Monday, July 31, 2017

Total OPEC Imports UP; Saudi Imports DOWN -- July 31, 2017

The most recent import; just posted. May, 2017, data.

Saudi Arabia crude oil imports into the US are down slightly:

But, overall OPEC crude oil imports into the US are up:

Machts nicht.

See if you can spot the problem?

As long as we're doing graphs, let's look at one more. US crude oil exports:

Fracking The Heck Out Of CLR's Candee 11-9H, #16509, Chimney Butte -- July 31, 2017

Link here.

Venezuela Imploding -- July 31, 2017

There are going to be a lot of articles in the mainstream media with regard to what might happen if the flow of Venezuelan oil is cut off. I've talked about this so much over the past several years in an indirect way, I have no interest in opining on what might happen with regard to Venezuela and oil. For now, I won't blog on that; I've simply grown too tired / bored with the subject. Perhaps for the archives, I might link headlines but that's about it. It will be a fascinating story to watch. I will blog about it eventually, I assume, but not for awhile.

Futures Mean Squat

Having said that, holy mackerel ... have you see equity futures this evening! The Dow 30 has been climbing all night; right now, Dow 30 futures are up 82 points; the Nasdaq up 21 points; and the S&P 500 is up 6 points (again, futures at 9:21 p.m. Eastern Time). [At 10:05 Eastern Time, Dow 30 futures are up 94 points. I've seen this movie before. By tomorrow morning, the market will open down. LOL.]

I can  hardly wait for the early morning presidential tweets. LOL.

North Korea Keeps Launching ICMB Missiles .. and No One Seems To Care...

... and no one is commenting on that, that no one seems to care. Not only does no one seem to care, but the stock market continues to surge despite the fact that North Korea is launching ICBM missiles on a daily basis, it seems. The most recent ones are able to reach the US, and the US military now suggests that within a year, North Korea will be able to launch these missiles with a nuclear weapon on top, like a cherry on a sundae.

This begs the question: would the market be hitting new records under these circumstances if a Jimmy Carter were president? if a Barack Obama were president? If a Gerald Ford were president?

I don't know. But for all the crap the mainstream media gives President Trump each day and for all the crap the opposition party gives President Trump each day, one gets the feeling that not only is everyone sleeping well at night because he IS president, but they are so comfortable with him as president at this particular time, they have no problem driving the market higher.

It doesn't hurt that he is surrounding himself with retired general officers who have served in South Korea and who have studied North Korea for decades.

The Apple Page

This past quarter (2Q17) is a "dead quarter" for Apple. No one cares what Apple reports this week; everyone is interested in the third quarter (3Q17) with the new iPhone release, and, of course, the fourth quarter -- the holiday quarter -- the big quarter for Apple.

But this was the great insight I heard on CNBC today regarding Apple. People shorting Apple are spreading the story/rumor that Apple might miss its launch date for the new Apple phone. Here's a little secret: no one cares. People are so used to delays in getting their new Apple products (for whatever reason) that a launch delay is  ... well, yawn.

Helping put this in perspective, of course, Tesla "always" misses its deadlines and no one cares, least of all Musk Melon.

There will be a lot of talk about Apple missing its iPhone launch date over the next few weeks.

And, no one will care. Next subject.


I really, really enjoyed the hour-long special on TCM tonight, a repeat showing of the 2017 recipient of the AFI Life Achievement Award, but how in the world did Diane Keaton ever win this award?

They're Reading The Blog -- July 31, 2017

From Investor's Business Daily:
Energy: Last week Royal Dutch Shell (RDSA) told investors that it expects oil prices to be "lower forever." We're still waiting for all those people who were only recently complaining about higher-forever oil prices to admit their mistake. It wasn't that long ago that President Obama was mocking Republicans for their "three-point plan for $2 gas: Step one is drill, step two is drill, and step three is keeping drilling."

He went on to say that "the American people aren't stupid. They know that's not a plan." Renewable energy, he said, was the only way to solve the "problem" of high oil prices.

And he kept pushing for new taxes on "old" energy to support federal subsidies for the energy supplies "of the future."

Of course, Obama wasn't the only one. There was endless talk about how Big Oil was making obscene profits while gas prices skyrocketed. There were calls for investigations into collusion among oil companies. Some wanted to bring back the Jimmy Carter-era "windfall profits tax."

Turns out drill, baby, drill was exactly what was needed.

Domestic oil production was skyrocketing even as Obama made those remarks — thanks to advanced drilling technologies that have opened up vast new domestic supplies to production.

The Energy Information Administration projects that, next year, U.S. oil production will average almost 10 billion barrels a day, which would beat the previous record of 9.6 billion in 1970. What's more, a quarter of this production is coming from one oil field: the Permian Basin in West Texas.
One might also ask where all those speculators are that are always being blamed for driving up prices of crude oil and gasoline. Many onshore oil companies have declared bankruptcy in the past year, and shares of XOM are trading at 52-week lows. Why aren't the speculators doing more to help these companies? Inquiring minds want to know. 

What a doofus

Eight New Permits; Five DUCS Reported As Completed -- July 31, 2017

Active rigs:

Active Rigs613574193180

Eight new permits:
  • Operators: Hess (5); Oasis (3)
  • Fields: Beaver Lodge (Williams); Banks (McKenzie)
  • Comments: Hess with permits for an E Burdick 5-well pad in SESE 19-155-95; Oasis with permits for a Berquist 3-well pad in NWNE 27-152-98
Interesting note:
  • Armstrong Operating has two wells plugged or producing, one Renville County (a Hanson well) and one in Stark County (a Frenzel well)
Five producing wells (DUCs) reported as completed:
  • 27419, 2,013, CLR, Garfield Federal 6-5H, Banks, t6/17; cum --
  • 27421, 2,032, CLR, Garfield 4-5H, Banks, t6/17; cum --
  • 30871, 284, BR, Curtis 21-16 TFH-3NH, North Fork, t6/17; cum --
  • 30872, 526, BR, Saddle Butt 21-16 MBH-3SH, North Fork, t6/17; cum --
  • 33148, 142,  STRI, 22-15 163-90B, Stony Run, t7/17; cum --

In cockpits, there is a fold-up seat between and behind the pilot/co-pilot seats: it's called the jump seat. You may have seen it in the movie, Catch Me If You Can.

Apparently Sophia was able to have her seat assignment upgraded.

Perhaps The Biggest Energy News Story Of The Week -- Nuclear Energy In The US Is Dead -- July 31, 2017


August 6, 2017: nuclear energy is dead -- NPR --
A decade ago, utility executives and policymakers dreamed of a clean energy future powered by a new generation of cheap, safe nuclear reactors. Projects to expand existing nuclear plants in South Carolina and Georgia were supposed to be the start of the "nuclear renaissance."
But following the decision last week by two utilities to scrap the expansion at the Virgil C. Summer Nuclear Generating Station in South Carolina, that vision is in tatters. There's now just one nuclear expansion project left in the country, its future is also uncertain. That remaining project is an expansion at the Vogtle Electric Generating Plant in eastern Georgia.
As recently as five years ago, then-Energy Secretary Steven Chu visited Plant Vogtle and declared the project the start of "the resurgence of America's nuclear industry" and a critical part of President Obama's energy strategy.
The two new reactors at Plant Vogtle were the first next-generation reactors in the country, and some of the first new reactors to be built in the U.S. in three decades. After the partial meltdown at Pennsylvania's Three Mile Island in 1979, the U.S. nuclear industry went into hibernation for more than two decades.
Then there were setbacks. First came the global financial crisis, which flattened the demand for electricity. Then fracking flooded the market with cheap natural gas. Renewable energy — especially wind power — also got more competitive.  
Later, 3:26 p.m. Central Time: see first comment. Apparently, other nuclear reactors on the east coast are also under scrutiny --
Potentially significant, related story playing out with the Millstone nuclear plants in Connecticut.
The two units provide over 2,000 MW capacity and the owner is saying they may shut down soon unless subsidies similar to those in Ohio and New York are forthcoming.
Original Post 

I've said many times on the blog that nuclear energy is dead. I never got any push back.

Today, the final nails in that coffin: The Washington Post reports that building of nuclear reactors in South Carolina has come to an abrupt halt. I'm not sure if this was a news story or an op-ed by The Post:
The long quest to revive America’s nuclear power industry suffered a crippling setback on Monday when two South Carolina utilities halted construction on a pair of reactors that were once expected to showcase a modern design for a new age of nuclear power.
The project has been plagued by billions of dollars of cost overuns (sic), stagnant demand for electricity, competition from cheap natural gas plants, and the bankruptcy of Westinghouse Electric, the lead contractor and the designer of the AP1000 reactor that was supposed to be the foundation of a smarter, cheaper generation of nuclear power plants.
Instead, the South Carolina reactors, along with two others under construction in Georgia, have demonstrated that the main obstacle to new nuclear power projects is an economic one.
The plants would be more viable if the federal government were to impose a tax on carbon as part of climate change policy, but that seems unlikely.
Killing these projects would not have been done if analyses did not show that natural gas was going to be available and affordable for at least the next 30 years.

With regard to a carbon tax, it certainly is not wind or solar killing nuclear energy -- anyone suggesting that has no clue how much wind/solar it would take to replace one nuclear plant -- there simply is not enough land for wind/solar to do that.

The reason story that is coming out of this story is this: GE and others are developing really, really good peaker generators to back up what little wind/solar energy offers.

Perfect Juxtaposition -- The Political Page, T+192 -- July 31, 2017

I cannot make this up. I'm watching CNBC: this advertisement is cut short by about 10 seconds ...

.... for this breaking news: Anthony Scaramucci OUT as White Communications Director, right after President Trump tweets ...

White House. Not. In. Chaos.

Yes, I cannot make this up.

And, again, one must ask why Anthony Scaramucci even lasted one day after that interview? The scuttlebutt is that Jared and Ivanka recommended Scaramucci to the president.

Scaramucci was out of the job less than six hours after the new chief of staff was sworn in.

Progressive soap opera.

Last man standing: Bannon. [Ten minutes after posting the "last man standing: Bannon" I see this article was posted three hours ago by Axios: Bannon working to destroy Scaramucci. Wow. Time to re-watch the Progressive Insurance commercial above.]

The Americal Division

During all the above chaos, President Trump was on television, live, awarding a military medal to a Vietnam veteran. The citation mentioned the "Americal Division." That was so neat to hear, for me; it's been awhile since I've heard that mentioned.

I wrote about the Americal Division before.  My father-in-law served in that division. His father arrived illegally in the US and was returned to Mexico; my father-in-law, born in the US, was allowed to stay and was raised by his aunt. He served at the very end of WWII; in the Korean War; and served two tours in Vietnam. His Japanese wife, my mother-in-law finally had enough of all the moves and settled in southern California until he finished his last tour in Vietnam. They enjoyed southern California for many years after retiring after 30+ years in the US Army. 

Time To Re-Look At A CLR Chimney Butte Eco-Pad -- July 31, 2017

First, review this post.

The well: now look at the recent production profile of this well on the same pad:
  • 16509, 484, CLR, Candee 11-9H, Chimney Butte, t6/07; cum 170K 5/17; FracFocus (33-025-00613) with no frack data as of July 31, 2017;
Recent production profile:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Random Look At CLR's Brandvik Well, #16460 -- July 31, 2017

The well:
  •  16460, 538, CLR, Brandvik 14-24H, Corral Creek, t3/07; cum 225K 5/17;
Coming back on-line: this well has been off-line since September, 2015. It recently came back on-line. Recent production:

Monthly Production Data:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

Graphics Have Been Added To The Update On An EOG Mandaree Well -- July 31, 2017

Link here.

European Refinery Shut Down Due To Explosion/Fire


August 1, 2017: this is Europe's largest refinery; earliest re-start, late August, 2017; Shell has also declared force majeure on supplies of solvents from Pernis, several of the company's customers said Tuesday.

Original Post 

Data points from Oil & Gas Journal:
  • a Shell refinery in the Netherlands (Rotterdam)
  • 400,00 bopd capacity
  • power outage over the weekend --> explosion --> fire --> decision to shut down entire operation
  • power failure occurred in a high-voltage power station


August 16, 2017: nope, I was right the first time. I guess I wasn't so dense. President Trump is upset that consumers don't pay taxes when ordering from Amazon. That's a bit of a lie. Third-party sellers do not collect taxes on their sales in (some/most/all) cases. But Amazon itself does charge state sales tax; collects that tax; and, reimburses the states on items that Amazon sells. Like many things, Trump is making a mountain out of a mole hill. South Carolina is suing Amazon for $12 million in back taxes for the first three months in 2016. Trump tweeted this early in the morning on August 16, 2017:

Amazon is doing great damage to tax paying retailers. Towns, cities and states throughout the U.S. are being hurt - many jobs being lost!
Trump's fascination with this issue is becoming tiresome.
Original Post
I finally get it. Wow, am I dense. I completely misunderstood President Trump when he said Amazon did not pay any taxes. I thought he was talking about charging taxes on products they sold. I'm not the only one. Brick-and-mortar retailers complain that Amazon has an advantage by not paying taxes, obfuscating the issue by suggesting that retailers have to charge sales tax at point of sale in most states whereas alleging that Amazon does not.

The whole thing is an apple-and-oranges issue.

Amazon collects state sales tax at point of sale on the products they sell (that is not always true for third party sellers selling through the Amazon site -- that's yet another issue).

The issue Trump has problem with: Bezos is the richest or second richest man in the world, and yet his main company, Amazon, as a whole, "generally" does not pay federal corporate income taxes because it "always" shows a loss.

I probably don't articulate it as well as I wish I could but I think it can be understood what I'm trying to say. The "light went on" when listening to an analyst talking about Amazon and the FANG stocks and Apple on CNBC this morning.

The Market And Energy Page, T+192 -- The Trump Rally Continues -- Dow Hits Record On Opening -- Just After Hand-Wringing Last Week; US Companies Post Profit Growth Not Seen In Six Years -- July 31, 2017


Closing: it looks like the Dow will hit a new all-time record at the close. WTI is solidly above $50; may close above $50.

10-year bonds: below 3%. 

Original Post 

Dow hits record high.... and barely noted on CNBC. Mentioned in passing, but the crawler is staying there: "record high for Dow." Wow. [Later: after a nice opening, the Dow 30 just keeps rising throughout the day; now -- 12:56 p.m. Central Time -- the Dow 30 is up one point shy of 100 points.]

NYSE, early trading:
  • new highs, 77 -- Boeing, Deere, Exelon, Sunoco,
  • new lows, 13 --  
Trump rally:
  • US companies post profit growth not seen in six years -- The Wall Street Journal
  • 73% of the S&P 500 companies that had reported as of Friday had topped on both the top and bottom lines -- repeating: 73% of companies reporting so far, topped on both the top and bottom lines
The Old-Fashioned Way Of Streaming Photos

Sophia loves looking at albums the old-fashioned way while visiting "the homestead" in California.

Tesla Sending Our Cancellation Refunds In "Batches"; The Political Page, T+192 -- July 31, 2017


August 1, 2017: They must be reading the blog. from Green Car Reports, Tesla won't discuss net Model 3 reservations number; why? The writer didn't say a thing, except to confirm two things:
Tesla won't provide updated reservation/cancellation figures; and,
this little gem:
A rare example of pushback came after it released second-quarter Model S and Model X delivery numbers last month but omitted the number of cars in transit, a statistic included in previous quarterly reports.
Relatively widespread complaints by analysts prompted the company to update its release a few days later: the number of cars in transit had declined from that of the previous quarter.
The revelation didn't necessarily help perceptions of the company's deliveries or ongoing demand for the aging Model S hatchback sedan and specialized Model X crossover utility vehicle.
Original Post

From Tesla: they are receiving a lot of cancellations from folks who reserved a Model 3 for $1,000. The company is, apparently, admitting that ... as an explanation why refunds are so slow. They can't keep up with all the cancellations. From Wired:
Chitti cancelled his reservation on May 17, 2017. He says he was tired of waiting and frustrated by Tesla's lack of transparency.
Yet more than two months later, he hasn't received his refund. "
Every time I reach out I get the same explanation: They have a lot of cancellations to process, they'll prioritize my request, and that my refund should go out in the next batch," he says.
His experience is not unique. Many deposit holders have taken to Twitter to complain to Musk directly about their late refunds.
In a poll posted to the popular Tesla Motors Forum, a majority of respondents reported waiting more than a month to receive their reimbursement. On other message boards, claims of 5-, 6-, and 7-week waits are common, and many say they’ve held out even longer.
“It has been three months,” wrote /r/teslamotors user UnDosTresPescao on Reddit on July 3. “I have called/emailed them several times over the last month and a half asking about status.
Every time they ask for my address and say that a check will be promptly on its way. The check never comes.”This seems as good a place as any to disclose that I, too, was once a Model 3 reservation holder. I cancelled my deposit in April, when an honest evaluation of my transportation needs forced me to concede that the last thing I need in life is a new car. Tesla took just shy of three months to refund my deposit, which I received soon after the company caught wind of me reporting this piece.
I saw a clip of the Tesla event delivering the 30 new cars (to its employees) -- someone once said the Saturn automobile was the ugliest vehicle ever produced -- I did not agree -- but the Tesla Model 3 looked almost identical to the Saturn from 100 yards away.

Tesla's earnings call is this week. If analysts don't ask the question and if Tesla is not forthcoming with actual numbers, I will be quite disappointed.

If refunds are going out in "batches," one wonders how many refund checks are in each batch?

More: I never really thought about that -- situations change over time with regard to car buying. Putting down $1,000 for a car for delivery sometime in the future....I think in hindsight this is going to turn out to be one of the biggest (and audacious) marketing schemes by any auto salesperson: getting folks to reserve a $40,000 car with a thousand-dollar deposit three years in advance. Can you imagine if Ford was able to pull off this advertising campaign: send us $1,000 now to reserve your new $75,000 F-150 five years from now?

A lot of folks put down $1,000, I suppose, just for a conversation stopper, "Yes, I've reserved a Tesla." From someone who was living from one pay check to the next.

But ordering a car one won't see for two years suggests the buyer really didn't need a new car anyway.

And, if her situation changes, that she really does need a new car sooner, she will ask for her $1,000 Tesla deposit back to use on another car.

Millennials want same day delivery. Tesla is unable to guarantee 36-month delivery. A lot happens in three years.

Bolt? I may be wrong. I've suggested the real Tesla story is the effect it will have on the Chevrolet Bolt. This morning, CNBC's auto reporter said very clearly that the Tesla is not to be compared to the Chevrolet Bolt. Two completely different cars; two completely different audiences. Phil LeBeau says the Tesla Model 3 is targeting the "3-series" (BWM) and the "C-class" (Mercedes). That should be an easy bar to jump. Mercedes sold zero Mercedes C350e's in June (discontinued? no it's still there). BWM sold about 500 330e's in each of the last few months. This will be fascinating to watch. All three sell for about $44,000.

Hyperbole. Huffington Post suggests these 30 Teslas could represent the end of the internal combustion era. "This might be the way horse stable owners felt when they first saw a Ford Model T." Incredibly bad -- but easy -- analogy. Electric cars have been around 1884. Electricity has powered rail since 1879. The delivery of tirty Teslas may represent something but I don't think it represents the end of the internal combustion era. 

The Market And Energy Page, T+192 -- July 31, 2017

WTI briefly goes above $50; then drops back. I guess we can close the poll in which we asked whether we would see $50-WTI before August 5, 2017 --
  • yes: 78%
  • no: 22%
Futures: wow! I wasn't paying attention. Last night Dow 30 futures started negative but improved early in the evening. Now I see Dow 30 futures up almost 70 points; Nasdaq futures up 16 points; and, even the S&P 500 is up nicely. Wow. 

US energy suppliers: North Dakota ranks fifth behind Wyoming, Texas, Pennsylvania, and West Virginia. North Dakota could very easily surpass both Pennsylvania and West Virginia to become #3. But, of course, that's where it will stop.

They Must Be Reading The Blog; CVX -- Higher Production For Less Dollars -- July 31, 2017

Enbridge. Link here. They must be reading the blog; I don't know how many times I've written: Canadian oil = Venezuelan oil. And, this is what the Keystone XL was all about. The oil men (to include George W. Bush) knew what they were doing. Obama had no clue. We're lucky shale came alone the same time Obama did and Obama was too slow to shut down fracking.

Back To The Bakken

Active rigs:

Active Rigs613574193180

RBN Energy: why US LNG won't face Australia's natural gas supply problem.
The U.S. and Australia have been ramping up their LNG exports — Australia already is the world’s second-largest LNG exporter after Qatar and the U.S. will soon rank third.
Two recent events highlight the difference between the two countries and their natural gas markets.
First, in June the Australian prime minister acted to curtail LNG exports next year because of gas-supply shortages affecting domestic consumers.
Second, on July 19, the Potential Gas Committee released its biennial analysis of recoverable gas resources in the U.S.; its findings support the view that U.S. LNG exports can continue growing without causing domestic supply constraints.
Today we review the PGC report and the Australian LNG/supply situation, then compare the two markets.
There are real similarities — and noteworthy differences — between the U.S. and Australia. They’re similar in size (Australia’s land mass is slightly smaller than the Lower 48). Both were British colonies before establishing stable, long-lasting democratic governments. Both call their currency the dollar, and both are blessed with extraordinary scenery and natural resources. Big differences stand out, though. Australia’s population is only 24 million, an astounding 300 million fewer than the U.S. — heck, Texas alone has four million more people than The Land Down Under. And, as we will discuss today, there appears to be a big gap between the U.S. and Australia in the respective capacity of their natural gas sectors to accommodate a big ramp-up in LNG exports.
Chevron: swung to a 2Q17 profit even as refining returns fell short. From Bloomberg. Data points that stand out:
  • Chevron's production was the most in more than seven years
  • adjusted, the company earned 91 cents, beating estimates of 87 cents; unadjusted, they missed by 10 cents
  • cost cuts erased $50 billion from Chevron's market capitalization
  • more production for less money
  • cuts in CAPEX to continue
  • in passing, despite the headline: "the company also reported shrinking returns from its refining unit.
  • meanwhile, analysts expected XOM production to climb 1.5%, bu tin fact dropped almost 1%, and in a low-price environment, a double whammy