Holy Guacamole, Batman, Futures Are Up Over 70 Points (On The Dow) -- October 18, 2017

The surge: I was surprised the market did not do better yesterday on both technicals and fundamentals. On the technical side, once 23,000 was breached, it seemed likely that the market would break out. On the fundamental side, the earnings reports yesterday were simply incredible, to say the least, and yet the market would not have moved had it not been for one ObamaCare health insurer -- UnitedHealth Group -- that soared.

The movers and shakers on Wall Street must have re-written the software code overnight to correct a programming glitch: this morning futures for the Dow 30 are up over 70 points.

By the way, it doesn't take a rocket scientist to understand why UNH soared yesterday.

The Brits apparently don't understand the US shale revolution. A reader sent me this article -- absolutely fascinating -- and so incredibly off base I will come back to it later when I have more time. The link: https://www.ft.com/content/e17930dc-b288-11e7-a398-73d59db9e399.

It's behind a paywall. If the link is blocked, google -- ft in charts has us shale peaked.

For now, all I will say is this: what was the point of the article? By the way, suggesting that the Brits don't understand the US shale revolution, there are suggestions that Reuters oil analyst John Kemp doesn't quite understand the US free market model. But that's another story for another day.

Timing is everything. Read the Financial Times article and then read the RBN Energy essay posted today (see below) -- it begins:

Lower-48 natural gas production is expected to surge 18 Bcf/d (25%) by 2022 to 90 Bcf/d, up from an average near 72 Bcf/d this year. Gas demand is also on the rise, mostly from exports. The U.S. is expected to add 8.0 Bcf/d of new LNG export capacity in the next few years. 

Active rigs in the Bakken:

$52.05→	10/18/2017	10/18/2016	10/18/2015	10/18/2014	10/18/2013
Active Rigs	58	32	67	190	184

RBN Energy: prospects for export and power demand growth.

Lower-48 natural gas production is expected to surge 18 Bcf/d (25%) by 2022 to 90 Bcf/d, up from an average near 72 Bcf/d this year. Gas demand is also on the rise, mostly from exports. The U.S. is expected to add 8.0 Bcf/d of new LNG export capacity in the next few years.

At the same time, there is ample new pipeline capacity available for gas deliveries to Mexico from Texas, with more on the way, and gas-fired power generation demand is also expected to increase steadily. Will all this new demand be enough to absorb the incremental supply, and what will be the timing of it? In today’s blog, we continue our five-year outlook series, this time with a focus on the demand side of the equation.

This is Part 2 of a breakdown of our five-year outlook for the U.S. natural gas supply and demand balance. We began the series with a look at production trends in Part 1, namely that producers this year are emerging from the recent period of low oil prices, tightening capex budgets and contracting volumes. Crude production is nearly back up to its peak of 9.6 MMb/d set in April 2015, and is likely to surpass it soon.

Similarly, Lower-48 dry gas production has been roaring back and approaching a record 75 Bcf/d, led by the Marcellus/Utica shale, as well as associated gas production in crude-focused regions, including the Permian and Oklahoma’s South Central Oklahoma Oil Province (SCOOP) and Sooner Trend Anadarko Canadian Kingfisher (STACK) shale plays.

Lawsuit reversed. I don't like the way the company was able to get the case reversed but at least it's a start.

Johnson & Johnson on Tuesday won the reversal of a $72 million verdict in favor of the family of a woman whose death from ovarian cancer they claimed stemmed from her use of the company’s talc-based products like Johnson’s Baby Powder.

The Missouri Court of Appeals, Eastern District said that given a recent U.S. Supreme Court decision that limited where injury lawsuits could be filed, the case over Alabama resident Jacqueline Fox’s death should not have been tried in St. Louis.