(Bloomberg) -- To understand why U.S. oil production is so resilient, it helps to consider the maze of pipelines running out of Midland, Texas.
New lines have relieved a chokepoint in America’s biggest oil-producing area. A massive supply glut had forced producers to offer discounts of more than $20 a barrel below the U.S. benchmark last year. This month, prices have been at an average premium of 78 cents, the most in records going back to 1991.
Magellan Midstream Partners LP, Plains All American Pipeline LP and Sunoco Logistics Partners LP finished work in the past year that added more than 750,000 barrels a day of capacity, while output grew by only 400,000. With an outlet to Gulf Coast refineries, the Permian has been the only major U.S. shale region to keep growing as prices dropped by more than half to less than $50.
“Putting in those pipelines and connecting the Permian to the Gulf directly allowed that premium to develop,” John Auers, Dallas-based executive vice president at Turner Mason & Co., an energy consulting firm, said by phone on July 27. “When you talk about these price levels, $5 to $10 is the difference between putting rigs back to work or shutting down.Much, much more at the link. Archived.
The world’s top crude-oil exporter, Saudi Arabia, is planning to pull back from record-high levels of production at the end of the summer when domestic energy demand subsides, according to people with knowledge of the matter.
The reduction could begin as soon as September and would amount to about 200,000 to 300,000 barrels a day, bringing production to about 10.3 million barrels a day, the people said. Saudi Arabia told the Organization of the Petroleum Exporting Countries that it produced 10.56 million barrels a day in June, a record high.
“It is purely based on the [domestic] demand situation,” one of the people said, adding that “production is likely to hover around” 10 million barrels until the end of the year.It's not a huge cut (250,000 bopd) but a) the headline; and, b) remember, Saudi Arabia has two new refineries, requiring about 800,000 bopd (together). For my purposes, I round that to one million bopd.
US ultra-low-sulfur diesel stocks rose to a record high for the fourth straight week, as East Coast stocks also hit a record for the fifth straight week.
Total US stocks of ULSD rose about 2 million barrels in the week that ended Friday to 123.91 million barrels, the highest level since EIA began collecting the data in 2004.
US stocks have risen to a record each of the last four weeks, with most of the stock builds concentrated in the East Coast.
East Coast stocks of ULSD rose 2.32 million barrels to 41.02 million barrels, the highest ever. Stock builds in the East Coast also have set records in each of the last five weeks.
ULSD stocks typically build this time of year in the East Coast ahead of peak winter demand season, with stocks rising last year to a then-record 33.27 million barrels.
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Signed contracts to buy US homes tumbled 1.8 pct. in June, as limited supplies weigh on market.
The National Association of Realtors said Wednesday that its seasonally adjusted pending home sales index declined 1.8 percent to 110.3 last month. Still, strong demand from would-be buyers has pushed the index up 8.2 percent during the past 12 months.
"We could see a bit of a slowing in the recent upward trend in existing home sales in the coming months," said Derek Lindsey, an analyst at the bank BNP Paribas.
The regional home sales number are probably much more interesting.Solid hiring and relatively low mortgage rates have fueled the previous five months of gains in the pending sales index. But buying options are increasingly limited because the market contains just five months' supply of homes, compared to the historical average of six months in a healthier market.
Whiting Petroleum beats by $0.02, misses on revs; guides Q3 production; 2015 capital budget revised to $2.15 bln for 6.5% production growth : Reports Q2 (Jun) earnings of $0.04 per share, ex-items, $0.02 better than the Capital IQ Consensus Estimate of $0.02; revenues fell 29.4% year/year to $590 mln vs the $677.6 mln consensus.Bloomberg is reporting:
- Production in the second quarter 2015 totaled 15.5 million barrels boe, 89% crude oil/natural gas liquids (NGLs).
- Second quarter 2015 production averaged 170,245 boepd. This represents a 2% increase over the first quarter 2015 despite non-core property sales of 8,300 boepd
- Co sees Q3 production guidance at 14.7- 15.1 million boe, sees 2015 guidance at 59.2-59.8 million boe
Hess Corp., which sold off fueling stations and refineries to focus on production, reported its second consecutive quarterly loss as higher oil output failed to compensate for lower prices.
The second-quarter loss was $567 million, or $1.99 a share, compared with net income of $931 million, or $2.96, a year earlier, New York-based Hess said in a statement Wednesday. Excluding one-time items, the loss was 52 cents a share, less than the 71 cent average of 21 analysts’ estimates compiled by Bloomberg.
The loss came as the company pumped more oil to make up for crude prices that fell 44 percent from a year earlier. Output rose 23 percent, led by North Dakota’s Bakken Shale where production was up a 49 percent to the equivalent of 119,000 barrels of oil a day.
Total production rose to 391,000 barrels a day, beating the highest analyst estimate of 361,600 barrels a day.
Hess also sold a half interest in operations that include a gas-processing plant, a crude rail terminal and rail cars to Global Infrastructure Partners for $3 billion in a deal that closed July 1.Noble Corporation shares surge 6%; held throughout the day, and after hours -- earnings release, press release:
Noble Corp PLC beats by $0.11, reports revs in-line: Reports Q2 (Jun) earnings of $0.64 per share, $0.11 better than the Capital IQ Consensus Estimate of $0.53; revenues fell 1.0% year/year to $771.3 mln vs the $766.36 mln consensus.
The refinery that has historically produced about a fifth of Southern California's gasoline has been crippled since a February explosion — and may stay that way for months to come.
The trouble at Exxon Mobil's refinery in Torrance is a major factor pushing up regional gas prices, which have risen dramatically this month. Restoring the site to full capacity is among the best hopes for bringing prices back down.
The Torrance refinery currently operates at less than 20% of its capacity.
Exxon Mobil asked the management district for approval to use an old pollution control unit it replaced in 2008 to temporarily restore full operations of the Torrance refinery, but regulators said the equipment does not capture emissions well enough. Emissions from the older unit would violate state regulations and rules.For those who still don't understand why gasoline in southern California can cost nearly $5 / gallon:
Smartphones have a lot of radios inside to provide all of the services we expect. Most of them have a radio that is turned off by the handset maker, likely for business and cost reasons. The FM radio for getting local music, news, and emergency information is not activated.
That will change next year for AT&T customers as the carrier will make active FM radio chips a specification for all Android smartphones it sells.
That will put the pressure on Android handset makers to turn the FM radios on if they want to sell on AT&T.This is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.
The growth rate of U.S. health care spending over the next decade is likely climb faster than it has since the Great Recession, according new government projections published Tuesday. And as the growth rate creeps higher, by 2024 nearly 20 percent of spending in the U.S. economy — one dollar in every five — will be related to health care, up from 17.4 percent in 2013.
As it is, health care spending reached an estimated $3.1 trillion last year, or nearly $9,700 per person. That represents an increase of 5.5 percent, the first time since 2007 that spending growth has topped 5 percent.
Crude exports from northern Iraq to Turkey through the Kirkuk-Ceyhan pipeline have been halted after the pipeline was blown up in a sabotage attack in the district of Cizre in Turkey, Turkey's energy ministry said Wednesday.
Iraqi and Kurdish sources told Platts that the line -- one of two parallel lines that make up the export link -- would be repaired and was expected to resume operations later Wednesday.
Exports through the pipeline, according to government officials, had been minimal at the time of the attack.EIA update on methanol and fertilizer plants in the US, and yes, North Dakota, has two. Great graphic; great article.
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Bakken crude-by-rail (CBR) volumes are down this year and pipeline shipments are increasing as production levels off in the wake of last year’s price crash. The trend is encouraged by lower price differentials between domestic and international crude as well as new pipelines coming online. Since 2012 a combination of rail and pipeline has given Bakken producers ample crude takeaway capacity but pipelines alone have not had sufficient capacity on their own. However, with production slowing down, pipeline capacity is catching up and by 2017 there should be enough pipelines to carry all North Dakota’s crude to market. Today we start a two part series asking whether pipelines can replace CBR from North Dakota.
The problem with his analysis: once the blackouts start, rooftop solar can't ramp up fast enough.And for the 1% of Californians that have rooftop, it's all residents; not industrial parks. So, the 1% with electricity will get to stay home to enjoy their appliances because they will be laid off because their assembly line has shut down.
The age of electrification across the transportation sector, the solar panel revolution, and Tesla’s battery gigafactory are igniting a battle for the cheapest battery. That will transform lithium into a boom-time mineral and the hottest commodity on the energy investor’s radar.
It has been easy to take lithium for granted. This wonder mineral is the backbone of our everyday lives, popping up in everything from the glass in our windows to our mountains of electronics.Players?
And while investors have long appreciated the steady rise in demand for this preferred mineral, the number of new applications continues to multiply. Smart phones, tablets, laptops, and other consumer electronics demand more lithium. But the largest driver for future lithium use will be in electric vehicles and home batteries for solar panels. That has lithium on the verge a boom for which supply can no longer be taken for granted.
Not since the shale boom have we seen a market transformation of such significance. Lithium has long been used for a variety of mundane purposes, and while the variety is spectacular—with applications in everything from glass, ceramics and greases to a line-up of industrial process—it has flown under the radar for most investors.
Tesla’s biggest rival will likely be Build Your Dreams (BYD), the Chinese automaker backed by Warren Buffet. Already, BYD is building electric buses on American soil and has global gigafactory ambitions. By the end of the year, according to Reuters, BYD should have 10 GWh of battery production capacity, which it expects to increase to 34 GWh by 2020 with a new factory in Brazil—about the same capacity as Tesla’s.
Other Tesla rivals rushing to the battery production scene will be iPhone manufacturer Foxconn and LG Chem, which is already one of the top three battery makers. Samsung is also hot on the trail, having just acquired Magna’s battery production division.Types of lithium?
Not all lithium is equal. It’s sold in different types for different prices. For instance, lithium carbonate sells for around $6,000 per ton and is used to make some of the materials for new battery technology.
However, many of the new battery technologies—particularly those used by Tesla—use lithium hydroxide as the starting material, which trades at around $2,000 more per ton than lithium carbonate. lithium found in salty water, or brines, is by far the most cost effective.
Brine is the best way to produce lithium because it’s so cheap, as nature has done all the hard work in rendering the lithium into a form that is easy to extract from the ground. All you have to do is drill a few wells and pump the liquid brine.”
The largest solar project in the world, Solar Star, is now operational in California and demonstrates Berkshire Hathaway's commitment to developing renewable energy assets.
Warren Buffett is famous for a number of bright ideas on investing, but this may be the brightest.
Just how bright?
About 579 megawatts' worth of solar-generated power from a single facility. Financed by BHE Renewables, a wholly owned subsidiary of Berkshire Hathaway, Solar Star is the world's largest solar project to date, and it began contributing power to the California grid on June 19.
Consisting of about 1.7 million SunPower solar panels, the facility will produce enough power to annually supply approximately 255,000 homes with electricity. BHE Renewables will sell the electricity to Southern California Edison under a long-term power purchase agreement.
BHE Renewables has wind, geothermal, hydro, and natural gas assets in its 3,470 MW portfolio, but solar, at 1,271 MW, represents the largest portion.
When it became operational, the Solar Star projects, two separate farms located in Kern and Los Angeles counties, supplanted another BHE Renewables-owned project as the largest in the world. Located in San Obispo County, CA, Topaz Solar Farms is a 550 MW facility consisting of over 8 million First Solar photovoltaic modules. Pacific Gas and Electric, a subsidiary of PG&E Corp, will purchase the electricity under a 25-year power purchase agreement.
Rounding out its solar projects is Agua Caliente, a 290 MW facility -- also supplied with First Solar PV modules -- in which BHE Renewables has a 49% interest. The facility is located in Yuma County, AZ.
