Thursday, May 17, 2018

Why I Love To Blog -- Reason #346 -- May 17, 2018

Size matters? The linked blog was posted just the other day. Take a look at the post.

Note the major oil company that is red; the other three, green.

Now, today, WTI hits $72 and the entire oil sector pretty much surges. EOG, OAS, CXV, PSX all moved nicely. EOG up almost $5/share.

But there was one oil company that actually declined today. Yes, XOM. Not much, but XOM was down about 14 cents, and is now trading under $82.


Maphead: Charting the Wide, Weird World of Geography Wonks, Ken Jennings, c. 2011.

The English Landscape, Viking Studio, Profile Books, c. 2000.
  • the Yorkshire Wolds, p. 338
  • the Vale of York, p. 340
  • the Yorkshire Dales, p. 363
  • the North York Moors, p. 373
The Yorkshire Dales
  • one of the most treasured and beautiful parts of Englnd
  • high, remote moorland cut by deep river valleys
  • over twenty separate dales can be identified in this part of the Pennines
  • Leeds, Sheffield, Bradford, York
  • magnificent limestone uplands
  • sheep: black-faced, curly-horned Swaledale
  • underlying rock is limestone, giving rise to classic "glacio-karst" formations such as caves, gorges, sink-holes and rock pavements
  • acidic moorland covered with heather ,bilberry and blanket bog and haunted by the occasional cries of grouse or curlews
  • many place-names indicate Norse or Viking origins, with suffixes such as "-thwaite" or "-thorpe"
  • these huddled villages often stand at river crossing points and at the junctions of ancient trading and pack-horse routes through the fells
  • the Dales are known for their handsome, historic market towns such as Skipton, Askrigg, Masham, and Reeth (I've spend time all of these except Reeth)
The North  York Moors
  • two major seaside resorts, Scarborough and Whitby
  • market towns of Pickering, Helmsley, Guisborough
  • North Yorkshire Moors Railway, built by George Stephenson, the steam-train pioneer, between Pickering and Grosmont
  • Robin Hood's Bay to Whitby
  • Rievaulx
  • Byland Abbey

Wow, 2Q18 GDP Estimate Remains At 4.1% -- May 17, 2018

Latest forecast: 4.1 percent — May 16, 2018:
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2018 is 4.1 percent on May 16, unchanged from May 15.
An increase in the nowcast of second-quarter real private fixed investment growth from 5.2 percent to 5.9 percent after this morning's new residential construction release from the U.S. Census Bureau and this morning's industrial production release from the Federal Reserve Board of Governors was largely offset by a decrease in the nowcast of the contribution of inventory investment to second-quarter real GDP growth from 0.81 percentage points to 0.72 percentage points.

The Market, Energy, And Political Page, Part 4, T+9 -- May 17, 2018

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

Wow, talk about a perfect storm: for a number of reasons the price of oil is rising faster than anticiapted. That alone should make investors in oil the oil sector very happy. But, now, remember, we have a president in the White House who is pro-US and pro-oil. And unlike the Bushes, who were also pro-US and pro-oil, the current president actually gets things done. And doesn't take two terms to do it. In fact, he's getting things done in the first 18 months that past presidents have not been able to accomplish in eight years. But I digress.

So, we have oil prices rising faster than expected, for any number of reasons. We have a president in the White House who is pro-US, pro-oil, and gets things done.

But there's more.

The Trump tax cut. This is not trivial.

So, with the Trump tax cut what did pundits say we would see? Share buybacks. Increased dividends. Increased investment.

Announced today, Phillips 66 boosted its dividend by 14%; will trade ex-dividend on May 18 -- that would be tomorrow.

Wow. 14%.

From the linked article, Philips 66 is forecasted to report earnings of $8.56 per share for the next year, which is more than double compared to the Company's annualized dividend of $3.20 per share.

EOG: on a down day for the market, EOG up almost $5.00/share.

UNP: keeps moving up despite cost of energy going up.


From The Goldman Sachs Archives

In no particular order.

February 9, 2016 --

October 15, 2015 -- 
January 7, 2016 --
September 11, 2015 --

September 11, 2015 --
I do not recall WTI ever, ever, ever coming close to $200 in the past couple of years. I thought there was a non-trivial possibility that oil would hit $20. It did not.

Hess Gene / JCP Wells In Truax Oil Field


February 14, 2019: graphic updated --

Original Post

Daily activity report, May 15, 2018:
  • Hess has permits for an 8-well Gene/JCB pad in SESE 8-154-98 
  • Truax oil field
  • all of them are 1,005 feet from the south line
  • from the east line: from 919 feet to 1,150 feet
  • four horizontals run north; four run south
  • Hess already had a similar pad to the west (see graphic below)
The graphic:

The wells:
  • 29165, 739, Hess, SC-Norma-LE-154-98-0705H-2, Truax, t5/15; cum 118K 5/20; no bump in production; off line for just half a month;
  • 29166, 988, Hess, SC-Gene--154-98-0805H-2, Truax, t4/15; cum 203K 5/20; no bump in production; off line for about two months; back on line 8/19;
  • 21037, 684, Hess, Gene 8-1H, Truax, t6/12; cum 227K 4/20; was off-line for three months while neighboring wells fracked; back on line 8/18; off line 5/20;

  • 33610, 1,268, Hess, SC-Gene-154-98-0805H-3, Truax, t8/18; cum 234K 5/20; offline 4/19; slowly coming back on line 8/19; off line 4/20; back on line 5/20;
  • 33609, 1,387, Hess, SC-Gene-154-98-0805H-4, Truax, t8/18; cum 127K 5/20; offline as of 11/18; remains off line 9/19;
  • 33608, 1,669, Hess, SC-Gene-154-98-0805H-5, Truax, t8/18; cum 196K 5/20;  offline as of 2/19; coming back on line 4/19;
  • 33607, 1,479, Hess, SC-Gene-154-98-0805H-6, Truax, t8/18; cum 175K 5/20;  offline as of 3/19; remains off line 9/19;
  • 33606, 2,121, Hess, SC-JCB-154-98-1720H-3, Truax, t8/18; cum 204K 5/20; back online as of 3/19; off line much of 4/19;
  • 33605, 1,650, Hess, SC-JCB-154-98-1720H-4, Truax, t8/18; cum 174K 5/20; offline as of 1/19; remains off line 9/19;
  • 33604, 1,097, Hess, SC-JCB-154-98-1720H-5, Truax, t8/18; cum 54K 5/20;  sporadic production since completion;
  • 33603, 1,637, Hess, SC-JCB-154-98-1720H-6, Truax, t9/18; cum 249K 5/20; huge well; remains online
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

The Market, Energy, And Political Page, Part 3, T+9 -- May 17, 2018

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

Quick takes:
  • Holy mackerel! PSX jumped over 3% today; up $3.66; now trading over $121.80; wow, PSX boosted its dividend by 14%; 
  • WMB jumps after $10.5 billion deal to buy Williams Partners common shares (link). Up 6%.
  • COP chooses Eagle Ford over Permian; here's why -- Zacks (link). 
  • Trans Mountain pipeline: British Columbia threatens to sue if Alberta turns oil tap off (link). Big story. Drop-dead date: May 31, 2018
  • Market: in general, oil companies are moving up and so is a transportation company -- UNP is up 1.1% -- pretty bullish sign when one considers that the price of energy -- something that UNP uses a lot of -- is moving up also
Trans Mountain: with regard to the linked article on Alberta and British Columbia, a reader with history of insightful comments noted:
Apparently, Alberta passed law yesterday giving (local) Provincial) government authority to regulate (restrict) hydrocarbon flow out of province, aka, cutting back BC's fuel.

Alberta head honcho, Rachael Notely, threatening to act within hours if needed.

At this stage, winners and losers will appear and be labelled as such.

Should any fuel restrictions actually take place, political consequences will be massive ... and extend far beyond western Canada. 
Comment: if Alberta acts, it should be a headline story -- although Drudge Report will probably miss it.

The Market, Energy, And Political Page, Part 2, T+9 -- May 17, 2018

Quick takes:
  • US birth rate drops to record low
  • most common birth name in the UK: Muhammad (link)
  • WSJ: oil is above $70, but frackers still struggle to make money (link) -- think Amazon
  • Mexican presidential election getting closer -- July 1 is a la vuelta de la esquina
  • window seat safe again: Southwest Airlines completes engine inspections
  • Australia on track to become world's largest LNG exporter by next year, but right now faces an LNG shortage that has made imports a "very urgent need" (link)
  • Brent hit $80 for first time since November, 2014; Iran sanction concerns (link)
Off the blog until later this morning: family commitment. Good luck to all. We leave you with this:
  • WTI: $72.18
  • Dow futures: down 9 points
  • WMB: up 1.57% pre-market trading according to some sources
  • OAS: hit 52-week high yesterday; pre-market now, up another 1.54%
  • UNP: up 0.75% yesterday, flat in pre-market today
  • TSLA: showed a bit of life yesterday but down again today in pre-market
  • most oil companies I looked at are "red" in pre-market trading despite WTI above $72
  • BTC-USD: down half-a-percent yesterday
  • ETH-USD: down a percent yesterday

The Market, Energy, And Political Page, T+9 -- May 17, 2018 -- One-Year Mueller Anniversary; Grassley Tweets

Why? Why are we playing this video at 6:20 a.m. Thursday morning?

Stormy Waters, Jimmy Martin

Because a reader requested it. You heard it here first -- the first 2020 Democratic party ticket to be floated by the DNC -- the Stormy/Waters ticket. A match made in heaven. This is not fake news:

Back To Energy

Trump energy official approved by US Senate committee:
President Donald Trump's nominee for the top U.S. State Department job dealing with matters related to energy and the global oil industry was approved by a Senate committee on Wednesday, as the United States gears up to re-impose sanctions on Iran's oil exports.
The Senate Foreign Relations Committee approved Francis Fannon, a former head of corporate affairs at mining company BHP Billiton and senior director of Murphy Oil Corp , to head the department's energy bureau.
Sanctions bite: French Total stops Iran gas project as risk from sanctions too high.

Drop-dead date, May 31, 2018. Canada backstops Kinder Morgan for Trans Mountain delays. This is really an incredible story when you think about it. Justin Trudeau, Obama's doppelganger, "needs" the pipeline so badly he will cover KMI losses. Obama, on the other hand, did whatever he could to kill the Keystone XL which remains in pipeline purgatory.
Justin Trudeau’s government is prepared to reimburse Kinder Morgan Canada Ltd. for any financial losses incurred by “politically motivated” delays in its proposed pipeline expansion to the Pacific coast.
Canadian Finance Minister Bill Morneau said Wednesday he will “indemnify” the C$7.4 billion ($5.6 billion) Trans Mountain project, which faces fierce opposition from British Columbia’s provincial government. He added that Canada is prepared to backstop any other company willing to take on the project if Kinder drops out.
Isn't Grassley from Iowa? Republican senator says EPA chief must slow refinery waivers or resign.
Republican Senator Chuck Grassley on Tuesday said Environmental Protection Agency chief Scott Pruitt must scale back the use of biofuels waivers for small refineries, or else he will join other lawmakers calling for Pruitt's resignation.
The demand ramps up pressure on the embattled EPA administrator, who is already under pressure from mostly Democratic lawmakers to step down over controversies that include high spending on travel and security.
Corn state senators like Iowa's Grassley have been infuriated by the EPA's decision to provide an unusually large number of waivers from the U.S. Renewable Fuel Standard (RFS) to refineries in recent months, freeing them from their obligation to blend biofuels like ethanol into the nation's fuel.
"I’ve supported Pruitt but if he pushes changes to RFS that permanently cut ethanol by billions of gallons he will have broken Trump promise & should step down & let someone else do the job of implementing Trump agenda," Grassley wrote on Twitter.

Thursday, May 17, 2018

Weekly jobs report: posted, Econoday --
  • prior: 211,000
  • consensus: 215,000
  • actual: 222,000
  • four-week moving average decreased from 216,000 to 213,250  
Back to the Bakken 

Active rigs:

Active Rigs59522683190

RBN Energy: the Panama Canal expansion has helped US exports, but will it be enough. This is one of my favorite stories -- the Panama Canal expansion -- ever since The NY Times suggested that the expansion would fail.
The new, larger locks along the Panama Canal have been in operation for almost two years now, enabling the passage of larger vessels between the Atlantic and the Pacific. The timing couldn’t have been better — when the expanded canal locks came online in June 2016, exports of U.S. LPG, crude oil, gasoline and diesel were about to take off, and Cheniere Energy had only recently started shipping out LNG from its Sabine Pass export terminal in Louisiana, with Asian markets in its sights. Hydrocarbon-related transits through the canal soared through the second half of 2016, in 2017 and so far in 2018. But the gains are mostly tied to LPG and LNG — even the expanded canal isn’t big enough for the Suezmax-class vessels and Very Large Crude Carriers (VLCCs) favored for Gulf Coast-to-Asia crude shipments. And there already are indications that the canal’s capacity may not be sufficient to meet future LNG needs. Today, we consider the expanded canal’s current and future role in facilitating U.S. hydrocarbon exports.
Public service reminder: if one is not a subscriber to RBN Energy the full RBN Energy posts are only available for a few days (weeks?). After that, they disappear and to "recover" them, a subscription is needed. I say that because yesterday's blog was particularly interesting. Don't miss it:
Steps toward making Louisiana a crude-exporting powerhouse