Current Exploration In The Gulf Of Mexico Not Encouraging -- January 7, 2017

Quick! What's the average family income for a Costco shopper? For a Sam's Club shopper? $120,000 vs $80,000 respectively. See link below. 

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Road To New England

Updates

February 1, 2017, EIA graphic via Twitter:

Original Post

 

Another aging nuclear power plant to close by 2021. Just another story? No big deal? This power plant provides 25% of electricity for New York City and Westchester County. No plans to replace that electricity have yet been announced. Reading between the lines: the license will be extended another 15 years. This is nothing more than a political effort to increase off-shore/on-shore wind:

"If we can shut-down Indian Point under an agreement that enhances public safety and kick-starts investment into safer and more reliable renewable energy sources, that will be a major victory for the millions of New Yorkers who live in the region," Schneiderman said in a statement.

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Demise of Big Box Stores

Demise of big box stores tracked here. News:

• Neiman Marcus drops plans for stock exchange listing; struggling luxury retailer would fetch bargain-basement prices for its shares
• The Limited is closing all remaining stores by Sunday (tomorrow); all on-line sales final; also at The Washington Post;
• Sam's Club CEO out amid tough Costco battle

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Back To The Bakken

Active rigs:

	1/7/2017	01/07/2016	01/07/2015	01/07/2014	01/07/2013
Active Rigs	39	54	166	189	180

Kostelecky: more than just wells named after Kostelecky. 

Not much, but nice to see. EPD increases distribution, up to 41 cents; previous, 40.5 cents. The yield is currently almost 6%. A big whoop.

Statoil may stop drilling in US Gulf of Mexico. Rigzone data points:

• costly search may end
• Statoil has been part of several discoveries in the region as a junior license partner but the company has failed to strike oil in the drilling campaigns it has operated, despite spending billions of dollars
• latest Statoil well in the region drilled some 18 months ago; no spuds planned for 2017
• Statoil says no decision has been made whether to continue drilling in the Gulf

Sounds like the decision has already been made even if Statoil says otherwise.

I assume Statoil is not an out-lier. If so, this increases the relative importance of US on-shore shale. 

OPEC, Russian oil cuts. Reuters' John Kemp provides his analysis: 

• the pledge: a cut of 1.7 million bodp in the first six months of 2017 (from "what" was not stated; oil producers maxed out production at time pledge to cut was made)
• Saudi Arabia and its Gulf allies are expected to implement their cuts immediately
• outside of OPEC, the cuts will be phased in gradually
• cuts should be felt at the start of the summer driving season (why does this not surprise me)
• underlying growth in oil consumption in all regions around the world should also affect supple-demand rebalancing
• the pledge did not extend past the initial six months, but they have the option (LOL)
• most traders expect rebalancing to be backloaded; futures prices trading in contango in the first half of 2017, but then moving to level or backwardation in the second half
• the Mideast has greater flexibility in managing production; Russia less due to Arctic drilling
• much more at the link 

By the way, this is probably why Gartman opined that oil would not go above $55 for years:

• the pledge to cut is for only the first six months
• producers maxed production just before cuts
• historically, some OPEC nations cheat (why would it be different this time?)
• Russia's ability to cut is more challenging for technical reasons; by the time Russian cuts start to be noticeable, OPEC may go back to max production

So, although I called out Gartman for his prediction, in the big scheme of things he may not be far off.

By the way, if John Kemp is correct, and the cuts become noticeable at the start of the summer driving season, President Trump won't wait six years (like his predecessor) to figure out what to do.

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#7 In The 20-To-Go Countdown

The Party's Over, Willie Nelson

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The Periodic Table Page

From Macrumors, Apple will start to use IGZO displays for its MacBook Pro later this year (2017):

• IGZO: indium gallium zinc oxide
• often simply referred to as Metal Oxide (I can understand why)

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Ancestry.Com

I just saw a commercial on the Weather Channel. A woman with high cheekbones was curious about her ancestry. She was most surprised to find she was 26% "Native American." It's hard to believe someone could be 1/4th Indian and not know it. Visiting Grandma at Standing Rock should have been a clue.

One wonders if Pocahontas has ever considered genetic analysis?

By the way, speaking of Pocahontas. After watching CNBC for quite some time this week, I'm under the impression that Queen Elizabeth, as others call her, will soon be a voice in the wilderness. She will get a lot of TV time only because there are so few members left in Pelosi's Party but her opinions won't amount to much.