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Wednesday, October 23, 2019

Notes From All Over, Part 1 -- October 23, 2019

First things first: F reports today, after market closes. According to Ford:  
DEARBORN, Michigan, Sept. 24, 2019 – Ford Motor Company (NYSE:F) and Ford Motor Credit Company will release their 2019 third quarter financial results at 4:05 p.m. ET on Wednesday, October 23.
  • 7:10 a.m. CT, today: F just turned green, up one penny; earnings not yet available; but Dow moves from negative 100 to negative 40; is the market excited about F?
  • 6:50 a.m. CT, today: F down 5 cents in pre-market trading; earnings appear not to be  out yet; overall market down in pre-market trading so five cents off for F not concerning;
First things first: South Dakota county gives "green light" to DAPL expansion in 4 - 1 vote.

First things first: Washington Nationals take first game, 5 - 4.

First things first: that lop-sided win Sunday night by the Dallas Cowboys over an important rival put a smile on Jerry Jones' face. 

UNP: huge day for the shares yesterday. Transcript here. UNP up 2.2% yesterday; up $3.70, traded over $170/share in first time for quite some time. Remains well below its 52-week high of $180.

US market: the market is down in pre-market trading -- some say it is due to fact that CAT disappointed: revenue declined by 6% in 3Q19; slashed 4Q19 earnings guidance by 10%.

Awkward grammar: in another first, US now exports crude oil to more destinations than it imports from. Link here. This was a big, big story yesterday at some sites. Does number of destinations to/from really matter, or is it the overall number more important. I don't know. I suppose if one thinks about it for a moment, I guess it's a big deal. The bigger story is that US crude oil exports are smashing records as seen by the graphic at that link. Interestingly enough, US imports remain stubbornly flat -- yes, recently a significant drop -- but still quite choppy. I guess between 2009 and 2019, it appears US imports dropped from 9 million bopd to 7 million bopd; while over same period, exports increased from zero bopd to 2 million bopd. Well, imagine that.

737 MAX: Boeing fires Kevine McAllister, head of unit that makes the 737 MAX. Link here.

Cash crunch or just smart move? We mentioned this in passing yesterday -- Saudi Arabia sells $2.5 billion in bonds. First international debt sale since the attack in September, 2019. Orders peaked at $14 billion (huge demand). Usury laws?

Chevron/Permian/boom: CEO not worried about boom/bust cycle in the Permian -- looks for boom/boom cycle. Behind a paywall at the first link, but full story, no paywall, at Rigzone

Chevron/Venezuela: granted 3-month waiver to continue operating in Venezuela. CVX up $1.19 yesterday but will be under pressure today with a) overall market down; b) another US crude oil build; and, c) WTI down a bit.

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China/natural gas shortage: tea leaves suggest China could be in store for a tough winter, natural gas shortages.

2 comments:

  1. The story on US crude destinations is interesting in that it basically shows US crude is a known. flexible crude.

    I remember having arguments with some of the peak oil oriented "crude quality matters" idiots. This one guy insisted that US crude would not find markets or expand exports significantly. This was ~JAN18.

    It was a silly argument even then. US crude is very similar to Brent chemically. And we'd already had a very recent runup from 0.5 MM bopd to 1.5 bopd at that time. But he insisted nobody would want it...and the only reason it was getting exported was (a) people trying it and hating it and not ordering more or (b) refineries of Exxon, Chevron.

    Of course since then, we've grown to 3 MM bopd of exports. Quite significant if you figure total country to country trade is on the order of 40 MM bopd.

    So seeing it go into so many countries, including several like South Korea that lack majors refineries, is interesting. Just shows (again) how silly this "crude quality matters" idiots were.

    US crude is not some strange, substandard product. But a desirable, understandable, and (now) very common traded crude. In fact, the volumes of US exported crude are greater than North Sea crude now!

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    Replies
    1. Great note, thank you. So many things I could say, but I'm so far behind -- have to keep moving. I will eventually come back to this. Much of this has to do with a) geo-politics; and, b) the right kind of oil -- heavy vs light, and what refineries are optimized for.

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