Thursday, October 11, 2018

Traveling Today -- Quick, Miscellaneous Notes -- October 11, 2018

Natural gas: more and more, this looks like this might be the energy story of the year --

Jobs: link here --
  • forecast: 207K
  • actual: 214K
EIA weekly petroleum report -- link here:
  • huge crude oil build (and it could be worse next week): 6 million bbls; now at 410 million bbls; my threshold 400 million bbls
  • refiners at a meagerly 89% operating capacity; wow; winter turnover; maintenance?
  • crude oil imports averaging 5.3% more than same four-week period last year (the country needs the "right kind" of oil)
  • gasoline production below 10 million bbls/day but distillate fuel production steady at 5.0 million bbls/day
  • gasoline provided is trending down, but jet fuel use is trending up
The road to New York: link here. From a reader --
  • Drill, baby, drill ...
  • While Upstate New York withers, due to Cuomo's hatred of natural gas ........
  • Shell to employ 6,000 construction workers to build plastic plant in Pennsylvania .......
  • SIX THOUSAND WORKERS employed while upstate NY withers due to anti-natural gas policies by those in Albany ..
GDP -- link here, latest forecast -- October 10, 2018 -- 3Q18 -- 4.2% --
The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2018 is 4.2 percent on October 10, up from 4.1 percent on October 5.
After this morning’s wholesale trade report from the U.S. Census Bureau and this morning's Producer Price Index release from the U.S. Bureau of Labor Statistics, the nowcast of the contribution of inventory investment to third-quarter real GDP growth increased from 2.09 percentage points to 2.20 percentage point.
Market crash: we'll see where we are six months from now. Investors don't often get these opportunities.

Morning Note Posted -- October 11, 2018

API weekly crude oil inventory data: link here. Wow, this is incredible -
  • a massive build of 9.75 million bbls (and it could be worse next week)
  • expectation: a smaller build of 2.62 million bbls
Natural gas prices soaring: fill-rate hits decade-low. The gap continues to widen.

Wells coming off confidential list today -- Thursday, October 11, 2018:
  • 34645, drl,  Eagle Operating, Popinga 32-16, wildcat, no production data,
  • 32021, SI/NC,  Hess, CA-Stangeland-155-95-2128H-5, Capa, no production data, 
  • 31987, 1,063,  Oasis, Hanover Federal 5300 41-11 13TX, Willow Creek, a nice well; t4/18; cum 105K 8/18;
Active rigs:

Active Rigs68593368190

RBN Energy: part 4, location, location, location, key to near-term E&P profitability growth.
Anyone who’s shopped for a home is well-aware of the relationship between location and valuation. The same holds true for oil and gas producers accumulating a portfolio of real estate underlain by the most promising oil and gas formations. Recently, the most desirable neighborhood has been the Permian Basin, which has seen more than $70 billion in M&A transactions since mid-2016. While the entire U.S. E&P sector has returned to profitability, Permian players have generated the highest production growth, the best margins, and the most substantial profits and cash flows. There’s a catch, though: production growth in the Permian has led to serious takeaway constraints. Today, we discuss how the impact of these constraints is reflected in a company-by-company analysis of quarterly results.