Wednesday, June 30, 2021

What Goes Around Comes Around -- June 30, 2021

Amazon: Jeff Bezos is/was a huge anti-Trumper. He succeeded in getting Joe Biden elected. LOL.

Now, Bezos has a bigger problem. Amazon seeks recusal of the FTC head Lina Kahn as the antitrust probe ramps up. Pretty funny.

Paris: on another note, JP Morgan makes Paris its post-Brexit European trading headquarters. Link here.

Dividends 101: ordinary dividends vs qualified dividends. Key data point:

Regular dividends paid on shares of domestic corporations are generally qualified as long as the investor has held the shares for a minimum period. 
The Internal Revenue Service rule says the shares have to be owned for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date. 
For preferred shares, the stock must be owned more than 90 days during the 181 days starting 90 days before the ex-dividend date.

Sort of reminds me of how Easter Sunday is calculated: first Sunday after first full moon after  spring equinox, or something like that. 

Jobless benefits:

The fruits of the decisions by a score of Republican governors to cut short the federal enhancements to unemployment benefits appeared in the ADP private payroll report on Wednesday, June 30, 2021. 
Private-sector employers added 692,000 workers to their payrolls, easily beating the consensus estimate for 550,000. Notably, 332,000 of those new workers were in the leisure and hospitality sector, which employs many workers at pay levels making them most likely to be disincentivized to work by very high unemployment benefits. It's worth pausing for a moment to get specific about just how much the jobless were receiving on enhanced unemployment. 
The precise amounts received by workers varies from state to state and depends on how much a worker earned before being laid off. But on average, jobless benefits pay around $320 per week, the equivalent of around $13.33 per hour. That's not very much to get by on, and it isn't meant to be. It's meant to bring in some income for a short time until a new job can be found. 
The federal enhancement brought the weekly average up to $600 per week, the equivalent of nearly $18 an hour. That's more than a lot of entry-level jobs pay, including many jobs in restaurants and hotels around the country. And in states like Washingon and Massachusetts that are especially generous with unemployment benefits, average enhanced benefits amount to almost $800 per week or more than $23 per hour. The effect was to put millions of workers out of reach of employers. 
Keep in mind that it's not enough for employers to simply beat the prevailing jobless wage. An employer paying $25 an hour in Washington—which is an annual wage of $45,500—is really only paying $2 an hour more than not working. You don't have to be especially lazy to decide that working 35 hours a week for an extra $70 is not as attractive of an offer as not working at all but being paid well. 
If benefits pay enough, there may be no wage that would lure a substantial portion of the population into a job.
Alex Marlow & John Carney
Breitbart News Network

And will avoid marriage: link here

Gasoline Demand -- June 30, 2021

Gasoline demand: link here

Oasis: maintains dividend.

Back to the Bakken

Active rigs:

Active Rigs2310616758

One new permit, #38407:

  • Operator: Petro-Hunt
  • Field: Elm Tree (McKenzie)
  • Comments: Petro-Hunt has a permit for a USA well in Elm Tree, in NWNE 24-153-95; to be sited 270' FNL and 1945' FEL

Four permits renewed:

  • Rimrock: a Unicorn permit, a Dragon permit, a Mermaid permit, and a Sasquatch permit, all in Dunn County.

Pretty Amazing Draws -- June 30, 2021

Link here

Supply Deficit To Worsen -- Goldman Sachs -- June 30, 2021

A couple of days ago, this was posted:

Supply deficit: I think the most fascinating story to watch play out the next two years -- whether there will be a supply deficit, a supply deficit to push the price of WTI to $100. 

Now today, Goldman Sachs is reporting that oil markets will see a deficit of five million bopd by the end of 2021. That's only six months from now. Currently the market is "short"about 2.8 million bopd; that deficit projected to grow another 2.2 million bopd in the second half of the year. Link to Irina Slav here

Entrepreneurial spirit. The other day I noted an Optimus Prime Transport truck near our home in Grapevine, TX. I posted a photograph of same. One of our sons-in-law works for Daimler Benz in Portland, OR, building the Optimus Prime. He and I were curious...and that led to this ...

  • Optimus Prime Transportation Inc, Batavia, IL; link here. Seven employees; annual revenue, $81,000.
  • Optimus Prime Transportation, Inc.Wheeling, IL; link here. One truck, one driver.
  • Batavia and Wheeling are one hour apart. 

Weekly EIA Petroleum Report -- June 30, 2021

Weekly EIA petroleum report. Link here.

  • US crude oil in storage decreased by a whopping 6.7 million bbls;
  • US crude oil in storage now stands at 452.3 million bbls; 6% below the five-year average;
  • refiners are operating at 93% of their operable capacity;
  • US crude oil imports averaged 6.4 million bopd; decreased by 0.5 million bopd; average is 6.7 million bopd; 3% more than the same four-week period last year;
  • total motor gasoline inventories increased by 1.5 million bbls last week; right in line with average;
  • distillate fuel inventories decreased by 0.9 million bbls and are 5% below the five-year average;
  • jet fuel supplied was up 83.5% compared with same four-week period last year;

Active Rigs Up To Twenty-Three; CLR With Seven Rigs -- June 30, 2021

Twenty-three and me? LOL. 

Texas: y'all might remember this story. Now it's being reported that Goldman Sachs will open a "Dallas campus, second largest after New York. Link here: I think the Schwab campus just north of Ft Worth might be the biggest Schwab campus. Not sure. Back in 2019, JPMorgan announced it was moving some "assets" to the Dallas area. For list of companies relocating to Texas, see this post.

Ten-year treasury: after all that hand-wringing, the narrative seems to be changing. Apparently inflation fears are taking a back seat to long-term growth hurdles. It appears the Biden administration will unnecessarily extend the pandemic consequences by at least a year; the labor force may be the biggest hurdle for US economic growth. Maybe instead of a huge jump in GDP in 2Q21 and 3Q21, the economic recovery will remain robust and last two full years. Link here. Today's range: 1.450 - 1.484. Wow. Link here.

China: facing its worse power shortage in a decade. Holy mackerel. Can't get to EVs fast enough. That will solve everything.

United Airlines: company's largest jet order, ever. Previously reported, but I was unaware it was the company's largest aircraft purchase, ever. Truly amazing.

PennEast pipeline: massive victory -- Oilprice

Covid-19: it appears the Biden administration extended the pandemic consequences by a full year. It's very likely under a "Biden administration" we would still be developing vaccines.

COP: cuts capex; cuts operating cost guidance; ups stock buybacks by a billion dollars. Link here And here.

Noise: you can go to the link but it appears to simply be background noise. I assume "this stuff" goes on all the time.

Back to the Bakken

Active rigs:

Active Rigs2310616758

Operators with active rigs:

  • CLR (7): Gordon Federal, Mittlestadt, Dvirnak, Pasadena Federal, Harrisburg, LCU Truman, LCU Ralph,
  • MRO (2): Osking USA,
  • Hess (2): BB-State A, BL-Myrtrice,
  • Oasis: Fraser Federal
  • Enerplus: Marten
  • Whiting: Lapica
  • Petro-Hunt: Jorgenson,
  • Slawson: Muskrat Federal,
  • Kraken: Bigfoot LE,
  • Ovintiv: Rolfsrud
  • Rampart Energy: Coteau 1,
  • Rimrock Oil: FBIR Johnson,
  • Armstrong Operating: Fugere,
  • Resonance Exploration:Resonance Ballantyne,
  • KODA Resources: Porter,

No wells coming off confidential list.

RBN Energy: building more natural gas pipeline takeaway capacity out of the Montney. part 4

Western Canada’s Montney-sourced natural gas production has been on a remarkable upward trajectory in the past decade. Most of this growth has been focused in one province: British Columbia. However, that progress has not come without difficulty. 
A key challenge during BC’s gas boom has been providing sufficient pipeline takeaway capacity — the hurdles include the BC Montney’s remoteness, various regulatory impediments, and the unique geologic nature of the play. For this amazing gas supply growth story to continue well into the future, more pipeline capacity needs to be constructed. In our concluding blog on the Montney, we discuss recent pipeline developments and the challenges still ahead.