No Wells Coming Off The Confidential List -- China Could Be In Real Trouble This Winter -- Transit Times For Fuel -- September 29, 2021

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.  

Investors: investors should be dancing in the street. Let me re-state that: certain investors should be dancing in the street. One can divide investors into multiple groups. For now, two binary groups:

• "retired" investors who need the income from their investments to live on vs those who don't (horizon: one month vs thirty years)
• investors who have a significant income stream and those who do not 

For investors who have a 30-year horizon and who have a significant income stream should be dancing in the street right now.

• we don't often get stock market pull-backs like the ones we are seeing;
• nothing suggests the market is in free-fall to zero; huge drops followed by recovery (so far) seems to be the norm (for now);
• huge, huge, amount of money on the side lines (see my favorite graph; posted numerous times);
• those with lots of money "off the table" have nowhere else to go; rising rates will provide another option, but at the end of the day Treasuries and money market funds are only good  for "parking" money for short periods of time;
  
• the gap between investors and those not investing is widening, and not by just a little bit;
• it's a stock-pickers market right now;
• value investors with a huge dividend stream will love this market, will stay on this horse: unlikely many companies will cut dividends in this environment;
• growth investors are seeing opportunities that don't often arise
  

Shares:

A number of months ago, it wasn't that long ago -- here it is, November 17, 2019 -- I wrote about this very subject: the number of shares Buffett owns. 

I thought the concept was ridiculous. Again, as usual, I was wrong. 

During this pullback, I am accumulating shares in myriad companies as fast as I can -- mostly due to a limited income stream -- and I don't care what I'm paying. I'm simply buying on the pullback. I'm only buying "good" companies, nothing speculative. 

Why don't I care what I'm paying? Don't take that out of context, of course I care, but I'm not waiting for lower lows. It's impossible to time the market. 

I will never "see" my portfolio. It will all go to the grandchildren. The bottom line value of the portfolio will be important, of course, but for me, something else is going to be much more important? The number of shares in the portfolio. I think that was the point the writer of that article at the linked post was trying to make.

If the day our portfolio passes to the grandchildren and we're in a severe recession, the portfolio might not look so good. But in a bull market, which will ultimately return, the number of shares will be what the grandchildren will thank me for. LOL. 

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. 

Covid -19 and United Airlines:

• has a mandate
• considering applications for exemptions; will decide within "weeks"
• 97% compliance (this really, really caught me by surprise)
  
• 2,000 seeking exemptions
• 503 fired to date over issue

Japan: will end an extended Covid state of emergency in all areas as of tomorrow, September 30, 2021, in response to a steady fall in the number of infections.

Vietnam: remember Nike! Well, that has spread to Apple. Holy mackerel: a most interesting graphic. Maybe a good time to check out Nigeria with "ivermectin" on one's mind. Not a good picture, especially with rate of deaths.

OPEC+: unwilling and unable to stop oil price rally. Link to Irina Slav. Wow, I wrote about this years ago when there was a similar spike in oil prices. One of the reasons I write so much about non-Bakken topics: it helps put the Bakken in perspective and it helps me understand why the Bakken is doing what it's doing. If that makes sense. 

For example, a reader asks why aren't operators drilling all out in the Bakken with prices so high? I'll post the comment in a moment. The answer is obvious from all that I've written over the years. I may or may not answer the reader's comment but I'll probably reply.

China: how bad could it be for China this winter? See RBN Energy today (scroll down). But if China is already running out of coal and natural gas, and winter is not here yet, think about this:

A round-trip voyage between any of the Gulf Coast LNG terminals and Japan, China or South Korea — the Far East destinations where the bulk of LNG demand is concentrated — via the Panama Canal takes around 60 days, including port loading/unloading and transit time. Of course, delays at the Panama Canal, like those seen last winter, can add additional days to the voyage. If a vessel wants or needs to avoid the Panama Canal, the most common alternative would be to go around the Cape of Good Hope (CGH) in South Africa, which takes about 75 days for a round trip, 25% longer than the Panamanian route. The cost-saving from not having canal fees is more than negated by the additional voyage time. In the past year, according to our cost model, on average it is about $0.30/MMBtu more expensive to go around the CGH than via the Panama Canal.

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Back to the Bakken

Active rigs -- 25 -- from the daily activity report at the end of day.

$74.86	9/28/2021	09/28/2020	09/28/2019	09/28/2018	09/28/2017
Active Rigs	25	11	57	66	58

No wells coming off confidential list.

RBN Energy: red-hot natural gas markets help push North American LNG to Asia. Archived.

With multiple energy markets around the world facing natural gas shortages, buyers are clamoring for more LNG. Pre-winter panic-buying has sent global gas prices to record highs yet again in the past couple of days, and even hauled Henry Hub gas futures up to new post-2008 records above $6/MMBtu in after-hours and intraday trading. With the incredible run in global gas prices, U.S. export economics have looked extremely attractive for nearly a year now, and you would think that buyers would be lining up for new liquefaction capacity in the U.S. Well, it has certainly drawn prospective offtakers back to the table. But they are wary of rising export costs and committing to projects long-term given the questionable future for hydrocarbon markets. Additionally, Europe’s rising piped gas imports from Russia and overall declining demand in the region have put long-term prospects for European LNG imports, in particular, on shaky ground. So, access to Asia is more important than ever for new LNG development, a key selling point for projects on North America’s Pacific Coast, both because of proximity to Asian markets and the absence of canal fees or constraints versus the Gulf Coast. There are no LNG export terminals on the Pacific Coast currently, but two projects — LNG Canada in British Columbia and Sempra Energy’s Energía Costa Azul (ECA) LNG in Baja California, Mexico — are under construction and due online mid-decade. Those projects are unlikely to be the last, given the more than $1/MMBtu in cost savings due to shorter voyage times and canal-free access to Asia. In today’s RBN blog, we begin a series looking at the state of LNG development on the North American Pacific Coast.

Back-to-back LNG blogs? We normally like to mix it up when it comes to blog topics. However, the past two days have been anything but normal in the gas markets. Global gas prices were already in the midst of the most epic bull run in modern times, if not ever, with gas prices abroad pushing to new highs all summer and into fall. This has been underpinned by strong global gas demand and a gas shortage in Europe, but now a coal shortage in China has sent the market into another upward spiral as the entire world weighs the impacts of multiple countries facing energy shortages and winter reliability fears. This has sent Asia’s Japan Korea Marker (JKM), Europe’s Dutch Title Transfer Facility (TTF) and the UK National Balancing Point (NBP) to all-time highs yet again this week. The U.S. gas market is tight as well, but it’s not facing the same kind of shortages. Even so, gas prices here have been unable to escape the upward pull. The October Henry Hub gas futures surged nearly 60 cents (11%) on Monday — the biggest single-day gain in nearly three years — to record a new post-2008 high of $5.706/MMBtu, despite little change in domestic fundamentals. Then, in after-hours trading Monday night, the prompt contract blasted past the $6/MMBtu mark and again topped $6/MMBtu in early trading Tuesday before expiring at about $5.84/MMBtu. This, as JKM reached a high-water mark just under $30/MMBtu. The linchpin for these dramatic price moves is of course LNG. Yesterday, we looked at the near-term impacts of rising LNG export capacity on U.S. gas demand, with commissioning for both Sabine Pass Train 6 expansion and the new Calcasieu Pass facility well underway and first LNG exports expected this winter. Next, we shift our focus longer-term to another aspect of the all-important LNG supply picture: the economics of North America’s Pacific Coast vs. Gulf Coast export projects.