Tuesday, June 6, 2017

It Never Quits -- June 6, 2017

Platts: US crude #oil production will, for first time in nearly 50 years, climb to 10 mil b/d by March 2018 -- US EIA. The previous record was 9.6 million bopd in 1970.

Priceless! What a doofus!

EIA: global oil oversupply could return in 2018.  Well, duh.

Homer Simpson

We now know what happened to British Airways when the entire system went down for 72 hours.

Ohio's Out
From The Washington Post:
One of the nation’s biggest health insurers says it will not return to Ohio’s public insurance exchanges next year, a decision that could open more holes in the Affordable Care Act’s increasingly thin system for helping people buy coverage.
The move announced Tuesday by Anthem Inc. could leave shoppers in 20 counties without an option for buying individual coverage on the exchange unless another insurer steps in, according to data compiled by The Associated Press and the consulting firm Avalere.

Global LNG -- Check Out The Graphic At The WSJ -- June 6, 2017

Link here.
Behind the evolution is improving technology for moving gas as a liquid, which means it can go to many more places rather than simply where a pipeline runs. In addition, a glut of gas has producers working to develop new consumers all over the world. The result is growing flexibility in once-rigid gas contracts and a convergence in prices long dictated by local factors such as weather.

Due to the nature of the graphic, I can't bring it to the blog; you will have to go to the linked article.

Williston New Airport -- Things Keep Moving Along -- June 6, 2017

Williston Herald: FAA, city OK new use for grant money. Agency will direct almost $20 million of remaining land grant money to other areas of new airport. This probably would have happened regardless of who was president, but my cynical nature wonders if it might have been held up had Hillary been president. There's a new sheriff in town, a new philosophy in Washington, and I think that it trickles down. I may be wrong.

From the linked article:
The FAA’s initial land grant totaled $27 million, which was intended to be a ceiling on the amount the federal agency would make toward siting costs. These included not just land acquisition but site consultation and design engineering fees.

Williston ended up not needing quite as much as expected in the way of consulting and design fees. However, the land itself ended up costing a significant amount more than the market appraisal, which was $5,500 an acre.

“We all knew we had two tasks,” Mayor Howard Klug said. “One was to buy the land and the other was to be fair with the landowners. We always said we were going to be fair to the landowners out there. The price we finally paid reflects those two philosophies that we had.”

That leaves a remaining $18.6 million in the land grant. That money is available this budget year, and the FAA has now agreed it can go toward other areas of the project, including building the airport terminal.

“They don’t typically do that,” Tuan told Commissioners.

However, the timeline for getting this leftover money apportioned to the project is tight.

“Their fiscal year ends in September and they want to get this paperwork done right away,” Tuan said.

In general, however, the FAA will not pay much more than the market appraisal for the land — but in this case they have agreed to pay 61 percent of the acquisition costs, for a total of $8.4 million.
Tuan is earning his pay. Good for him.

At 52 Active Rigs; Hess Reports Three Completed Producing Wells (DUCs) -- June 6, 2017

Active rigs:

Active Rigs522682194189

Two new permits:
  • Operators: Resonance Exploration, WPX
  • Fields: Westhope (Bottineau), Reunion Bay (Mountrail)
  • Comments:
Three producing wells completed:
  • 31761, 736, Hess, HA-State-LW-152-95-1621H-1, Hawkeye, t5/17; cum --
  • 32484, 1,213, Hess, BB-Chapin A-151-95-0403H-4, Blue Buttes, t5/17; cum --
  • 32485, 1,016, Hess, BB-Chapin A-151-95-0403H-5, Blue Buttes, t5/17; cum -- 
Well recompletion:
  • 13428, no new data, Rim Operating, Skurdal 6-24, Hardscrabble oil field, Red River and Stonewall
    • Red River, t4/94; cum 591K 5/14;
    • Stonewall, t10/97, cum114K 12/13; now PNA

Historical Look At EIA Forecasts For 2017 US Crude Oil Production -- June 6, 2017

This is a most interesting graph, from John Kemp, via Twitter. This graph shows EIA forecasts for US crude oil production in 2017 beginning last January, 2016.

This graph speaks volumes.

For me, it speaks to the ingenuity and the entrepreneurial spirit of US companies and their workers.

And this is the current EIA forecast for US production of crude oil in 2018.

The Market And Energy Page, T+137 -- June 6, 2017

Apple: Apple may or may not have hit a home run yesterday, but if not, it certainly came close. Generally following any WWDC keynote speech, there would be overwhelming disappointment reflected in the comments at Macrumors. Not this time. Overwhelming positive comments. In addition, the business media is also very positive. Usually AAPL drops significantly after any WWDC keynote speech. Yesterday the drop in AAPL shares happened before the keynote and was incredibly minimal. Today, AAPL is actually very slight up in a down market.

Apple HomePod: "first listen" impressions -- INCREDIBLE: Audio With Bass-Heavy Sound That Easily Beats Echo.

  • no surprise that Apple would have an incredible speaker
  • home pods
    • Amazon: emphasizes comsumerism
    • Google: emphasizes data mining
    • Apple: emphasizes entertainment
  • not one analyst yet has mentioned this (of those I've heard/read): Amazon/Google do not have the eco-system in which to place their home pods; Apple is one huge eco-system
  • I was on the fence on whether to get Amazon's home pod, but now, without question, we will get the Apple HomePod
  • Apple fans eagerly look forward to any "new" hardware -- the Apple Watch was perhaps the best example
  • Apple must have thought it was not worth in-house R & D to develop own "over-the-ears" headphones; bought Beats
  • too expensive is a common complaint: that suggests to me the analysts have no clue on several levels 
    • there's a lot of money out there
    • those who buy Apple products are used to "high prices"
    • it's all relative: compare the price of HomePod to any other Apple hardware product: I believe there is nothing less expensive in the Apple orchard
    • anything less than $350 -- possibly $299 would have been okay -- would have suggested a "cheap" Japanese plastic speaker
    • it's going to be released during the holiday period -- used to be called "Christmas" -- it will fly off the shelves; it could be the season's #1 "must-have gift"
    • biggest risk to Apple: delayed availability, missing the gift-giving season

The Political Page, T+137 -- June 6, 2017

Hartford, CT, on the brink -- WSJ. Apparently the city has run out of other people's money to spend.

Oil Barely Avoids Going Under $47 -- June 6,2017

Active rigs:

Active Rigs502682194189

RBN Energy: great review of EPD. A must-read for those interested in this sort of stuff.

Disclaimer: this is not an investment. Do not make any investment, financial, travel, job, or relationship decisions based on what your read here or what you think you may have read here.

The Qatar: this is exactly what's going on -- Saudi Arabia is reasserting its traditional primary within the GCC. Saudi Arabia's power play leaves Qatar with little room to manoeuvre.
The Saudi dispute with Qatar is rooted in the region’s two biggest power plays. That a usually reluctant Riyadh would choose to open a highly public feud with the tiny Gulf state so soon after hosting Donald Trump and 40 other world leaders stems from a deliberate calculation within the ruling House of Saud that now is the time to consolidate its status.
Trump’s visit marked a return to business as usual for a bilateral relationship that had remained solid until Barack Obama’s second term. Until then, the US had underwritten the regional order for almost 70 years, assessing – contentiously – that the Saudi leadership had been a plank of regional stability. The pivot to Iran, which offered Tehran regional legitimacy in return for agreeing to wind back its nuclear programme, changed all that. For three years, a troubled Riyadh felt as though its wings had been clipped.
Unable to guarantee the backing of a superpower, it looked on as Iran made gains in Syria, Iraq and Lebanon while also reaching out to other allies such as Egypt – and Qatar Successive US administrations had known what they were going to get with the Saudis and most of the Gulf. That has increasingly not been the case with Qatar. The former British protectorate, now the world’s wealthiest country per capita, had not played by the same rules, especially vis a vis its approach to Iran and the Muslim Brotherhood.
US vs OPEC: one million bbls of crude oil are leaving US ports each day; OPEC has not grappled with this yet. From Rigzone.
After a 40-year absence, the United States began shipping its crude around the world in January 2016, but the importance of the occasion is something OPEC hasn’t quite grappled with, experts say. Rather, OPEC’s focus remains on revenue, if not market share, to keep the world’s crude supply and demand in balance.
And once the nine-month extension of production cuts expires next March – and if global oil benchmarks still haven’t busted through to remain above $50 for a significant period of time – the club may see that it was simply not enough.
More than 1 million barrels of oil are leaving U.S. ports each day, noted Jamie Webster, senior director at the BCG Center for Energy Impact. Petroleum product exports are north of 3 million barrels of oil per day.
Jet fuel.
The amount of jet fuel consumed by U.S. airlines increased in both 2015 and 2016, although jet fuel use in 2016 remained 11% lower than its level a decade ago.
Jet fuel use was lower despite the fact that the number of passengers traveling on U.S. carriers in 2016 was 7% higher than in 2007. U.S. airlines with annual operating revenue of more than $20 million—accounting for virtually all of the value of all U.S. airline operating property and equipment—consumed 17.7 billion gallons of fuel in 2016.
Annual growth in jet fuel consumed by U.S. airline carriers was 3% in 2015 and 2% in 2016—the two highest growth rates since 2004. --- EIA