The Million Dollar Way (The Bakken Oil Blog): 07/06/17

Thursday, July 6, 2017

Not Much In The Daily Activity Report -- July 6, 2017

Active rigs:

$45.33	7/6/2017	07/06/2016	07/06/2015	07/06/2014	07/06/2013
Active Rigs	57	31	76	191	188

One new permit:

Operator: Foundation Energy Management, LLC
Field: Camel Hump (Golden Valley)
Comments:

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Drawdown / Re-Balance

Updates

July 7, 2017: oil prices plunge 3% as signs of oversupplied market persist.

The S&P 500 energy index sinks to its lowest level since April 2016, with U.S. crude oil now -2.9% to $44.20/bbl following EIA data that showed continued strength in U.S. oil production in the final week of June just as OPEC exports hit a 2017 high, casting doubt over efforts by producers to curb oversupply.

Original Post

US crude oil stockpiles drop 6.3 million bbls this past week. What does that mean? Only 58 weeks until US crude oil is "re-balanced."

Week	Date	Drawdown	Storage	Weeks to RB
Week 0	Apr 26, 2017		529.0	180
Week 1	May 3, 2017	0.9	528.0	178
Week 2	May 10, 2017	6	522.0	29
Week 3	May 17, 2017	1.8	520.2	95
Week 4	May 24, 2017	4.4	515.8	38
Week 5	May 31, 2017	6.4	509.9	41
Week 6	June 7, 2017	-3.3	513.2	60
Week 7	June 14, 2017	1.7	511.5	63
Week 8	June 21, 2017	2.5	509.0	62
Week 9	June 28, 2017	-0.2	509.2	71
Week 10	July 6, 2017	6.3	502.9	58

Trump Suffers "Major Setback" Before The End Of His First Year In Office -- Bloomberg -- July 6, 2017

From Bloomberg:

A seven-year, $7.5 billion effort to build a first-of-its-kind “clean coal” power plant in Mississippi is officially over.

Mississippi regulators ordered utility owner Southern Co. on Thursday to come up with a deal that’ll have the Kemper plant -- once hailed by the Obama administration as the future of coal -- running as a natural gas-fired generator instead. That ratified Southern’s June 28 proposal to pull the plug on using coal there.

The ruling seals the fate of the Kemper plant, and memorializes the state utility commission’s call last month for the company to give up on “unproven” technologies at the plant. It also assures that customers won’t pay for the failure.

Almost three years after the plant began generating power with gas, Southern has been unable to put crucial coal-gasifiers into service.

The death of Kemper’s “clean coal” component represents a major setback for the very technologies that President Donald Trump has promoted as a way to help save mining jobs. It also marks the end of a high-profile project that was plagued by construction slowdowns, equipment failures and sliding gas prices. Kemper is already years behind schedule and more than $4 billion over budget.

Yup, a major setback for President Donald Trump.

By the way, under which president was this project started? Whatever.

The Kemper story is tracked here.

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And This Is The Problem, Folks --

Getting Caught With A Hand In The Proverbial Cookie Jar

From Joannenova.com:

The BOM got caught this week auto-adjusting cold extremes to be less cold. Lance Pidgeon of the unofficial BOM audit team noticed that the thermometer at Goulburn airport recorded – 10.4°C at 6.17am on Sunday morning, but the official BOM climate records said it was -10.0°C. (What’s the point of that decimal place?) Either way this was a new record for Goulburn in July. (The previous coldest ever July morning was -9.1°C. The oldest day in Goulburn was in August 1994 when it reached -10.9°C).

Apparently this was an automated event where the thermometer recorded something beyond a set limit, and the value put into the official database was the artificial limit. Since colder temperatures have already been recorded in Goulburn, who thought it was a good idea to trim all future minus-ten-point-somethings as if they were automatically “spurious”?

Yesterday, the BOM have acknowledged the error and at first deleted the -10.0 figure, replacing it with a blank space. Then today, after Jennifer Marohasy’s post, they’ve corrected it.

Texas Hyperdrive -- July 6, 2017

From The New York Times, Texas hyperdrive:

In a twist that would have been unthinkable only two years ago, the oil tanker that arrives in China today may be carrying crude that left the South Texas port of Corpus Christi instead of Saudi Arabia.

Chinese drivers most certainly don’t care where their fuel comes from, but the export of American crude oil to dozens of countries over the last year is the latest chapter in a remarkable turnaround for the American oil and gas industry, about the only good news in three years of plummeting commodity prices, bankruptcies and layoffs.

For 40 years it was virtually impossible to sell American oil to any country except Canada because of an export ban that was a bedrock of United States energy policy. The Obama administration slowly loosened the ban and Congress finally ended it in late 2015 in a compromise that also extended tax credits for renewable energy.

Oil exports grew slowly through most of 2016, but this year there has been a surge reaching 1.3 million barrels a day — roughly 15 percent of domestic production — which even at today’s depressed prices is worth more than $1.5 billion a month.

Meanwhile, Warren Buffet is ready to announce the purchase of a huge Texas utility:

Oncor, one of the largest utility companies in the US, says it serves 10 million customers across Texas. It earned $935 million in operating revenues and $73 million in net income in the quarter ended March 31.

Berkshire Hathaway Energy owns electricity and natural-gas utilities across the US. Berkshire's acquisition would value Oncor below the $18.4 billion that NextEra had agreed to pay before that deal was halted by regulators.

Job Watch -- Private Sector Jobs -- Big Miss; Meanwhile Unemployment Claims Unexpectedly Jump -- July 6, 2017

Unemployment: holding steady.

The unemployment rate is forecast steady at a 16-year low of 4.3 percent. It has dropped five-tenths of a percentage point this year and matches the most recent Fed median forecast for 2017.

Jobs miss - CNBC:

forecast: 185,000
actual: 158,000

Unemployment claims: unexpectedly jumped

for first time, rose to 248,000
forecast: a dip to 243,000 from the prior unrevised 244,00
actual: 248,000
four-week moving average: 243,000; up 750 from prior week

Woulda, coulda, shoulda: one wonders what the numbers would have been had we had health care issue resolved and tax reform in place.

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Back To The Bakken

Active rigs:

$45.96	7/6/2017	07/06/2016	07/06/2015	07/06/2014	07/06/2013
Active Rigs	57	31	76	191	188

RBN Energy: crude output, petrochemical growth drive Enterprise Products Partners' margin rise.

Midstream giant Enterprise Products Partners (EPD) has attracted significant investor interest because of its simplified structure, 51 consecutive quarters of dividend growth and strong coverage — $2.7 billion in retained cash in the past three years.

The company, with a market capitalization of $58 billion, has also quietly continued to build out its large integrated midstream network despite the plunge in commodity prices, investing almost $18 billion in organic growth projects and acquisitions in 2014-16.

The end result is impressive: Enterprise is now connected to every major U.S. shale basin, every U.S. ethylene cracker and 90% of the refineries east of the Rocky Mountains.

As a result, the company is well positioned to benefit from the recovery in oil and gas production, especially in the Permian Basin and Eagle Ford Shale; the surge in hydrocarbon exports; and the rapid growth of the U.S. petrochemical industry.

For The Record -- Earthquake Felt In Lakeside,MT, At 12:35 A.M. July 6, 2017

Updates

July 6, 2017: strongest earthquake for Montana in 12 years.

July 6, 2017: NBC Montana. From the Missoulian:

A 5.8-magnitude earthquake that hit western Montana early Thursday morning was felt from Missoula to Billings and some surrounding states.

The epicenter of the 12:30 a.m. quake was about 6 miles south of Lincoln, originating from a depth of nearly 3 miles underground, according to a preliminary report from the U.S. Geological Survey.

The USGS recorded at least nine more tremors in the same area within an hour of the initial quake, and they ranged in magnitude from 4.9 to 3.1.

The initial earthquake was strong enough to knock items off of walls and shelves in Helena and Missoula. Lewis and Clark County Sheriff Leo Dutton said Lincoln lost electricity as a result of the quake, but the power has since been restored. A gas leak was reported in Helena, according to the National Weather Service.

Later, 1:28 a.m. Mountain Time, July 6, 2017: another tremor; very short; table shook but nothing more.