Three "Levers" Moving The Market And Only One Lever " Talking" -- May 1, 2019

How much have things changed?

Six months ago "everyone" was worried about another "rate hike" in early 2019. If at that time, Jerome Powell had said "no" rate hikes in 2019, the market would have surged.

Now, the talk has swung the other way: "everyone" sees the need/opportunity for a 25 point basis - 50 point basis cut in the "Fed rate."

So, today when Jerome Powell said he sees no need for cutting (or raising) the Fed rate, the Dow goes from 60 points in the green to 60 points in the red. Just for staying neutral.

And tomorrow his comments will be forgotten.

It's May: "sell in May, and go away."

The three "levers" that affect the overall market: 1) fiscal policy; 2) monetary policy; and, 3) trade. 

By the way, speaking of which, the top bills passed by the 115th Congress so far:


And, we move on.

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

65 Active Rigs In North Dakota; Rimrock With Eight New Permits; WTI Holds Above $63 -- May 1, 2019

WTI: despite staggering increase in US crude oil inventories, WTI holds above $63 

Active rigs:

$63.62	5/1/2019	05/01/2018	05/01/2017	05/01/2016	05/01/2015
Active Rigs	65	61	49	29	86

Eight new permits:

• Operator: Rimrock Oil & Gas Williston, LLC
• Field: Mandaree (Dunn County)
• Comments: Rimrock has permits for an 8-well Skunk Creek / Two Shields Butte in section 24-149-93, Mandaree oil field

One producing well (DUCs) reported as completed:

• 35373, 2,437, Whiting, Knut Berg Trust 41-28H, Pembroke, no production data;

Idle Chatter Regarding The Bakken -- May 1, 2019

I've been going through the wells that came off the confidential list in 1Q17. Some observations:

• these are huge wells; much different than the wells we saw in the earlier days of the boom
• wells are reaching 250,000 bbls or upwards of 400,000 bbls in two years
• the wells show the usual decline, but the decline is nothing like it was in the early days of the boom
• many, many wells are showing significant increased production due to impact of newly fracked neighboring wells
• older wells -- even two years old -- show remarkable return even after a small re-frack
• if the Permian is anything like the Bakken, the US shale revolution will be factors of 10 greater than what folks think the US shale revolution was going to be
• most of these older wells require little daily maintenance; little expense
• the major expense has been re-captured; it would be interesting to see the "margins" on these older wells (the price received for the oil vs the cost of producing it after the original CAPEX was spent)
• these wells will continue to produce for the next 30 years
• tier 1, tier 2, tier 3 will be defined by the price of oil, or to paraphrase Hemingway, "movable tiers"

***************************

The Sports Page

Apparently I'm not the only one.

After watching for the second time the Texas Rangers "closer" lose a game for the team, I was curious if anyone was talking about this debacle.

Yes. Over at google, 1.8 million hits asking the same question or something related.

Last night, the Texas Rangers were ahead 3-0 at the top of the 9th inning -- they were playing in Arlington, TX, just down the road from us.

The "closer" for the Texas Rangers simply had to keep the Pirates from scoring three runs in the top of the ninth.

Nope. The Pirates tied 3 - 3 at end of regulation and went on to win 6 (PP) - 4 (TR).

WPX Caribou Wells In Mandaree Off-Line -- May 1, 2019

Fracking operations in the area have recently been completed, it appears.

Affects these three WPX Caribou wells (as well as some Enerplus wells):

• #32677,
• #32678,
• #32679,

The Bakken Dreaded Decline Rate -- Re-Visited -- May 1, 2019

The well:

32736, 3,031, Newfield, Lost Bridge Federal 148-96-9-4-4HLW, Lost Bridge, t2/17; cum 373K 3/19;

Recent production. Regardless of "where" this well started, the fact that this well is still producing upwards of 12,000 bbls/month two years after it was fracked, speaks volumes how far "we"ve" come in the Bakken.

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	3-2019	31	11630	11836	13438	0	0	0
BAKKEN	2-2019	28	7113	6798	9697	9305	8044	1034
BAKKEN	1-2019	31	11447	11166	11433	15337	14748	314
BAKKEN	12-2018	31	10955	11821	12043	15581	14545	778
BAKKEN	11-2018	30	10687	10033	13437	14731	14136	340
BAKKEN	10-2018	31	12701	13012	15300	17774	17258	237

Why The Bakken Continues To Excite Me -- Thousands Of Wells Waiting To Be Re-Fracked -- May 1, 2019

Small re-frack; huge results.

See this post.

For newbies: current completion strategies, upwards of 10 million gallons of water or more. CLR re-fracks this well with 2 million gallons of water and gets this kind of return:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2019	28	19566	19462	25367	49381	48389	621
BAKKEN	1-2019	31	26040	26464	31398	54039	47776	5877
BAKKEN	12-2018	30	23141	22654	34189	35934	22812	12755
BAKKEN	11-2018	10	2743	2831	5489	2781	2648	79
BAKKEN	10-2018	31	11058	10920	28330	5220	4430	390
BAKKEN	9-2018	29	17070	17636	24454	29659	29275	0
BAKKEN	8-2018	8	4443	3854	3944	5354	4779	505
BAKKEN	7-2018	0	0	0	0	0	0	0
BAKKEN	6-2018	0	0	0	0	0	0	0

Those results are better than the original frack, the original well, two years ago:

BAKKEN	8-2017	31	665	622	2755	14116	14116	0
BAKKEN	7-2017	31	820	773	3825	1458	1363	95
BAKKEN	6-2017	21	569	606	3142	1216	1152	64
BAKKEN	5-2017	31	3430	3560	4965	7454	7454	0
BAKKEN	4-2017	30	16876	17168	12284	28288	28288	0
BAKKEN	3-2017	31	18615	18226	14841	31469	31469	0
BAKKEN	2-2017	14	16544	16159	10484	27151	27133	18

 I used to think that the re-fracks would be "reserved" for wells older than 2014, but here we go: a re-frack on a well that was just fracked two years ago. Literally thousands of Bakken wells that will be re-fracked.

Definition Of Doofus -- May 1, 2019

We just can't drill our way to lower prices -- we also have to build pipelines. Gasoline is approaching $5.00/gallon out in California (or so I'm told by my brother-in-law) -- 

See these posts:

• first;
• second.

*****************************

Another Doofus

In midst of greatest measles outbreak in two decades, Buttigieg says he supports vaccine exemptions based on personal beliefs.

As someone noted, apparently science is not one of the 29 languages Buttigieg knows.

And, yes, he will try to walk back that comment.

Williston -- The Bakken Economy -- Led The State In Taxable Sales/Purchases GROWTH In 2018

Link here to The Williston Herald.

Awesome!

North Dakota's taxable sales, for the year, 2018:

• Fargo:
• Williston: #2, passing Bismarck
• Bismarck:

Taxable sales for 2018:

• state: $20.24 billion; 12.54% increase over 2017
• state: the 12% annual growth rate is the largest year-over-year increase in taxable sales since 2012
• Williston: 26.17% year-over-year; #1 annual growth rate in the state
• Dickinson, #2: way behind at 14.10%

For the year: Williston now #2, surpassing Bismarck which has held that record for decades.

Complete figures at "ND Tax."

But again, look at that growth, year-over-year. For Williston, a 26% annual growth rate. Dickinson, coming in at #2, was way behind, about half of what Williston's growth rate was. 

Maybe The Atlantic will do a follow-up story to its big article back in 2016 or thereabouts in which the writers said the boom was over. I guess it all depends on the definition of "boom."

I'd like to pack this in and take you to the stars.


My Love For Evermore, Hillbilly Moon Explosion

Music -- Nothing About The Bakken -- May 1, 2019

A reader asked me about my music.

How can one not get re-energized with just this opening?

Lay Down (Candles In The Rain), Melanie, 1969

YouTube Fugue.

There was an 18-month-period, from late 1968 through mid-1970 that clearly had some of the best music ever.  This was the year of Woodstock. The Beatles were still going strong, but touring less, and would soon stop completely.  Led Zeppelin's first two albums, Zeppelin I and Zeppelin II, were released in 1969. The era of "free love" and the uncertainties of the Vietnam War probably contributed to some of this really incredible music.

Speaking of the Vietnam war, I turned 18 in 1969. My lottery draft was July 1, 1970; my lottery number was 103. The highest lottery number called for this group was 125; all men assigned that lottery number or any lower number, and who were classified as available for military service, were called to report for possible induction. I would have been deferred by virtue of being enrolled in college. I was worried that I would be called up before I graduated from college. I was convinced, but wrong, that the war would still be going on when I graduated from college.

Some irony, that after all was said and one, a 30-year career in the USAF.

US Commercial Crude Oil Inventories Increased By A Whopping 10 MIllion Bbls -- May 1, 2019

9.9 million bbls to be exact.

EIA: US crude oil inventories rise to highest levels since September,  2017.

Ben Winkley: "US crude oil inventories large enough to be visible from space."

Refiners: cut back. weekly refinery utilization off 09%.

Anas Alhajji: tried to make a case for oil going from green to red after the EIA data released; in fact; oil stayed almost flat.

It will be interesting to watch the "spin" on this.

Had you paid for Z4 research, this is the data that was forecast earlier this week -- Z4 Research / Z-Man forecasts (from twitter):

• crude: up 0.9 million bbls (off by a factor of 10)
• gasoline: down 1.0 million bbls (initial report only said gasoline inventories increased)
• distillates: down 0.8million bbls (decreased by 1.3 million bbls)
• strong gasoline demand (pending)
• a drop in net imports (wrong)

WTI: down all of 21 cents, moments after inventory number released.

WTI, later: holding at $63.41 -- folks suggest that the huge build is offset by the turmoil in Venezuela. 

Re-balancing:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 10	January 31, 2019	0.9	445.9
Week 11	February 6, 2019	1.3	337.2
Week 12	February 13, 2019	3.6	450.8
Week 13	February 21, 2019	3.7	343.8
Week 14	February 27, 2019	-8.6	445.9
Week 15	March 6, 2019	7.1	452.9
Week 16	March 13, 2019	-3.9	449.1
Week 17	March 20, 2019	-9.6	439.5
Week 18	March 27, 2019	2.8	442.3
Week 19	April 3, 2019	7.2	449.5
Week 20	April 10, 2019	7.0	456.5
Week 21	April 17, 2019	-1.4	455.2
Week 22	April 24, 2019	5.5	460.1
Week 23	May 1, 2019	9.9	470.6

Somehow this week's numbers seem to be off slightly. If last week's inventory was 460.1 million bbls and this increase this week was 9.9 million bbls, then the inventory should be an even 470 million bbls. I must have made a typographical error. 

Saudi Arabia Update; EIA US Weekly Petroleum Report -- May 1, 2019

Saudi crude oil imports, US, link here:

Saudi Arabia foreign exchange reserves, link here, huge rebound:

EIA US weekly petroleum report, link here:

• US crude oil inventory: confirms API data yesterday; a whopping 10 million bbl increase;
• US crude oil inventory: at 470.6 million bbls, US inventories are at the five-year average; again, the EIA fails to say that the five-year average continues to increase; historically 300 million bbls in storage was more than adequate; 350 million bbls in inventory would suggest "successful" re-balancing; unless I'm missing something -- an increase of 10 million bbls in one week is not trivial; twitter will be going nuts in a few minutes
• refineries operating capacity at: 89.2% capacity; low end of general range
• imports: up by 265,000 bopd from previous week; at 7.4 million bopd 
• gasoline and distillate production: within usual range

Re-balancing:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 10	January 31, 2019	0.9	445.9
Week 11	February 6, 2019	1.3	337.2
Week 12	February 13, 2019	3.6	450.8
Week 13	February 21, 2019	3.7	343.8
Week 14	February 27, 2019	-8.6	445.9
Week 15	March 6, 2019	7.1	452.9
Week 16	March 13, 2019	-3.9	449.1
Week 17	March 20, 2019	-9.6	439.5
Week 18	March 27, 2019	2.8	442.3
Week 19	April 3, 2019	7.2	449.5
Week 20	April 10, 2019	7.0	456.5
Week 21	April 17, 2019	-1.4	455.2
Week 22	April 24, 2019	5.5	460.1
Week 23	May 1, 2019	9.9	470.6

Somehow this week's numbers seem to be slightly off. If last week's inventory was 460.1 million bbls and this increase this week was 9.9 million bbls, then the inventory should be an even 470 million bbls. I must have made a typographical error.