Monday, August 3, 2020

Wow, It Never Quits -- Hardly Noticed -- US ISM Manufacturing Expands At Fastest Pace Since March, 2019 -- August 3, 2020

Link here.
U.S. manufacturing expanded in July at the fastest pace since March 2019 as more factories boosted production in the face of firmer orders and lean inventories. 
The Institute for Supply Management said Monday that its manufacturing gauge increased to 54.2 last month from 52.6. Readings above 50 indicate expansion, and the latest figure exceeded the 53.6 median projection in a Bloomberg survey of economists. 
The data point to a steadier environment for producers, months after demand plummeted during the pandemic-related lockdown of the economy. Nonetheless, the pace of improvement risks moderating as the coronavirus stands in the way of a sustained quickening of demand.
Futures, late evening, Monday, August 3, 2020:
  • pretty much flat, but showing green

Germany Wind Energy, Or Lack Thereof -- A Random Update -- August 3, 2020

From a reader, thank you.

Germany: solar sweeps the board again in renewables acution, May 20, 2020.

Not one wind power project was submitted to the German network authority for the April round of a national clean energy procurement program. Almost 204 MW of solar generation capacity was allocated across 30 solar projects with an average final electricity price of €0.053/kWh. 
Wind developers appear to have thrown in the towel in Germany with federal network agency the Bundesnetzagentur revealing it received no wind project bids for last month’s national solar and wind power energy auction, which procured 203.7 MW of solar capacity across 30 projects. 
Note: Germany gets 13% capacity factor from solar. 200 MW x 0.13 =26 MW = < 1 MW/ solar installation. 
There is not one chance in a million that Germany will meet its 2030 renewable goals despite $billions poured down this rat hole during their "virus stimulus".

Atmospheric CO2: pending. Should be released on/about August 6, 2020.

V-Shaped Recovery For Investors; FOMO -- August 3, 2020

Microsoft, Apple lift NASDAQ to 29th record close of the year. What will propel the NASDAQ to hit 11,000? FOMO.

Clearing out the in-box after another incredible day in the market:
  • Levi to accelerate its consumer strategy shift, link here.
  • Eurozone suffers 40.3% annualized contraction -- greatest drop on record.
  • Caterpillar sales sage 31% in coronavirus slowdown.
  • Refiners retrench as demand for gasoline, jet fuel shrivels, link here. Can anyone spell Mandan Refinery?
The dollar as reserve currency. Anyone reading the business pages know there is a lot of talk about the possibility that the US dollar will no longer be the global reserve currency. Okay. I'm sure a lot of folks bought into that. To say the least, I was quite surprised when I saw this:

Covid supercharges Federal Reserve as backup lender to the world.

Say what? The WSJ said it.

My hunch is that governments around the world are not only looking at the US as the the lender of last resort, but they are also looking to the US for guidance. I would assume -- well, let's not assume -- let's look it up:
  • since 1969, when the award was first given, there have been 84 men and women so honored
  • wow, talk about white privilege (is putting something in black bold the same as blackface?); if there was a person of color, I missed him or her; there were a couple of Indian laureates
  • more than half of the awards have gone to Americans
  • as of 2018, the institution with the most affiliated laureates in economic sciences: the University of Chicago, which has 32 affiliated laureates;
  • since 2004, in only three years did an American not win or share in the prize
  • the guy with the best beard: Robert J. Aumann, US/Israel, 2005;
By the way, if "we" get through this "Covid thing," my nominees for the 2020 economics award would be a joint award to Steve Mnuchin and Jay Powell for "melding economic theory with practical applications to save the global economy."

Endurance: GM Electric

Lordstown Motors to merge with DiamondPeak, link here;
  • DiamondPeak: a "blank check" company -- a SPAC
    • DPHC shares surged
    • the combined company will take the name Lordstown Motor, ticker symbol: RIDE
  • the deal
    • $1.6 billion equity value
    • $500 million, private investment
    • $75 million, GM
    • others: Fidelity, Wellington, BlackRock
  • operations:
    • last November, Lordstown purchased GM's Lordstown assembly plant, a 6.2 million square foot facility capable of producing 600,000 electric vehicles annually
    • in June, Lordstown unveiled a prototype Endurance pickup truck and has received more than 27,000 preorders representing more than $1.4 billion of potential revenue from commercial fleet customers
    • initial production of the Endurance electric truck is expected in the second half of 2021
Preparing For School Testing

Sophia took an on-site computer test last week for "grade" placement. In anticipation of the test, in which she was required to wear a mask, we practiced at home for two days prior to the day of the test.

No New Permits -- August 3, 2020

Active rigs:

Active Rigs1258645834

No new permits.

Seven permits renewed:
  • XTO (6): six Cindy Blikre permits in Williams County
  • Iron Oil: one Bear Butte permit in McKenzie County

Got Steak? Covid Clinical Trial: The Trump Cocktail -- Hydroxychloroquine, Steak, And Azithromycin

From, link here:

Clinical trial:
  • hydroxychloroquine + steak + antibiotic (azithromycin or doxycycline)
  • 750 participants
  • test dates:
    • start date: April 28, 2020
    • estimated primary completion date (when results of the study will be leaked): September 3, 2020
    • estimated study completion date (when massaged results of the study will be officially released): December 31, 2020
Detailed description of this study:
COVID-19 is an aggressive and contagious virus, found to have high mortality especially in persons with comorbidities (age>60, hypertension, diabetes mellitus, cancer, and otherwise immunocompromised). 
Zinc is a supplement with possible antiviral properties, having been shown to have effect in the common cold, many of which are due to coronavirus. 
In addition, elderly patients and patients with co-morbidities have high incidence of zinc deficiency. 
We are repleting zinc in all patients and studying its direct effect in combination with hydroxychloroquine, and an antibiotic, either azithromycin or doxycycline to see if there is enhanced treatment efficacy in early COVID-19 infection and assess the safety of these two regimen.
Re: zinc.

From one source -
Zinc supports the production and maturation of white blood cells, which are the major players in the immune system. There are multiple types of white blood cells, some of which make antibodies, capture and destroy pathogens, and return the immune system to normal after an infection. Zinc also helps to regulate inflammation. While an inflammatory response is necessary to fight infection, the overproduction of pro-inflammatory cytokines early in the infection is responsible for some of the worst symptoms of COVID-19. The review describes evidence showing that zinc may have an anti-inflammatory effect in pneumonia, limiting the damage to lung tissue. For decades, scientists have known that zinc can block the replication of rhinoviruses responsible for respiratory infections in people, including the common cold. Higher levels of zinc in cells help block the reproduction of rhinoviruses and stimulate interferon alfa production. This signaling molecule prompts nearby cells to initiate their anti-viral defenses. The review also found evidence specific to coronaviruses. One study showed that zinc blocks the enzyme responsible for replicating the coronavirus that led to the SARS outbreak of 2002.
From another source:
Interestingly, chloroquine — which some people suggested as a treatment option early on in the pandemic – increases the cells uptake of zinc, which may underlie some of its positive effects. A 2020 study showed that when doctors treated patients with zinc and hydroxychloroquine, they discharged more patients, and fewer people died from COVID-19 Foods high in zinc include animal products, such as beef, shellfish, dark-meat chicken, and fortified breakfast cereal. However, beans, nuts, and seeds also contain zinc. Phytates in vegetables and grains can reduce the absorption of zinc and, therefore, vegetarians and vegans may need 50% more zinc in their diet.
Re: Covid and those with underlying co-morbidities -- add "vegans" to that list.

Question: What can vegans do to get off the list of "underlying co-mordibities" and Covid-19?

Answer: McDonald's once a day and a Weber grill / t-bone steak on the weekend. This is not rocket science.

Sources of zinc:
Zinc is a water-soluble nutrient - so you need to replenish it every day. Here's what you can eat to get 100% of your daily requirement - eat the item on one line and you're set:
  • 1 1/2 oysters (so each oyster is 66% of your requirement - powerful!)
  • 1 large king crab leg
  • 10 ounces lobster meat
  • 4 ounces beef steak
  • 8 ounces hamburger
  • 2 complete chicken thighs and legs (all the dark meat from one chicken)
  • 3 cups firm tofu (tofu is a 4-letter word)
  • 9 ounces of pork steak (beef is twice as good)
  • 7 ounces of cashews
  • 5 cups of cooked lentils, beans, garbanzos etc. See above: a vegetarian may need 7 1/2 cups
  • 10 ounces hard cheese
  • 10 poached eggs
  • 5 cups of yogurt, or oatmeal or mushrooms
  • over 2 pounds of fish such as salmon, tuna, pike, mackerel
  • over 2 pounds of chicken breast or turkey breast
That's every day.

Re-Posting: MPC To Close Two Refineries -- August 3, 2020

The refinery deal is a bigger deal than folks realize. Another loss for California. I assume North Dakota is watching closely.

  • MPC: "7-11" to buy Marathon's Speedway for $21 billion; link here; at the close on Friday, trading at $38.20/share; Monday: $38.89, pretty much unchanged; Reuters says the deal could fetch between $15 billion and $17 billion;
  • MPC: won't re-start two idled oil refineries; one in California; one in New Mexico; link here;
    • Martinez, CA: to comply with California's Low Carbon Fuel Standards objectives and greenhouse gas-reduction targets; fourth largest refinery in California
    • Gallup refinery, in New Mexico: 26,000 b/d
    • May 5, 2020, earnings call: said these refineries were being looked at because they are the company's highest-cost facilities among its sixteen refineries
    • note to folks in ND/Mandan refinery: too much global refining capacity and existing refineries will be pressured by new facilities coming online
  • MPC: from Reuters --
    • Marathon Petroleum plans to permanently close two small U.S. oil refineries in Martinez, California, and Gallup, New Mexico, the company said, eliminating 800 jobs in response to lower fuels demand.
    • The largest U.S. refiner by volume had earlier idled the two facilities following weak demand due to COVID-19 outbreaks in the United States. U.S. refiners on average idled about 20% of total processing capacity on falling vehicle and air travel.
    • Marathon said it plans to use the Martinez facility as an oil-storage facility and is evaluating its future use to produce renewable diesel, a fuel made from industry waste and used cooking oil. Martinez is California’s fourth largest refinery.
  • MPC: Mandan Refinery, Mandan, North Dakota
    • since 1954; a very, very old refinery
    • 71,000 BPCD capacity
    • refined products shipped by rail and truck
    • CEOs are making decisions, it seems, with lightning speed;
    • total MPC global refining capacity: 3 million BPCD
    • Mandan Refinery: 2% of MPC's total refining capacity

Four Wells Coming Off Confidential List Today -- August 3, 2020

Note: we have a new "well status" designation in play. Wow, it never quits:
  • 36986, drl/TAI, CLR, LCU Truman Federal 2-23HSL, Long Creek,
Fast and furious:
  • Warren Buffett's stake in AAPL tripled in value;
  • Men's Warehouse files for bankruptcy, link here;
  • Lord & Taylor files for bankruptcy, link here;
  • Norwegian cruise ship out at sea; did not get the memo; link here;
  • Biden's VP short list: walks back support for Fidel Castro; can you spell "Florida"?
Apple, Inc:
  • snaps up Canadian payment startup Mobeewave for $100 million; will crush Square; link here;
  • wants same deal as other tenants in UK: a 50% discount in rent! LOL. Link here.
Saudi Arabia:
  • OPEC basket, link here: $43.02 -- enjoy it while "you" can --
  • may be forced to lower price again; get out the violins; link here;

Back to the Bakken

Active rigs:

Active Rigs1258645834

Wells coming off confidential list --

Monday, August 3, 2020: 4 for the month; 75 for the quarter, 521 for the year:
  • 36986, drl/TAI, CLR, LCU Truman Federal 2-23HSL, Long Creek,
Sunday, August 2, 2020: 3 for the month; 74 for the quarter, 520 for the year:
  • None.
Saturday, August 1, 2020: 3 for the month; 74 for the quarter, 520 for the year:
  • 36627, loc/NC, XTO, Arnold 21X-17H, Tobacco Garden;
  • 36418, SI/A, Zavanna, Panther 16-22 5TFH XE, Stony Creek, t--; cum 76K 4.5 months;
  • 36161, drl/A, Hess, GO-Hauge-LW-156-97-2116H-1, Dollar Joe, t--; cum 93K 4 months; off line 6/20;

The Northeast natural gas market this past spring and early summer averted a major meltdown, as production shut-ins, record cooling demand, and increased outflows helped the region balance. But the fall shoulder season is liable to be less forgiving, given that storage levels are much higher and carrying a surplus to prior years. Now, shut-in wells are back online for the most part and production has surged.

In-region demand has been at record highs, but summer cooling demand will peak soon and give way to balmy fall weather. As that happens, the Northeast will increasingly rely on outbound flows to offset a growing supply imbalance. But pipeline capacity utilization for routes moving gas out of the region have been running high already. How much incremental volumes can the takeaway pipelines absorb before constraints develop and hammer regional supply prices? Today, we analyze flows and capacity out of the region.