WMB -- September 8, 2021

The feature story: is North Dakota's oil industry finally bouncing back? Link to Felicity Bradstock.  I will post that as a stand-along post.

It's important to note that I've "lost that lovin' feeling." I no longer have an unconstrained emotional attraction to the Bakken I once had. Now that I understand it and know its potential, I'm much less attracted to it. I am still inappropriately exuberant about the Bakken but I think the two are mutually exclusive. I'm not sure that makes sense; if not, it's because of my inability to articulate it better on the fly.

Thinking strategically: The Keystone XL was a national strategic pipeline. But some folks cannot think strategically.

Never underestimate Resident Biden's ability to screw things up. Kills the Keystone XL first day in office. Now, Russian oil shipments to the US set to surge following Hurricane Ida. Link here. Or direct to Bloomberg. 

• Western Canadian Select (WCS) would easily replace the loss of Gulf of Mexico (M) oil.

Meanwhile, the price of MARS crude oil hits a one-year high amid lingering Hurricane Ida supply disruptions. Link here. Or direct to SPGlobal.

• Mars trades at WTI plus $1.50 / bbl.
• nearly 77% of Gulf of Mexico crude oil output remains offline
• onshore infrastructure damage delays platform restarts
• but refineries are restarting faster than oil from the gulf
• if Keystone XL was in operation, the loss of Mars oil would not be an issue
• these are "heavy" oil and WTI does not help
• that's why Russian oil shipments to the US are about to surge
  

But, having said all that, talk about a mixed picture. This just tells me  .... well, it tells me a lot ... LOL. From the API today, link to Julianne Geiger.

Wow, the data points, all from the API, numbers rounded:

• weekly crude oil inventory dropped by 3 million bbls;
• the 2021 crude draw so far: 65 million bbls
• for context, the SPR can hold 720 million bbls; currently holds 620 million bbls
• inventories dropped but US crude oil production rose 100,000 bopd to 11.5 million bopd
• this is despite most of GoM shut in
• distillates are most interesting: continuing to plummet; dropped another 4 million bbls this week;
• that 4 million bbls is double the previous week, slightly less than a decrease of 2 million bbls
• Cushing inventories rose by almost two million bbls; and the previous week, Cushing inventories also rose by more than two million bbls
• all those (faux) hand-wringing stories about oil shut in in the GofM after Hurricane Ida and then these numbers
• yes, I know: the type of oil from the Permian (in Cushing) is light oil vs heavy oil coming from the Gulf but no one would ever know that if only listening to CNBC.

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Natural Gas

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. 

Williams (WMB): bullish US LNG export activity buoys pipeline operator Williams' growth forecast. Link here. Or direct to Platts.

• two more Gulf export terminals under construction
• northeast takeaway capacity a factor for G&P business
• Williams will keep annual growth project spending steady at $1.2 billion through 2026
• Williams handles about 30% of US natural gas volumes
• CEO thinks export business is going to grow dramatically
• US LNG feedgas demand:
• currently: 11 Bcf/d (2021)
• 2026: 15 Bcf/d
• LNG export terminals:
• currently: six in operation (in the US, in 2021)
• 2022: seven
• 2025: eight (based on current construction)
• four or more could be sanctioned by the end of 2022
• much more at the link
• it's amazing: when I started the blog back in 2007, folks like Pickens said natural gas would be the "bridge" to renewable energy; nothing has changed;
• WMB:
• on another "down" day for the market, WMB was up a half-percent during normal trading hours and up another quarter percent after hours; trading at $24.81
• 52-week high is $28.35
• the annual dividend, $1.64, which, by the way, goes ex-dividend tomorrow, September 9, looks "safe";
• the quarterly dividend, 41 cents is payable September 27, 2021
• tea leaves suggest the dividend will remain unchanged in December, but then could be increased significantly in 2022

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. 

EIA: boosts late-2021 spot natural gas price estimates, as Ida, slower injections take toll; link here;

• 4Q21 Henry Hub spot price forecast raised 54 cents to $4/MMBtu
• agency lowers expected 4Q21 gas marketed production by 420 MMcf/d