Thursday, October 5, 2017

WTI Up 1% -- - October 5, 2017 -- I'm Done With This Page -- No More Updates (Except Formatting)

Saudi Arabia: again, I am spending a lot of time on Saudi in this post, for several reasons. Over time, the reasons why I spend so much time on Saudi Arabia have changed. These are the three reasons that currently make this a compelling story:
  • a) having lived through the "embargo" back in 1973 or whenever it was, this is schadenfreude for me;
  • b) Saudi is facing an existential situation; with a new heir recently named; huge "opportunity" for huge shake up (peaceful or not) in the Mideast. This could be the third most momentous period in Saudi's modern history (since 1951; and,
  • c) WTI (and the viability of many US shale operators) is directly related to what is going on with/in Saudi Arabia
Back To The Bakken And The US

Active rigs:

$51.00 10/5/201710/05/201610/05/201510/05/201410/05/2013
Active Rigs593267190183

RBN Energy: Tallgrass gears up for DJ production growth with Cheyenne expansion plans.

Trump approval rating at 45%. Hannity more than doubles Rachel's viewership. In fact, Rachel even trails Wolf (CNN). Drudge says he passes Yahoo!, Twitter, Googlenews in traffic. Doesn't mention Facebook

US economy: optimism about the economy at a 13-year high.

Jobless claims: drop 12,000, despite two incredible hurricanes.

WTI: oil up 1%. Who wudda thought?

Crude oil exports: there's a story out there, yesterday or today -- that US crude oil exports for most recent reporting period -- September, 2017 -- was way more than forecast; caught analysts by surprise.

Saudi king visits Russia. Astounding. Tectonic shifts in the Mideast. Even the king doesn't need his reading glasses to see this chart:

Market: looks like new records, again, today. I'm sure CNBC is still trying to figure this one out. Suggestion: listen to Warren Buffett's recent interview on your show. Already in early morning trading, 194 new highs on the NYSE, including BRK-B; GM; D. R. Horton; Lennar; Oasis Midstream Partners; Valero;
  • new lows: only 4
Investing: wow, I would love to talk about individual companies with regard to investing, but this is not an investment site, so I won't do that. Of the companies noted above, I only own shares in one of them (this does not include what I might have in IRAs, 401(k)s, etc.)

Methane venting and flaring: I will post the link later, but a federal judge -- in San Francisco, if I remember correctly, nixed the Trump's administration to rescind Obama's rules on methane venting and flaring. This will resolve itself by the end of 2018.

NFL-free Thursday night. Speaking of sports, last night's "win or go home" game between Colorado Rockies and the Arizona Diamondbacks was simply incredible. I'm glad I saw it. It is ironic (?) that just as my love affair for the NFL and college football is pretty much over, I'm starting to enjoy baseball. I think I will enjoy NASCAR less when "junior" retires; I care not a bit for Kyle Busch. I don't miss #24 but I'm still glad #48, Jimmie Johnson, is still racing. Danica Patrick? No longer matters one way or the other. I was thrilled when she joined NASCAR but the thrill is gone. I used to really, really dislike Keselowski, but I'm changing with regard to him, also. I look forward to the PGA, again, but not to the NBA. If we still lived in San Antonio, I would likely be a huge NBA fan. The golden years for the NBA for me? When Phil Jackson coached the Chicago Bulls.

The kingdom's cash situation: FUBAR, to quote "Doyle and Debbie."

Not to belabor the issue but look at the Saudi cash debacle. The chart above only goes back to September, 2016. What did it look like before then?

From an older post, January 14, 2017:


Compare these two graphs, taking particular note of the size of the bars for May, 2016, and comparing most recent data.

First, the "old" graph:

Now, compare to the "new" graph with updated data.

There are several things to note:
  • the right hand (vertical) axis has changed
    cash reserves had a slight uptick in May compared to April (2016) 
  • from June, 2015, to November, 2015, one could argue the decrease in cash reserves was steep but somewhat "smooth"
  • in the "old" graph, there was a deep drop-off in January, 2016
  • although the decline seemed to flatten a bit in spring / early summer, 2016, it took another drop by autumn, 2016
  • but, look at that huge drop-off in November, 2016 -- in percentage terms, it looks like the biggest drop since June, 2015
I don't know what others might say, but to me this is quite staggering.

From a later post, March 8, 2017:
Cry me a river.

I "predicted" there would be a month-over-month drop going into January, 2017, but I honestly never thought it would be that .... well, that graphic.

I mean, look at that drop. It's hard to read the numbers, but it looks like November to December (2016) it was "only" a drop from 2,020,000 to 2,010,000 million SAR ($2.7 billion) but the most recent data suggests a drop from 2,010,000 to 1,960,000 million SAR ($13.5 billion).

One Saudi riyal equals about a US quarter, more accurately 27 cents.

So, 2,010,000 million SAR x 0.27 = $542,700,000,000 or $542.700 billion.

and, 1,960,000 million SAR x 0.27 = 529,200,000,000 or 529.200 billion.

In the February note, it looked like the month-over-month decrease was in the $8 billion range and between November/December, 2016, the delta might have been significantly less, maybe $3 billion, but my calculations suggest the drop was closer to $14 billion between January, 2017, and December, 2016.

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