Thursday, January 19, 2017

In Addition To Gasoline Demand, It Appears Demand For Heating Oil Has Fallen Significantly, Also -- Noted By A Reader -- January, 19, 2017

Earlier today I posted this note:
With more folks returning to work, or at least not being laid off, one would have thought gasoline demand would have increased. Gasoline demand is now lower than it was a year ago. The price of gasoline has increased about 6 cents/gallon over the past week or so, but that certainly is not enough to explain the significant decline in gasoline demand.

Gasoline demand:

Weekly US Product Supplied of Distillate Fuel Oil:

After the note above regarding gasoline demand was posted a reader noted something else (see first comment at this post). Look at the graph below, weekly US distillate fuel oil supplied:

Pay attention to the weeks highlighted with the ovals. The last week in December was incredibly low, and the first week in January was, at best, mediocre compared to previous comparable weeks.

It's possible the distillate fuel oil is simply "one of those things" (a snapshot in time) and perhaps reflecting really warm weather that last week in December (I don't know; one would have to check), but when you look at the gasoline demand plunging over the past few weeks and now the fall in heating fuel oil, one begins to wonder what might be going on.

Three Nice DUCs Completed -- January 19, 2017

Active rigs:

Active Rigs3749161187187

No wells coming off confidential list Friday.

No new permits.

Three producing wells (DUCs) reported as completed:
30973, 2,325, BR, Gudmuri 1-1-26TFH-ULW, Elidah, t12/16; cum --
31591, 1,080, Statoil, Ruth 28-33 5H, East Fork, t12/16; cum --
31592, 1,008, Statoil, Jack 21-16 4H, East Fork, t12/16; cum -- 

And that's all.

Natural Gas: How Fast Things Change; Gasoline Demand Continues To Fall -- January 19, 2017

Natural Gas Fill Rate (Or Withdrawal)

The most recent US natural gas draws data (dynamic link):

Gasoline Demand

 On the other hand, the most recent "gasoline demand" data does not fit the other two economic data points reported earlier:
  • US housing starts surged;
  • first time unemployment claims plummet by 15,000
With more folks returning to work, or at least not being laid off, one would have thought gasoline demand would have increased. It's now lower than it was a year ago. The price of gasoline has increased about 6 cents/gallon over the past week or so, but that certainly is not enough to explain the significant decline in gasoline demand.

Gasoline demand:

Global Crude Oil Supply And Demand

Three links sent to me by a reader I don't want to lose:

Songs And Videos That Will Play Continuously January 1 - 31, 2017

The Obama Legacy:

President Obama will “be the only president in history to never have a year of 3% GDP growth.

President Obama is the only president ever to have had Americans fighting in wars for the full eight years of his two-term presidency. And he has the Nobel Peace Prize.

US health care, rightly or wrongly, known as ObamaCare, perhaps the only major Obama initiative that wasn't done by executive order, may be "history" before the end of 2017.

News stories, without video:
The Twenty Songs
(okay, #20 is not a song)

#20. Say Goodnight, Gracie.
#19. What Is Love?
#18. Time To Say Goodbye.
#17: Crying Time Again.
#16: How Do You Mend A Broken Heart?
#15: Before The Next Teardrop Falls.
#14: Hello, Goodbye.
#13: The Great Pretender.
       An extra: Mr Lonely for the FBI Director.
#12: I Will Follow Him.
#11: If I Could Turn Back Time.
#10: Every Breath You Take (I'll Be Watching You).
#9: Sukiyaki (I Look Up When I Walk, So Teardrops Won't Fall).
#8: It's Closing Time.
#7: The Party's Over.
#6: I Am A Man Of Constant Sorrow.
#5: Good Riddance (I Hope You Had The Time Of Your Life).
#4: Hit The Road, Jack.
#3: End of the Line.
#2: You're So Vain.
#1: From Russia With Love.


"Say Goodnight, Gracie" (

Thank God and Greyhound, You're Gone, Roy Clark

Whatever Happened To Aleppo? What Is Love? -- January 19, 2017

It looks like the Russian a/c carrier is headed home. The tug that generally accompanies the a/c carrier appears to be anchored off Tunis.

... and here's the story: after two months off the Syrian coast, the Russian a/c carrier is headed home. That story was posted January 6, 2017.

Where's John Kerry?

Where's Waldo?

Enquiring minds want to know.

How Many Executive Orders Will President Trump Sign Tomorrow?

I apologize for being so lame on this one. There are a gazillion polls that could be taken right now:
  • who will get more TV coverage during the inauguration? Michelle or Melania 
  • will Tillerson be confirmed for Secretary of State?
  • related: will John Kerry submit his resignation?
  • will PEOTUS Trump tweet just prior to taking the oath?
  • will POTUS take one-last selfie?
But we will settle for this one:
There are reports that President Trump is expected to sign a "handful" of executive orders within 24 hours of being sworn in. How many executive orders do you think President Trump will sign within 24 hours of being sworn in?
Poll at the sidebar at the right.

Energy Deregulation: "Day One Agenda" For POTUS -- Harold Hamm

Story over at CNBC.

What Is Love?

Apparently there is a "closed luncheon" today for GOP senators and congressmen/women to offer congratulations to the new president the day before he is sworn in, sort of like a bachelor's party, I suppose. The difference is: at a bachelor's party, the bachelor's true friends are there.

Not true for PEOTUS. With rare exceptions, none of these guys at the luncheon openly supported Trump. He did it all by himself, despite the non-support of his party; the non-support of the Bushes; the non-support of Paul Ryan; and the outright biased coverage by all major networks and print media outlets. He did it entirely on his own.

Any doubt I'm wrong. The video at this link needs no further comment. 

I'm sure he is asking himself, "what is love?" #19 in the twenty songs that will be playing continuously over the next few days.

A Night At The Roxbury, What Is Love, Haddaway

Global Oil Discoveries Drop To 70-Year-Low -- Rystad Energy; Helps Explain Why XOM Double-Downed In The Permian; IEA Forgot To Factor In DUCs; Peak Oil? What Peak Oil? -- January 19, 2017

That was the headline story: global oil and gas discoveries drop to 70-year low.

But the devil is in the details. Here's the fine print:
The numbers do not include North American shale resources which have been a key driver in supply growth in recent years.
An oil company's value is based on a couple of things, including reserves.
Oil and gas discoveries around the world dropped last year to their lowest since the 1940s after companies sharply cut back in their search for new resources amid falling oil prices.
The decline in discoveries means companies such as ExxonMobil and Royal Dutch Shell will struggle to offset the natural depletion of existing fields, reinforcing forecasts of a supply shortage by the end of the decade.
Total oil and gas resources found in 2016 reached just more than 6 billion barrels of oil equivalent (boe).
As a result, companies were able on average to replace only 10 percent of their oil and liquid gas reserves last year, compared with a reserve replacement ratio of 30 percent in 2013.
This may be one of the bigger reasons why ExxonMobil doubled down in the Permian.

Speaking of US shale, the IEA sees significant gains in US shale oil as prices rise. From Bloomberg:
Oil-price gains will trigger a “significant” increase in U.S. shale output as OPEC and other producers rein in supply, according to the head of the International Energy Agency.
“U.S. shale-oil production will definitely react strongly,” .... At $56 to $57 a barrel, “a lot of shale plays in the United States would make perfect sense to produce.”
.... comments suggest that the IEA has become more optimistic about the outlook for U.S. production. [Just two or three days ago, it was "game on."]
Last month, the Paris-based agency said it expected U.S. tight oil -- as shale is also known -- to rise only “marginally” in 2017.
Oil prices have risen about 20 percent since the Organization of Petroleum Exporting Countries reached a deal to curtail supply last year.
The oil industry is becoming more cost-efficient and a “big chunk” of global output is now profitable at $50 to $55 a barrel, ....  Brazil, Mexico and China as countries that will also boost production. There will be “lots more” supply in late 2017 or early 2018....
“This will make it more difficult for OPEC to achieve its goal of restoring the balance on the oil market by means of production cuts,” said analysts at Commerzbank AG led by Eugen Weinberg in Frankfurt.
Much more at the link.

Peak oil? What peak oil?

Active Rigs In The Williston Basin Climbing, Slowly But Surely -- And This Is In The Middle Of Winter; Trump Optimism Extends To Housing Starts; Jobs -- January 19, 2017

The market: absolutely crazy. The Dow 30 has been down five or six days in a row and yet some shares are doing very well:
  • CSX: soaring
  • UNP: up 4% -- coattails of CSX, no doubt
  • Netflix: soaring; hits all-time high
  • TSLA: soaring; heavily shorted (wow)
  • Apple: at a new high? not sure, but doing well [it's not: its high was about 130; currently about 120
Economic numbers (housing, unemployment claims) are also out today and are quite amazing. All this since Donald Trump was elected to be the next president.  Amazing what optimism can do.
First, housing: housing starts surge in December (2016). Data points:
  • more than expected (how often have we heard that?)
  • jumped 11.3%
  • seasonally adjusted rate: 1.23 million units in December
Now, first time unemployment claims, same link:
  • near a 43-year-low
  • plunged 15,000 to 234,000; just shy of the 233,000 level touched in mid-November (2016), the lowest rate since November, 1973
  • 4-week average also fell an amazing 10,250 to 246,750
Back To The Bakken

Active rigs:

Active Rigs3949161187187

RBN Energy: boosting crude and products pipeline capacity with drag reducing agents.
The capacity of a pipeline built to transport crude oil or refined products is often thought to be tied only to the pipe’s diameter and pumps, as well as the viscosity of the hydrocarbon flowing through it. Increasingly, though, midstream companies are injecting flow improvers—special, long-chain polymers known as “drag reducing agents” —into their pipelines to reduce turbulence, thereby increasing the pipes’ capacity, trimming pumping costs or a combination of the two. The role of these agents has evolved to the point that they aren’t simply being considered to boost existing pipelines, their planned use is being factored into the design of new pipes from the start. Today we begin a series on DRAs and their still-growing influence on the midstream sector.