WTI Goes Below $48 -- February 27, 2020

Something to think about: with the stock market plummeting; concerns about a recession or worse, depression, do you really think those high rollers are going to send more political cash to Buttigieg, Pocahontas, Biden, et al?  The same goes for all those down-ballot candidates.


More politics than usual (sorry) but I find the coronavirus story absolutely fascinating on so many levels:

Trump is always thinking. I am sure he is thinking about this -- coronavirus, Mexico, and the border wall.

The last time I looked, Canada, Mexico, and the US all share something in common -- we're all in North America, fairly isolated from coronavirus ground zero.

If coronavirus is "inevitable" in the US, it's inevitable in Canada and Mexico.

Two things:

• It will be interesting to see how coronavirus is managed in these three countries; and,
• President Trump may get even more support to strengthen the southern border / wall "when" (because it's "inevitable") Mexico reports its first case of coronavirus.

The health care systems in these three countries could not be more different  (well, actually they could but you get the point). 

Mexico has no reported cases of coronavirus yet; will Mexico close its border to the US now that the US has 60 cases (and rising)? Same with Canada. With 60 cases, the US has five times the number of cases as Canada (12). Is it time for Canada to close its borders with the US? Compared to Canada, the US clearly doesn't not have the situation under control. 

Additional comment: my hunch is that Mexicans, in general, will react quickly to any news that there are coronavirus cases in their country. And I doubt they will head south to Guatemala for health care. Back to that earlier point: Trump is always thinking -- and now this: coronavirus, Mexico, and the border wall.

It will be interesting to see if Schumer / Pelosi pushback on immunization requirements for folks crossing the southern border. There are a lot of diseases much worse than coronavirus that can be prevented with immunizations. Never let a crisis go to waste.

Most surprising "factoid" from yesterday: the seasonal flu vaccine used in the US is, at best, 45% effective. That's less than 50%. Who knew.

Seasonal flu: in the US so far this year, and the season is not yet over --

• 36.5 million illnesses
• 34,200 death
• at least 105 children have died
• these are only US numbers
• How good is the vaccine? Apparently not very effective. 50/50. In fact, worse than 50/50. Link here. From an interim report released by the CDC yesterday (at the halfway mark through the seasonal flu season).

COVID-19: overnight in the US --

• no vaccine
• cases:
• three new cases, currently at 60 cases
• one case, possibly three may be "de novo"
• deaths
• no deaths overnight
• total number of deaths in US so far: 0 

Plagiarism: Buttigieg -- clearly channeling President Obama in his speeches, Buttigieg is now said to be ripping off others. Mainstream media is ignoring the story.

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Back to the Bakken

Active rigs:

$47.72	2/27/2020	02/27/2019	02/27/2018	02/27/2017	02/27/2016
Active Rigs	51	66	57	41	38

Permits coming off the confidential list today -- Thursday, February 27, 2020:

• 36793, drl, Sinclair Oil, Harris Federal 2-32H, Lone Butte, t--; cum --;
• 35424, SI/NC, MRO, Frances USA 11-15H, 33-061-04288, Reunion Bay, t--; cum --;
• 34392, drl, White Butte Oil, Jore Federal 5-12H, Clark Creek, t--; cum --;

RBN Energy: sagging supply and rising demand for Jones Act ships to send rates higher.

Back in 2013-14, a run-up in demand for Jones Act tankers and large articulated tug barges –– and a spike in time charter rates — spurred orders for a flotilla of new vessels. By the time the new tankers and ATBs were built and launched, however, demand for them had fallen off. That decline was mostly due to the mid-decade slump in U.S. crude oil production and, with the lifting of the ban on most U.S. crude exports, the drop in crude shipments from one U.S. port to another. Term charter rates plummeted and ship owners stopped ordering new tankers and large ATBs. Now, for the first time in more than five years, there are barely enough Jones Act vessels to go around, and charter rates are on the rise. Today, we discuss recent trends and how they’re impacting crude oil and refined products transportation costs.

This year marks the 100^th anniversary of the Merchant Marine Act of 1920, a federal law whose section 27 is better known as the Jones Act for its author, Senator Wesley Jones of Washington state. The Jones Act requires that all goods transported by water between U.S. ports be carried in U.S.-flagged ships constructed in the U.S., owned by U.S. citizens, crewed by U.S. citizens, and registered in the U.S. As it applies to the energy sector, the Jones Act fleet consists of five main categories of vessels: smaller inland barges that typically carry either 10 Mbbl or 30 Mbbl of crude or refined products and operate on inland waterways as well as coastal canals; regional offshore tank barges (e.g. New York Harbor) with capacities of 50 MMbbl to 135 Mbbl; coastal barges, including larger articulated tug barges (ATBs) with capacities of 142 Mbbl to over 320 Mbbl; tankers that operate in both coastal and international waters and generally carry ~330 Mbbl of crude oil or refined products; and large crude oil tankers in the Alaskan trade.