US Crude Oil Stockpile Hits Record High; Production Hits 20-Month Lows -- ZeroHedge -- June 10, 2020

Record inventory: after EIA posted its weekly petroleum a reader noted:

I've looked around, and Zero Hedge seems to be the only one who noticed crude inventories were at a record high.

https://www.zerohedge.com/energy/wti-holds-losses-after-crude-distillates-builds

I had figured that would be the headline virtually everywhere..

Adios. Mexico suspends service contracts. Link here. Again, seems to be a big headline, small story.

Over the past several weeks, Petroleos Mexicanos has suspended contracts with at least eight local and international oil-service providers and suppliers to cut spending, said the people, who asked not to be named because they weren’t authorized to speak publicly on the matter. The bulk of cancellations is for offshore maintenance work in shallow-water hubs such as Ciudad del Carmen in the state of Campeche, two of the people said.

Two-year window. Hunch: the service industry, the health care industry, retailers, etc., are going to be bending over backwards for the next two years to do what it takes to bring back their old customers and attract new customers as they begin to recover from this pandemic. 

The "Fed": "not even thinking about" raising interest rates for two more years, at least through the end of 2020 and probably through the end of 2021.

Major oil company to watch: OXY.

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

The Doomsday Chronicles: during the Obama administration, some sectors of the US economy looked so bad, "the Doomsday chronicles" were needed to keep track of everything. We haven't seen many stories along this line, but I think it's just a matter of time. If so, along with the link above, this is where these stories will be tracked:

• Doomsday: The Big Box Store 
• Doomsday: Public Sector Pensions
• Doomsday: US Cities 
• Doomsday: US States

How New York balanced its budget, April 2, 2020, Politico. Mostly with projections.

Did Someone Once Say "A Bad Day Of Fishing Beats A Great Day At Work" -- June 10, 2020

No luck today with fishing, but we sure had a lot of fun feeding the turtles our fish bait. And Sophia loved her picnic. Wow, we have fun together.

What an incredible evening to be fishing.

Gasoline Demand -- June 10, 2020

Link here -- scroll to bottom of the page at that link.

Looking for any bit of good news --- not much here --- hate to see the four-week average leveling off ---

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Clearing Out The In-Box

The gap between the top 10% and the rest widens:

Saudi exports in May, 2020, if this is accurate, this is absolutely amazing. Less than six million bopd is not all that much for a country like Saudi Arabia. This really surprises me.

Goldman Sachs is doing well. I would love to make some comments but my comments would be misunderstood and taken out of context. Better part of valor is to hold my thoughts:

Legacy Fund -- May, 2020, Deposits

Link here.

Phelps Bay -- June 10, 2020

I've looked at this a gazillion times, but I think I'm correct. If not, I will have egg on my face. This will be embarrassing.

But this is the entirety of the daily activity report today. My comments in red on the screenshot.

If this is indeed incorrect, it certainly means this location needs to be resurveyed. Someone needs to get the correct county.

And The Results Are In -- "This Cut Is Amazing!" -- June 10, 2020

A couple of readers and I have been talking about grilling teres major. The reader who brought it to my attention mentioned they had it again this week and continue to really enjoy it. Another reader, a real grill master / a Weber aficionado said he had not grilled teres major before but was always looking for something new.

He ordered teres major from Snake River Farms about a week ago, and coincidentally it arrived today:

And tonight, just moments ago, he sent this photograph and this comment: "This cut is amazing!"

Wow, is that not impressive!

In the upper midwest, your butcher may know it as chuck-eye. It comes from the shoulder (chuck) of the steer, but it's an elongated muscle that is a pain for the butcher to separate out from the rest of the shoulder, so one seldom sees it (at least based on what others have said). On a transverse cut of the chuck, the teres major looks like the eye -- or the center -- and thus chuck-eye.

At least that's my understanding. 

June 10, 2020

NOG: announces core bolt-on acquisition. Link here.

Starbucks kiosks: to close 400 stores, speed expansion of "Pickup" locations. Link here.

Starbucks announced today it will expedite the rollout of its new "Pickup" store concept, powered by mobile ordering, in response to the coronavirus pandemic. It will also expand access to curbside pickup, drive-thru and walk-up counters in less dense, suburban markets, the company said. These changes aren't going to arrive as new additions to Starbucks' existing store lineup, however. Instead, the company said it will close up to 400 company-owned stores in the U.S. and Canada over the next 18 months, as it rolls out the new format stores and makes other changes.

A large part of the restructuring plan is to shutter more of Starbucks' traditional cafe-like locations in favor of new formats that better cater to convenience orders, not sitting around with friends. One of these is the Starbucks Pickup store concept.

Ahead of the COVID-19 crisis, Starbucks had been testing the Pickup store concept on a small scale. In the last seven months, the company opened and had been operating two of these stores -- one at Penn Plaza in Manhattan and another in Toronto’s Commerce Court. Both have offered the company early insights into how to design the pickup-store experience for both employees and customers.

Starbucks says it's now preparing to launch a third Pickup location near Grand Central Station in Manhattan in the immediate future.

PG&E: moving across the bay from San Francisco to Oakland.

AAPL: another new all-time high. Up 2.6%; up almost $9.00. Closes at $352.94.

Goldman Sachs: banked a billion dollars on the oil price cash. Link at MSN/Money.

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Back to the Bakken

Active rigs:

$39.08	6/10/2020	06/10/2019	06/10/2018	06/10/2017	06/10/2016
Active Rigs	12	64	61	52	28

No data posted from today's daily activity report, including no update regarding errors and omissions from yesterday. 

Major omission: scout tickets for file  #37626 - #37729, inclusive, still not posted. In addition, permit #37629 on the daily activity report is reported as #37630 on the scout tickets.

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Grilling

Others are doing fancy cuts of meat, I'm making waffles on a Mickey Mouse waffle-maker on the patio. LOL.

NOG: Announces Core Bolt-On Acquisition -- June 10, 2020

NOG: announces core bolt-on acquisition.

• acquisition expected to produce approximately 1,200 Boe per day in 2021, and wells are expected to be online in the first quarter of 2021 
• all acquisition and development capital included in Northern’s previously stated budget 
• acquisition expected to generate $11.3 million of 2021 cash flow from operations at June 5, 2020 strip prices; expected payback period under 1.5 years 
• Northern has entered additional commodity hedging instruments at prices higher than the strip for 2021 

More:

• Williston Basin
• $1.5 million
• seller: WPX
• 320 acres
• nine gross well proposals to fully develop the unit consisting of 2.1 net wells
• back-of-the-envelope: about $5,000/acre

Break-even estimates:

• Northern entered into additional crude oil derivative swaption transactions (link here) to hedge a portion of the production associated with this and other transactions at an average of $45.48 per barrel for 2021 for 1,500 barrels per day. That average price is approximately $3.85 higher than the underlying strip price used to calculate the estimated cash flow stream described above. 

Slawson's Torpedo Federal Wells Are Off Line -- June 10, 2020

Slawson's Tropedo Federal wells are tracked here.

These are incredibly good wells, but interestingly most of them are now off line.

I don't see any activity (except for #29615, a Slawson Rebel well on conf status) in the area, so possibly just off line until oil prices improve.

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Grilling

From a reader.

Teres major. Google the blog for previous posts.

This was an a-ah moment for me. The reader sent a number of photographs of the teres major / grill.

What I appreciated most was the "recipe" and how the recipe was presented. I get tired of having to read paragraphs of instructions when I go to web sites looking for tips on grilling. Most of us can figure out the details; all we need is a visual. And perhaps any got-cha's or tips.

Tip: 20 minutes; indirect heat; internal temperature: 120 degrees. These cook fast; watch the meat and the thermometer closely; tapered ends may end up over-done.

Here's the reader's recipe:

See this post for grilled teres major from another reader.

Flashback! -- February 20, 2020 -- June 10, 2020

Do you remember this one? I posted this back on February 20, 2020. Covid-19 had not yet closed TutorTime. How fast things changed.

On February 20, 2020, AAPL was selling for $320.

Had Sophia waited one month, she could have bought AAPL at $224 on March 20, 2020.

Today? $352.

Today:

Weekly EIA Petroleum Report -- June 10, 2020

Link here, pending:

• US crude oil inventories increased by 5.7 million bbls;
• US crude oil inventories stand at 538.1 million bbls; 14% aboove an already fat inventory average which is rising every week;
• refineries operating at 73.1%; maybe a bit higher, maybe trending higher, but still at historic lows;
• US imports increased by 0.7 million bopd last week but four-week average remains 13.3% less than last year
• jet fuel supplied: down 64%, compared with same four-week period last year

Re-balancing:

Week	Date of Report=	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 71	April 8, 2020	15.2	484.4
Week 72	April 15, 2020	19.2	503.6
Week 72	April 22, 2020	15.0	518.6
Week 73	April 29, 2020	9.0	527.6
Week 74	May 6, 2020	4.6	532.2
Week 75	May 13, 2020	-0.7	531.5
Week 76	May 20, 2020	-5.0	526.5
Week 77	May 28, 2020	7.9	534.4
Week 78	June 3, 2020	-2.1	532.3
Week 79	June 10, 2020	5.7	538.1

Imports, crude oil:

Crude Oil Imports
Week (week-over-week)	Date of Report	Raw Data, millions of bbls	Change (millions of bbls)	Four-week period comparison
Week 0	March 11, 2029	6.4	0.174
Week 1	March 18, 2020	6.5	0.127
Week 2	March 25, 2020	6.1	-0.422
Week 3	April 1, 2020	6.0	-0.070
Week 4	April 8, 2020	5.9	-0.173
Week 5	April 15, 2020	5.7	-0.194
Week 6	April 22, 2020	5.6	-0.700
Week 7	April 29, 2020	5.3	0.365	-19.700%
Week 8	May 6, 2020	5.7	0.410
Week 9	May 13, 2020	5.4	-0.321	-26.100%
Week 10	May 20, 2020	5.2	-0.194
Week 11	May 28, 2020	7.2	2.000	-16.400%
Week 12	June 3, 2020	6.2	-1.000	-18.300%
Week 13	June 10, 2020	6.4	0.000	-13.300%

Jet fuel supplied:

Jet Fuel Delivered, Change, Four-Week/Four-Week
Week	Date of Report	Change
Week 0	3/7/2020	-12.80%
Week 1	3/14/2020	-12.60%
Week 2	3/21/2020	-8.90%
Week 3	3/28/2020	-16.40%
Week 4	4/4/2020	-0.22%
Week 5	4/11/2020	-39.70%
Week 6	4/18/2020	-53.60%
Week 7	4/24/2020	-61.60%
Week 8	5/1/2020	-66.60%
Week 9	5/8/2020	-68.50%
Week 10	5/15/2020	-67.90%
Week 11	May 22, 2020	-66.60%
Week 12	June 3, 2020	-68.70%
Week 13	June 10, 2020	-63.70%

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While We're Waiting

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

While we're waiting, let's look at the market:

• major indices
• NASDAQ: up 61 points
• Dow: down almost 300 points; worried about the Fed today
• S&P 500: down 16 points
• Of interest:
• the airlines:
• UAL: down almost 13%
• DAL: down almost 12%
• LUV: down almost 7%
• AAL: down over 12%
• see this link:
• AAPL: up another $6; hits another all-time record; 
• market cap: $1.516 trillion (that's with a "t")
• IMUX: down 9%
• EPD: down 4%; paying over 8%;

From this link, I get such a kick out of this:

This is huge, absolutely huge, and explains why I said an analyst recently made a rookie mistake when he said Warren Buffett made a mistake by "panic selling" his airline stocks. See "Warren Buffett's Spreadsheet" below. Re-posting from a couple of days ago:

Panic selling: there is an article over at Investor's Business Daily which suggests Warren Buffett took a $2.7 billion loss due to "panic selling" of his equity in four airlines (UAL, AAL, LUV, and DAL).  The journalist made a huge rookie mistake in his analysis.Warren Buffett's spreadsheet below:

	Airline	Shr Price: 3/31/2020	Dollars	Shares	Shr Price: June 10, 2020	Total
	DAL	28.53	675,000,000	23,659,306	29.88	706,940,063
	UAL	31.55	675,000,000	21,394,612	38.75	829,041,204
	AAL	12.19	675,000,000	55,373,257	16.01	886,525,841
	SWA	35.61	675,000,000	18,955,350	35.17	666,659,646
			2,700,000,000			3,089,166,755
	AAPL	254.29	2,700,000,000	10,617,799	350	3,716,229,502
						627,062,747
						3,089,166,755
						20.29876653%
March 24, 2020		224		10,617,799		2,378,386,881
June 10, 2020		350		10,617,799		3,716,229,502
						1,337,842,621

Clickbait: I "never" click on stories with these kind of headlines, but not much news out there, so --- two of the "ten of the best cheap dividend stocks to buy right now" -- I have built positions over the years in two of them. Just saying.