Sunday, March 7, 2021

"Focus On Fracking" Posted -- March 7, 2021

Link here.

The lede:

Fuel supplies drop most on record as US oil refining collapses, leading to largest ever jump in oil supplies ​.

Refinery utilization at an all time low, 10% lower than it's ever been; oil refined is least on record; record jum​p in oil inventories, record drop in gasoline inventories; distillates production at a 26 year low, distillates inventories drop most in 18 years; largest jump in oil imports in 39 weeks.

Phillips 66 And DAPL -- Seeking Alpha -- March 7, 2021

Link here.

Phillips 66. 

DAPL connection.

Meantime, in yet another example of what my followers know I consider a broken MLP model that is heavily skewed in favor of the general partner ("GP"), it appears PSX - the GP of LP Phillips 66 Partners (PSXP) - plans to take advantage of the DAPL pipeline "closing drama" and the severe price weakness in PSXP units, to merge the MLP back into the company (ex-DAPL). 
This will be just awful for PSXP unit-holders, but great for PSX shareholders. 
That is because not only will PSX likely be buying PSXP units at a fire-sale price, but it will be also be adding excellent distributable cash flow back into the company.

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.

According to the 13-D filing, PSX already owns 74.3% of PSXP's units with 25.7% of the units being held by the public. That equates to 58,580,009 shares PSX would have to roll-up and, at the current $3.50/unit annual distribution (11.4% yield), would be an estimated $205 million annual windfall for PSX shareholders. 
But PSXP unit-holders are going to get hosed on a roll-up if it happens anytime soon, just as higher crude oil production will spur US shale production and will increase volumes through PSXP's pipelines. 
And as I mentioned in my last article on PSXP (see PSXP: My Favorite Mistake Is A BUY), it would appear that the worst-case DAPL outcome (i.e. the pipeline is ordered to be closed) is already more than fully priced into the units. Not to mention closure is not even a given. 
Oh well, another MLP bites the dust.

I can relate to this. Years ago I invested in an MLP. Then Canada changed its tax policy and the GP "closed" the MLP. In the short term, I lost a lot of money (all "virtual" money), but in the long term I'm quite happy how it all worked out.  

And something tells me, I'm going to be even happier before this week is over.

Idle Rambling While Waiting For "Focus On Fracking" To Post -- March 7, 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

For investors only. 

Just some idle surfing and rambling while watching a Columbo re-run on MeTV.

At the bottom of this post is a screenshot of the share price / volume of shares traded for a publicly traded company over the past five years. 

The publicly traded company is in the fossil fuel sector -- what company it is doesn't matter. I'm not even sure if it's considered a good investment or a poor investment. It's simply a screen shot of a fossil-fuel energy company. 

It goes back five years, essentially the period when we were living under a "make America great again" policy.

Five years ago, where the graphic begins, shares were selling for $30. 

On February 17, 2020, shares had reached $77.

Then, March 16, 2020, shares dropped to $21. 

I have no idea what precipitated the sudden drop from $77 to $21. It could have been any number of things. According to sites that check these things, there was no split to explain this. 

Let's assume the global economy was on a roll back in early 2020 beginning back in 2016, and fossil fuels were in normal-to-above normal demand. That might explain why this fossil fuel stock appreciated from $30 to $77. I don't know. Just thinking out loud.

But then something happened that interrupted the growing global economy. I don't know. Just thinking out loud. 

Now let's assume that whatever happened back in March, 2020, that caused the precipitous drop in the share price of this company, is quickly becoming a non-issue; and that fossil fuels are back in demand as the global economy opens up. In fact, there are indications that gasoline demand is coming back stronger than ever, and that gasoline demand may even break records going back to 1990 (that's as far back as these records are kept, by the way). 

Is is too much to posit that this company's share price might return to where it was a year ago? As I said earlier, I don't think it really matters what fossil-fuel company this is. There must be a hundred examples I could have found.

Just out of curiosity, I decided to look at another publicly-traded company in the fossil fuel industry. The company was picked randomly -- after it was mentioned over at SeekingAlpha earlier today. 

And here we go again: five years ago the shares for this company were trading for $89. During the four-year period when we were trying to "make America great again," the shares melted up to $120. That was November 11, 2019. Then in early March, 2020, the shares plummeted, settling at $48 or thereabouts. 

The stock is currently trading at $87.

Let's see. Somewhere I read that fossil fuels could surge another 34% before the year is over. 

Hmmm..... $120 - $87 =  $33. 

33/87 = 38%. Pretty close to 34%. 

If nothing else, I understand where that analyst came up with "34%."

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.

The News Keeps Getting Better And Better -- Final Post -- 8:26 P.M. CT -- March 7, 2021

First things first:

Oil prices, 8:23 p.m. CT, March 7, 2021:

  • WTI: up 2.72%; up $1.80; trading at $67.89;
  • Brent: up 2.75%; up $1.91; trading at $71.34
  • OPEC basket: laggard -- up a measly 0.29%; up 18 cents; trading at $62.15

Link here.

US shale companies: whoo-hoo!

So, Biden:

  • kills the Keystone XL;
  • revokes drilling permits on federal land;
  • slows the permit approval process across the board;
  • appoints IntSec who wants the DAPL shut down;

And we're blaming the Saudis and Russians for the high price of oil since Trump left office?


Someone is watching a different movie.

Sturgis redux:

Nevada: most recent state to relax restrictions. Productions may return to Las Vegas. 

Headlines From WSJ Tonight


  • calls grow for Governor Cuomo to resign;
  • Manhattan landlords take apartments off market during rental slump;
  • for first time 2005, the US is expected to make a bigger contribution to global economic growth then China;
  • fund managers brace for Europe's new anti-greenwashing rules;
  • chip shortage strains heavy-duty truck makers; link here;
  • why Elizabeth Warren's wealth tax could be good for investors;

Folks On Social Media Are Already Asking "The Question" -- March 7, 2021

First question: what role is the US CIA playing in all of this? Timing is interesting, coming so soon after "return to normal OPS in Washington, DC." The CIA loves these kinds of things. After being caged for the past four years, the CIA might be back in business. I'm certainly not saying that. One can start to find these questions being asked on social media.

Apparently some missiles, drones are finding their targets. 

Before the attackes:

  • Brent ends the weekend at $69.36.
  • WTI ends the weekend at $66.09.
  • OPE basket ends the weekend at $62.15.

If You Don't Screen / Test For It, It Won't Be Found

Link here

Wind, Solar, Now Hydrogen -- Third Time The Charm? Saudi Arabia Pivots -- March 7, 2021

Link here. 

For the archives.


I don't have much interest in hydrogen as a fuel source over the next few decades, but it's quite a story, now that I understand the "holy grail" of energy, as it were.

It begins with photosynthesis. 

There are two components:

  • photosynthesis I, requires light; e.g., daylight;
  • photosynthesis II, does not require light; can continue throughout the night;

Photosynthesis II requires an oxygen-evolving complex -- the complex sits at the very edge of the Photosynthesis II system itself, facing the outside world, and gives a sense of being 'tacked on.' It's shockingly small. The complex is a cluster of four manganese atoms and a single calcium atom, all held together by a lattice of oxygen atoms. And that's that.

That was from Life Ascending: The Ten Great Inventions of Evolution, Nick Lane, p. 85.

Lane goes on:

... until 2006, we did not know the structure of the manganese cluster in atomic resolution, ... but now we know ... Whether the original oxygen-evolving complex was simply a bit of mineral that got wedged in Photosystem II, we don't know ... Like a few other metal clusters found at the heart of enzymes, it is almost certainly a throwback to the conditions found billions of years ago in a hydrothermal vent. Most precious of all jewels, the metal cluster was wrapped in a protein and held in trust for all eternity by the cyanobacteria.

However it formed, this little cluster of manganese atoms opened up a new world, not only for the bacteria that first trapped it, but for all life on our planet. 

Once it formed, this little cluster of atoms started to split water, the four oxidized manganese atoms combining their natural avidity to yank electrons from water, thereby releasing oxygen as waste. 

Stimulated by the steady oxidation of manganese by ultraviolet radiation, the splitting of water would have been slow at first. But as soon as the cluster became coupled to chlorophyll, electrons would have started to flow. 

Getting faster as chlorophyll became adapted to its task, water was sucked in, split open, its electrons drawn out, oxygen discarded.

One a trickle, ultimately a flood, this life-giving flow of electrons from water is behind all the exuberance of life on earth

We must thank it twice -- once for being the ultimate source of all our food, and then again for all the oxygen to burn up that food to stay alive.

It's also the key to the world's energy crisis. We have no need for two photos systems, for we're not interested in making organic matter. We only need the two products released from water: oxygen and hydrogen. 

Reacting them together again generates all the energy we'll every need and the only waste is water. 

In other words, with this little manganese cluster, we can use the sun's energy to split water, and then react the products back together to generate water -- the hydrogen economy. 

Chemists around the world are racing to synthesize this tiny manganese cluster in the lab, or something similar that works as well. Soon, surely, they will succeed.

And then it can't be long before we learn to live on water and a splash of sunshine.

Perhaps something that Sophia will see someday.

Right now, as readers tell me, it is incredibly expensive the way humans use electricity to make hydrogen.

What amazes me is that the Japanese and Chinese are able to reverse engineer American inventions, but American inventors are not able to reverse engineer what nature has done.

Saudi Looking To Maximize Free Cash Flow -- Raises Asian Prices -- Whoo-Hoo! -- March 7, 2021

Link here.

Cartoon Of The Day

Initial Production Data For Wells Coming Off Confidential List This Next Week -- March 7, 2021

 The wells:

  • 37036, conf, Zavanna, Leopard 20-18 4TFH, Cow Creek, first production, 10/20; t--; cum 100K 1/21;
DateOil RunsMCF Sold
  • 37713, conf, Moris 12-26H1, Oakdale, no production data, 
  • 37672, conf, Minnkota Power Cooperative, J-ROC1 1, wildcat, no production data, 
  • 36206, conf, CLR, Polk Federal 13-33HSL, Banks,
DateOil RunsMCF Sold
  • 35712, conf, Whiting, Renbarger 24-34HU, Banks, first production, 9/20; t--; cum 90K 1/21, 33K over 24 days extrapolates to 42K over 30 days:
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare
  • 37793, conf, CLR, Morris 14-26HSL2, Corral Creek, no production data;

Wells Coming Off The Confidential List This Next Week -- Record-Setting Number Of Days With No New Wells Being Reported -- March 7, 2021

Six months ago: September 7 - September 15, 2021. What was going on six months ago. From September 12, 2020, the number of active rigs down to 12; WTI below $40; and few permits:

Monday, March 15, 2021: 13 for the month, 69 for the quarter, 69 for the year.
37036, conf, Zavanna, Leopard 20-18 4TFH,

Sunday, March 14, 2021: 12 for the month, 68 for the quarter, 68 for the year.

Saturday, March 13, 2021: 12 for the month, 68 for the quarter, 68 for the year.

Friday, March 12, 2021: 12 for the month, 68 for the quarter, 68 for the year.

Thursday, March 11, 2021: 12 for the month, 68 for the quarter, 68 for the year.

Wednesday, March 10, 2021: 12 for the month, 68 for the quarter, 68 for the year.

Tuesday, March 9, 2021: 12 for the month, 68 for the quarter, 68 for the year.

Monday, March 8, 2021: 12 for the month, 68 for the quarter, 68 for the year.
37713, conf, Moris 12-26H1,
37672, conf, Minnkota Power Cooperative, J-ROC1 1
36206, conf, CLR, Polk Federal 13-33HSL,

Sunday, March 7, 2021: 9 for the month, 65 for the quarter, 65 for the year.
35712, conf, Whiting, Renbarger 24-34HU,

Saturday, March 6, 2021: 8 for the month, 64 for the quarter, 64 for the year.
37793, conf, CLR, Morris 14-26HSL2,

Friday, March 5, 2021: 7 for the month, 63 for the quarter, 63 for the year.

California: I Am An Island --- March 7, 2021

Most Californians are paying $4.00 / gallon for gasoline, and the driving season has not even begun, link here:

Oil supply in US, in days, looking good, link here:

Bye-bye, Bismarck
, won't be missed, Washington Post, link here:

: most privileged, elitist sport out there. At least NASCAR has one black-owned team and Bubba. The PGA is predictable: every week, starting Thursday, ending Sunday, on multiple stations, live, and replays. Soothing talk, not much kneeling, minimal yelling, especially now with lockdowns. 

Boxing: I've never understood why progressives love this sport. Generally two BLM athletes trying to prove BLDM.

Bullish: yeah, go ahead, bet against the market; bet against the Fed; bet against YOLO; bet against FOMO, and most of all, bet against China: