Friday, January 23, 2015

Active rigs:

	1/23/2015	01/23/2014	01/23/2013	01/23/2012	01/23/2011
Active Rigs	159	189	190	203	165

Reporting today (see disclaimer):

• BK, forecast 59 cents, 58 cents after adjusted; earnings of 70 cents;
• GE, forecast 55 cents; 51 cents; adjusted 56 cents; 
• KSU, forecast $1.23; $1.28, adjusted, $1.27;
• MCD, forecast $.122; $1.13, adjusted $1.22; 

Starbucks shares are brewing up a fresh record, up 5% after the coffee chain posted an 82% jump in quarterly profits. That's a $1.30 a share on revenue of $4.8 billion. Worldwide comp-store sales also rose 5% on strong holiday sales. Not only that, CEO Howard Schultz named a new COO Kevin Johnson, formerly of Juniper Networks, whom Schultz compared to as a #1 draft pick during the earnings conference call. 

RBN Energy: Contango -- the Cushing trade. 

• Combining the physical and futures trades we get a physical profit of $13.50 and a futures loss of ($5.61) or a net $7.89/Bbl – exactly the same as the contango spread at the beginning of the trade.
• We estimate the typical term storage cost at Cushing is 40 cents/Bbl per month – under a long-term contract. At that rate the cost of storage for 12 months would be  $4.40/Bbl. Taking that cost off the $7.89/Bbl contango spread brings the gain down to $7.89 - $4.40 or $3.49/Bbl. There would also be other fees to pay including terminal fees to bring the crude in and out of Cushing storage and exchange commissions and margins to hold the futures contracts. Those costs vary but a conservative estimate would be $1.50/Bbl leaving close to $2/Bbl as the final profit less any borrowing costs to finance the trade.
• The biggest constraint against putting on a storage trade like this is getting access to Cushing term storage at reasonable rates. Several oil trading firms have long term storage contracts at Cushing with rates at or under 40 cents/Bbl (and they would probably look at the cost as ‘sunk’ since they will pay for it anyway, thus increasing their motivation to do the trade). But if you don’t have a long-term contract you are probably stuck paying a higher walk up rate for storage – eating into the trade profit.

 Obama administration: local fracking bans is/are NOT the way to go; fracking is safe.

Apple's CEO Tim Cook's 2014 compensation grew to over $100 million.  Read this also.

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Tired Of Fiction?

Politico is reporting record-low ratings for any SOTU address:

Nearly 32 million Americans watched President Barack Obama's 2015 State of the Union address on television, the lowest turnout since President Bill Clinton's final State of the Union address in 2000, according to newly released Nielsen ratings.

Obama attracted 31.7 million viewers. Viewership for Obama's State of the Union addresses has been in decline since 2009, when he drew 52.4 million television viewers. Subsequently, 48.0 million watched on television in 2010, 42.8 million in 2011, 37.8 million in 2012, 33.5 million in 2013 and 33.3 million in 2014. This year's speech replaces last year's as the second-lowest rated since Nielsen began recording viewership in 1993.

I love the last line: this year's low rating replaces last year's as the second-lowest rated since 1993 (also Bill Clinton's).