Wednesday, January 31, 2018

US Crude Oil Production Record Is Absolutely Staggering -- Doubled In Ten Years -- January 31, 2018

Earlier it was reported that US crude oil production hit 10 million bopd in November, 2017, (most current data available) for the first time since 1970. EIA data here.

There's a great interactive chart at this post that compares exactly onshore vs offshore US crude oil production.

In addition: look at these stats:
  • the production in November, 2017, was 13.1% greater year-over-year (2017 compared to 2016)
  • production in November, 2017, was 42.8% greater than 2012, when the Bakken was hitting its stride
  • production in November, 2017, almost exactly doubled (99.4%) US production in November, 2007, the year of the "discovery" well in the Bakken

Memo to self: send note to Jane ("it's all hype") Nielson --

The interesting thing is that when Barack Obama said this, he was removing Federal land from oil exploration. A "drill, baby, drill" strategy off-shore and on Federal land would have probably been as successful as the shale revolution had the former not been stopped dead in its tracks.

US - Saudi Crude Oil Imports Increase Slightly -- November, 2017, Data Just Posted

Link here.

MRO Reports Two Huge Wells; WTI Rises Despite All Odds; Number Of Active Rigs In North Dakota Advance By Two -- January 31, 2018

In the dead of winter, this is nice to see -- active rigs in North Dakota jump by 2:

Active Rigs594045146191

I'm also surprised that WTI price held in there, holding above $64, and actually trending back toward $65.

Five new permits:
  • Operators: Kraken Operating (4); Whiting
  • Fields: Ellisville (Williams), Truax (Williams)
  • Comment:
No permits canceled: pending

One permit renewed: a Hunt Patten permit in Mountrail County.

Two producing wells (DUCs) reported as completed:
  • 30133, 4,855, MRO, Veronica USA 14-22TFH, Sanish, t12/17; cum --
  • 30488, 4,144, MRO, TAT USA 14-22H, Sanish, t12/17; cum --
New permits:
34533, Whiting, Thomas Federal Truax,
34534, Kraken, Longhorn, Ellisville,
34535, Kraken, Longhorn, Ellisville,
34536, Kraken, Longhorn, Ellisville,
34537, Kraken, Longhorn, Ellisvile,

Comment: The MRO Veronica and TAT USA wells are seen in the graphic below. In addition to being an extremely active area right now, MRO is reporting some very huge wells.

New Poll: What Might Replace GE On The Dow? -- January 31, 2018

Poll at the sidebar at the right.

You can choose up to two (2) selections.

Poll encourages folks to offer their own suggestions.

Making America Great Again -- Americans' Pay Rose At Fastest Pace Since 2008 During Trump's First Year In Office -- January 31, 2018

From ZeroHedge:
  • while The Fed may be getting nervous, we suspect the Trump administration will be smirking quietly as Labor Department data showed total U.S. employee compensation rose in the fourth quarter to match the biggest 12-month gain since 2008, as private-sector pay picked up
  • the headline index rose 0.6% q/q (matching est.) after 0.7% gain in prior three months
  • wages and salaries rose 0.5% q/q following 0.7% gain
  • benefit costs increased 0.5% q/q after rising 0.8%
  • total compensation, which includes wages and benefits, rose 2.7% over past 12 months, the highest since 2008
The Energy And Market Page, T+10

MPC: to reward shareholders with 15% dividend hike.

Disclaimer: this is not an investment site. Do not make any financial, investment, relationship, travel, or job-related decisions based on what you read here or what your spouse might have read here.

EPD from Motley Fool via Yahoo!Finance:
For an investor looking at Enterprise Products Partners for the first time, this past quarter's results probably look great. Gross margins, net income, and cash flow all grew substantially and beat Wall Street's expectations. For those who have followed the company for a long time, though, these results aren't too much of a surprise as this quarter was pretty much business as usual for the oil and gas pipeline and processing giant.
EPD from Reuters via Yahoo!Finance, Enterprise Products eyes expansion of Midland-to-Sealy crude pipeline. Data points:
  • could expand capacity on its Midland-to-Sealy crude oil pipeline by more than 20 percent to help transport even more oil from the Permian Basin of West Texas and New Mexico, the largest U.S. oilfield
  • the expansion comes as Exxon Mobil Corp and others map out aggressive growth for Permian operations, fueling a rising need for transport to refining and export facilities near the U.S. Gulf Coast
  • crude flows on the line averaged 330,000 bpd after the pipeline came online in November
  • flows are expected to hit 450,000 bpd as soon as April once the line is fully operational
  • preparations are under way to potentially further boost capacity on the line by installing pumps and drag reducing agents, chemicals added to pipelines to improve the flow of liquids
  • the company has the capacity to go in the 540,000 bpd to 550,000 bpd range "right now"

Disclaimer: I'm a long term investor in two pipeline MLPs, including EPD. I have no plans to sell or buy any shares of EPD in the near future.

Hess: from Reuters via Yahoo!Finance, Hess plans $2.1 billion budget for 2018, unchanged from 2017.
  • mostly in North Dakota and Guyana, keeping its budget unchanged from 2017 amid a battle over corporate strategy with activist investor Elliott Management Corp.
  • Hess Corporation will spend $900 million to drill 120 wells with six drilling rigs and completing 85 wells in 2018 in the Bakken
  • executives across the U.S. oil industry have been feeling pressure to focus on profitability and shareholder returns, a departure from their long-established practice of boosting production regardless of the cost
  • Hess said it expects it can be "cash generative" after 2020 with oil prices of $50 per barrel. The company has not made a profit since 2014
  • Hess has recently been in the news: the recently announced Hess-Targa Resources joint venture
Disclaimer: I've been an investor in Hess over the past 30 years. I have no plans to buy or sell any shares of Hess in the near future. Growing up in Williston, ND, I grew up with Hess, figuratively and literally.

.... And How Much Of It Was Shale? One Might Ask -- January 31, 2018


February 1, 2018: Bloomberg answers part of the question.
U.S. oil production surged above 10 million barrels a day for the first time in four decades, another marker of a profound shift in global crude markets.
The milestone comes weeks after the International Energy Agency said the U.S. is poised for "explosive" growth in oil output that would push it past Saudi Arabia and Russia this year. New drilling and production techniques have opened up billions of barrels of recoverable U.S. oil in shale rock formations in the past 10 years, reversing decades of declining output and turning the nation into an exporter.
Production from Texas, which also included the Eagle Ford play, contributed 3.89 million barrels a day to the November figure, the most of any state. Production from the Gulf of Mexico and North Dakota, where the Bakken shale lies, were close behind.
Later, 3:09 p.m CT: after posting the screenshot/data below, a writer wrote me --
Continental sold X amount in October when $ low, X x 150% in November, back to X again in December (payable on January 29, 2018), prices still high, but trending upward.

Appears that if Continental expects prices to be higher the following month they increase the pump rate. "My" wells all have remote control enabling pump speed management from Oklahoma ... you've must likely touched on this before and I've forgotten.....
Yes, I've mentioned this before, in passing, but for new newbies, CLR (and others) can control their pumps remotely. I also believe that CLR no longer hedges its oil.
Original Post

Faster than expected but look at where the US could be a year from now, link here:

US Added A "HEALTHY" 234,000 Jobs In January -- AP -- January 31, 2018


Later, 2:25 p.m. CT: it appears the AP's article was a bit under-stated. Here's what CNBC had to say about the jobs report today:
  • numbers crushed forecast
  • forecast: 185,000
  • actual: 234,000
  • "well above expectations"
  • service-related industries led, but sectors with high-paying jobs also did well
Original Post

Jobs, jobs, jobs. Link here.  Data points:
  • "US businesses continued to hire at a healthy pace"
  • "a sign that the economy is off to a solid start for the year"
  • 234,000 jobs added, according to ADP; we will get official government figures tomorrow
  • "businesses are optimist about the economy, particularly after the President Donald Trump's tax overhaul was approved last month
  • the recover that began shortly after the steep recession in 2008 is now the second longest in US history
  • "at this point in the cycle, it's really impressive to still be generating this many jobs"
I assume CNBC's Steve Liesman has been able to find the downside in all this.

I haven't watched CBNC the past two days and won't watch it today. I purposely won't watch CNBC during major political events, and I won't watch it during particularly volatile days on the market. The hyperbole of the talking heads is almost too much to take on a "normal, quiet day" in the market; on anything but quiet days, it's impossible for me to watch CNBC; the inanity increases exponentially.

I assume CNBC's senior markets commentator is still talking about overshoot, and I assume Steve Liesman is really, really flabbergasted by the most recent ADP numbers, probably suggesting that the official government numbers coming out tomorrow will likely show something different.

The CNBC crew continues to suggest this "bull market" is long in the tooth, and they don't understand how it can continue. It seems they have not looked at the 100-year Dow chart:

History does not predict what the market will do next, but to say that the current bull market has never happened before or is somehow different or has "overshot," or is frothy or is "different this time," seem(s) to be somewhat inaccurate.

There are many, many story lines in the chart above. Note: the y-axis is non-linear. If it were linear, it would be even more staggering.

A Note To The Granddaughters

I read Michael J Behe's first book many years ago, and read it only once, though I probably read sections of it more than once. I forget.

I was happy to see Behe write a follow-up book but on first reading I was disappointed in the book for a number of reasons: it seemed to be a repeat of what he had already said, and it seemed very repetitious in and of itself. However, now that I am re-reading it very, very slowly, I am very impressed.

It's very much an argument between Michael J Behe and Richard Dawkins. Now that I am reading The Edge of Evolution: The Search for the Limits of Darwinism again, it seems to me that Dawkins deals with the little questions about life, while Behe addresses the big questions about life.

Oh, Oh -- The Bakken Strikes Back -- US Crude Oil Inventories Surge -- Up 6.8 Million BBls -- Saudi's Worse Nightmare -- Time To Re-Balance Jumps -- WTI Holds Above $64


Later, 9:50 a.m. CT: look at the data below -- it's really quite amazing --
  • first, look at refinery operating data -- dropped to 88% -- I haven't seen that in a long time; likely due to refineries starting to switch from winter to summer blends; possibly due to regularly scheduled maintenance; possibly increased capacity coming on line
  • second, note that despite the decrease in refinery operating data, gasoline production increased -- two important story lines:
    • refineries able to maintain production despite operating at 88% capacity
    • gasoline prices had been trending up over the past few weeks, and pundits were starting to talk about the impact higher gasoline prices might have on Trump's economy
  • third, even though crude oil imports seem to be moving up/down in a narrow range, the fact is imports have had a four-week trend of decreasing
  • fourth, the surge in US crude oil inventories is not something Saudi wants to see
  • we will see the gasoline demand graph later today
Original Post
Anticipating EIA data later today: posted here.
  • US crude oil inventories: increased by 6.8 million bbls
  • refineries operating potential collapses; well below 90% now; at 88.1%
  • despite that, gasoline production increased last week -- wow -- almost 10 million bbls per day
  • distillate fuel production decreased last week
  • crude oil imports down a bit, continuing that trend
  • at 418.4 million bbls of crude oil, US crude oil inventories are in the middle of the average range for this time of year
  • gasoline inventories near the top of the average range (all things being equal, gasoline prices should drop this week)
Re-balancing: the chart was getting too long, so I only included the data since October, 2017. This is really quite amazing. This is the first time in quite some time that the time to re-balance has increased, and the jump/reversal was not trivial. It jumped from 20 weeks to 24 weeks before we see re-balancing based on current rate of decrease in US crude oil inventories:

Week 24
October 12, 2017
Week 25
October 18, 2017
Week 26
October 25, 2017
Week 27
November 1, 2017
Week 28
November 8, 2017
Week 29
November 15, 2017
Week 30
November 22, 2017
Week 31
November 29, 2017
Week 32
December 6, 2017
Week 33
December 13, 2017
Week 34
December 20, 2017
Week 35
December 28, 2017
Week 36
January 4, 2018
Week 37
January 10, 2018
Week 38
January 18, 2018
Week 39
January 24, 2018
Week 40
January 31, 2018

The Political Page, T+10 -- January 31, 2018

Trump speaks, market soars.

Pelosi Personality Discorder. Psychiatrists are now suggesting that Pesky Pelosi was catatonic during the SOTU address. Some suggest she has an underlying dissociative disorder. More likely she suffers from post-traumatic stress disorder (PTSD) following events of November 7, 2016, and exacerbated on January 20, 2017. She has previously been diagnosed with MSNBC-CNN personality disorder (DSM-V) which crosses / overlaps three of the five major personality disorders: Antisocial/Psychopathic, Avoidant, Borderline.

Meanwhile, The SOTU Ratings

This means a lot of Dems did not tune in to watch.

Making America Great Again: North Dakota's Gate City Bank Announces Reinvestment Plan, Plus Bonus Check -- Specifically Cites Trump Tax Bill -- January 31, 2018

Link to article sent to me by a reader. Thank you very much.
In response to the GOP tax bill recently passed by Congress, Gate City Bank announced plans late last week to reinvest $1.6 million to benefit its employees, customers and the community.
Included in its plan is $625,000 in employee bonuses. According to a press release issued by Gate City, each employee will be hand-delivered a $1,000 bonus check on January 15, 2018.
Customers will benefit from the bank's plan to offer $500,000 in free home appraisals. According to Gate City Bank, an average appraisal is valued at $600.
Pretty amazing. Good for them. 

Wednesday, January 31, 2018 -- Anticipating EIA Data Today

Trump speaks, market soars.

Disclaimer: this is not an investment site. Do not make any investment, financial, travel, relationship, or job-related decisions based on anything you read here or what you thought you  might have read here.

Apple: Apple likely to post a record-setting $84 billion in quarterly revenue for Q4 2017
Amid reports that Apple is planning to drastically scale back iPhone X production next quarter, the company later this week may very well post its most impressive earnings report in history. We’ll get a handle on specific figures at the close of trading on Thursday, but in the interim, the consensus on Wall St. is that Apple will post revenue of about $87 billion and EPS in the $3.83 range. 
If Apple should come anywhere close to meeting those figures — and there’s no reason to believe it won’t — it will easily mark the most successful quarter in company history. By way of comparison, Apple during the same quarter a year-ago posted $78.4 billion in quarterly revenue and overall earnings of $3.36. Incidentally, the $78.4 billion figure still stands as Apple’s most successful quarter to date. And with Apple last quarter providing revenue guidance in the $84 billion to $87 billion range, it’s a safe bet that Apple during the most recent holiday quarter shattered a number of records.

As a quick point of interest, the most bullish Apple analysts are projecting revenue of $90.2 billion while bearish analysts are anticipating revenue to hover around the $84 billion mark. And as far as overall earnings are concerned, the highest estimate we’ve seen is $4.12 per share while the lowest estimate is $3.41 per share.
Anticipating EIA data later today: posted here.
  • US crude oil inventories: increased by 6.8 million bbls

API data, posted yesterday: weekly US crude oil inventories. Link here. Also, at this site.
  • previous: 4.755 million bbls 
  • forecast: 1.5 million bbls
  • actual: 3.229 million bbls (almost twice forecast)
  • this is a "build"; but API data, at least recent history, has been significantly different than what the EIA will report -- today, 10:30 a.m. -- but a build of 3.2 million bbls suggests that the EIA data tomorrow could come in somewhere between a draw of 1 million bbls and a build of 1 million bbls; within that range, it will not change the number of weeks to re-balance which is currently at 20 weeks. I use the EIA data to calculate weeks until US crude oil stores have "balanced"
  • analysis six hours before the API data was released; this suggests me to the stronger dollar is not being offset by increased demand/less supply hopes
Back to the Bakken

Active rigs:

Active Rigs574045146191

RBN Energy: rising Canadian production, takeaway constraints and WCS price discounts, part 2.

Accuracy In Reporting

So, what is it? A five-fold increase or production to triple? Reported yesterday at this post, that Exxon's production would increase 5-fold in the Permian by 2025. Later, the story changed to this: Exxon production in the Permian would triple by 2025. It seems to me there's a pretty good difference between "five-fold" and "triple."