Thursday, August 13, 2015; Western Canadian Liquid Production To Increase In 2016 -- Peak Oil? What Peak Oil?

Job watch: wow, the spin never quits. First time unemployment claims:

• up unexpectedly;
• exceeds forecasts; and,
• all this after a gazillion dollars in stimulus;

And Reuters highlights how good the trend is.

The number of Americans filing new applications for unemployment benefits unexpectedly rose last week, but the trend continued to point to a strengthening labor market.

Initial claims for state unemployment benefits increased 5,000 to a seasonally adjusted 274,000 for the week ended Aug. 8, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 fewer applications received than previously reported. 

The headline: U.S. jobless claims up, four-week average lowest since 2000. The lowest four-week average because of an anomalous report four weeks ago. Four-week average fell 1,750 to 266,250 last week, the lowest since April 2000.

Whatever.

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EVs

Another phony number. The number may not be phony but the numbers would be a lot different if federal / state tax credits were removed. I wonder how the BMW i8 would sell if owners were given a $10,000 tax credit. Whatever.

gas2.org is reporting:

A new survey of plug-in hybrid and electric car drivers by Ford Motor Company finds that 90% of the 10,000 people surveyed like driving a plug in hybrid or electric car and have no plans to go back to driving a gasoline-powered car in the future.

Actually that's not a bit surprising.

First, why would anyone say they made a mistake in the first place. (By the way, this survey is at odds with real activity; previously reported.)

Second, they get that huge tax credit. The folks that buy these small EVs are exactly the folks who are price sensitive and depend on the tax break.

Third, one of the big obstacles to buying an EV is getting the $2,000 charging station put in one's garage (apartment dwellers are out of luck in most cases). Once someone has invested $2,000 in a charging station, it hardly makes sense not to take advantage of it.

So, we'll see.

I think it's a non-story.

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E-mail Gate?

There are two issues. First issue, will this affect her nomination? Hard to say. I'm betting she is still nominated. But I have several months in which to continue betting. Today's wager is fairly small.

Second issue: if it does become a criminal case, how high will it reach? Which of the "H's" will be charged -- or will they both be charged?

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Back to the Bakken

NG gas fill rate (dynamic link): 65. In the East Region, stocks were 61 Bcf below the 5-year average following net injections of 53 Bcf.

WTI oil could go into the $30-range.

Active rigs:

	8/13/2015	08/13/2014	08/13/2013	08/13/2012	08/13/2011
Active Rigs	72	193	184	203	191

RBN Energy: update on the crude oil distribution in the Houston area.

Crude oil distribution to Houston area refineries is still being re-plumbed to reflect the ongoing transition to domestic supply. Although plenty of new pipelines provide access for new crude flows into Houston, logistic challenges arise from a crude quality mismatch with refinery configurations. The handling of condensate – whether lightly processed for export or refined in a splitter is also increasing infrastructure overhead.

Today we look at new crude infrastructure challenges in the Houston area.

A key crude logistics issue for the Gulf Coast refining industry in general and Houston in particular is overcoming the mismatch between refineries built decades ago in an era when available crude quality was expected to get heavier (i.e. with a lower API degrees gravity) and more sour (with a higher sulfur content) and new crude supplies from domestic shale basins that are light or ultra-light (higher API degrees gravity) and sweet (low sulfur). What that means today is that U.S. refineries – as configured – can only absorb so much domestic light crude and need to continue importing heavy and medium grade crudes in order to optimize processing. We discussed the topic in detail at our “Surviving The Flood” conference with Turner Mason & Company a year ago in Houston. [That's what the Keystone XL was all about. That could be the #1 reason why gasoline prices remain high despite a glut of oil. Refiners are recouping their money they lost on betting on the Keystone XL.]

For Houston region refineries that means all remaining waterborne crude imports are medium and heavy crudes and that those imports are not likely to be totally replaced by domestic crude anytime soon because the refineries can’t handle much more light crude. But within that wider issue there are a lot more subtle changes going on that complicate the flow of crude in and around Houston.

Western Canadian oil sands production is projected to increase in 2016.

Wood Mackenzie Ltd.'s breakeven review of more than 180 individual company assets in western Canada reveals significant variation in the economics of each core area. The results show many of the Canadian plays yielding comparable returns to key producing plays in the US Lower 48.

"Our Western Canadian liquids production forecast is underpinned by an increasing commodity price environment and growing demand for oil sands diluent," said Peter Argiris, WoodMac upstream analyst in Calgary. "We anticipate an upward trajectory in volumes beginning in 2016 and peaking in 2021 with the Montney, Duvernay, and Cardium formations driving volumes."