Jobless Claims Down An Incredible 10,000 From Previous Week; Analysts Off Again; Jobless Claims At 49-Year Low; Four-Year Average Also At 49-Year Low -- So Low, Evern Kaepernick Found A Job -- Now He Just Needs A Skill Set -- Stock Market Reaction? Yawn -- Tesla May Be Missing Its Own Targets, But It's Blowing Away The Competition -- September 6, 2018

Comment: yesterday I received a note from a reader -- my financial consultant is recommending additional equities in my portfolio. The reader was concerned that his portfolio was increasingly heavy in equities. My thought: would it be riskier if his portfolio was lighter in equities -- holding cash or investing in bonds vs US equity? See ISM below. What's riskier: investing more in the market, less in the market. Probably depends on one's time line / horizon. If horizon is ten years, it's a no-brainer.

PGA: BMW top 70. Leaderboard here. Woods, Fowler, and Spieth in a threesome, starting on the back nine?

UNP: thank you Ms LaDuke.

ICYMI:

Japan: massive earthquake shuts down Hokkaido refining. No link, story easily found.

Nike: headline yesterday, "millennials snapping up Nike" after Kaepernick announcement. I doubt folks will make investment decisions on this one announcement. Having said that, who probably holds most of Nike stock: millennials in their 20s or old white men 65+?

Jobless claims: link here. Holy mackerel! Down to 203K --- a decrease of 10K. Amazing. Consensus, 213K (identical to prior, 213K). At a 49-year low -- only the WSJ is reporting that. It's reported and CNBC immediately moves on.

Though data can be volatile from week to week, the four-week moving average of claims, a steadier measure, also fell to a 49-year low.

The measure dropped to 209,500. Jobless claims have remained low in recent years, as the labor market continues to tighten and managers face difficulty finding qualified employees. U.S. employers added 157,000 jobs and the unemployment rate fell back to 3.9% in July, hovering near the lowest level since April 2000, according to the Labor Department’s latest jobs report.

Meanwhile, the overall labor-force participation rate, defined as the share of the adult population either working or looking for work, has been little changed over the past four years. The share of the population with jobs, however, has steadily climbed.

US ISM Manufacturing Index: zoomed to 61.3 from 58.1 -- expectations were for a slight dip to 57.7. Link here. The ISM has not been this high since May, 2004. The market's reaction: yawn.

Largest Saudi debt deal ever? Link here. Data points:

• Saudi Aramco looking for $70 billion loan
• to put that in perspective, Saudi's foreign reserves assets is about $500 billion (in very round numbers) 
• Saudi's monthly foreign reserves move up/down $1 billion to $8 billion / month
• Saudi Aramco looking to take majority stake in Sabic, a Saudi petrochemical firm
• Sabic: the world's fourth-largest petrochemical company

Peak demand? What peak demand? Now OPEC says global demand will hit 100 million bopd sooner than expected. Link here. Can you imagine how beholden the world (and the US) would be to Putin and Saudi Arabia had there not been a fracking revolution in the US. Scary.

Irrelevant? How important is Canadian heavy oil for the US or global supply? Apparently not very. Suncor announces cutback in production due to Trans Mountain Pipeline expansion "delay," and WTI actually falls in price. Western Canadian select fell $1.15 to $38.72; meanwhile WTI stays in trading range around $68. Many years ago, WCS was said to have a $60-breakeven point; I doubt it has changed much. 

My favorite company: EPD breaks ground on yet another NGL expansion. Link here. Data points:

• fractionater adjacent to its complex in Mont Belvieu, TX
• the company's tenth NGL fractionator at Mont Belvieu
• 150,000 bbls per day
• to enter service 1Q20
• will raise EPD's Mont Belvieu fractionation capability to almost 1 million bopd
• will raise company's total fractionation capacity to just under 1.5 million bopd
• the latest expansion at Mont Belvieu represents a departure for Enterprise because the new fractionator will be able to process dramatically larger volumes of NGL than each of the series of units installed before it

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

EPD: considering a new gas plant in east Texas. Data points:

• $125 million natural gas processing facility
• 200 million cf/d
• Panola County, TX
• construction to being 4Q18 (end of this year); in service 4Q19

EPD: paying 5.94%.

Deep-sea drilling is back. Link here. 

Meanwhile, back in Burnaby: taking a bold step, Justin Trudeau says Canada might appeal ruling that killed the Trans Mountain. Really? "Might." The appeal should have been prepared before the ruling and dropped on the appellate court in a New York minute. Remember: Trudeau knew that the Trans Mountain faced the same issue that killed the Enbridge Northern Gateway, and the case was being adjudicated by the same judge. Eh, what just happened?

Car sales: when I think Toyota, I think Prius, green, and EV; when I thing Ford, I think SUV. August sales: Ford sales up 4.1%; Toyota US sales drop 2.0%. EV sales for August, link here. Tesla doing surprisingly well, blowing away the competition:

• Tesla Model 3: 17,800 (goal, 5,000 / week = 20,000)
• Tesla Model S: 2,625 (2,100 one year ago)
• Tesla Model X: 2,750 (1,575)
• Toyota Prius Prime: 2,071 vs 17,800 Tesla Model 3 -- wow, wow, wow -- why is TSLA stock down?
• Chevy Volt: 1,825
• Chevry Bolt: 1,225
• Nissan Leaf: 1,315
• Chrysler Pacific hybrid: 654
• But look at the 17,800 for Tesal Model 3 -- blowing away any other individual competitor

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Back to the Bakken

One well coming off confidential list today:

Thursday, September 6, 2018

• 33924, SI/NC, MRO, Skadeland USA 31-30TFH, Reunion Bay, no production data,

Active rigs:

$68.84→	9/6/2018	09/06/2017	09/06/2016	09/06/2015	09/06/2014
Active Rigs	64	56	33	75	196

RBN Energy: have northeast natural gas supply prices turned a corner?

The Marcellus/Utica region is in the midst of a major turning point. Natural gas production from the region continues to post record highs. But regional basis differentials to Henry Hub are the strongest they’ve been at this time of year since 2013. Spot prices at Dominion South — the representative location for the overall Marcellus-Utica supply — averaged at a $0.35/MMBtu discount to Henry Hub this August, compared with a $1-plus discount to Henry in each of the past four years.

The deep discounts in previous years reflected the inadequate takeaway capacity and the resulting pipeline constraints to get gas out of the region. Now, basis shifts suggest those constraints are easing somewhat — a trend that will redefine pricing relationships across the broader gas market. In today’s blog, we continue a series examining the changing flow and price dynamics in the Northeast gas market.

The Other Side of Town, John Prine