Something to look forward to: #33120 and #33121 come off confidential list August 25, 2018, and August 27, 2018, respectively. See this post.
****************************
Flashback
Caricature by artist (unknown -- Air National Guard or Air Force Reserve, enlisted, female, temporary duty to Langley AFB, 2001 or thereabouts); my wife always hated this picture because it reminded her of someone else -- apparently to my wife -- Japanese-Hispanic -- all us "white guys" look alike.
US LNG exports should surpass 4 Bcf/d by the end of this year
with other facilities under construction, total US LNG exports should double, hit 8 Bcf/d by the end of 2019
Update on projects:
first wave of LNG export developers
Corpus Christi: this will be Cheniere's second LNG export terminal; the first at Sabine Pass (Louisiana); Corpus ready to fire-up; be ready by end of year (2018)
Corpus Christi: construction ahead of schedule; a second train is being built; a third is being planned
Cheniere also working to commercialize a sixth liquefaction train at Sabine Pass; four trains currently operating at Sabine Pass and a fifth one, like Train 1 at Corpus Christi, is expected to being producing LNG before the end of 2018
Dominion Energy and Cheniere had first two; Cheniere will be the country's third
will fire-up by end of year
delays at Freeport LNG and Cameron LNG; to come on line 2H19
KMI, Elba Island, Savannah, GA: 4Q18 and final units by 3Q19
second wave of LNG export developers: what next?
more than a dozen projects are being proposed
startups expected in early- to mid-2020s
many have struggled with long-term contracts with buyers
international trade disputes another problem
China said August 3 it may impose 25% tariffs on American cargoes of LNG if President Trump follows through on threat to expand tariffs on Chinese goods
Operators: Kraken Operating (5); MRO (4); Whiting Fields: Oliver (Williams); Reunion Bay (Mountrail); Pembroke (McKenzie) Comments: Kraken Operating has permits for a 5-well permit in Lot3/2-156-99; MRO has permits for a 4-well pad in Lot 4/2-151-93; Whiting has another Berg trust Federal permit in 27-149-98
Five permits renewed:
Whiting (2): a Dietz permit and a Solberg permit, both in Stark County
Petro-Hunt (2); two USA permits in McKenzie County
Liberty Resources: a Blomquist permit in Burke County
One permit canceled:
Oasis: a Kellogg Federal permit in McKenzie County
Four producing wells (DUCs) reported as completed;
33253, 1,158, Whiting, Wold Federal 44-2-1TFH, Banks, t7/18; cum --
29090, 1,032, Petro-Hunt, USA 153-95-23C-14-6H, Charlson, t7/18; cum 7K after 13 days;
33812, 1,480, Petro-Hunt, USA 153-95-23D-14, Charlson, t7/18; cum --
33548, 4,283, MRO, Alexander USA 44-33TFH, Reunion Bay, t7/18; cum --
AAPL flirted with an all-time high again today. AAPL's high for the day was $210.56. It's all-tie high is $210.95. AAPL is currently up about 38 cents to $209.23.
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.
This is pretty cool. Last week I said that as of T+75, the daily note would move on from Trump's tariffs to sanctions on Iran regardless of the news that day. Well, today is T+75 of Trump's trade wars. Time to move on. The trade wars amounted to little in the big scheme of things.
Although it's still August 14, 2018, T+75, we will post the first daily note in this series and date it as of August 15, T+1.
Iran Sanctions
October 18, 2018, T+66: this page has gotten too long -- time to move on ...
October 17, 2018, T+65: looks like Saudi Arabia will find way to thread the needle after killing a journalist.
October 14, 2018, T+62: Hillary defends Weinstein. Says if women are adults at the time of sexual harassment, it cannot be "an abuse of power." Wow. I can't make this up. From Fox News reporting on Hillary's interview with CBS today:
Hillary Clinton, who went on to be elected to the Senate and
served as President Obama’s secretary of state, said the relationship
was not an abuse of power because Lewinsky “was an adult.” At the time
of the affair, Lewinsky was 22.
October 13, 2018, T+61: quiet.
October 12, 2018, T+60: Dow (irrelevant) gains almost 300 points.
October 11, 2018, T+59: Dow (irrelevant) falls almost 600 points.
October 10, 2018, T+58: Dow (irrelevant) falls almost 900 points.
October 9, 2018, T+57: quiet.
October 8, 2018, T+56: he does have a point --
October 7, 2018, T+55: my favorite video of the day, LOL. I hope it loops over and over on election day. I enjoy it best with the video turned OFF ... it makes me think of Druids and Stonehenge.
October 6, 2018, T+54: Heitkamp, Schumer, et al -- politicians and petty; Susan Collins: a senator and stateswoman. Outshines Diane Feinstein. But wow, I was completely wrong. I thought Feinstein played this well and had won. Final vote: 50 - 48, apparently with one GOP senator not showing up to vote; and one GOP senator checking that she was "present" but had not yet made up her mind.
October 5, 2018, T+ 53:
October 4, 2018, T+ 52: Heidi Heitkamp will vote "against" Kavanaugh.
October 3, 2018, T+51: Washington, DC -- more
entertaining then ever. Every print media eagerly looking forward to day
they splash this headline: "You're Fired."
October 2, 2018, T+50: holding pattern, again today ...
October 1, 2018, T+49: Iran sanctions starting to bite; China economy shows signs of slowing down due to trade war; and, Canada blinks.
September 30, 2018, T+48: US golfers at Ryder Cup -- huge embarrassment. Wow. Could they have possibly done any worse?
September 29, 2018, T+47: if I were a 17 y/o male, I would never again go to a party where there were women; I would never date a woman; I would never go into any room and close the door. When practicing medicine in the USAF, I never closed my office/exam room door.
September 28, 2018, T+46, posted 10:10 a.m.CDT, September 27, 2018):
What difference does it make?
September 27, 2018, T+45: nomination won't come out of committee. (Posted 6:45 p.m. CDT, September 25, 2018.) Thursday, September 27, 2018: wow, what an incredible day -- Trump takes on China; Trump delays meeting with Rosenstein; SEC charges Elon Musk with fraud; TSLA drops 10%; unbiased reporting suggests Kavanaugh saved himself; but the media will spin the story; big story: will Grassley hold the committee vote Friday; Genscape suggests New England could have huge natural gas shortage risk over next few weeks;
September 26, 2018, T+44: into the danger zone.
September 25, 2018, T+43: in the past 24 hours, things look brighter for Kavanaugh. Should be a very, very interesting Thursday.
September 23, 2018, T+41: this must have been one heck of a party that all these folks can actually remember this party. I recall a few parties during my college days, but I don't recall the specifics dates, or the locations, and I kept a lot of journals during this time.
September 22, 2018, T+40: accuser given more time. Palo Alto loony sets US Senate schedule. Headline says she has agreed to testify. She said nothing of the sort. She said negotiations will continue. Grassley needs to schedule the vote and tell the accuser she is welcome to testify whenever she wants. This is just the committee vote, not the Senate confirmation vote. For Pete's sake.
September 21, 2018, T+39: Trump tweets -- Senator Feinstein and the Democrats held the letter for months, only to
release it with a bang after the hearings were OVER - done very
purposefully to Obstruct & Resist & Delay. Let her testify, or
not, and TAKE THE VOTE!
September 20, 2018, T+38: Kenney, Kopechne, Kaepernick, Kavanaugh, Kaos.
September 19, 2018, T+37: Well played, Ms Feinstein.
September 18, 2018, T+36: Kennedy, Kopechne, Kaepernick, Kavanaugh.
September 17, 2018, T+35: End of the line.
End of the Line, The Traveling Wilburys
September 16, 2018, T+34: Kavanugh #MeToo.
September 15, 2018, T+34: Kavanaugh accused.
September 14, 2018, T+33: for first time in 13 years, US will sell beef to China. Not one single pound of beef was sold to the Chinese under the Obama administration -- a policy that began under the "intellectually uncurious" George Bush and continued by Barack "you can't just drill your way to lower oil prices" Obama.
September 13, 2018, T+32: lest we forget.
September 12, 2018, T+31: someday we are going to look back on the Trump era -- remember it fondly and wonder how the next president screwed it up so badly. Meanwhile, his predecessor continues to claim it was policies that set these things in motion. What a doofus:
Obama:
if you like your doctor, you can keep your doctor -- huge lie
you can't just drill your way to lower oil prices -- huge lie (I don't know if he believed that, or if that was a policy decision)
the Russians are not trying to influence the Hillary - Trump presidential campaigns
September 11, 2018, T+30: record after record after record being broken.
September 10, 2018, T+29: unless you were under the Geico rock the past week, you could not have possibly missed former President Obama taking credit for building the Trump economy. LOL. The bigger story: Trump is getting under everybody's skin / inside everyone's mind.
September 8, 2018, T+27: a footnote in history at worse, at most, a very, very short chapter, "ObamaCare."
September 7, 2018, T+26: annual wage growth highest since 2009; jobs report blows past forecasts; September 6, 2018, T+25: Senator Warren says if Trump unfit to be president, time to invoke 25th Amendment.
September 5, 2018, T+24: graphic of the day --
September 4, 2018, T+23: loss of civility in the US Senate today -- Kavanaugh -- Supreme Court nominee -- hearings begin.
September 3, 2018, T+22: Ivanka emerges as Trump's jobs czar; focus on "forgotten men and women." Posted on Labor Day. In other news, photo-cropping:
September 2, 2018, T+21: quiet Sunday. Trump will re-consider freezing federal employee pay raises. Virginia GOP at risk. LOL. As usual, Trump is doing the right thing, and he is doing it his way.
August 29, 2018, T+16: wow, Trudeau is spooked! After US-Mexico come to "broad" agreement (announced just two days ago), Trudeau who has not had a good year so far, says Canada could have a deal with the US by the end of the week. Trudeau's country has become known as the country that can't "close a deal." Four pipeline attempts: four strike outs -- Northern Gateway (killed by Trudeau); Keystone XL (killed by Trudeau's close friend Barack Obama); Enbridge Line #3 in deep trouble in Minnesota (arguing over one or two miles of route); and, TransMountain Pipeline expansion (Trudeau had to buy it and all hinges on court decision expected to be announced tomorrow).
August 28, 2018, T+15: second estimate of 2Q18 GDP -- at high end of consensus (3.8% - 4.2%) -- 4.2%.
August 28, 2018, T+14: major indices hit new record highs yesterday; one exception -- Dow -- but very, very close to it's all-time high of 26,600 or thereabouts.
August 27, 2018, T+13:
August 26, 2018, T+12: quiet.
August 25, 2018, T+11: quiet.
August 24, 2018, T+10: quiet.
August 23, 2018, T+9: remember when Obama Campaign was fined $375,000 for campaign reporting violations and no jail time. Cohen was screwed.
August 22, 2018, T+8: Market yawns despite news yesterday. Headline: US entering longest bull run ever. S&P 500 hits all-time record; extends records.
August 21, 2018, T+7: "Manafort" found guilty on 8 of 18 charges; none have to do with Trump or "Russian collusion." "Cohen" pleads guilty to two charges breaking campaign finance laws.
August 20, 2018, T+6: Quiet.
August 19, 2018, T+5: Governor Andrew Cuomo really stepped in it this past week, saying that "the United States was never that great." And that's not out of context, and it's not paraphrasing. He said that very, very clearly. The crowd's reaction was "mixed"? Mostly incredulous. Cuomo's "deplorable" moment. August 18, 2018, T+4: first former CIA director to lose his security clearance. Sounds like other "spooks" got the message. At least two said the former CIA director was "out of line" with his public comments.
August 17, 2018, T+3: President Trump revokes the security clearance of former CIA director John Brennan. It's about time. I'm looking for Trump to fire Sessions, Rosenstein, and Mueller sometime between now and January 3, 2019. My hunch: after Kavanaugh is confirmed.
August 15, 2018, T+1: Iran's latest tactic to save market share. Iran will cut prices for its Asian customers. Sanctions are starting to bite. Link here.
The eagle-eyed reader who first spotted the reference to a "carver's cabin" at Burnaby has now photographic evidence of such a structure, and indeed, it is a two-story cabin as the reporter first reported.
August 20, 2018: Venezuela to formally introduce new currency
the sovereign bolivar will replace the existing strong bolivar
the sovereign bolivar will strip off five zeroes from the exiting strong bolivar
the sovereign bolivar will be tied to the "petro"
the petro is a newly introduced Venezuelan cryptocurrency -- will hide sources of financial transactions
the petro will be backed by Venezuela's oil, gold and diamonds (I am not making this up)
the central bank will publish the value of the new sovereign bolivar on a daily basis
if its backed by the price of oil (for the most part), Venezuela has turned to "dollarization" of its currency -- Argus -- because internationally, oil is still priced in US dollars
whether this works or not, it would not have required "cryptocurrency" unless Venezuela has something to hide (I'm shocked, I'm shocked)
This is the third post regarding this Reuters story. For an earlier note on this article, see this post. I am posting this again, because of all the data points, from OPEC:
this is from OPEC's monthly report -- OPEC's monthly reports shift like the blowing sand
OPEC: lower demand for its crude oil next year as rivals pump more
Saudi Arabia: eager to avoid a return of oversupply, has cut production
OPEC: the world will need 32.05 million bopd from its 15 members, down 130,000 bopd from last month's forecast
130,000 / 32.05 million = 0.4%
OPEC prices topped out at $80 this year; have since slid to $73
OPEC July production rose to 32.32 million bopd
this is a "mere" 41,000 bopd from June as the Saudi cut offset increases elsewhere (other OPEC nations taking Saudi's market share?)
OPEC: moderate demand growth next year
demand to grow by 1.43 million bopd
that's 20,000 bopd less than forecast
a slowdown from 1.64 million bopd in 2018
July: Saudi Arabia claims it cut production by 200,000 bopd to 10.288 million bopd
Bottom line: a lot of verbiage for not much change: when OPEC suggests demand will be 20,000 bopd less than forecast (just one month ago), one gets the feeling that there are a few princes behind a computer with too much time on their hands.
Bottom line: no matter how many times I look at Saudi's production figures, they always seem to be about 10 million bopd, never less, but not much more. More importantly, "they" always talk about production but never about domestic consumption which historically increases every summer (air conditioning demand) and will increase going forward under Prince Salman's Vision 2030.
Bottom line: parsing OPEC's monthly letters feels a lot like listening to Steve Liesman parsing "the Fed's" by monthly minutes.
Bottom line: by the way, if that is accurate that next year global demand will be 20,000 bopd less than forecast, that makes Williams County in the Bakken, a swing producer. Harold Hamm, alone, can increase / decrease production by that much electronically and remotely from Oklahoma.
OPEC on Monday forecast lower demand for its crude next year as
rivals pump more and said top oil exporter Saudi Arabia, eager to avoid a
return of oversupply, had cut production.
In a monthly report, the Organization of the Petroleum Exporting
Countries said the world will need 32.05 million barrels per day (bpd)
of crude from its 15 members in 2019, down 130,000 bpd from last month's
forecast.
The drop in demand for OPEC crude means there will be less strain on
other producers in making up for supply losses in Venezuela and Libya,
and potentially in Iran as renewed U.S. sanctions kick in.
For newbies:
among global oil producers, Venezuela, Libya, Iran, and Canada no longer matter
the only global oil producers that matter: Russia, Saudi Arabia, and Texas -- as swing producers -- and probably in that order
The second article:
Most of the time, the overall inventory numbers at Cushing don’t move
up or down long enough to attract a lot of attention. When production
upstream of the hub swells, we can start to see builds. And when Gulf
Coast demand rises or Midwest refiners are running at top utilization,
we’ll typically see draws. But when inventories are hovering around a
manageable average (like mid-2016), we tend to view stockpiles at the
“Pipeline Crossroads of the World” as an indicator for the WTI
supply/demand balance and thus prices — but not as a source of market
consternation.
Where things really start to get interesting — and what’s currently
keeping Midcontinent traders up at night — is the current scenario of
crude inventories inching towards the bottom of their tanks. Recent
footage of Cushing, in the video at the lnk, gives you a sense for just how
low we’ve gotten.
Crude inventories have moved low enough in recent weeks that much of the
market is beginning to question how low we can go.
The reason this
question can be a bit murky is tank bottoms, the minimum amount of crude
oil that is always left in storage tanks. Tank bottoms are kind of like
a minimum balance in your checking account — to keep the account
running, you need to leave, say, $1,000 in it.
You can add a bunch of
money above that threshold, but you really, really don’t want to dip
below that lowest limit. Tank bottoms provide a sort of liquid
foundation for the tank, or a minimum operating balance, where volume
can easily flow in and out of the tank as long as it stays above that
bottom level.
Because the vast
majority of tanks at Cushing have floating roofs, tank bottoms also
ensure those roofs don’t hit the physical bottom of the tank. Crude
cannot flow unless the proper tank bottoms are in place, and the owner
or operator of a tank will leave those bottoms in place until that tank
is taken out of service.
Comment: some weeks ago, John Kemp was one of the first to shout loudly and clearly on twitter that we had ended a period of severe backwardation.
Comment: this will turn out to a non-problem.
The third article is a great read -- some interesting analysis that fits much of my world myth, although I disagree with some of his "facts." However, at the end of the day, "the beat goes on," this is the writer's thesis:
In spite of the oil prices nearly tripling from the 2016 lows, the big players just haven't invested money in the mega-project arena
as of yet. The oil mix needs these long-cycle barrels as these wells
tend to flow at many time the rate of the unconventional shale plays that are now soaking up the lion’s share of new capex dollars.
Intuitively
we know long-cycle production must return.
But, as the EIA supply
graphs show, it is way past due if we are to have any hope of replacing
barrels lost to the decline of fields currently on stream.
So, the
good news is it will happen. But no one is calling for a meaningful
return to higher capex levels for a year or two. And that is exactly why
I believe there is a price super-spike in the offing. My guess is it’s a
couple of years out, but I could be wrong both on the short and the
long side.
We are living on borrowed time in the area of oil supply. The glut of
mega-projects completed in the run up to 2014 is aging rapidly, and
declines will start to be felt. There is a gap in the pipeline to
replace these supplies that cannot be filled in the short run.
We
seem to keep re-learning the same lessons. I may sit my young grandson
down soon. He will be driving age in a couple of years. Perhaps by then I
will have figured out a way to tell him about gas lines.
Comment: haven't the "peak oil" folks been talking about a "super-price-spike" for the past ten years? If so, we're now moving into the second decade of "peak oil" folks talking about the coming "super-price-spike."At some point, they will be correct. Goldman Sachs probably knows the precise date when we will see that "super-spike." By the way, we've been to $140 in the recent past, so the "super-spike" has to be well above $140 to qualify for "super-price."
One of my least favorite songs, but there's no other choice, as the beat goes on:
Disclaimer: this is not an investment site. Do not make investment, financial, job, travel, or relationship decisions based on what you read here or what you think you might have read here. Market: the market opened strong on Home Depot's second-quarter earnings, but then faded. Mid-morning the Dow was up all of 32 points, after several days of huge "down" days.Analysts forecast EPS at $2.84; came in at $3.05, and guidance for full year was raised to $9.42 from $9.31 by the company.
Timing the market: Mark Cuban says he has sold off all his equity investments, except for a few, including Amazon and Netflix. No specific dates were mentioned, but must have sold near recent market tops.
************************************* Back to the Bakken
The Director's Cut is scheduled to be released tomorrow.
Wells coming off the confidential list today:
34054, SI/NC, BR, Rink 6-1-5 MBH, Pershing, no production data,
33231, 1,856, CLR, Vardon 3-14H2, Siverston, Three Forks, 62 stages; 14.8 million lbs, another huge Vardon well; the Vardon wells are tracked here; t3/18; cum 120K -- 120K in four months -- and not too long ago the folks over at SeekingAlpha were all agog at EOG targeting first-year production of over 100,000 bbls in the Bakken; the completion is instructive -- CLR, in its 2Q18 corporate presentation said this: optimized completion, 60 stages; Whiting, in its 2Q18 corporate presentation said this (slide 16):
wells stimulated with less than 3 million lbs were underperformers
strong production increase going to 7.5 million lbs
no apparently production increase seen at 15 million lbs
Crude oil inventories at Cushing have been in a free fall. After last
peaking at more than 69 MMbbl in April 2017, stockpiles have decreased
to less than 22 MMbbl recently, nearing all-time lows for tank
utilization at the Oklahoma crude-trading hub. While we’ve seen volumes
drop quickly in the past, inventories have now declined for 12 straight
weeks at a staggering pace. Traders, refiners, and other market
participants are starting to fret. Is this just another cyclical trend
or are market factors exacerbating the impact? Today, we examine the
influence of historical pricing trends on Cushing inventories and why it
seems that demand factors are speeding up the drop.
Cushing inventories, a leading benchmark for U.S. crude oil stockpile
analysis, are measured weekly as part of the Energy Information
Administration’s (EIA) Weekly Petroleum Status Report. Stockpiles at
Cushing averaged just under 65 MMbbl from 2016 through the beginning of
2017. Inventories ramped up to 69.4 MMbbl in April 2017 (Figure 1
below), an all-time high for volume at the trading hub. That high was
quickly followed by a sharp drop, then a rebound towards 64 MMbbl in
October 2017. But since October, we’ve seen an almost relentless decline
in crude inventories at Cushing, with stocks falling 30 out of the last
42 weeks and for the last 12 weeks straight
