The Million Dollar Way (The Bakken Oil Blog): 04/26/17

Wednesday, April 26, 2017

Meager Daily Report From The Bakken -- April 26, 2017

Active rigs:

	4/26/2017	04/26/2016	04/26/2015	04/26/2014	04/26/2013
Active Rigs	48	26	84	182	187

Wells coming off confidential list Thursday previously posted.

Six new permits:

Operators: Enerplus (5), EOG
Fields: Moccasin Creek (Dunn); McGregory Buttes (Dunn); Parshall (Mountrail)
Comments:

That was it.

Are They Kidding? On US Inventory News, Crude Oil Prices Surge -- 17 Cents/Bbl -- April 26, 2017

These two screenshots were taken within 30 seconds of each other, taken from Yahoo!Finance.

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London Review of Books

Just when I was about to cancel my subscription to London Review of Books (or, more accurately, simply not renew), the editors publish a very, very good issue. I am impressed. I have not had time to read much of it so I do not know how much the London folks are still obsessed with the Trump election/presidency, but at first glance, they have moved on to a great extent.

It appears that I will enjoy many, many of the articles. The very first article is how the EU has really impacted Britain. Cadbury, the chocolate company that everyone associates with England, moved to Poland "recently." It's quite a sad story for the Brits; and a great story for the Poles. But that's the EU, picking winners and losers, I guess. Most essays in the London Review average about three to four very dense pages, I suppose. This essay goes on and on and on, six full pages or thereabouts, and one has to turn six pages (13 single pages) to get from the beginning to the end. That's a bit over the top, even for a story on Cadbury, I would think. And it was an essay, with nothing to do with any book review.

The second story is on Trump's border wall, and a review of a book, so that's okay. It's a wash: anti-Trump, but a book review.

Then an essay (no book review) on Fritz Lang. Awesome. I look forward to reading it.

My favorite essay / book review will probably be Peter Green's review of "class war" and the history of ancient Greece. There are few things that the Brits are more focused on than Trump and one of them would be classical Greece.

Then an essay on the "Bensons in Victorian Britain: a very queer family indeed, being the subtext. I can hardly wait. The Brits are also obsessed with homosexuality and one certainly wonders if this essay will be all about that.

I have no idea what "Slammed by Hurricanes" by Jenny Turner will be about. Then an essay on Michelangelo and Sebastiano. Okay. I am familiar with one of the two. The next essay, "I'll Have To Kill You," by J. Robert Lennon is a book review/essay and hopefully nothing to do with US politics or the recent election.

And this would have been a great essay / book review -- a review of politics as Shakespeare staged his plays, but a quick glance suggests the writer does not know the "real" Shakespeare and thus whatever he/she says (in this case, a "he": Blair Worden, assuming Blair is a man's name) will fall short of what he/she could have said about the subject. Knowing the "real" Shakespeare will help connect a lot of dots that Blair most likely missed.

I don't plan on reading a review of Deaths of the Poets but it's always possible. I enjoy almost any subject if the writing is good.

Julian Barnes' diary is very long this time. The opening does not interest me, but again, who knows. I may find that I enjoy it.

US Crude Supplies Post Biggest Weekly Fall Of The Year -- Third Week In A Row For Falling Inventory -- April 26, 2017

Link here.

But that didn't help oil prices which actually fell back. Why? Unexpected inventory increases for gasoline and distillates.

How much did oil inventories fall? Remember, the US has over 500 million bbls of inventory and 32 days of supply. Historically, the US has done just fine with 350 million bbls of inventory and 21 days of supply.

So, how much did crude oil inventories fall? Threepointsix (3.6) million bbls. This was the largest weekly decline so far this year. The forecast ranged from a about a one-million bbl gain to a one-million bbl decline.

The gasoline inventory increase is described as "glaring." Gasoline stockpiles rose by 3.4 million bbls; distillage stockpiles were up 2.7 million bbls. At least one senior petroleum analyst said "this is rather early to see such large builds."

So, I assume the price of gasoline will drop this week. LOL.

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Meanwhile, The Permian Is Expected To Keep Growing

From the EIA:

Crude oil production in the Permian Basin is expected to increase to an estimated 2.4 million barrels per day (b/d) in May, based on estimates from EIA’s Drilling Productivity Report.

Between January 2016 and March 2017, oil production in the Permian Basin increased in all but three months, even as domestic crude oil prices fell.

As production in other regions fell throughout most of 2015 and 2016, the Permian provided a growing share of U.S. crude oil production.

With rising oil prices over the past year, the Permian continues to be attractive to drillers, as reflected in rising rig counts. As of April 21, 2017, the number of rigs in the Permian Basin reached 340, or 40% of the 857 total oil- and natural gas-directed rigs operating in the United States. The Permian rig count reached as high as 568 in late 2014 before falling to a low of 134 in spring 2016. --- EIA

The Energy And Market Page, T+95 -- April 26, 2017

Ivanka wins: Energy Secretary says US should "renegotiate" the Paris Accord -- will recommend to the president that US push the European nations to take on a larger share of emissions reductions. Perry is not the sharpest knife in the drawer.

GDP watch: President Trump tweets 1Q17 GDP at 1.6%. Interestingly, the government won't release that number until 8:30 a.m. two days from now.

Will they or won't they: increase its dividend? We're all watching ExxonMobil today. [Update: XOM raised its dividend from 75 cents/quarter to 77 cents/quarter; shares fall in price; some had expected an increase in the dividend to 78 cents/quarter -- it is amazing any dividend at all, but "they" needed to protect share price; a 2-cent raise matches last year's raise, which was the lowest ever, or at least in recent memory.]

Trump rally continues: third day in a row the market rallies. Today, there were ~~229~~ 253 issues on the NYSE that hit new 52-week highs; only 6 issues hitting new lows.

Boom: Fiat Chrysler profit jumps 34%.

Distillate export boom: keeping US refineries busy, at Reuters. Data points:

offsets warm-winter in the US
distillate fuel exports rose to a record 1.4 million bbls per day in most recent week's data
averaging 1.1 million bpd
distillates: home heating fuel, diesel fuel

Ouch: oil service costs could rise 15% this year -- Wood Mackenzie. Data points:

oil field service costs could jump 15% this year over
price for some equipment and services could possibly rise as much as 40%
unlikely to charge the same prices they got in 2014, before oil prices collapsed
in other words: services and equipment costs will follow the price of oil

Vaca Muerta. More "muerta" than "vaca." Bloomberg. Data points:

one of the largest shale formations outside of North America
Argentina says "lightning fast" growth likely
analysts disagrees: Vaca Muerta lacks infrastructure
drilling costs run 30% + higher than in the US

Reality: Bloomberg says oil will fall below $40 if OPEC cuts are not extended. My hunch: Goldman Sachs will say the same thing. And almost everyone else.

Unsung Gulf of Mexico tracks new crude oil production record, Rigzone. Previously posted by RBN Energy and linked earlier. Pretty cool for RBN Energy.

Far from the $40,000 per acre land rush for shale in the Permian Basin, operators in the Gulf of Mexico are toiling offshore to outpace their own production records.

In January, Gulf of Mexico (GOM) production totaled 1.75 million barrels per day, less than a percentage point away from the previous record set in 2009, according to Housley Carr, an analyst at RBN Energy LLC. Within the next month or so, the 2009 record is expected to fall.

By 2018, the U.S. Energy Information Administration (EIA) expects a total of 1.9 million barrels per day in 2018, Carr noted in an April 24 report.

“Admittedly, that’s an increase of only [300,000 barrels per day] from 2016, which might not be groundbreaking news, but it sure puts the kibosh on any suggestion that production off the coasts of Texas, Louisiana, Mississippi and Alabama is dead in the water,” he said. “It’s not – by a long shot.”

Bust. US Steel down almost 20% in two days, I think. I don't follow but happen to see this on CNBC.

The Political Page, T+95 -- April 26, 2017

Boom. Coming. Oil companies "say" EV car boom is coming and is "real." Says the surge will cause demand for oil-based fuels to peak in the 2030s.

Trump effect: Twitter monthly users beat forecasts; shares spike. Twitter shares surged more than 11% today. Meanwhile, this is The Washington Post headline today: Trump tweets don't help: 1st Twitter revenue drop since IPO. No one has any idea how Twitter will do going forward but Amazon.com did not show any profit for years after it went public. The Wall Street Journal has a nice article on this story also.

Ryan: GOP will fund Planned Parenthood; won't fund the wall.

Just doesn't "get it." Steve Liesman's views on Trump not attending this year's White House Correspondents' Dinner. Trump has it right. To call this one night of detente between the press and the president suggests Liesman has not been paying attention. He certainly is not watching YouTube. Thirty-eight seconds into this video: detente? Hardly think so.

Active Rigs To 48 -- April 26, 2017