Monday, February 6, 2017

Platts Forecasts Another 1.2 Million-Bbl Build in Gasoline Stocks Next Reporting Period; Huge Jump In 1Q17 GDP Forecast -- February 6, 2017

Note recent post on gasoline demand.

Platts reports today, Monday, February 6, 2017, it expects US gasoline stocks to rise another 1.2 million bbls when the data is presented later this week. The four data point/estimates:
  • gasoline stocks: to rise 1.2 million bbls
  • distillate inventories: to rise 1.1 million bbls
  • refinery utilization: to remain unchanged (has slowed recently but has been higher than normal for this time of year)
  • crude oil stocks: to increase 2.5 million bbls
We'll know later this week how their projections/estimates came out.


Latest forecast for 1Q17: 3.4 percent — February 1, 2017
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2017 is 3.4 percent on February 1, up from 2.3 percent on January 30, 2017.
After this morning's ISM Report On Business from the Institute for Supply Management and the construction spending release from the U.S. Census Bureau, the forecasts for first-quarter real personal consumption expenditures growth and real private fixed investment growth increased from 3.0 percent to 3.8 percent and 4.7 percent to 8.0 percent, respectively.

Atmospheric CO2

Huge jump from January, 2016, one year ago.
  • 406/1,000,000 this year. 
  • 402.5/1,000,000 this year.
3.5 ppms jump in one year.

3.5 / 402.5 = 0.87% jump in atmospheric CO2 in one year. At this rate, we could hit 410 ppm by next January, 2018.

Saudi Arabia Foreign Exchange Reserves Continue To Drop -- February 6, 2017

Wow, I love it when a story comes together or the dots connect.

Earlier this evening, a reader sent me a link to a Bloomberg article: US east coast has a growing appetite for foreign oil. I responded by saying Saudi Arabia must really be undercutting the price of Bakken to make those deals. That's fine with me if Saudi Arabia wants to continue draining their foreign exchange reserves by giving their oil away.

I was curious if that data point - Saudi Arabia's foreign exchange reserves -- has been updated.

First, note the previous post on this subject. At the link, note the projection for December, 2016 (at the bottom of that post).

Now, let's turn to more recent data; data for December, 2016, has just been posted.

Again, it's hard to read the graph, but, it appears:
  • October, 2016: 2,040,000 million SAR (conversion, 1.00 SAR = 0.2666 USD) = $543,864 million
  • November, 2016: 2,020,000 million SAR = $538,532 million
  • December, 2016: 2,010,000 million SAR = $535,866 million 
  • Projection, at the same pace, the January, 2017, will drop below 2,000,000 million SAR (or come close)
  • November - October: decline of $5.332 million = $5 billion decline, month-over-month;
  • December - November: decline of $2.666 million = $3 billion decline, month-over-month;
John Kemp recently estimated Saudi Arabia was hemorrhaging $7 - $9 billion/month which seems to be in the ballpark of the above figures.

If the "$3 billion" figure is close, the decline in monthly foreign exchange reserves has dropped off markedly. But it's still not a pretty picture.

Diclaimer: I often make simple arithmetic errors. Reading these graphs is very problematic. There are numerous places I could have made errors.

I assume John Kemp will soon be updating his own figures. If I see them, I will post them.

Eastern Canadian Crude Oil On Its Way To China
Due Partly To A Shrinking Middle East Supply -- OPEC-Led Production Cuts

Platts is reporting:
  • first-of-its-kind voyage: into the Caribbean and then on to China
  • mostly likely via a VLCC
  • 710,000-bbl cargo; 30.56 API, 0.28% sulfur
  • will likely be co-loaded with Venezuelan extra-heavy sour crude Merey (16 API; 2.45% sulfure)
  • unique arbitrage due to
  • depressed shipping rates
  • Brent's narrowing premium to benchmark Dubai
  • a shrinking Middle East supply due to OPEC-led production cuts

Compare The North Dakota Bakken Oil Pads With The Protest Camp -- February 6, 2017

Wait until this all floods this spring.

Link here. Pretty much tells me all I need to know how much they respect their land, their water. Maybe George Soros will help set up a "GoFundMe" site to help pay for the cost of clean-up.

Now the well pads in North Dakota: One drop of oil on any of these pads, a report must be provided to the state, and immediately cleaned up.

A close-up of a Bakken oil pad:

Indian, EU Navigation Satellite Clocks Failing

Link here.

China uses the same technology as India, EU.

Tick-tock, tick-tock.

The Closer, T+17; Hess To Report Another BB-Eide Wells Tuesday; Rigs Hold Steady -- February 6, 2017

Active rigs:

Active Rigs4042137191182

One well coming off confidential list Tuesday;
30507, see below, Hess, BB-Eide-151-95-3328H-6, Blue Buttes, producing, was supposed to come off confidential this date; did not;
One new permit:
Two producing wells (DUCs) reported at completed:
  • 30731, 173, Slawson, River Rat Federal 6-23-14MLH, Big Bend, t12/16; cum --
  • 30929, 1,989, Whiting, Two Shields Butte 1-24-12-1H, Mandaree, t1/17; cum -
Ten (10) permits cancelled:
  • SM Energy (8): a Marlyn, a Laura, a Bob, a Maria, a Kelly, a Kade, a Macey, and a Jeffrey permit; all in Divide County (remember: SM Energy is leaving North Dakota, as I understand it)
  • Statoil: a Wright permit, in Mountrail County
  • HRC: a Fort Berthold permit, SESW 35-148-94; Dunn County
Six (6) permits renewed:
  • MRO (6): two State permits (Willard and Loland); a Mathias, a Coan, a Bollete, and a Nisbit permit, all in Dunn County
30507, see above, Hess, BB-Eide-151-95-3328H-6, Blue Buttes:

DateOil RunsMCF Sold

CORRECTION: Huge IP Reported By EOG Is A Typo -- February 6, 2017


February 24, 2017: yes, it was a typo. See EOG's report here.  

Original Post 

See this post: A reader was kind enough to point out the likely typo.

I'm embarrassed; I should have questioned it myself. Again, my irrational exuberance about the Bakken got ahead of me.

Monday Morning Reading -- Nothing About The Bakken -- February 6, 2017

First of all, another big "thank you" for a reader sending me that link to the Foreign Affairs article on Donald Trump and Jacksonian populist nationalism. That article helps immensely when reading the post-election issues of The New Yorker.  I mention the Foreign Affairs article, again, here. Just reading that article and taking notes on it has made in infinitely easier to get through The New Yorker. Once one is able to actually read TNY one finds, again, that it really, really has some good writing. Their politics and their world myths may be completely wrong, but it is so much easier to read when one realizes the writers have no clue and why they have no clue.

Back to TNY later.

But first some notes on Last Girl Before Freeway: The Life, Loves, Losses, and Liberation of Joan Rivers, Leslie Bennetts, c. 2016. I generally have no interest in the biographies of current celebrities but Joan Rivers has always fascinated me. The facts in the introduction in this book are quite extraordinary:
  • age 55: after a lifetime of earning millions, she was in debt $37 million
  • her husband had squandered her wealth on bad investments
  • she had a gun on her lap and was contemplating suicide
  • she stopped when she asked herself who would take care of her Yorkie
  • no one was hiring her any more; she was washed up
  • she decided to press on 
Let's see, from wiki:
  • born 1933
  • 55 years old: 1988
What happened to Joan in the 1980s and the comeback? From wiki:
  • 1983: Carnegie Hall
  • 1984: UK's TV show An Audience With Joan Rivers
  • 1986: longtime friendship ended with Johnny Carson
  • 1987: her nighttime show -- behind-the-scenes disaster
  • 1987, May 15: Rivers and husband fired by Fox
  • 1987, August 14: Rivers' husband commits suicide
  • 1987: Nancy Reagan helps Rivers
  • 1988: $37 million in debit 
  • 1989: The Joan Rivers Show -- five years; 
  • 1990: Daytime Emmy for that show
  • 1994: hosts E! Entertainment Television pre-awards show for the Golden Globe Awards
  • 1995: hosts the show itself
  • 1994: nominated for a Drama Desk Award as Outstanding Actress in a Play and a Tony Award for Best Actress in a Play (a play she co-wrote and starred in)
  • 1997: hosts own radio show in NYC
  • 2003: 3-year, $8 million contract to cover award shows' red carpet events for the TV Guide Channel
A word I would not have known had I not read British history: droit du seigneur, p. 83.  Rivers tells how she broke into the big time.

Chapters eight, nine, and ten, hickory, dickory, dock: the story of the Joan Rivers-Johnny Carson feud.
Hickory, dickory, dock,
The mouse ran up the clock,
The clock struck one ...
From The Book of Numbers, John H. Conway and Richard K. Guy, c. 1996, page 2:
One such system is:
wan, twan, tethera, methera, pimp,
sethera, lethera, overa, dovera, dick,
wanadick, twanadick, tetheradick, metheradick, pimpdick,
setheradick, letheradkic, hoveradick, doveradick, bumfit,
wanabumfit, ...
Such rustic sequences appear in many countries. They are usually highly corrupted versions of the standard number systems of ancient languages.
Hickory, dickory, doc,
The mouse ran up the clock.
The clock struck one;
The mouse ran down.
Hickory, dickory, dock.
Probably "hickory," "dickory," and "dock" are the words for "eight," "nine," and "ten" in one of these systems (compare "hovera, dovera, dick"), while "eeny, meeny, miny, mo" mean "one, two, three, four" in another.
More can be found at wiki, elsewhere.

The New Yorker


February 7, 2017: I've mentioned many, many times that after years of off and on subscriptions to The New Yorker, I finally had to cancel the magazine last year -- it had turned into a mouthpiece for Hillary. I thought things might change after the election, but it seems the editor has doubled down. Now the Trump cartoons are on the front cover. Perhaps I was over-reacting?

A reader sent me a link to this CNN interview. I was not imagining things -- it's being reported even on CNN -- The New Yorker seems to be "hysterical" over the Trump presidency. I rarely visit the Rush Limbaugh site, and and only went there to see the CNN video -- it's a long piece, but the New Yorker reference is very, very early on: 

Original Post
I can't find it now, but in one of the articles I read today, the writer suggested (and probably quite accurately) that the moment Donald Trump decided to run for president was while listening to Seth Meyers at the 2011 White House Correspondents' Association Dinner. The writer noted that even President Obama's "words" at that dinner were beneath the dignity of the "dignity president himself." 

January 23, 2017:
  • "The Financial Page: Big Ticket Transit" by James Surowiecki, p. 21
    • NYC's recently opened Second Avenue subway
    • three stations and two miles of track: $1.7 billion
    • James sounds like a Trumper in his essay
  • "Personal History: My Father's Cellar, A Lifetime of Drinking" by John Seabrook, p. 22
    • seven pages
    • personal history of a most tragic history
  • "The Critics, On Television: Tragedy Plus Time, How jokes won the election, p. 66
    • four pages plus a full page graphic
    • I always find it amazing how folks who claim to "know" Trump so well don't get the joke (or the jokes) 
January 30, 2017:
  • "American Chronicles: Autumn of the Atom, How arguments about nuclear weapons shaped the climate-change debate" by Jill Lepore, p. 22
    • 6 pages 
    • I am not sure it's worth reading
February 6, 2017:
  • "The Financial Page: The Corruption Conundrum" by James Surowiecki, p. 21
    • eyes wide shut
  • "A Reporter At Large, The Avengers of Mosul, The desperate fight, block by block, to destroy, ISIS" by Luke Mogelson, p. 35
    • 26 pages with pictures
    • certain to be part of a future book
    • really, really good

Permian Update -- Filloon -- February 6, 2017


Later, 9:57 a.m. Central Time: why I love blogging. In the Filloon article linked below, a reader noted Brigham Resources, LLC, was mentioned. For the record, we mentioned Brigham Resources at the blog two years ago -- a big whoop! 
  • BEXP, founded by Ben "Bud" Brigham announced sale to Statoil, October 16, 2011
  • Ben "Bud" Brigham founded Brigham Resources in 2012
  • Brigham was back in the Bakken drilling by 2014  
Filloon: Permian update.

Hartstreet Oil: Permian Basin Production Analysis Comparison Of Concho And Occidental In Southern Reeves County

The Polling Page

In other news, via Twitter:

Gasoline Demand -- February 6, 2017

For quite some time I've been blogging about the plunge in gasoline demand. Over the weekend, Reuters finally had a story on the subject.

A reader may have provided a possible reason for the decrease in gasoline demand.

Start with this link: gasoline, winter-summer switch-over; April - May - June. Maybe the RBN Energy post today might be related.

No one has been able to explain the significant drop in gasoline demand over the past few weeks. It simply does not make sense: gasoline is very, very inexpensive; the economy is improving; this winter was one of the warmest on record (the huge winter storms that got a lot of press were short-lived; and regional; and, not a lot different than other years).

So, again, the plunge in gasoline demand makes no sense.

The big question, which a reader alluded to, has to do with this: where is the data being collected? Is gasoline demand collected at the hundreds of thousands of gasoline pumps across the US, or is the data collected at the relatively few wholesale crude oil storage sites that "feed" the US service stations?

I don't know.

Over the past decade, RBN Energy has had any number of stories on all the crude oil infrastructure (including the one today); refinery updates; storage facilities; etc, being put in place to meet the shale revolution. Perhaps the wholesalers now have storage capacity to  better "manage" (some would say "manipulate") the gasoline market.

We are now entering the government's mandated switch from winter-blend to summer-blend gasoline. The official date is May 1 of any calendar year for the switch-over, but the actual date is spread over two months across the nation for various reasons. California mandates an earlier switch-over, as early as April. Because of the logistics involved, most states are given until June 1 to make the switch. 

I don't know.

If the data is collected at the wholesalers' storage facilities, this would go a long way to explaining the decline in gasoline demand. A huge "thank you" to a reader for continuing the discussion.

Politics, T+17: February 6, 2017: Jacksonian Populist Nationalism -- Again

I thought we were finally "over it," but apparently not. The New Yorker was a mouthpiece for Hillary during the campaign; it became so bad, I finally cancelled my subscription. I thought after the election, TNY would move on, and for a few issues, things looked pretty good. Then the cartoon on the back page was a "Trump cartoon." This week I see TNY has placed a "Trump cartoon" on the cover. They just can't get over it, making American great again.

Trump's Really, Really Stupid Comment

Trump's really, really stupid comment. Why I love to blog.

I don't think this story will have legs, based on early Monday morning reporting, but Trump's "really, really, stupid comment" about the US not being so "pure" when asked a question about Putin by "O'Reilly" was seen as a "really, really, stupid comment."

Why would Trump make such "a really, really stupid comment"?

The answer:
  • Trump reads voraciously
  • Trump thinks in the "here-and-now"
  • Trump has (almost) "no filter"
  • Trump is three to four steps ahead of the press
This article was making the news during the same 24-news cycle that Trump was talking to O'Reilly. It explains almost everything. This all occurred under the Obama Administration:
The American military has failed to publicly disclose potentially thousands of lethal airstrikes conducted over several years in Iraq, Syria and Afghanistan, a Military Times investigation has revealed.
The enormous data gap raises serious doubts about transparency in reported progress against the Islamic State, al-Qaida and the Taliban, and calls into question the accuracy of other Defense Department disclosures documenting everything from costs to casualty counts.
In 2016 alone, U.S. combat aircraft conducted at least 456 airstrikes in Afghanistan that were not recorded as part of an open-source database maintained by the U.S. Air Force, information relied on by Congress, American allies, military analysts, academic researchers, the media and independent watchdog groups to assess each war's expense, manpower requirements and human toll.
Those airstrikes were carried out by attack helicopters and armed drones operated by the U.S. Army, metrics quietly excluded from otherwise comprehensive monthly summaries, published online for years, detailing American military activity in all three theaters.
Most alarming is the prospect this data has been incomplete since the war on terrorism began in October 2001. If that is the case, it would fundamentally undermine confidence in much of what the Pentagon has disclosed about its prosecution of these wars, prompt critics to call into question whether the military sought to mislead the American public, and cast doubt on the competency with which other vital data collection is being performed and publicized. Those other key metrics include American combat casualties, taxpayer expense and the military’s overall progress in degrading enemy capabilities.
If that's not enough, remember: President Obama -- the president, the US president, the US president against water-boarding, the Nobel Peace Prize winner -- "neutralizes" a US citizen with a drone in the Mideast. The Obama administration also put together the Yemeni strike plan, carried out most recently, that resulted in significant civilian "collateral damage."

I was disappointed that Trump spokesmen on Monday morning were unable to make the connection. Very disappointed.

Having said all that, Trump either needs to become a better communicator (unlikely to happen) or he needs to be more circumspect in what he says (equally unlikely). 

Jacksonian Populist Nationalism: It's Starting To Make Sense

The Foreign Affairs article helped me understand the Jacksonian populist nationalism a whole better.

Super Bowl Ad: USA Today's Ad Meter
Melissa McCarty's "Hero's Journey"

Link here.

As soon as I saw this ad, I said it would be #1. I was surprised it was not mentioned among the top 3 on Fox Business News this morning.

The Market, T+17: Great Photo In The Bakken -- February 6, 2017

For me personally, this may be the best picture of the day, sent to me by a reader.

Yesterday, while at McDonald's in Williston, north on the Million Dollar Way, a reader took this photo for four trucks carrying pipe. As the reader said, any photograph of more pipe in the Williston Basin is a great site.

On top of this: these are Western Star trucks! My son-in-law builds Western Star trucks in Portland, Oregon.

Always on the lookout for Western Star trucks. Hoo-ahhh!

DAPL Decision By The End Of The Week?

From Bloomberg: the decision could come by the end of the week. 

The Big Stories: Egypt

I will have to add "Egypt" to "The Big Stories" under "Natural Gas and Coal in a Post-Nuclear World."

From Bloomberg, Egypt will import a lot of LNG this year, but hopes to be self-sufficiency by 2018.

The Market

WTI: $53.73

Hasbro surging. Our granddaughter Sophia loves the Hasbro "princess" and "Frozen" toys.

The Opening, T+17: A New Wave Of Houston Crude Pipeline And Storage Infrastructure -- RBN Energy -- February 6, 2017

Active rigs:

Active Rigs4042137191182

RBN Energy: a new wave of Houston crude pipeline and storage infrastructure.
As U.S. crude production ramps back up and larger volumes flow to the Gulf Coast, competition is building among midstream companies for control over the final miles from pipeline to refinery or marine dock.
Nowhere is this more evident than the Houston area, where more than a dozen pipelines can deliver as much as 4 million barrels/day to the region’s 10 refineries as well as to export docks. Owners of the long-distance incoming pipelines—seeking to secure terminal, storage and dock fees—are making significant midstream investment in Houston, but smaller players are also developing assets. 
Scott Adams: Sam Harris induces cognitive dissonance in Ben Affleck.

For the good times, Tom Brady's fifth Super Bowl ring:

For The Good Times, Ray Price