Active Rigs In North Dakota Down To 145; XOM Shares Rise In Pre-Market Trading -- February 2, 2015

Russia and Saudi Arabia are competing for the Chinese market -- WSJ is reporting:

Chinese customs data released Friday show that China’s crude imports from some big OPEC nations have plummeted, while imports from Russia surged 36% in 2014.

Meanwhile, imports from Saudi Arabia fell 8% and those from Venezuela dropped 11%.
As American companies have pumped soaring amounts of oil from shale, U.S. imports of Saudi Arabia’s crude oil and petroleum products have also fallen, dropping to 25.6 million barrels a month in October, from more than 42 million barrels a year earlier.

The changing pattern in China’s imports is one result of Russian President Vladimir Putin turning to China as an economic lifeline as Moscow is shunned by the West over the Ukraine crisis.

That has tilted in China’s favor the relationship between two countries that for decades have jousted for influence in Asia.

For its part, Beijing wants to make sure Russia’s economy doesn’t deteriorate further as that could threaten stability on China’s borders, security scholars say. In addition, buying more of its oil from Russia helps China lessen dependence on seaborne imports from the Middle East, which it fears are susceptible to supply disruptions.

Lots of moving pieces. 

****************************************

Apple trivia: in 4Q14, Apple sold nearly 75 million iPhones -- that works out to ten iPhones EVERY SECOND for three months, seven days a week, 24 hours/day. Source. 

Wells coming off confidential list over the weekend, today have been posted. 7/14 Bakken wells to DRL status; CLR has a dry well due to surface casing failure. 

Reuters is reporting on the strikes at refineries across the US.

The walkouts were the first in support of a nationwide pact since 1980 and targeted plants with a combined 10 percent of U.S. refining capacity. One of the plants, Tesoro Corp's 166,000-barrel-per-day Martinez, California, refinery, was being shut because it was in the midst of planned maintenance work. The other refineries appeared set to continue running normally as operators initiated contingency plans, calling on trained managers as replacement workers. U.S. gasoline and diesel fuel prices rose on Monday on concerns over supply, as well as a bounce in crude.

This was a headline story over at Yahoo!Finance. It won't amount to a hill of beans. The targeted plants account for 10 percent of US refining capacity. One plant will shut down but that was "planned" maintenance. The others will continue operating using "trained" managers.

*************************************** 

You know borrowing rates are low when Apple issues more debt. Apple is prepared to sell $5 billion 5-year fixed and/or 7-, 10-, and 30-year debt. Perhaps they will use it to pay taxes on their overseas cash. LOL. Why? 24/7 Wall Street is reporting:

Apple has filed to sell a multi-traunch offering of notes and bonds, and the reported amount is $5 billion. This would be smaller than the $12 billion it raised in 2014 and the $17 billion in 2013.

If you go back to Apple’s earnings release analysis, it showed that international sales were 65% of revenues. This means that much of Apple’s cash treasure trove is stored outside of the United States. Apple would have to pay a huge penalty to bring that money back into the country.

*****************************************

I won't bother to link the stories but both President Obama and France agree with Bloomberg that Greece needs to be given a break. Give me a break.

See disclaimer.

Link here to earnings.

Exxon Mobil Corporation today announced estimated full-year 2014 earnings of $32.5 billion compared with $32.6 billion a year earlier, reflecting the strength of its integrated business model in a lower price environment.  ExxonMobil completed a record eight major Upstream projects during the year, including the Papua New Guinea liquefied natural gas project, and achieved its full-year plan to produce 4 million oil-equivalent barrels per day. Fourth quarter earnings were $6.6 billion, or $1.56 per diluted share, down from $8.4 billion in the year-ago quarter. Lower commodity prices in the Upstream and higher planned maintenance costs in the Downstream were partially offset by improved Chemical margins. During 2014, the corporation distributed $23.6 billion to shareholders in the form of dividends and share purchases to reduce shares outstanding, resulting in a total shareholder distribution yield of 5.4 percent.

************************************

Back To The Bakken

Active rigs:

	2/2/2015	02/02/2014	02/02/2013	02/02/2012	02/02/2011
Active Rigs	145	192	187	201	166

RBN Energy: the floating crude oil storage trade.

With crude prices close to six year lows and the futures market pointing higher, a number of the larger commodities trading houses are buying and holding cheap crude in huge floating tankers for later sale. For the trade to work, prices today must be lower than they are in the future and the spread must cover the storage cost and other expenses. Players in the floating storage game have to be high rollers – the minimum cost of a bet at this table is ~$100 million. Today we complete a two-part series on contango-spread trades with a look at floating storage.

*************************

Something Doesn't Ring True

Bloomberg is reporting that a 56-year-old couple are saving $500/month in gasoline bills:

Charles and Cheryl Saul are reaping a timely windfall: an extra $500 a month thanks to cheap gasoline.

The couple, both 56 and from Emmaus, Pennsylvania, drive a lot so filling the tank didn’t leave much room for fun. Now they’re splurging after years of staycations, minor-league baseball games and free concerts. In October, they visited Disney World, their priciest vacation in ages. They’re also planning to renovate, meaning more trips to Home Depot Inc.

Let's do the math:

With a drop in the price of gasoline from $4.00/gallon to $2.00/gallon, that means a savings of $2.00/gallon.

$500 / month divided by $2.00 = 250 gallons of gasoline they buy each month.

If their car (truck) gets a measly 20 mpg, then 250 gallons x 20 mpg = 5,000 miles / month or 60,000 miles per year.

If they are really that tight -- based on the story -- giving up so many luxuries in life -- like eating out once in awhile, one would assume their vehicle is getting at least 30 mpg.

250 x 30 = 7,500 miles/month = 90,000 miles/year.

Okay.

If they are putting 90,000 miles on their car (non-business), they got bigger problems than the price of gasoline. If this is a business expense, then there are tax "consequences." But at 90,000 miles per year (personal or business) they are buying a new car every year if the average individual sells/trades his/her car with less than 100,000 miles on it.

******************************

Global Warming

Extreme Weather

Ice Age Now

WGN TV is reporting that the "2015 Super Bowl Blizzard" was officially Chicago's 5th largest snowstorm:  

1. 23.0 inches January 26-27, 1967: The Big Snow
2. 21.6 inches January 1-3, 1999: The New Year’s Storm
3. 21.2 inches January 31-February 2, 2011: Groundhog Day Blizzard
4. 20.3 inches January 12-14, 1979: Blizzard of '79
5. 19.3 inches January 31-February 2, 2015: The Super Bowl Blizzard
6. 19.2 inches March 25-26, 1930
7. 16.2 inches March 7-8, 1931
8. 14.9 inches January 30, 1939
9. 14.9 inches January 6-7, 1918
10. 14.8 inches December 17-19, 1929 

Many of these storms have occurred during a period of rising CO2 levels and after Agore won his Nobel Prize for his PowerPoint Presentation.

And regular readers know this story very, very well. Icecap is reporting:

The theme had been snows were diminishing due to global warming.

Flashback 2000: ‘Snowfalls are now just a thing of the past’: According to Dr David Viner, a senior research scientist at the climatic research unit (CRU) of the University of East Anglia, within a few years winter snowfall will become ‘a very rare and exciting event. Children just aren’t going to know what snow is.’

The IPCC and US government reports through 2007 had projected snows would become much less common as the climate warms especially in the cities. 

Environmentalist from Princeton Michael Oppenheimer and RFK Jr, in the year before the Snomageddon winter both bemoaned there children would never get to enjoy sledding like they did as young in the 1960s.

 At least the RFK, JR, kids won't have to looks at windmills off Martha's Vineyard.