Wednesday, September 19, 2018

A Reader Connects The Dots: Bakken Ethane, Calgary, And Dubai -- September 19, 2018

Ethane: from a reader --
The last couple days you, along with RBN  have been discussing the issues associated with ethane production.

Here is a link to a June 2014 OGJ article announcing Nova Chemicals of Calgary, Alberta began processing the first barrels of Bakken ethane at their Joffre chemical complex near Red Deer.

After completing an upgrade to their Tioga NG processing plant in spring 2014, Hess began dropping ethane from the NGL's and shipping it in the 432-mile Vantage pipeline to Empress, Alberta where it was taken into the Alberta Ethane Gathering System for transportation to Joffre.

Nova uses the ethane as feedstock for their ethylene and polyethylene production.  Nova currently has three ethylene and two polyethylene facilities at its Joffre complex.

Now, note this: Nova Chemicals is a wholly owned subsidiary of International Petroleum Investment Company of Abu Dahbi, United Arab Emirates.

So what we have here is that Hess is in the fifth year of a ten year deal to supply Bakken ethane to UAE interests -- and it has kind of flown under the radar.

The Bakken never ceases to amaze!
With regard to the Bakken: so much is off the radar scope. A huge "thank you" for the update. The Bakken simply never quits.


Bond yield: CNBC continues to talk the market down -- one day after a huge day on the market. I wrote this yesterday:

Market: while CNBC continues to talk the market down, no one has mentioned this. All things being equal, a rising bond market is deleterious for the stock market. For the past year, talking heads have set the 10-year bond as the metric to watch. The threshold was seen as 3% by most talking heads. As long as the10-year bond stayed below a 3% yield, the stock market would/should/could go higher; but if the 10-year bond yield went over 3% then one would expect the market to fall. So, what happened today? The 10-year bond yield is ... drum roll ... 3.04% at the very moment the Dow is flirting with an all-time intra-day high ... currently up an incredible 250 points.

Now, just moments ago, CNBC's market guru, Art Cashin -- CNBC's answer to Louis Rukeyser -- when asked about the bond market, when would be be worried. For the past year, the "worry" was set at a yield of 3.0% for the 10-year bond. Well, we hit 3.04% yesterday and the Dow (irrelevant) went up 250 points, to close up 180 point at the end of the day. So, how did Art Cashin answer the question, when the 10-year bond yield would worry him? His answer: 3.5%. LOL. At least they're reading the blog.

Trade wars? What trade wars: Asian markets were huge yesterday. The Shanghai put together two "one-percent" days. I think I heard them say the Japanese market -- FWIW -- hit a six-year high yesterday.

S&P 500: went over 2,900 yesterday. That's pretty amazing.

Three-K, Free-K, and Pre-K

After showing this to my wife, she noted that I was the one who was wrong. I mis-heard Sophia. Sophia was talking about pre-K. Wow, I certainly hope I didn't mess up Sophia too much. I'll go over this with her tonight and make sure she understands it was pre-K, not "free-K."

I guess their civics lesson today was "not to talk about guns."

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