Wednesday, April 7, 2021

Weekly EIA Petroleum Report -- Huge Change In Jet Fuel Delivered Compared To One Year Ago -- Biggest Change In Past Year? April 7, 2021

FWIW, perhaps "Focus on Fracking" will discuss this in more detail this Sunday:

Weekly EIA petroleum report: to be released in about fifteen minutes. Link here.

  • US crude oil in storage: 498.3 million bbls; about 3% above the five-year average;
  • US crude oil decreased by a moderate 3.5 million bbls.
  • refiners operating at 84% operating capacity; not remarkable;
  • distillate in storage increased by 1.5 million bbls; about 5% above the five-year average;
  • jet fuel delivered was down 12% compared with same four-week period last year!

EIA: gasoline prices at the pump could hit 3-year high. Quick look:

  • PXD: confounding the experts; up almost 1%; up $1.22; trading at $152.60
  • ENB: down 0.3%; trading at $36.67;
  • EPD: up 0.4%; trading at $22.68;
  • KMI: up marginally; trading at $16.70;
  • HES: up a nice 1%; trading at $72;
  • EOG: very nice, up 1%; trading at $73;
  • CVX: nice, up 0.5%, despite downgrade; trading at $104;
  • COP: own 0.2%; trading at $52.50;
  • MNRL:down 1.5%; trading at $15.45
  • SRE: down a bit; trading at $133.67
  • AAPL: up 3/4th of a percent; up about a dollar; trading at $127; creeping quietly the wall of worry;
  • XLNX: up about 0.6%; trading at $131; special meeting today;
  • AMD: up about 0.5%; trading at $82; special meeting today;
  • UNP: trading up about 0.4%; trading at $222

After report:

  • WTI drops 30 cents; trading at $59.03

Apple, Inc

Apple chips: supplier set to begin mass production ahead of schedule. Mass production of A15 chip for iPhone 13 set to begin ahead of schedule in late May.

The new chip will be based on an enhanced version of the 5nm process, which first debuted in the A14 Bionic with the 2020 iPad Air and iPhone 12 lineup. While the full report will likely offer more details as to the specifics of the new chip that will power the next-generation iPhones, it can be reasonably assumed that it will improve on performance and power efficiency.

Due to impacts to suppliers as a result of the global health crisis, Apple launched the ‌iPhone 12‌ series in October, out of the normal September timeframe. With impacts to supply chains now easing, Apple analyst Ming-Chi Kuo believes that Apple is on track to release the iPhone 13 in September. With TSMC now believed to be starting mass shipments of the new chip ahead of schedule, that certainly does seem to be the case.
Apple "search": will drive services revenue growth through 2022. Link here. This was a much-discussed topic earlier this year. I thought it was going to become a "monopoly" issue for the US government. That talk seemed to go away once the new US president sworn in. Coincidence? I think not. Regardless, even if I have all that wrong, this is huge news for AAPL. Currently trading at $125, one year target for AAPL is $160.
In a research note shared with MacRumors, Morgan Stanley analyst Katy Huberty said stronger licensing revenue is the primary driver of the raised estimates, including an acceleration in the search traffic-related payments Apple receives from Google. The New York Times last year reported that Apple receives an estimated $8-12 billion per year in exchange for making Google the default search engine on devices like the iPhone and iPad.

"Following strong March quarter App Store results and an analysis of the key drivers of Apple's Licensing & Other segment, we raise our already above-street FY21 and FY22 Services revenue estimates by 3% and 5% respectively, and are increasingly convinced that consensus Services forecasts over the next 2+ years are too low," wrote Huberty.

If APPL goes to $160 in the next twelve months, "Katy, bar the doors."  Price point to watch: $125.

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Ivy League acceptance rates fall to record lows due to Covid-19.

The WSJ, link here

Harvard accepts just 3% of applicants, while Columbia admitted 4%, numbers rounded.


  1. Biggest change I see in the EIA report is now USA is a net importer for several weeks of crude and products. Domestic production of crude seems to be leveling off at 10.5 to 11 mmbbls/day. Would guess that gasoline consumption will increase due to more driving. Jet fuel consumption will increase, more flights and higher load factor which will more payload, more fuel burned per mile.

    1. I might post a stand-alone note on my thoughts. A lot of new metrics to follow. Gasoline demand is still the single most important metric I follow to gauge US economy.