Friday, September 2, 2016

NDIC Website Back Up; Daily Activity Index Still Not Available; US August Jobs Report Terribly Disappointing; That Florida "Hurricane" -- Were The Numbers Fudged? -- September 2, 2016

NDIC site back up; came back up around 7:00 a.m. Central Time.

Saudis increase their moat: adding Asia storage to maintain market share. Bloomberg.  Connects with earlier story that Chinese oil production may have peaked.

Norwegian North Sea: majors leaving or cutting back; smaller operators moving in. Other data points:
  • Norway's crude oil production has dropped by half since 2000 (the Bakken Boom began in 2000)
  • Statoil operates about 70% of Norway's petroleum output
  • newest operator hopes to increase boepd production by 250,000 by 2023

Active rigs:

Active Rigs3375194185192

RBN Energy: MPLX's plan for moving northeast condensate and natural gasoline.
MPLX LP and the midstream limited partnership’s subsidiaries (collectively referred to as “MPLX”) are stepping up to address a lingering hydrocarbon-delivery issue in the Utica and “wet” Marcellus plays, namely, how to more efficiently transport the field condensate and natural gasoline produced there to refineries, Western Canadian heavy-crude shippers and other end-users. Currently, condensate and natural gasoline are moved within and out of production areas in eastern Ohio, northern West Virginia and western Pennsylvania via truck, rail or barge. MPLX’s three-part, $500-million plan, the first elements of which are nearing completion, is mostly about pipelines—a mix of new ones and creatively repurposed existing ones. It looks like a win-win for condensate and natural gasoline producers and buyers. Today we begin a series on improving the flow of these two close relatives in the hydrocarbon family to buyers in the Midwest and beyond.
Job Watch

August jobs data: the spinmeisters will call this a great report. In fact, it's pretty dismal. US adds 151,000 jobs (before the Obama administration, the magic number was 200,000: adding less than 200,000 jobs in any month was a sign of economic stagnation. Sometime during the Obama administration, the major business news outlets moved the goalposts).  Full employment is the headline: unemployment rate unchanged at 4.9%. Let's see how Yahoo!Finance spins it:
The US labor market disappointed in August.
US companies added just 151,000 payrolls during the month, missing expectations for 180,000 payrolls
While the numbers were lighter than expected, it reflects the 71st consecutive month of job gains, which is already the longest streak on record. [MORE SPIN]
The unemployment rate stood at 4.9% in August, which was higher than the 4.8% forecast by economists. Notably, the July unemployment rate was revised up to 4.9% from an earlier estimate of 4.8%.
Janet Yellen? At most: "one and done" and even that "one" may be delayed.

Even the expected 180,000 jobs would have been below the 200,000 threshold. Just saying.

How did the market react. Futures pointed to a slightly higher opening, maybe 30 points in the Dow 30, prior to the jobs report. If the market opens higher, it's because traders think the jobs report will delay "one and done"; if the market opens lower, traders are hunkering down for a two-fer: a worsening economy, and despite that, the Fed still talks about raising the rate sooner than later. (It's all relative: the Fed -- or at least the media -- has been talking about raising rates for the past five years, it seems.) Common sense would tell us that the jobs report will boost the market today. So let's see: futures are now up almost 50 points.

The Market

Closing: it looks like the Dow 30 might be able to hold unto its gains, perhaps closing up 60 points by the end of the day. Another jump in the number of issues hitting new highs; and very, very few issues hitting new lows. NYSE --
  • new highs: 185
  • new lows: 10
Early afternoon trading. Has pulled back considerably, but number of issues hitting new highs has jumped significantly from this morning, a good sign. NYSE:
new highs: 165 -- BRK-B (a big whoop);
new lows: 9

Mid-morning market. Up about 120 points at one point, now back to 105 points. NYSE:
  • new highs: 99 -- WPX Energy;
  • new lows: 6
I'm just waiting to see if BRK-B goes over $151. [Remember: this is not an investment blog.]
The Open: futures suggested a modest increase at the open, until the jobs report came out. Then futures jumped. The opening: up almost 100 points.

ISM manufacturing index contracted in August. WSJ calls this a key gauge of the sector. Readers have told me the index is overrated in the 21st economy. 

Not payback, but interesting timing.  Caterpillar considers closing Belgian site, laying off 2,000 workers. Isn't Belgium the HQ of the EU?

Tablets on fire: Samsung issues recall of Galaxy Note7 just weeks after release.

Costco reports disappointing expectations for 4Q16: shares down. Hanjin-related?

Most anticipated: box office results for "Hell or High Water" when it opens to wide release this weekend. It's been playing for the past week here in the Grapevine area, but I have not gone. My wife is not interested. Everything suggest that it will be the "sleeper hit of the summer."

Pipeline protests update, Dakota Access Pipeline, reported in The Wall Street Journal.

Two Colorado coal-fired power units to close as part of clean-air deal. In Wall Street Journal.

Gerald Baker's 10-point here: Trump and Mexico; the explosion on the Cape. Does the 10-Point add any value to the WSJ?

Hurricane Update


September 4, 2016: biggest "dud" of the year? of the decade? Remember: this is the first "hurricane" to his the US mainland in eleven (11) years. It made landfall just before the weekend, allowing plenty of time for networks to air the storm. But nothing. Absolutely nothing. This is a huge "dud." Barely made hurricane status -- if indeed it was even a hurricane -- yes, I know: it is devastating for those directly affected by it. I'm just amazed that so little has been said about it. It's as if it didn't happen. The first hurricane to make US landfall in eleven years. Global warming. Climate change. Extreme weather.

Later, 6:29 p.m. Central Time: maybe it's just me, but going through the major news outlets (outside of Florida) I find nothing on the Florida "hurricane" on the "front page":
  • WSJ: nothing on front page
  • NYT: small little story in middle of front page; hard to find
  • LAT: nothing (not unexpected)
Quick: google Hurricane Hermione wind and the first hit is a CNN story posted 22 hours ago. It was finally on the second page of hits that I found a wind-speed for this "hurricane." The site: Archy World News.  This is what "they" reported:
As a Category 1 hurricane hit “Hermione” shortly before 2 am (local time) on Friday with gusts up to 130 kilometers per hour in St. Marks near Tallahassee on land. 
The Saffir-Simpson hurricane wind scale is based on "sustained" winds. Category 1 is defined as sustained winds at 74 - 95 mph.

Considering this was the first Atlantic hurricane to hit land in eleven (11) years, the silent reporting is deafening. 

Original Post

Hurricane? Something tells me the numbers were fudged. To gain hurricane status, winds must reach 75 mph (sustained? spike?). When the storm was upgraded to "hurricane," we were told that winds were "about" 80 mph. This "about" was reported by the same organization that tells us, without question, they can predict the rise in global temperature to the tenth degree one hundred years from now. The phrase "about 80 mph" has now become the meme for this particular storm: everywhere it's being reported that the winds were 80 mph for this "hurricane." Whatever.

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