bloomberg:
Applications for unemployment benefits in the U.S. rose to 317,000 last week, holding below this year’s average and signaling sustained progress in the labor market.
Applications for unemployment benefits rose -- during the summer in perfectly good weather when road construction is at its highest -- and Bloomberg says that signals sustained progress in the labor market. Really?

The boiler plate is interesting but what I enjoy most is the spin. The increase wasn't all that much; in fact it's a non-story.


The big story what not mentioned. It wasn't the "number" that was important, it was the direction of the move that analysts predicted (or had hoped), and Bloomberg cleverly tried to hide that.

If the new number is 317, 000, a jump of 4,000, means that the previous number (revised, of course) was 313,000. Now the next line in the Bloomberg story:
The median forecast of 52 economists surveyed by Bloomberg called for 310,000.
Claims have averaged around 324,000 so far in 2014. 
Analysts expected a decrease in the overall number from 313,000 to 310,000. In fact, the number did not decrease; it went up (as "increase").

The most important figure by Bloomberg's own admission is the four-week average. If it's a good number it is at the top of the story. If it's a bad number, it's buried. (The order is reversed under a Republican administration.) So at the very bottom of this report that signals the American job market is only getting stronger, we have this, and again, I cannot make this up:
The four-week average of claims, a less-volatile measure than the weekly figure, climbed to 315,250 from 310,500 in the prior week. 
That's a pretty healthy climb when this week's report was a measly increase of 4,000. That tells me the trend is not your friend.


In anticipation of the president's "not-open-to-the-public-photo-op-trip" to one of the most remote Indian reservations in America:

Cherokee Nation, Paul Revere and the Raiders

Half Breed, Cher

Active Rigs In North Dakota Down Significantly -- June 12, 2014; Worldwide, 4 Million BOPD Just Went Off-Line

Active rigs:

Active Rigs187187211169125

RBN Energy: final installment on pipeline takeaway in the Marcellus/Utica.

The Wall Street Journal

Iraq. Hope and change.

Iraqi forces exchange blame over failures. Hmmm., sounds like Washington (DC).

Lawyers race GM to find black boxes.

Trainwreck: many of the nonprofit insurers falling short of goals; viability threatened. Perhaps more on this later in a stand-alone post. For now:
Many of the nonprofit health-insurance cooperatives created by the Affordable Care Act have enrolled far fewer people than they had hoped, according to figures obtained by a Republican-led House committee, calling into question their viability.
Fourteen of the 23 co-ops reported to the panel that, as of April 1 or later, they had enrolled significantly fewer people than they had projected for 2014 when they obtained $2 billion in federal loans from a fund created under the health law.
The shortfalls create steeper obstacles for the plans to succeed and repay the loans. Health-insurance co-ops are nonprofit insurance entities governed by their members. They were included in the 2010 health law as an alternative to creating a government-run insurance plan, which was championed by some liberal Democrats. The co-ops were designed to give consumers an alternative to traditional plans and inject competition into the law's new online insurance marketplaces, putting pressure on established plans to offer lower premiums.
Cantor's loss: immigration reform placed on a back burner.

Hagel says US had to move quickly on the swap. It will be interesting how fast Obama moves to throw Chuck under the bus. The swap completed. On to Baghdad.

Colorado and fracking. Oil companies ready to "walk."

The VA debacle? Now the FBI investigates. Jail time for appointment clerks, the minimum wage folks, for keeping two sets of books?

A Federal appeals court: cops need warrants to track cellphones.

Aubrey McClendon starts his comeback.

Detroit's appetite for aluminum grows. Don sent me a story on this some time ago: watch Ford pick-up trucks and aluminum.

Emirates cancels entire 70-plane Airbus order.  This story is two days old, but I keep forgetting to post it. This is a huge story. Do you know Boeing's ticker symbol?

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.

Overheard on the street: OPEC production ceiling hurting majors. A paradox. 
Now, with Libya and Iraq in crisis again and U.S. talks with Iran looking dicey, OPEC's job is a lot easier as it its latest get-together wraps up; the group Wednesday agreed to maintain current production quotas.
OPEC did so as production of about 3.5 million barrels per day is offline world-wide due to disruptions, according to Citigroup. That is the highest in years and equivalent to Brazil and the U.K. shutting down production. Brent crude oil is at about $110 a barrel, roughly where it started the year.
I assume the 3.5 million is low-balling what might actually be closer to 4 million.

The Los Angeles Times

Flashback: the O.J. trial -- the glove was the keyIf any doubt, watch the movie, "L.A. Confidential."

All Along The Watch Tower, Continued

Finally, the proxy for the civil war in Iraq is in. I was surprised by how long it took for the oil futures market to respond. But finally, I see, oil is up nearly 2% in overnight futures.

I used to say there were two things driving any market: fear and greed. I forgot about the third leg of investment sentiment: reality. The reality is that oil exports from Iraq will be affected by the civil war.

It is interesting that the Dow futures are green. It will be interesting to see if that lasts.

A little over a decade ago we had "shock and awe." Baghdad fell on April 9, 2003.

Fast forward, we now have "hope and change." Seriously. This was the sub-headline in the Los Angeles Times regarding the president's decision not to support the Iraqi democratically-elected government:
The militants roll past the major northern city of Mosul and into Tikrit. U.S. officials are hopeful that the fall of Mosul will galvanize the Iraqi government.
So, we have hope. And by the end of the weekend we will have change. If nothing else, the Sunnis (the peaceful ones now control much of the north). I can't make this up. The Los Angeles Times actually spelled out the Obama Doctrine when it comes to a shooting war: hope.

In the end, it will be determined that Obama made the right choice. The Americans don't want to go back into Iraq. It is what it is. It was what it was. Oh, the places you will go. Green eggs and ham? Ask the cat in the hat.

On June 10, 2014, I posted my thoughts on the global energy picture. To the best of my knowledge, and re-reading the post, there was nothing in there about a shooting war (except perhaps, peripherally, the Russian-Ukraine event) but nothing about the Mideast imploding. It was about the global energy picture without a shooting war in the mideast.

If this "thing" in Iraq goes as it appears to go, once the sand settles, I may have to add a fifth center of gravity: IranSyriaIraq. Which leads us to Saudi Arabia. One word: terrified.