Tuesday, January 13, 2015

Stories Coming Fast And Furious -- January 13, 2015

Information is coming fast and furious with the collapse in oil prices. I may or may not get back to these articles from Rigzone:

Oil, Gas M&A in Upstream Sector Climbs to $37 Billion in 4Q 2014 -- an opinion piece, which begins:
The total value of upstream oil and gas m&a deals, according to data from the Evaluate Energy M&A database, reached $37 billion in Q4 2014, a slight increase from the $35 billion total of Q3. However, the falling oil price would have resulted in a sharp decline in total deal value this quarter, had it not been for Repsol agreeing to acquire Talisman Energy for $13 billion at the beginning of December. This one deal represented a significant 35% of Q4’s total deal value and was the biggest E&P deal of the year.
Kemp: Break-even and shut-in prices for oil wells.
There are no precise measures for wellhead prices. The Department of Mineral Resources estimates wellhead prices by averaging WTI futures (which is the very best operators could hope to receive ignoring all transport costs) and posted prices (the worst operators would receive for spot sales on their property).
On this average measure, the approximate wellhead price for North Dakota's oil producers was just $38 per barrel on Jan. 12, making production in all peripheral areas of the Bakken play uneconomic and only marginally profitable in three core counties (Dunn, McKenzie and Williams).
For the first time, wellhead prices were no longer high enough to support new drilling in Mountrail, one of the four counties at the heart of the Bakken play.
Breakeven prices are also relatively high in the Permian Basin in Texas as well as in more peripheral shale plays with difficult geology like the Anadarko Basin.
New drilling in many parts of the Bakken, Permian, Eagle Ford and Anadarko plays will therefore stop unless wellhead prices recover.
EIA: US 2016 Oil Output Growth Seen Slowest In 5 Years 
The U.S. government said on Tuesday it expects domestic oil output in 2016 to grow only 2.2 percent, the slowest pace in years, as the relentless rout in prices puts the brakes on the country's five-year shale boom.
In its first forecast for next year, the U.S. Energy Information Administration said domestic oil production will rise about 200,000 barrels a day to 9.5 million bpd in 2016.
That amount in barrels is the smallest increase since 2011. While this would be the second-highest annual average level of production in U.S. history, the slowdown in growth reflects the long-term impact of plunging prices on output as drillers curb higher-cost capacity in some shale formations.
"Many oil companies have cut back on their exploration drilling in response to falling crude prices and will concentrate their drilling activities in established areas that already have productive wells," EIA Administrator Adam Sieminski said in a statement.
The EIA held its estimate for 2015 at a rise of 720,000 bpd to around 9.3 million bpd. Output rose to 9.13 million bpd by the end of 2014, according to EIA data. Oil production in the Lower 48 states excluding the Gulf of Mexico is expected to expand during the first four months of 2015, data shows. Between April and May, production is expected to remain unchanged, then it will taper off until the end of the year.
Vikas Dwivedi, global oil and gas strategist for Macquarie, said the outlook is a "tale of two halves." He explained that 2015 forecasts show residual output growth from investments made before oil prices collapsed, while cuts in drill rigs already under way should feed through to production rates by the end of the year if prices remain around $50 per barrel.
Petrobras 2014 Oil, Gas Reserves Grow Slowest in 6 Years
Oil and natural gas reserves at Brazil's state-run oil company Petroleo Brasileiro SA rose at the slowest pace in six years in 2014, ending the year little changed as new discoveries barely kept up with production.
The company had 13.13 billion barrels of proven reserves of oil and equivalent natural gas (boe) as of Dec. 31, using criteria set down by the U.S. Securities and Exchange Commission (SEC), said Petrobras, as the company is commonly known, in a statement on Tuesday.
That is an increase of only 0.1 percent over 2013. In 2014 reserves grew at their slowest since 2008, when they fell 4.39 percent. Growth in 2014 was also well below the 2.3 percent average annual growth rate for the past 14 years.

Featured Blogs

Be sure not to miss the two featured blogs today: Coyote Blog and ClimateDepot.

Coyote BlogCalifornia Drought Update -- Not Even Close to Worst Drought EverThe Coyote Blog is written by a very credible writer.

Climate DepotMIT Climate Scientist Dr. Richard Lindzen on U.S. Senate climate vote: It’s ‘bizarre’ & ‘ludicrous’ – ‘An attempt to hijack science for political purposes

Musings On A Tuesday Night -- January 13, 2015

Scroll down to see wells coming off the confidential list on Wednesday.

Richard Zeits makes a bullish case for natural gas in 2015 over at SeekingAlpha.

These are some of the other stories I missed earlier today or will be reading about tomorrow, from The Wall Street Journal.

Oil replays 1980s bust.
A surge of oil from outside of the Middle East flooded global energy markets. The world-wide thirst for crude didn’t keep up. The Organization of the Petroleum Exporting Countries stood by and watched as oil prices fell and then fell more. Welcome to the world of oil in 2015—a repeat in surprising ways of the story 30 years ago.
Between November 1985 and March 1986, the price of crude plunged by 67%. Between June 2014 and today, crude prices have fallen by 57% and could well head lower.
After the mid-1980s bust, it took nearly two decades for oil prices to rebound to pre-bust levels and remain there. Energy executives are now haunted by the question: Will it take as long this time?
Many economists and energy analysts believe that prices will probably rebound somewhat from current levels by the end of the year.
The global benchmark for oil, currently $46.59, will “head back toward the $70 range and I suspect that will be sustainable for quite some time,” says Stephen P. A. Brown, an energy economist at the University of Nevada, Las Vegas, and former economist with the Dallas Federal Reserve Bank.
The dollar increased in value in the early 1980s as the Federal Reserve wrung inflation out of the U.S. economy, but the Reagan Administration engineered a large devaluation in 1985 in agreement with other major economic powers. Between March 1985 and December 1987, the dollar lost 40% of its value against a basket of other major currencies.
That stands in contrast to the current episode: The dollar rose more than 12% in 2014, compared with a basket of widely traded securities.
Much, much more at the linked article including how little it can cost to drill for oil in the Bakken and the Eagle Ford.

Railroads steam toward big gains
How are plunging crude-oil prices affecting railroads? That’s the crucial question as big North American freight railroads begin to report their fourth-quarter earnings, with CSX Corp. posting a 15% rise in profit on Tuesday.
The answer isn’t what one might guess.
Despite a drop since mid-June of more than 50% in the price of crude oil—one of the fastest-growing parts of the rail business—analysts expect nearly all railroads to post strong fourth-quarter profit gains.
While the growth of crude-by-rail transport could start slowing by midyear as cheaper pipelines become available, Wall Street expects most railroads to post double-digit 2015 earnings-per-share growth as they raise prices and improve service.
No, the big problem for rail won’t be lost oil revenue, it will be stiffer competition from trucks. Lower fuel prices will trim the price advantage trains have had over trucks in recent years, an edge that has helped railroads steal share from the highways.
Also, much, much more at the linked article.

What about the Canadian oil sands? Suncor cuts spending but ...
It said projects under way such as the C$13.5 billion Fort Hills oil-sands mine in Alberta and the Hebron oil field off Canada’s east coast, will move forward as planned and take full advantage of the current economic environment. These long-term growth projects are expected to come online in late 2017.  
And finally, US racks up smallest deficit since 2007. I wonder why? Could it be the decrease in oil imports? Let's see what this article has to say. It's all smoke and mirrors in a sense; it's the lowest since 2007, but that's because the gap between 2007 and 2013 was so severe -- why:
The government’s fiscal outlook has improved markedly since the 2007-09 recession, when government tax revenues withered as the national unemployment rate climbed toward 10%. The Obama White House responded to the economic collapse with a more-than-$800 billion stimulus package, designed to defibrillate the economy even as it added further to the deficit.
A look at the graph at the linked article "proves" the point. 

Disclaimer: this is not an investment site. Do not make any investment, financial, or relationship decisions based on anything you read here. Having said that, I remain inappropriately exuberant about the US economy. I particularly got a kick out of the article on the profitability of trains (despite slump in oil prices) and the likelihood of the resurgence in truck manufacturing. If both trains and trucks show resiliency, I think it spells great things for the economy. And the automobile manufacturers came off one of the best Decembers ever. I was impressed that Suncor will cut CAPEX but won't scrap projects. That WSJ article on "the replay of the 80's oil bust" was quite enlightening. Right now, I think Saudi Arabia is looking at $50 oil for quite some time. And China is looking at more and more ocean-going tankers to store it. For young folks with a long, long horizon, this is a great opportunity for investing. If young folks are having difficulty looking for places to invest, read: Wall Street Journal, Barrons, and Wired, for starters. 

Speaking of Wired, look at the great photo at this article: "The Flying Hospital That Rushes Wounded Soldiers To Safety." It was my pleasure and my honor and my fortune to have served under the US Air Force Surgeon General who first conceived the need for an airborne hospital, not just air evacuation. It was his vision, and then the subsequent USAF Surgeon General who kept the ball rolling. It is amazing how far flying hospital has come. The most impressive thing: the average age of the pilots (male and female) up front is probably 27; the average age of the nurses (male and female) in the back: 25; the average age of the physicians (male and female) in back, 29. And most of the advancements in flying hospitals were developed by those young folks. I could be way wrong on the ages; it's just what I remember some decades ago.

And it really was men and women both in the front end (pilots) and back end (medics). 

Nineteen (19) New Permits -- North Dakota -- January 13, 2015

Scroll down to the "producing wells completed." Check out the three Whiting wells. They are all "KOG" wells / Koala wells in Poe oil field, all on the same pad, lot 4, section 4-151-99. Pretty nice wells, huh?

Nineteen (19) new permits --
  • Operators: Hess (5), MRO (4), Statoil (3), CLR (2), American Eagle, Petro Harvester, BTA, Whiting,
  • Fields: Robinson Lake (Mountrail), Murphy Creek (Dunn), Alger (Mountrail), Cabernet (Dunn), Skjermo (Divide), Portal (Burke), Bicentennial (Golden Valley), Pleasant Hill (McKenzie)
  • Comments:
Twelve (12) producing wells completed:
  • 24002, 2,490, Statoil, Syverson 1-12 4H, Stony Creek, t12/14; cum --
  • 26927, 1,323, BR, Crater Lake 11-14MBH-R, Hawkeye, t12/14; cum --
  • 27261, 1,204, Emerald, Slugger 5-16-21H, Charbonneau, t12/14; cum --
  • 27408, 3,272, Whiting/KOG, Koala 4-4-29-1H, Poe, t11/14; cum 4K 11/14;
  • 27410, 2,444, Whiting/KOG, Koala 4-4-28-3H3, Poe, t11/14; cum 6K 11/14;
  • 27503, 1,675, Hess, BB-Budahn A-150-95-0403H-8, Blue Butte, t12/14; cum --
  • 27612, 603, Hess, EN-Abrahamson-155-93-3019H-8, Alger, t1/15; cum --
  • 27681, 892, Hess, EN-Pderson-LW-154-94-0408H-2, Alkali Creek, 4 sections, t1/15; cum --
  • 27706, 1,440, BR, Haymaker 44-22MBH-A, Elidah, t12/14; cum --
  • 27796, 949, Hess, AN-Evenson-152-95-1003H-7, Antelope, t12/14; cum --
  • 27825, 2,351, Whiting/KOG, Koala 4-4-28-4H3, Poe, t12/14; cum --
  • 28226, 300, Triangle, Paulson 150-101-23-14-4H, Rawson, t1/15; cum --
Wells coming off the confidential list today were posted earlier; see sidebar at the right.

Wells coming off the confidential list Wednesday:
  • 21963, drl, HRC, Fort Berthold 148-95-26A-35-2H, Eagle Nest, no production data,
  • 27848, 144, OXY USA, Dakota Meyer 2-19-18H-143-97, Crooked Creek, t7/14; cum 10K 11/14;
  • 27924, conf, OXY USA, Elroy Kadrmas 5-3-10H-143-96, Fayette, producing,
  • 27979, 879, Emerald, Billy Ray Valentine 1-8-5H, Boxcar Butte, t7/14; cum 29K 11/14;
  • 28064, conf, Oasis, Helling Trust Federal 5494 43-22 4B, Alkali Creek, no production data,
  • 28538, 872, Hess, BW-Norgard-149-100-1102H-3, Ellsworth, t11/14; cum 24K 11/14;
  • 28553, drl, XTO, HM Hove 34X-33D, West Capa, no production data,
  • 28625, conf, CLR, Mildred 5-19H1, Brooklyn, producing,
Vecta reports a dry hole:
  • 21155, PA/dry, Vecta Oil & Gas, Mark KOK 15-1, Plaza oil field, a Madison well, Mountrial County, this well is in the general vicinity of several very nice Madison wells;
One recompleted well:
  • 16071, Armstrong, Hanisch 26-1, Moraine oil field, first spud 1/06; Duperow, 10/13/PNA; Silurian, 4/14/AL; Silurian, 4/06/dry; Winnipegosis, 4/14; dry; Silurian, 10K; Duperow 93K; others insignificant; recent production:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Government Borrowing Costs Tumble
The collapse in crude oil prices, which on Tuesday approached six-year lows, is proving a mixed blessing for central banks. While lower energy costs should stimulate economies, in continental Europe in particular they risk creating damaging deflation pressures — expectations of further general price falls that prompt consumers and businesses to shelve spending decisions, weakening growth.

Yields on five-year UK Gilts fell below 1 per cent – their lowest level for more than a year – after official data showed UK annual inflation was just 0.5 per cent in December, a 15-year low. Meanwhile, German five-year yields have been hovering around zero since the start of the year.
US 30-year yields have also fallen closer to historic lows recently, although they edged higher on Tuesday. UK Gilts also rebounded later in the day.
Connecting The Dots

Late last week a reader sent me the link to a PDF regarding food stamps, year-over-year comparisons, 2013 / 2014 for all 57 states. It was notable that food stamps were down in almost all states year-over-year. There were two outliers: California and Nevada. Not only did the number of food stamp users go up in each state, the increase was almost 10%.

I assume Nevada's state economy is pretty much driven by the Las Vegas city economy. And Las Vegas is driven by California.

If California's economy is failing to improve, one would suspect food stamp usage would increase in California. Likewise, if the California economy is failing to improve, one might expect problems in Sin City.

Don just sent me an interesting link. The Wall Street Journal is reporting
Caesars Entertainment Corp. ’s largest unit will file its own Chapter 11 bankruptcy petition, as planned, despite an involuntary bankruptcy proceeding initiated against it by bondholders.
I assume Las Vegas is home to some of the 50 casinos and hotels. I assume Atlantic City is struggling also.

Electric Charging Stations In China -- An Update

Business Insider is reporting:
Elon Musk has taken the stage at the Detroit Auto Show, speaking at the  Automotive News World Congress at the Renaissance Center in Downtown Detroit.
He dropped a bomb right away when he said that Tesla sales are down in China for the fourth quarter of 2014. 
That sent Tesla stock into a tailspin after-hours, down 6% to $192.
The problem, according to Musk, is perception: potential Chinese customers don't think China's charging network is sufficiently built-out to ensure that the cars can cover significant distances. He said that perception has been dealt with.
In fact, the Chinese charging network is slated to expand, but it's currently not nearly as extensive as what Tesla has in the US and Europe.
Imagine that.
Now They Are Really Grasping For Straws

We can now add volcanoes to the list at this pdf: https://tallbloke.files.wordpress.com/2015/01/climate-predictions.jpg.

YahooWochit is reporting:
Study: Global Warming ‘Pause’ Caused By Small Volcanic Eruptions by Wochit 0:43 mins Small volcanic eruptions have helped cause a “pause” in global warming over the last 15 years, according to a recent study from scientists at the Lawrence Livermore National Laboratory.
When volcanoes erupt, they emit tons of sulfur dioxide into the sky, which can have a cooling effect on the atmosphere.
Scientists at Livermore labs now say that a series of small volcanic eruptions during the 21st century could explain up to one-third of the so-called pause in global warming.
“This new work shows that the climate signals of late 20th- and early 21st-century volcanic activity can be detected in a variety of different observational data sets,” Benjamin Santer, LLNL scientist and lead author of the study, said in a statement.
Yes, volcanoes have only recently appeared on earth. LOL. What about cows and methane?

Permitting Stats For Calendar Year 2014 -- North Dakota

I have not cross-checked information from previous posts so I have no idea how accurate this information is. If this information is important to you, go to the source, the NDIC. This data is from my own database and will differ from that of the NDIC. My permits are for oil and gas wells only; the number does not include permits for salt water disposal wells. This number also includes permits that were later canceled. Some permits were canceled in the same calendar year they were issued; others were canceled in a subsequent year. New, almost identical permits, were sometimes issued for earlier canceled permits (due to siting changes, or change in operator, for example). These numbers may not be identical to numbers I have previously posted. I did not cross-check; I simply went back to my original databases.

I also track permitting projections in real time (when I remember).

Total permits by year:
  • 2014: 3,012
  • 2013: 2,671
  • 2012: 2,522
  • 2011: 1,916

Permitting (2014):

  • December, 2014: 251
  • November, 2014: 235
  • October, 2014: 328
  • September, 2014: 261
  • August, 2014: 273
  • July, 2014: 265
  • June, 2014: 247
Permitting (2013):
  • December, 2013: 227
  • November, 2013: 232
  • October, 2013: 267
  • September, 2013: 287
  • August, 2013: 276 
Permitting (2012):
  • January, 2013: 218 (note the increase)
  • December, 2012: 154 ( significant decrease)
  • November, 2012: 211 (all-time high was 370 in Oct 2012)
  • October, 2012: 370 (all-time high)
  • September, 2012: 273
  • August, 2012: 261

HAL Cutting Back In Houston; At Least It's Hard To Catch -- January 13, 2015

Houston Biz Journal is reporting that Houston-based Halliburton Co. has cut an undisclosed number of jobs in Houston due to current business conditions.


Tweeting now: Fort Hood confirms an investigation involving a soldier who died after returning from West Africa.

The CDC has been told to "embargo" news stories regarding Ebola based on an earlier posted story.

Also tweeting now, and quite surprising, or maybe not: the vote to extend military intervention against Islamic State militants in Iraq passed French parliament 488 to 1.

And while we're at it, first Muslim lawmaker will be named to House intelligence committee giving him unlimited access to state secrets in his intelligence oversight position.

And so it goes.

See Disclaimer.

Schools And iPads

The elementary school that our younger granddaughter attends here in Texas has very successfully incorporated the Apple iPad into its "curriculum."

The Los Angeles Independent School District ... failed. And the FBI is investigating.

My wife's siblings attended schools in the LAISD so we follow the district with some interest. I also enjoy Apple so it was "doubly" interesting to follow the inclusion of iPads into the curriculum of various school districts.

Three things, I think, mean the difference between success and failure introducing the tablet into the elementary schools.
  • incredibly good teach instructor and knowledge of the operating system
  • tablets stay in school; tablets do not leave the school
  • tablets are an adjunct, and not the center, of the curriculum
It appears that LAISD failed on two counts, and probably all three. I believe I am correct when I say that LAISD students were "issued" iPads which they took home with them every weekend and over the weekend.

Having seen how challenging the iPads can be to technologically-challenged adults over the age of 25, I can only guess that LAISD teachers were well beyond their comfort zone when working with the iPad.

Finally, according to the linked article over at Macrumors, the new report deems "the project too heavily focused on Apple's iPad as the centerpiece for the initiative, with no willingness to focus on a less-expensive alternative."

I don't think cost had anything to do with it; after all, it was already in the budget when the program was determined a failure. The money had been spent. I have no idea what the writers meant by "no willingness to focus on a less-expensive alternative." One set of Encyclopedia Brittanica in each classroom? Perhaps.

I have been incredibly impressed with how computer-tablet-e-book literate our younger granddaughter is, a third grader. Each day at the start of the school year for the first two weeks, the students spent 30 minutes at the start of each day loading applications into their tablets. This was not "digging-ditch" work. They learned how to download apps, using passwords and "install." After those 30 minutes the iPad was put away for the day.

At the end of the two weeks, the iPads were used at particular points (and for a defined period of time) throughout the day for specific tasks and then put away. The students did not take their iPads home. They were not given homework to be done on mobile or laptop or desktop devices at home. However, over time, the teachers, parents, and students have learned to use the internet / e-mail to correspond with each other. The other day our granddaughter forgot her "agenda" at school, over the weekend, and panicked, not knowing/remembering the homework.

Her mother was able to go on-line and find that homework assignment. Our granddaughter was thrilled and completed her homework. However, on Monday, our granddaughter was given one demerit because she had forgotten to take her agenda home to have it signed by her parents. That was her first demerit and to put it mildly, she was bummed. But she moved on; more importantly the homework was done.

My wife still thinks California public schools are better than Texas public schools.

And so it goes. Memo to self: talk to that teacher about that demerit. LOL.

Say It's Not True

Macrumors is reporting, that after 11 years, Apple is quietly doing away with its weekly iTunes freebie.
Apple has seemingly ended its weekly iTunes "Single of the Week" promotion that gave out a free music single download each week on the iTunes storefront. As noted by Business Insider, a member of the Apple discussion forums claims an Apple support employee informed him the company decided to drop the weekly promotion. 
I wonder if this might be in response to the U2/Bono debacle. Which was way overblown (WWWO).

One of the comments mirrored my last statement: "Apple is probably sick of having to be insulted for giving out some little things for free."

Notes To The Granddaughters

Speaking of schools and technology (iPads above), when I went to pick up the older granddaughter, the third grader was all excited. She had just finished all of her "advanced" arithmetic on her laptop: addition, subtraction, multiplication, division. She scored 100% in all modules. And was quite excited. She got the task accomplished, and her mother was able to devote quality time to the six-month-old whom she had not seen much today. She was at the city library working on her Ph.D. in nursing.

And now to competitive swimming with the older granddaughter.

More On The Storage Issue Of US Crude Oil -- January 13, 2015

More from the Reuters article linked earlier:
Since September, U.S. commercial stocks have risen by about 22 million barrels.
Assuming all of that fed into tank farms, rather than refineries or pipelines, whose inventory levels generally don't fluctuate much, more than half of the nation's tanks still stand empty, the data show.
The historically large volume of empty tank space may also herald a pause, if not an end, to an unrelenting rout in global markets, as traders embark on a sustained campaign to buy physical crude to stockpile, analysts said -- at least until stocks rise so high that space once again becomes scarce.
"We're at an inflection point" in the oil market, said Philip K. Verleger, an energy economist who has closely tracked oil storage economics for three decades. "Prices can stay at these levels as storage fills. But if demand doesn't pick up or supply go down, then prices will fall again."
The figures may surprise traders who have been thus far focused on the atypical build in stockpiles this winter, with inventories reaching record seasonal highs at a time when they normally decline due to heating demand and year-end tax issues.

Williston Permits, 2014 Vs 2013

From City Of Williston (the chart is undated, but I posted it this date). The most interesting thing I noticed: in 2013, total number of permits did not require a "000-comma" designator, whereas a "000-comma" designator was required in 2014.

Y-T-D Comparison of Building Permit Totals
2013 vs. 2014
Type of Permit 
No. of Permits

Value of Permits
 No. of Permits
Value of Permits
 New Dwellings 
 $ 19,144,004.00
 Apartment Buildings
49 (1501 units)
48 (1290 units)
 New Duplex 5 (12 units)  $ 1,693,019.00 3 (7 units) $  1,029,924.05
 Manufactured Homes
 New Commercial/Industrial 58  $70,251,294.00 38  $203,411,832.96
 Commercial Alteration
 Garage & Accessory Bldgs.
 $  13,149,727.18
 Residential Alterations
 $ 3,663,934.00
 $  3,256,726.16
Site Grading 23 - 32 -
 Temporary Structure 39  - 29  -
 Total Year-to-Date
 $352,763,110.00 1,047 $500,342,125.60

Articles And Links I Will Come Back To Later -- January 13, 2015

Initial production data has been posted for wells coming off confidential list today

Bakken economyRapid City reports more than $200 million in building permits in 2014. Compare this with Dickinson and Williston for 2014:
Dickinson, as of November: permit values stood at just over $205 million, behind the roughly $309 million at the same time in 2013.
Williston, year-end: slightly more than $500 million.
By the way, in that linked Dickinson Press article, the writer noted that permits had slowed year-over-year in both Dickinson and Williston. Here is Williston, 2013 and 2014:

 Total Year-to-Date
 $352,763,110.00 1047 $500,342,125.60
A reader alerted me to a new presentation over at the North Dakota Industrial Commission website.

Enerplus has a new presentation

This is another great article about the real winner in the oil price collapse, from Bloomberg.

Active rigs:

Active Rigs156193182199163

RBN Energy: Expansion plans in the Eagle Ford and the Permian.

This is a most interesting story; a reader sent me the link. This caught me by surprise based on everything I've been reading over at RBN Energy. Either I've misread RBN Energy or their reports were focused elsewhere. Regardless, another great link sent by a reader. Thank you.  Reuters is reporting that U.S. oil tanks are barely one-third full, beckoning a crude contango play:
The U.S. oil storage trade is back - and may be bigger than ever.
Six years ago, the financial crisis led to a sudden surplus of oil and a collapse in prices, spurring a classic low-risk trade that's set to make a comeback: buying crude to store in onshore tanks or floating tankers, since oil costs $8 a barrel less now than what futures buyers will pay in a year.
OPEC's decision not to cut output in the face of slower demand and growing U.S. shale has traders scrambling to cash in on the return of a market structure known as 'contango,' by securing storage that could yield an almost guaranteed return of 8 percent or more. This year, they'll have more scope than ever before to take advantage of the contango play: the capacity of U.S. commercial oil storage tanks has expanded by a third since 2010, while months of strong demand for domestic crude from North American refiners has prevented inventories from swelling too far.
As a result, those onshore tanks are barely a third full, with less than 150 million barrels of the nation's total 439 million barrels of shell storage capacity occupied as recently as October, according to a Reuters analysis of U.S. data. That's by far the highest vacancy rate since the Energy Information Administration began a bi-annual survey of tank farm capacity -- which exclude refinery stocks and oil in pipelines - in 2010. 
Much, much more at the link.

Death Watch

The AP is reporting:
A high-profile Venezuelan opposition leader is calling for protests while President Nicolas Maduro travels abroad seeking help for the financially struggling country.
Tensions have escalated in recent days as the socialist administration has deployed troops and implemented a rationing system to control lines for groceries.
Henrique Capriles, who nearly defeated Maduro in the 2013 presidential election, said Monday that it was time for public demonstrations.
"We are in a state of emergency," he said. "This is the time to mobilize in the streets"
The official state press in Venezuela says there is more than enough bread and diapers; it's simply a distribution problem. 

Sayonara To OPEC

A reader suggests to me that it is very likely that WTI could become the global benchmark once again after losing that status in 2007.

Oil's "race to the bottom" shows OPEC's irrelevance --  Yahoo!Finance. This is a most interesting article. One forgets that Saudi is propping up at least three other countries: Egypt, Lebanon, and Jordan.
The crude crash was arguably the biggest story of 2014 (and now the start of 2015) in part because it caught almost everybody by surprise.
Almost. In early January 2014, Ian Bremmer, president of Eurasia group, told Yahoo Finance that oil could "crater" in 2014 and OPEC could "fall apart."
He was right -- even if he now admits the depth of the decline caught him by surprise.
Bremmer’s call last year had a lot to do with the fact that the geopolitics were “overpriced."
“People said that the Middle East was falling apart and that was going to lead to a lot of oil coming off the market,” says Bremmer. “We agreed the Middle East was coming apart but it wasn’t going to affect oil production.”
Bremmer says the misunderstanding of energy and the politicial landscape has now come out of the market and prices dropped dramatically as a result.
Then there's the question of if or when the Saudis are going to pull back production.
“I have a hard time seeing the Saudis going through 2015 without [any cuts] on the production side, “ Bremmer says, pointing to the Saudi's budget concerns and the country’s growing population.
Also, he notes they have a lot of commitments to places like Egypt and Jordan and Lebanon that "really need Saudi money."