Thursday, April 6, 2017

59 Tomahawk Missiles, Proportional Response, T+75 -- April 6, 2017

I will leave the discussion regarding US military response to others elsewhere. Enough said on this particular blog. But it will take all I have to refrain from commenting. For the archives.

I was not aware that Syria was a big crude oil producer but maybe I'm missing something.

Why I love to blog. From a post on December 19, 2016:
5. Observation. George Will made this observation. Obama is the most loquacious president in modern history. He asked a panel of four journalists if any of them could remember one -- just one -- memorable line made by Obama. No one could think of any. I thought of -- "If you like your doctor, you can keep our doctor." Or, "I set a red line at Syria using chemical weapons."
Making the rounds on social media now:

Second Consecutive Day, Daily Activity Report Posted Late -- April 6, 2017

No wells coming off confidential list Friday.

Active rigs:

Active Rigs492894192187

One new permit:
  • Operator: Liberty Resources
  • Field: Gros Ventre (Burke)
  • Commens:
Nine permits renewed:
  • XTO (8): one Janice permit; four Kenneth permits; and, three Johnsrud permits, all in Williams County
  • BR: one Saddle Butte permit in McKenzie County
One producing well (a DUC) reported as completed:
  • 32330, 1,008, BR, CCU Dakota 8-2-16 TFH, Corral Creek, t3/17; cum -- 
That should be the last of the CCU Dakotan wells in this group. I track the CCU Dakotan wells here

Panama Regains Crown As Latin America's Fastest Growing Economy -- Expanded Canal -- Bloomberg -- April 6, 2017

Regular readers know that one of the burrs under my saddle is the slanted / shoddy / fake news reporting in The New York Times. For most recent rant, see this post from a couple of days ago. In that post I talked about The New York Times reporting on the expanded Panama Canal.

It turns out that, as predicted, the expanded Panama Canal has had a considerable effect on two countries. First, the US is going to really, really benefit from the expanded Panama Canal. With regard to LNG exports, it already has. RBN Energy has blogged about this on many occasions. Expanded cargo terminals along the Texas-Louisiana coast, and the large cargo terminals along the US east coast (e.g., South Carolina) are already taking advantage of the expanded Panama Canal.

The second country to have really benefited from the expanded canal is, of course, the country itself. A huge "thanks" to Don for sending me this link over at Bloomberg (and if it's "in Bloomberg, it must be true): Panama Seen Regaining Crown as Region's Fastest Growing Economy. Some data points:
  • increased trade through the Panama Canal will drive 5.8% growth
  • Panama will regain its crown as Latin America's fastest growing economy this year on a surge in trade through the newly-expanded canal
  • no concerns about global trade policy comments being made by President Trump 

Saudi Arabia's Travails Continue -- April 6, 2017

Before reading the story below, take another look at Saudi's reserve assets. I just love looking at those graphs.

Now for the newest story, which certainly:
  • won't help relations between Russian and Saudi Arabia (they need each other to support cut in production to raise prices; Russia won't play along; Saudi Arabia in deep doo-doo)
  • won't help Saudi's bottom line
Saudi Aramco says it will cut pricing for Europe where Russia dominates. From Bloomberg. The headline says it all. No more comment needed. Just go back and look at the graphs. LOL.

Rigzone is curious, also, what folks think Brent will be selling for by the end of the year. Via twitter, a poll:

Don Rickles
1926 - 2017

The Market And Energy Page, T+75 -- April 6, 2017

Yahoo!Finance banner: 7-Eleven buys Sunoco stores; Costco sales jump. 

WTI: solidly above $51, again.

Staggering: I've always liked this graph; I've seen it before but have never posted it. Via twitter:

Chevron pivots to Permian. Mega-project era fades -- Reuters. Data points:
  • Chevron is "hitting the accelerator on developing the company's vast Permian Basin holdings
  • plans to make the Permian one of Chevron's biggest ventures
  • some of the best things in Chevron's portfolio: shale -- the CEO
  • their Permian has been owned a long time; free of royalties to landowners
  • owning this land outright gives Chevron a cost advantage over rival Permian producers
  • within the next decade, plans to grow the Permian eightfold to more than 700,000 bopd
  • by the end of 2018, will add 9 more rigs to the already 11 rigs it has in the Permian 
  • total recoverable reserves: more than 9 billion bbls; almost all of it owned outright by the company
  • market value estimated to be $43 billion (CEO's estimate): makes it more valuable than other Texas producers
  • Chevron does not hedge oil production
  • will boost spending in the Permian by 67% to $2.5 billion
  • no concern about peak oil demand for at least the next 20 years -- CEO

Unemployment Claims: Biggest Drop In Nearly Two Years -- The Political Page, T+75 -- April 6, 2017

Purely a business decision: Aetna "pulls out" of Iowa

Purely a political decision: Nunes steps aside.

Purely wonderful: Amazon will create 30,000 part-time jobs

Jobs. From CNBC:
  • better than expected
  • biggest drop in nearly two years
  • largest since the week ending April 25, 2015 
  • estimate: 250,000
  • actual: 234,000
  • previous week: revised up 1,000
  • claims have now been below 300,000, a threshold associated with a healthy labor market for 109 straight weeks. That is the longest stretch since 1970 when the labor market was smaller.
  • the labor market is currently near full employment.
  • four-week moving average fell 4,500 to 250,000
  • the number of people still receiving benefits after an initial week of aid decreased 24,000 to 2.03 million in the week ended March 25
  • the four-week moving average of the so-called continuing claims fell 7,750 to 2.02 million, the lowest level since 2000 

2017 Geico Rock Award nominee:  Lonnie Golden, economics professor at Penn State University.
"There’s no clear association with the implementation of the “employer mandate” in Obamacare and the time trend in involuntary part-time workers, said Lonnie Golden, economics professor at Penn State University and author of that EPI report."
From MarketWatch today:
Seeking more flexibility, American workers are working from home and part-time, but these jobs often come with fewer benefits. In fact, the number of Americans working involuntarily part-time rose 45% since 2007 to 6.4 million, a December 2016 report by the Economic Policy Institute found. The EPI, a nonprofit think-tank in Washington, D.C., said the increase is almost entirely due to the inability of workers to find full-time jobs, leaving many workers to take or keep lower-paying jobs with less consistent hours to make ends meet. And more than half (54%) of the growth in these involuntary part-time jobs between 2007 and 2015 were in retail, leisure and hospitality industries.

Traders Still Bullish On Natural Gas -- RBN Energy -- April 6, 2017

Active rigs:

Active Rigs492894192187

RBN Energy: US natural gas storage injection and inventory scenarios for 2017.
Considering that most of our scenarios lead to relatively bullish outcomes compared to last year, it’s no wonder that the bulls have been “hangin’ on” to $3.00/MMBtu pricing in the futures curve, even as weather has remained mild. That said, there are still several curve balls that could knock the market off its current, generally bullish course. For instance, on the bearish side, production could roar back faster than expected in the second half of the year. On the bullish side, exports or U.S. consumption also could ramp up more than we assumed. But what we do know from the scenarios is that the year-on-year deficit in storage currently and the underlying supply/demand balance give the bulls a bit of an edge going into this injection season.
Scott Adams: the Syrian gas attack persuasion.