Chinese Flu Watch -- North Dakota -- November 4, 2020

Spend some time playing around with these numbers. The only other number you need is the population of North Dakota: about 800,00 people, officially 762,062 in 2019. Do some percentages; some "per capita" numbers. Compare your numbers with the numbers of total deaths and causes of those deaths in North Dakota.

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OPEC Basket Up Over 7%; WTI And OPEC Basket At Parity -- November 4, 2020

Active rigs:

$38.74	11/4/2020	11/04/2019	11/04/2018	11/04/2017	11/04/2016
Active Rigs	13	56	66	55	37

Operators with active rigs:

• MRO: 3
• CLR: 2
• BR: 2
• WPX: 2
• Petro-Hunt: 1
• Hess: 1
• Oasis: 1
• Midwest AgEnergy Group, LLC (not an oil and gas well; CCS)

No new permits.

One producing well (DUC) reported as completed:

• 32714, 2,878, Equinor, Patent Gate 7-6 XE 1H, Poe (McKenzie County) t2/18; cum 117K 9/20;

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Politics

From Rigzone:

Republican Jim Wright was elected as one of three powerful commissioners at Texas’s oil and gas regulator, ending a high-profile battle that had been called “the most important environmental race in the country,” by his Democratic opponent, Chrysta Castañeda.

Wright was ahead in the vote count overnight, and Castañeda conceded Wednesday in a statement.

“Texas will determine its own energy future, and that is a future that includes an all of the above approach led by fossil fuels,” Wright said in a statement. “Together we will find new ways to improve our climate and environment.”

His victory ensures a Republican lock on the leadership of the Texas Railroad Commission, which oversees an industry producing more crude than any OPEC member except Saudi Arabia. 

It’s also a setback for those who see the commission as too lax on environmental issues, particularly the flaring of natural gas.

How Phillips 66 Broke Even -- SeekingAlpha -- November 4, 2020

Peak Demand
Rystad Revises Forecast

This is very interesting. I've said from the beginning the Chinese flu pandemic would be with us for four years based on the experience of the Spanish flu pandemic in 1918 - 1920. Rystad suggests oil demand won't be back to pre-Covid-19 levels until 2023. That's about four years. The difference between the Spanish flu pandemic and the Chinese flu pandemic: politicians elected to "flatten the curve" when Wuhan flu broke out, thereby extending the duration of the pandemic.  

In addition to this story, there is another article in Rigzone suggesting a Biden presidency will accelerate energy bankruptcy fillings. There are going to be a huge number of opportunities for vultures, particularly SPACs. This will be fascinating to watch. Qatar thinks it can manage a budget based on $40 oil. Saudi Arabia cannot.

Link here to Rigzone:

Rystad Energy revealed on Monday that the Covid-19 pandemic and the acceleration of the energy transition have led it to significantly revise its long-term oil demand forecast.

The company now sees global oil demand peaking at 102 million barrels per day in 2028 as the most likely scenario. Before Covid-19, Rystad Energy was forecasting that peak oil demand of just over 106 MMbpd would be realized in 2030.

According to Rystad Energy, the persistence of the pandemic is likely to cause 2020 oil demand to decline to 89.3 MMbpd, compared to 99.6 MMbpd in 2019.

Demand is then expected to recover to 94.8 MMbpd in 2021 and 98.4 MMbpd in 2022, Rystad Energy outlined, adding that it will still be stuck below pre-virus levels due to structural Covid-19 impacts, such as less work commuting and slower aviation recovery.

The company says it is only in 2023 that oil demand will recover to pre-Covid-19 levels and jump back to 100.1 MMbpd.

Between 2025 and 2030, oil demand will enter a plateau phase at around 102 MMbpd, Rystad Energy noted. In this phase, the company no longer sees any residual Covid-19 impacts. In the very long-term, the company sees a steep decline of oil demand to 62 MMbpd in 2050, “driven by the high penetration rate of EVs in the automotive industry”.

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Qatar: Plans for $40 Oil

Link here to Bloomberg via Rigzone: 

Qatar will base its budget on an oil price of $40 a barrel, below what markets expect, as the world’s biggest exporter of liquefied natural gas seeks to reduce the impact on its finances, according to its ruler.

The move will help Qatar “avoid negative economic consequences due to oil-price volatility,” Emir Sheikh Tamim bin Hamad Al Thani told members of the country’s legislative body, the Shura Council, on Tuesday.

The price of oil is closely linked to that of natural gas. Still, gas has fared better amid this year’s coronavirus-triggered slump in energy prices, helping Qatar weather the fallout more easily than oil-dependent neighbors such as Saudi Arabia and Kuwait.

Early results show that Qatar’s budget deficit for the first half of the year is 1.5 billion riyals ($406 million) despite expectations it would be much higher, the emir said.

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PSX: Breaking Even

Link here. 

Summary:

• Phillips 66 posted a break-even Q3 with a loss of a penny a share;
• midstream, chemicals, and M&S propped up the refining segment, which remains in a state of depression;
• while the results show the benefits of management strategy to diversify away from refining, the company still burned $400 million in cash during the quarter;
• the refining segment is in for a long, tough slog due to the pandemic. However, PSX looks very well-positioned and the dividend, at least for now, looks secure (yields 7.7%);

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

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COP: How The Company Wasted $10 Billion
SeekingAlpha Contributor

Link here. Archived.

Summary:

• ConocoPhillips released its Q3 EPS report on Thursday and there were no big surprises given the current O&G price environment;
• for those investors who made it to the end of the conference call, the best question was saved for last;
• it was a question that concerned COP's $10 billion of wasted shareholder capital on stock buybacks and the future of the dividend;
• CEO Ryan Lance says he wants to make COP a "compelling" investment to draw investors back to the energy sector. But actions speak louder than words.
• this article will discuss the dividend impact for both Concho and Conoco shareholders going into - and out of - the merger which is expected to close in Q1 2021.

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Cenovus Buys Husky

Link here. 

Summary:

• Cenovus reached an agreement to buy fellow Canadian oil sands producer Husky Energy.
• with the transaction, Cenovus doubles-down on oil sands production (bad) while achieving additional refining and pipeline exit capacity (good).
• the problem is that the pandemic has put North America refining into a state of depression, especially for distillate refining due to jet-fuel demand destruction.
• while the longer-term outlook for this combination makes strategic sense, there is no need for investors to rush into this duo.
  

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For The Archives: ATT Will Increase Dividend -- Tea Leaves
SeekingAlpha Contributor

Link here.

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Chinese Flu Update

Link here.

North Dakota:

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Dead Reckoning

TCM movie. 

Humphrey Bogart and Lauren-Bacall-look-alike Lizabeth Scott. Link here.

US Crude Oil In Storage Decreased By 8.0 Million Bbls -- EIA -- November 4, 2020

Note: I accidentally rejected / deleted a comment from John. Sorry. I re-posted that comment over my name. Nothing lost. I agree with John's comment. 

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Original Post

Weekly EIA petroleum report, link here.

• US crude oil in storage decreased by a whopping 8.0 million bbls from the previous week;
• US crude oil in storage now stands at 484.4 million bbls; about 7% above the already-fat five-year average;
• refiners operating at 75.3 of their operable capacity;
• distillate fuel inventories decreased by 1.6 million bbls; inventories are now about 18% above the five-year average;
• US crude oil imports averaged 5.0 million bopd last week; really not much change in the big scheme of things;
• jet fuel supplied was down 44.6% compared with same four-week period last year

Re-balancing: in the 100 weeks since continuous tracking on the blog began on November 21, 2018, reports on the following dates showed a decrease of 8.0 million bbls or more of crude oil in US storage:

• June 26, 2019: a decrease of 12.8 million bbls (469.6 million bbls in storage)
• January 3, 2020: 11.5 (429.9)
• July 24, 2019: 10.8 (445.1)
• July 29, 2020: 10.6 (526.0)
• August 28, 2019: 10 (427.8)
• March 20, 2019: 9.6 (439.5)
• July 10, 2019: 9.5 (459.0)
• September 2, 2020 (9.4 (498.4)
• February 27, 2019 (8.6 (445.9)
• July 31, 2019: 8.5 (436.5)
• November 4, 2020: 8.0 (484.4)

Re-balancing:

Week	Date of Report=	Change	Million Bbls Storage	Over/under 5-year average
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 84	July 15, 2020	-7.5	531.7	17%
Week 85	July 22, 2020	4.9	536.6	19%
Week 86	July 29, 2020	-10.6	526.0	17%
Week 87	August 5, 2020	-7.4	518.6	16%
Week 93	September 16, 2020	-4.4	496.0	14%
Week 94	September 23, 2020	-1.6	494.4	13%
Week 95	September 30, 2020	-2.0	492.4
Week 96	October 7, 2020	0.5	492.9	12%
Week 97	October 15, 2020	-3.8	489.1	11%
Week 98	October 21, 2020	-1.0	488.1	10%
Week 99	October 28, 2020	4.3	492.4	9%
Week 100	November 4, 2020	-8.0	484.4	7%

Crude oil imports:

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 13	June 10, 2020	6.4	0.000	-13.300%
Week 22	August 12, 2020	5.6	-0.389	-20.400%
Week 23	August 19, 2020	5.7	0.109	-21.700%
Week 24	August 26, 2020	5.9	0.185	-16.900%
Week 25	September 2, 2020	4.9	-1.000	-20.200%
Week 26	September 10, 2020	5.4	0.500	-17.900%
Week 27	September 16, 2020	5.0	-0.416	-20.100%
Week 28	September 23, 2020	5.2	0.160	-24.200%
Week 29	September 30, 2020	5.1	0.045	-21.600%
Week 30	October 7, 2020	5.7	0.600	-18.900%
Week 31	October 15, 2020	5.3	-0.447	-15.400%
Week 32	October 21, 2020	5.1	-0.167	-13.800%
Week 33	October 28, 2020	5.7	-0.131
Week 34	November 4, 2020	5.0	-0.600	-15.400%

Distillate fuel:

Distillate Fuel Inventories
Week	Date of Report	Change in Millions	Relative to 5-Yr Avg
Week 1	August 26, 2020	1.40	24.0%
Week 2	September 2, 2020	-1.70	23.0%
Week 3	September 10, 2020	-1.70	20.0%
Week 4	September 16, 2020	3.50	22.0%
Week 5	September 23, 2020	-3.40	21.0%
Week 6	September 30, 2020	-3.20	21.0%
Week 7	October 7, 2020	-1.00	23.0%
Week 8	October 15, 2020	-7.20	19.0%
Week 9	October 21, 2020	-3.80	19.0%
Week 10	October 28, 2020	-4.50	17.0%
Week 11	November 4, 2020	-1.60	18.0%

Jet fuel delivered:

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 20	July 29, 2020	-42.10%
Week 21	August 5, 2020	-40.90%
Week 22	August 12, 2020	-45.80%
Week 23	August 19, 2020	-47.60%
Week 24	August 26, 2020	-45.70%
Week 29	September 30, 2020	-46.10%
Week 30	October 7, 2020	-47.50%
Week 31	October 15, 2020	-41.80%
Week 32	October 21, 2020	-45.90%
Week 33	October 28, 2020	-44.30%
Week 34	November 4, 2020	-44.60%