Active Rigs Steady At Eleven; WTI Holds Above $50; One DUC -- January 7, 2021

My hunch: Scott Adams' head is exploding. LOL. Wrong on everything?

Happy days are here again! Wealth inequality is bad. Long live wealth inequality.

Flip-flop: Saudi Arabia surprised everyone by announcing a unilateral cut in production.

Headline: oil market gears up for $9 billion index buying spree. 

Tens of billions of dollars worth of commodity investments are about to be switched around in a move that’s set to cause a wave of oil-futures buying.

While the move happens every year, crude’s 20% decline in 2020 means that the value of oil index investments has been far below its target for months. As a result, as much as $9 billion of oil contracts could be purchased over the five days of re-balancing that start Friday, according to Citigroup Inc., at a time when the market is already surged to 10-month highs.

The move affects the world’s two biggest commodities indexes -- the S&P GSCI Index and the Bloomberg Commodities Index. Crude has recovered from its coronavirus-driven rout and so far this year has been benefiting from Saudi Arabia’s unilateral output cuts, a surge of investments to hedge reflation and coronavirus vaccines. Markets are now abuzz with talk of the next tailwind for prices: commodity indexes plowing into another 80 to 100 million barrels of crude futures contracts.

“It’s a big deal,” said Gary Ross, a veteran oil market watcher and chief executive officer of Black Gold Investors LLC. “If you start increasing financial length by 80-100 million barrels, you push up the price $2-$3, all other things being equal.”

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Elon Musk: within striking distance of passing Jeff Bezos as the world's richest person. Some data points:

• for the fully year 2020, Tesla delivered 499,550 vehicles
• bulls: "pretty impressive" considering how difficult the year has been
• bears: Tesla's 800% increase in market cap isn't exactly in-line with its 35.9% increase in deliveries (completely missing the point, of course)
• past predictions:
• would "comfortably exceed" 500,000 vehicle deliveries in 2020
• one million robotaxis in operation in 2020

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Brief summary from Tory Newmyer, Wednesday, January 6, 7:21 a.m. CST, link here:.

Pop quiz how bad was 2020 in terms of bankruptcies?

• most number of bankruptcy filings in 35 years (1985)
• most number of bankruptcy filings in 10 years (2000)
• least number of bankruptcy filings in 10 years (2000)
• least number of bankruptcy filings in 35 years (1985)

Auto sales, 4Q20:

• Toyota: a 9.4% increase
• VW: a 9.4% increase
• GM: a 5.8% increase
• GM's average transaction price per new vehicle set a full-year record of $39,229 in 2020

Market on Monday -- note this was  from Monday, January 4, 2021, first trading day of the new year:

• Dow up almost 170 points; or 0.6 percent higher
• Boeing was the best-performing stock in the Dow; gaining 4.4%
• Chevron rose 2.7 percent

Factory activity approaches a 2.5 year high.

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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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New jobless claims: unexpectedly steadied below 800,000.

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Futures: do I need to post the YouTube "Happy Days are here again" again?

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Back to the Bakken

Active rigs:

$50.59	1/7/2021	01/07/2020	01/07/2019	01/07/2018	01/07/2017
Active Rigs	11	56	64	54	39

One well coming off the confidential list -- Thursday, January 7, 2021: 6 for the month, 6 for the quarter, 6 for the year.

• 37457, loc/NC,  Petro-Hunt, USA 153-95-13D-12-7H, 

RBN Energy: the push to expand Canada-to-Gulf-cast crude oil pipeline capacity. Well, this is interesting. It will be interesting how Canada tries to pull this off in a Biden administration. Hope springs eternal. Archived.

The province of Alberta has lifted its cap on crude oil production, oil-sands producers are implementing plans to increase their output through the 2020s, and new pipeline capacity from Western Canada into the central U.S. is being added on the all-important Enbridge Mainline system. With those stars aligning, the next big push by midstream companies will be expanding their ability to move Canadian barrels south to the Cushing hub in Oklahoma, the Patoka hub in Illinois, and refineries and export docks along the Gulf Coast. As a group, these new and expanded lines — plus a major pipe reversal — will represent one of the biggest midstream build-outs in the U.S. of this coming decade. Today, we begin a blog series about these projects and what’s driving their development.