Tuesday, October 4, 2016

Global Inflation Falls To Seven-Year Low -- October 4, 2016

Global inflation falls to seven-year low. WSJ. Data points:
  • global inflation rates fell for the second straight month in August
  • lowest level in almost seven years
  • seven years ago: global economy in the throes of a downtown that followed the financial crisis (mark-to-market mayhem -- see below)
  • inflation rate now at 2.1% (down from 2.2% in July)
  • smallest rise in consumer prices since October, 2009, when they increased by 1.7%
Perhaps Krugman was correct.

Back to the Bakken

Active rigs:

Active Rigs3268190183189

RBN Energy: Colonial leak's impact minimized by imports, use of line 2. The big story here is how one interruption in the nation's energy pipeline system can become such a huge story. Perhaps President Obama should shut down all pipelines until they figure out what caused the Colonial leak.
The increase in waterborne flows to the East Coast in response to the recent Colonial Pipeline outage illustrated the flexibility of supply in the U.S. motor gasoline market. At the same time, the lack of a lasting impact from the loss of 8.3 million barrels of gasoline to a key U.S. demand region highlighted the degree of oversupply in the market. Today we look at how waterborne flows helped to mitigate the effects of the Colonial Pipeline outage, and how flexibility in the East Coast motor gasoline market enabled it to handle unexpected supply constraints with minimal disruption.
Colonial Pipeline is the largest source of refined product supply for the U.S. East Coast. Colonial’s primary route (from Houston to Linden, NJ) consists of four distinct segments, which, like the “arms” and “legs” of an X, meet at Greensboro, NC. One of the two Houston-to-Greensboro lines is dedicated to moving motor gasoline (Line 1, capacity, 1.37 MMb/d), and the other line (Line 2; capacity, 1.16 MMb/d) can be used to ship either distillate (diesel and heating oil) or gasoline, each of which can be move sequentially through Line 2 in “batches”.
At Greensboro, these products go into breakout tanks; from there, gasoline and distillates are sent further north (again in batches) on two mainline pipes. Line 3 (capacity, 885 Mb/d) runs from Greensboro to Linden––where it connects with the Intra Harbor Transfer (IHT) system, which facilitates deliveries to terminals across the New York and New Jersey area. Line 4 is a 32-inch-diameter pipe (capacity, ~700 Mb/d) that runs from Greensboro to Colonial’s Dorsey Junction terminal near Baltimore, MD.
US Propane Exports Now 2nd Largest US Petroleum Product Export

From the EIA:
In the first half of 2016, the United States exported 4.7 million barrels per day (b/d) of petroleum products, an increase of 500,000 b/d over the first half of 2015 and almost 10 times the crude oil export volume. While U.S. exports of distillate and gasoline increased by 50,000 b/d and nearly 140,000 b/d, respectively, propane exports increased by more than 230,000 b/d. Propane surpassed motor gasoline to become the second-largest U.S. petroleum product export, after distillate. --- EIA
That Phony Cut
  • OPEC is pumping at record levels even after end of summer surge
  • Nigeria, Libya are exempt from OPEC's "agreement" (Bloomberg story here)
  • Russia is not part of the deal
Mark to Market and Boeing

Mark to market mayhem: Investopedia.
Boeing's unique accounting method helps improve profit picture: WSJ.

President Obama's Foreign Policy Successes

What President Bill Really Thinks Of ObamaCare

ObamaCare is a "crazy system": Bill Clinton.
The Demise Of The Big Box Stores

The Market

Late morning: flat; Dow 30 up about 5 points. Oil up five cents at $49.45. NYSE:
  • new highs: 55 -- CLR, another big whoop; Encana;
  • new lows: 13
Opening: Dow 30 up about 50 points, if I remember correctly.

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