Notes From All Over -- Midday Edition -- Sunday, June 21, 2020

Backwardation: came sooner than expected -- HFIR via SeekingAlpha. A reader once warned me that HFIR had a poor track record. I'm beginning to think so. From the link:

• Brent 1-2 is now in backwardation.
• This is sooner than what we had expected (month-end) and much sooner than anyone else in the market had expected.
• Backwardation will start the process of inventory rebalancing. Excess crude on water needs to be drained first, then we will see onshore inventories decline in size.
• US crude storage will start to move lower starting next week with larger draws in July and onward. Right now, the US is absorbing the excess crude from Saudi's supply surge in April.
• The oil market rebalance will be bearish for tankers and bullish for oil producers.

Geico Rock Award nomination: Julian Lee, Bloomberg Opinion -- Buyer Beware: Oil Stockpiles are Enormous. Well, duh.

From the link:

Remember negative oil prices and the fear that every storage tank on the planet would get filled to the brim? That seems a long time ago, with West Texas Intermediate crude now hitting $40 a barrel and the buildup of stockpiles poised to go into reverse. The warning sent by that trip below zero was heeded. Oil production was slashed and the crisis averted.

But if you were hoping for a quick, V-shaped recovery in oil demand, look away now.
The International Energy Agency published its latest oil market outlook last week, pushing its quarterly forecast out to the end of 2021 for the first time. It doesn’t think demand will have fully recovered by then. 

In the final quarter of next year it predicts global oil demand will still be running about 2 million barrels a day below pre-pandemic levels, and more than 4% below where it might reasonably have been expected to be in the absence of the crisis.

No free lunch: Disney+ no longer offering free one-week trials. Why? The much-anticipated Hamilton will be premiered on July 3, 2020. Wow. It's being released more than one year ahead of schedule -- no doubt to counter the revenue lost from shutdown theme parks. Wow.

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Water Polo Practice -- Texas Style

This is so cool. The Grapevine Lake is huge, and just ten minutes up the road from us. This past week, the coach took the team out to the lake to practice. They practiced in a very, very small inlet, open to the public. Out where they were playing the water was well over ten feet deep. The coach had three kayaks, one not being used, and offered it to me. I had a blast. Even took the iPhone out to film the action.