Week 30: July 24, 2016 -- July 30, 2016

Internationally, there were a lot of stories this past week on how the Panama Canal Expansion was changing the order of things in energy, especially with regard to US LNG exports.  Platts had just one of many stories but a browser search will bring up many, many more.

I also posted a story on surging petrochemical demand around the world. ExxonMobil and Saudi Arabia are in discussions about a possible joint venture petrochemical plant in along the US Gulf Coast, in Texas or Louisiana.

In perhaps the most ludicrous story of the week, Bloomberg suggested that the world may need to depend on Russia to meet oil demand in the next few years. Actually, there was one story even more ridiculous: SecState Kerry said that air conditioners were more dangerous than ISIS.

WTI flirted with $40 this past week, and the government provided the first official estimate of GDP for 2Q16: a horrendous 1.2% -- not even half of a the tepid 2.6% analysts had expected. And, of course, with revisions (there will be two), it's possible that the 1.2% number will go down. Or go up. Or stay the same. Chevron, ExxonMobil, and COP all reported disappointing earnings for 2Q16. The way things are going in this third quarter, it may get worse before it gets better. Assuming it gets better.

I think we will look back on the recent jump in the number of active rigs in North Dakota as "jumping the gun." It now seems it was too soon to start bringing rigs back in but things looked differently in early 2016 when the decisions were made to contract for new rigs.

Outside the Bakken, CLR reported its record well in the Meramec, STACK, Oklahoma. Devon reported something similar a week earlier.

Home ownership in the US is at a 51-year low, another arrow in the president's quiver labeled "Legacy." But there are mixed messages: it was also reported that June home sales were the highest in more than eight years; with a seasonally-adjusted rate of almost 600,000 homes, it was the best month since February, 2008.

Tesla declared that its giga-factory in Nevada is now open for business. The factory itself is 14% complete. I assume the "14%" is the front end where the Tesla's press office is.

I posted a book recommendation; the book can be bought at Books on Broadway in Williston, or on Amazon, including a Kindle edition.

With regard to the Bakken, the trend right now is not so many new permits, but lots and lots of renewed permits. Although mentioned once before, there is now a new operator in the Bakken -- perhaps not an operator but an "energy management company" -- a company that owns acreage and wells but contracts out to others to actually do the heavy lifting -- like drilling and producing and transporting. In this case, it is Foundation Energy Management out of Dallas, TX, I believe. It appears they acquired a package of North Dakota Madison wells from Whiting.

Now, to the Bakken itself:

Operations
North Dakota active rig count jumped to 35 from an "average" of 30 the previous week
The Mergent Group reports that Bakken DUCs have risen to nearly 1,000
Mike Filloon provided an update

CBR
An update in The WSJ: like man-camps, a solution for a problem that no longer exists

Bakken Economy
Update on the new Williston airport