Gasoline Demand -- September 25, 2019

Link here.

Gasoline production. Note -- this is about gasoline production, not gasoline demand. This is a comment a reader provided at another post regarding gasoline production last week:

Even with the decrease in the amount of oil being refined, gasoline output from our refineries was quite a bit higher, increasing by 789,000 barrels per day to 10,240,000 barrels per day during the week ending September 20th, after our refineries' gasoline output had decreased by 909,000 barrels per day to a nine month low the prior week.

With that big increase in gasoline output, this week's gasoline production was 4.1% higher than the 9,832,000 barrels of gasoline that were being produced daily over the same week of last year.

Weird swings in gasoline production like that are usually due to some kind of adjustment for ethanol blending. In addition, year-over-year comparisons at this time of year are also subject to whatever hurricanes might have been around last September, so pass the grains of salt.

Health Care Insurance -- Connecting A Couple Of Dots -- September 25, 2019

I don't know if folks remember this story of just a couple of days ago: Jeff Bezos cut off health insurance for part-time workers at Whole Foods. Wow, my wife thought that was "criminal."

I had heard the report/headline (maybe on the radio?) but did not read the story. I argued that it might not be due to costs alone.

With a headline story over at the WSJ today, I went back to check the Whole Foods story. The lede:

National grocery chain Whole Foods, which is owned by multibillion-dollar corporation Amazon, is cutting medical benefits for hundreds of part-time employees, Business Insider reported today. The decision, according to the company, is designed “to better meet the needs of our business and create a more equitable and efficient scheduling model,” a Whole Foods spokesperson told BI.

I suggested to my wife at the time that there were may be reasons other than costs alone that drove the decision. I can go through those with you sometime if anyone is interested but that will be a story for another time.

So, how many Whole Foods folks are affected? From the linked story:

Whole Foods claims that the percentage of its workforce that’ll be affected by the cost-cutting measure, and therefore no longer eligible to purchase employer-provided health care, is less than 2 percent. (That equates to nearly 2,000 people.)

One affected employee, who’s worked for Whole Foods for 15 years, told Business Insider they were “in shock,” as the company’s benefits options were why they held on to the job. [Parse that sentence.]

Now, the headline story over at The WSJ today:

From the linked story:

The average total cost of employer-provided health coverage passed $20,000 for a family plan this year, according to a new survey, a landmark that will likely resonate politically as health care has become an early focus of the presidential campaign.

Annual premiums rose 5% to hit $20,576 for an employer-provided family plan in 2019, according to the yearly poll of employers by the nonprofit Kaiser Family Foundation. On average, employers bore 71% of that cost, while employees paid the rest.

Cutting off health insurance from Whole Foods parttime workers may or may not be "crimianl" to use my wife's words, but certainly, $20,000/year/family for health insurance is.

Thirty percent of $20,000 is $6,000 but that does not count deductibles and co-pays. I don't know to what extent it includes prescription drugs.

This also explains why the unemployment number is so low.

Once the Dems decide on their presidential nominee, Trump better get ahead of this story. He's not responsible; the US House has done nothing on this issue but Trump will be held accountable by the media.

Here We Go Again -- CLR With Eight More Long Creek Unit Permits -- September 25, 2019

Active rigs:

$56.56	9/25/2019	09/25/2018	09/25/2017	09/25/2016	09/25/2015
Active Rigs	59	66	58	33	71

Eight new permits, #37008 - #37015, inclusive:

• Operator: CLR
• Field: Long Creek Unit (Williams)
• Comments:
• CLR has eight more LCU permits, including three LCU Reckitt Federal permits; one LCU Foster permit; and, four LCU Ralph Federal permits; the CLR Long Creek unit is tracked here;
• Reckitt Federal in section 22-153-99; 1094 FSL 1180 FWL
• Foster also in section 22-153-99; 1244 FSL 1090 FWL
• Ralph Federal also in section 22-153-99; 1094 FSL 1225 FWL

Coming off the confidential list today:

• 35896, SI/NC, Slawson, Slasher Federal 3-27-22MLH, Big Bend, no production data,
• 35311, 2,020,  CLR, Putnam 7-25H, 41 stages, 9.3 million lbs, East Fork, t5/19; cum 66K over 2.5 months;
• 35310, 1,085,  CLR, Putnam 6-25H1, Three Forks, 41 stages; 6.3 million lbs; East Fork, t5/19; cum 11K over 20 days;

Three permits were renewed but they were all salt water disposal wells.

Four producing wells (DUCs) reported as completed:

• 35953, 715, RimRock, Two Shields Butte 5-7-8-8H3, Heart Butte, t9/19; cum --;
• 36015, 1,681, RimRock, Two Shields Butte 5-7-24-16H3U, Heart Butte, t8/19; cum --;
• 36014, 1,218, RimRock, Two Shields Butte 5-7-8-1H3U, Heart Butte, t8/19; cum --;
• 33875, 760, Crescent Point Energy, CPEUSC David 2-29-32-157N-99W MBH, Lone Tree Lake, t8/19; cum --;

Recession Is Right Around The Corner -- September 25, 2019

Updates

12:26 p.m. CT: I posted the original note at 8:37 a.m. CT elsewhere but now moved the original post over here (12:26 p.m. CT). I did not buy any shares of GM when the market opened, but I did buy shares in another company as soon as the market opened. The Dow was negative at the time. Right now, the Dow is up 141 points -- and this is after the "transcript of the telephone call was released." It looks more and more like the whistleblower is working for Pocahontas or Kamala Harris, at least that's what I'm hearing on talk radio. This turns out to be a twofer -- embroils both Trump and Biden. LOL. But I digress. Some think that Trump could gain two to three points in the next Rasmussen poll. [Later: Rasmussen poll shows Trump at his recent high, at 53% approval.]

The point of the GM note below: this certainly does not look like movers and shakers think there will be a recession in the next six months. 

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

GM

Updates  

On a day of volatility in the market and then at the end of the day, a small loss for the market, shares in GM were up. We discussed the GM strike earlier. Two developments today:

• an Investor's Business Daily story that there are signs that the UAW strike is nearing an end; and,
• GM says it will continue to pay for health insurance for those on strike

Original Note
GM:

• employees on strike
• could lose $100 million / day
• car sales down globally
• and, recession is right around the corner
• and, GM shares:
• up eleven cents today, and
• paying over 4%

GM strike:

• could go on much longer than expected
• will be much shorter than anyone expects
• it takes about two years for a long-term employee to recover what was lost during  the strike
• that was also true in the USAF; every move -- especially if it was an overseas move -- took me two years to fully recover; to get back to where I was before the move (and that move was largely paid by the government)

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

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

Trump's Timing

Unless President Trump had an interview with a hologram of the president of the Ukraine, it sounds like President Trump met personally and publicly and took questions at the UN with the president of the Ukraine. The latter said he was never pressured to do anything by President Trump.

Now, correct me if I'm wrong, but what are the odds that the president of any foreign government would "be in town" exactly on the day that Trump needs him most, when the US House is taking up an impeachment inquiry? Not only that but Trump will hold another press conference later today (September 25, 2019). "Never let a good crisis go to waste," Rahm Emanuel, the Obama administration. President Trump will note that this Congress has done nothing, particularly:

• nothing on expediting visas/citizenship for DACA-eligible immigrants
• nothing on gun control
• nothing on prescription drug pricing

Everything hits the fan yesterday; Nancy Pelosi begrudgingly sets "impeachment" in motion ... and the man of the hour, the president of the Ukraine just happens to "be in town." What are the odds?

Winter Is Here -- First Day Of Autumn -- September 25, 2019

Link here.

Link here.

That Attack On Saudi Arabia? -- Never Mind -- September 25, 2019

All Politics -- Nothing About The Bakken -- September 25, 2019

This is pretty funny. From a story on the internet this morning:

Kevin McCarthy: If you want to know what Pelosi will do tomorrow, read AOC's tweets tonight.

I can't wait to see the transcribed phone call, and the whistle-blower's complaint.

You know, the one thing that this scandal does not have that it needs if this story were to have any legs: sex. As far as I can tell, there will be no sex scandal in this. Unless, somehow, President Trump brought up cigars with the Ukrainian president.

Quick: who is the president of (the) Ukraine? "The" is optional. I bet you didn't know that. Wiki told me.

The talk here in north Texas on talk radio and in Starbucks this morning: they just handed Trump the 2020 election. Apparently there are some congressmen / women already having second thoughts. I assume the congressmen/women noted that without sex there is no scandal. Impeachable, perhaps. High crimes and misdemeanors, maybe, but without sex, no scandal. The French must be wondering what in the world is this all about? I know that's what the Ukrainian president said. Whatever.

It is very likely that the squad just handed the US House of Representatives back to the GOP. 

Meanwhile the turtle just goes about his business confirming federal judges.

How To Keep Track Of The Number Of Stages In A Fracked Long Lateral -- September 25, 2019

This turns out to be more complicated than I first thought. After posting this picture yesterday, I had a couple of comments / queries -- one anonymous and two by e-mail.

I honestly did not know what they were doing in the photo above.

Today, when I took Sophia into her Montessori classroom -- we arrived early before her teacher was there -- so she could have a second breakfast with her classmates -- I asked her to show me what she was doing.

She pulled out the project.

I don't know if you can see it in the photo below but each of the little "tabs" have a number. Each number was a multiple of "2" so, randomly, 2, 4, 6, 8, 16, 32, 64, etc. Or maybe better said, all (?) the even numbers.  

Sophia said that one had to put the numbers in a certain order to make a chain.

In the photo below, one sees a chain with beads of the same color. Apparently they had to match the tabs with numbers on them with the number of beads in each section of the chain. And then total them up as they went along -- sort of like an abacus.

She appeared to know exactly what she was doing. In fact, it appeared she was surprised that I was confused. She said, "it's easy. Don't you get it?" She could have added, "you dummy." LOL.

It really is bittersweet to see one's granddaughters grow up. By age eight they don't need you any more except as an Uber-driver.

So, anyway, it turns out to be much more complicated than I originally thought. It appears that one could also use this method to describe how many stages CLR uses when fracking a long lateral.

Is It Time For Saudi Arabia To Panic Yet? -- September 25, 2019

Let's see what the EIA numbers were:

• EIA US crude oil inventory, week-over-week: an increase of 2.4 million bbls; Big_Orrin was off by a country mile, or as much as a long-reach horizontal lateral
• EIA US crude oil inventory: 419.5 million bbls; supposedly at the 5-year average
• but look at this: refineries operating at 89.8% capacity (a rainstorm called Imelda shut down the Exxon refinery in Houston)
• even so, gasoline production increased last week, who wudda thought?
• distillate fuel production decreased last week but not by much

WTI: after the EIA report -- down a whopping $1.26; down 2.2%; and now trading at $56.03. Even worse for Saudi Arabia, who is not yet back in business, is selling what they have with a Brent price of barely breaking $60.

US shale, the swing producer:

• Saudi loses half (or more) of its export capacity
• a rainstorm shuts down (some) operations along the US coast 
• crude oil imports dropped an astounding 672,000 bopd (over a denominator of about 6.5 million bopd, or 10%)
• and, yet, US gasoline production actually increased last week, albeit not much
• US gasoline production over past four weeks averaged 9.4 million bbls; last week production came in at 10.2 million bbls -- an 8.5% increase -- and that's with Exxon's largest refinery along the coast shut down for the week (assuming that was the week that was, and I could be wrong) -- Focus on Fracking will sort this out in the weekly Sunday note

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	447.2
Week 12	February 13, 2019	3.6	450.8
Week 13	February 21, 2019	3.7	454.5
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
Week 24	May 8, 2019	-4.0	466.6
Week 25	May 15, 2019	5.4	472.0
Week 26	May 22, 2019	4.7	476.8
Week 27	May 30, 2019	-0.3	476.5
Week 28	June 5, 2019	6.8	483.3
Week 29	June 12, 2019	2.2	485.5
Week 30	June 19, 2019	-3.1	482.4
Week 31	June 26, 2019	-12.8	469.6
Week 32	July 3, 2019	-1.1	468.5
Week 33	July 10, 2019	-9.5	459.0
Week 34	July 17, 2019	-3.1	455.9
Week 35	July 24, 2019	-10.8	445.1
Week 36	July 31, 2019	-8.5	436.5
Week 37	August 7, 2019	2.4	438.9
Week 38	August 14, 2019	1.6	440.5
Week 29	August 21, 2019	-2.7	437.8
Week 30	August 28, 2019	-10.0	427.8
Week 31	September 5, 2019	-4.8	423.0
Week 32	September 11, 2019	-6.9	416.1
Week 33	September 18, 2019	1.1	417.1
Week 34	September 26, 2019	2.4	419.5