Let's See: The US Is Not Yet Completely "Open." Many Pockets Still Locked Down -- July 8, 2021

From twitter today, link here, pretty funny:

Is that not an incredible graphic? Did you all see the "plunge" in 2020 and yet atmospheric CO2 continued to rise throughout 2020. 

Link here. 

 

*******************************

A Musical Interlude

Send me down to Tucson:

No New Permits; Twelve Permits Renewed -- July 8, 2021

That didn't last long: after a head-fake and drop in oil prices, WTI was back up today, up 1.23%; up 89 cents; and trading at $73.09. See link over at ZeroHedge. 

That didn't last long: inflation fears may be starting to pass. Link here.

White House: denies any responsibility for higher gas prices. Fails to mention killing the Keystone XL. Link to Charles Kennedy. The whole purpose of the Keystone XL was to bring western Canadian sands oil to the Texas/Louisiana refineries to "balance" the light oil coming from the US shale plays. The refineries are optimized for oil heavier than the light WTI oil and Canadian oil was perfect. Instead, the White House is now asking for that similar quality oil from Saudi Arabia. 

*******************************
Back to the Bakken

Active rigs:

$73.09	7/8/2021	07/08/2020	07/08/2019	07/08/2018	07/08/2017
Active Rigs	22	10	59	64	56

No new permits.

Twelve permits renewed:

• Petro-Hunt (7): four Noonan Federal permits, and three Clark Griswold Federal permits, all in McKenzie County.
• BR (4): four Ole permits in McKenzie County.
• EOG: one Burke permit in Mountrail County

The Great Gatsbys -- July 8, 2021

The great Gatsbys (plural). Wealth concentration at the very top now exceeds the peak of the Gilded Age. Link here. It's quite remarkable to say the least.  Did we mention that Mike Bloomberg has sixteen houses?

And ... Drum Roll .. It's An All-Time Record -- US Gasoline Demand -- July 8, 2021

Days supply, link here: sixteen weeks of decreasing days of supply. Went below 30 days about a month ago, June 11, 2021, report. Last week, it had dropped to 28 days. Now, today's report, days of US crude oil drops to 27.5 days.

Gasoline demand, EIA, link here, ten million bpd:

North Dakota Sues Federal Government Over Canceled Oil And Gas Leasing -- July 8, 2021

Link here.

EOG Brings An Old Wayzetta Well In The Parshall Back On Line -- July 8, 2021

Previous entry:

• 17478, 238, EOG, Wayzetta 20-17H, Parshall, t9/09; cum 489K 4/20; only sixteen days, 4/20; off line 5/20; remains off line 11/20;

New entry:

• 17478, 238, EOG, Wayzetta 20-17H, Parshall, t9/09; cum 489K 4/20; only sixteen days, 4/20; off line 5/20; remains off line 11/20; back on line 4/21; cum 490K 5/21; recent production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2021	31	855	771	794	3721	3471	0
BAKKEN	4-2021	10	251	241	235	656	579	0
BAKKEN	3-2021	0	0	0	0	0	0	0
BAKKEN	2-2021	0	0	0	0	0	0	0
BAKKEN	1-2021	0	0	0	0	0	0	0
BAKKEN	12-2020	0	0	0	0	0	0	0
BAKKEN	11-2020	0	0	0	0	0	0	0
BAKKEN	10-2020	6	0	0	0	464	415	0
BAKKEN	9-2020	9	260	248	315	1121	0	1053
BAKKEN	8-2020	1	0	0	0	27	8	11
BAKKEN	7-2020	0	0	0	0	0	0	0
BAKKEN	6-2020	0	0	0	0	0	0	0
BAKKEN	5-2020	0	0	0	0	0	0	0
BAKKEN	4-2020	16	369	381	227	2405	2277	0
BAKKEN	3-2020	23	582	578	451	2608	2420	6

The Slawson Whitmore Well In Parshall Brought Back On Line -- July 8, 2021

Previous entry:

1. 17354, 2,205, Slawson, Whitmore 1-7H, Parshall, t10/08; cum 686K 4/20; off-line as of 8/18; see this post; back on line as of 12/18; off line 2/21;

New entry:

• 17354, 2,205, Slawson, Whitmore 1-7H, Parshall, t10/08; cum 686K 4/20; off-line as of 8/18; see this post; back on line as of 12/18; off line 2/21; back on line 4/21; recent production:
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	5-2021	31	2135	2158	354	1767	1590	22
BAKKEN	4-2021	24	831	784	281	431	311	0
BAKKEN	3-2021	0	0	0	0	0	0	0
BAKKEN	2-2021	0	0	0	0	0	0	0
BAKKEN	1-2021	0	0	0	0	0	0	0
BAKKEN	12-2020	0	0	117	0	0	0	0
BAKKEN	11-2020	0	0	117	0	0	0	0
BAKKEN	10-2020	0	0	0	0	0	0	0
BAKKEN	9-2020	25	255	240	39	196	71	0
BAKKEN	8-2020	0	0	0	0	0	0	0
BAKKEN	7-2020	9	172	0	77	112	67	0
BAKKEN	6-2020	4	73	0	22	30	7	3
BAKKEN	5-2020	8	98	0	10	236	175	19
BAKKEN	4-2020	30	16	454	6	905	900	0
BAKKEN	3-2020	31	1003	1126	210	1635	1480	0
BAKKEN	2-2020	29	1152	799	196	1803	1658	0
BAKKEN	1-2020	31	1516	1477	328	6653	6339	0
BAKKEN	12-2019	31	1191	1305	234	3124	2845	0

Off The Net For Awhile -- Going Swimming -- July 8, 2021

FOMC minutes: from twitter --

The FOMC minutes suggest the Fed will  keep inflating the largest asset bubbles in modern human history with complete disregard for the record inequality it has created.

The Fed: favoring the investor. One can argue why it is happening, or who is responsible, but I think all agree, current events favor the investor. The gap between investors and savers will continue to widen, and those folks not working are not putting money into their retirement accounts nor building their social security history. I suppose one could argue that folks currently not working probably wouldn't have their own personal retirement accounts even if they were working, but that's not true for social security. 

Market: on a day like today, look for those equities that are actually in the green. Yes, there are some. Holy mackerel, I did not notice this. The Dow, which was off by more than 500 points pre-market has clawed its way back to being down only 215 points, down 0.62%. But the bigger story is this, and I almost missed it, even being down 215 points, the Dow is still above 34,460. 

Another guy who doesn't get it:

Fast And Furious -- Ten-Year Treasury Drops Below 1.3% -- July 8, 2021

Frack spread primer over at twitter. I found it fairly useless but then I didn't spend much time on it. Link here.

Bridge: no one likes bridges and no one likes pipelines. The Billings County commission will not pursue plans to build a bridge over the Little Missouri River across the property of landowners who objected to the project -- The Bismarck Tribune. 

Amtrak: $7.3 billion investment in new trains from Siemens. Amtrak contracts with Siemens Moblity Inc to manufacture 83 new trains. Contract awarded to Siemens Mobility, Inc. in California, a subsidiary of German conglomerate Siemens AG. Infrastructure and rolling stock were mentioned  but I don't know if it includes locomotives. I'm in the minority on this one but I consider Amtrak and the USPS essential services.

Chick-fil-A: a reader writes that Bismarck, ND, will finally get its own Chick-fil-A. 

Covid-19: they beat me to it. I was going to post something similar but OFB beat me to it over at twitter:

If you paint unvaccinated blood over your doorway, the angel of the governmental vaccine task force will pass by your house.

**********************
The Market

COP: not to be outdone, COP touts its "Triple Mandate" to oudo EOG's "Double Premium" locations!! LOL. Link here. It looks like I wasn't the only one that noted "zippering zippers."

AAPL: hit an all-time closing record yesterday, though it fell a dollar short of an all-time high. Today, in early trading, AAPL gave it all back. LOL. Easy come, easy go. But it was nice for awhile. 

Ten-year treasury: 1.301%. And literally as I was typing that, the number changed, and the ten-year treasury dropped below 1.3%. Now at 1.299%. One can do better throwing darts at the Dow. Blindfolded.

*************************
Breitbart Business News
Housing Prices

The heat emanating from the U.S. housing market has the attention of at least some of the folks at the Federal Reserve. The minutes of the June meeting revealed that "several" Fed officials think there would be benefits to begin the eventual taper of bond purchasers by reducing the mortgage-backed securities buying faster than Treasuries. The reason for this, in the gentle language of the minutes, is to ease "valuation pressures in housing markets.”

At the end of June we got the S&P CoreLogic Case-Shiller National Home Price Index for April showing a gain of 14.6 percent compared with a year prior, the fastest pace on record and acceleration from the 13.3 percent annual gain in March. 

 

By all accounts, home prices have continued to accelerate. 

 

Indeed, Fed staffers reported to officials that "Housing demand continued to be robust, with construction of single-family homes and home sales remaining well above their pre-pandemic levels and house prices rising appreciably further. The incoming data for this sector indicated that residential investment spending was being temporarily held back in the second quarter by materials shortages and limited stocks of homes for sale."

Residential investment spending is Fed-speak for construction spending. In the jargon of the Fed, building new homes counts as investment but buying an existing home does not. So what the Fed staff is saying is that home prices will likely keep rising because home building has been held back because of shortages and inflation. And even though this week's mortgage applications numbers suggested that the high prices of homes are slowing down sales, Ed Pinto of the AEI Housing Center points out that we're still far above pre-pandemic levels. 

 

Indeed, purchase volume was 36 percent above the same week in 2019 and at about the same level as in 2020.

All of this has some people beginning to worry that we may be in a new housing bubble. Won't the panic buying of the pandemic retreat with the virus? Certainly, home prices cannot continue to rise nearly 15 percent a year for very long. But many of the fundamentals that are driving what we've been calling the "flight to the suburbs" for over a year are not going to go away soon. 

 

The cities are likely to see further deterioration as schools slump, the shrinking tax base erodes funding for services, and crime escalates. Remote working, even if only part-time, makes longer commutes more tolerable. And people have discovered, once again, that it's nice to live in a house with a yard. [Some, including me, heartily disagree.]

Pinto estimates that we will continue to see double digit levels of home price appreciation through the end of this year and into next year. That sounds about right to us. After that, however, we wouldn't expect a crash or even a modest decline in prices—save perhaps in the hottest markets—but a slowdown in gains. 

 

We're likely seeing a good deal of the gains for the future realized now.

– Alex Marlow & John Carney
Breitbart News Network

The Mideast Is Getting "Noisy" Again -- July 8, 2021

At the sidebar at the right, I track the unpleasantness in the mideast at this site: "Mideast On The Brink." It has not been updated in a long time. 

For the archives:

• US embassy targeted on third day of attacks in Iraq.
• huge tanker explosion while sitting in port in Jebel Ali port, Dubai
  
• OPEC in disarray.
• US exits Afghanistan: Taliban set to take over Bagram Air Base.
• "Majors" announce intention to exit Iraq.
• Unexplained explosions continue to be reported across Iran (Israel has a new PM).
• Gasoline prices surging in US: White House asking Saudi Arabia to open the taps to replace the heavy oil that would have come to the US from western Canada via the Keystone XL.

Now this: soaring fuel prices in Lebanon could trigger a "social explosion." Link to Tsvetana Paraskova. 

Lebanon, which is in the midst of a severe economic crisis, is “days away” from a social explosion, the country’s caretaker prime minister warned on Tuesday, moments before renewed, violent protests broke out as people desperately search for essential medicines, gasoline, and food.

“Lebanon is a few days away from the social explosion. The Lebanese are facing this dark fate alone,” caretaker Prime Minister Hassan Diab said in a speech during a meeting with international organizations and ambassadors.

“I appeal through you to the kings, princes, presidents and leaders of brotherly and friendly countries, and I call upon the United Nations and all international bodies, the international community, and the global public opinion to help save the Lebanese from death and prevent the demise of Lebanon,” Diab added.

Earlier this month, the caretaker government in Lebanon effectively slashed fuel subsidies and raised the prices of gasoline and diesel in the Middle Eastern country which is reeling from an unprecedented economic crisis. 

The Lebanese energy ministry announced a massive increase – by 35 percent – in fuel prices after slashing fuel subsidies amid a severe economic crisis and rallying global commodity prices.

Implied Gasoline Demand Hits All-Time Record? Let's See If Corroborated By EIA -- July 8, 2021

Re-posting. This is huge. 

This is huge, if it's corroborated later today by the EIA, which I doubt will happen [I was wrong; see this note.] But one twit suggests "implied gasoline demand" has now surpassed 10 million bpd. If that is accurate that should be a new record, passing even high-water (or should we say, the high-gasoline) mark of 2019. Link here. 

Weekly EIA Petroleum Report -- Yawn -- But Gasoline Demand Hits An All-Time High -- July 8, 2021

This is huge, if it's corroborated later today by the EIA, which I doubt will happen. But one twit suggests "implied gasoline demand" has now surpassed 10 million bpd. If that is accurate that should be a new record, passing even high-water (or should we say, the high-gasoline) mark of 2019. Link here. 

Later: it turns out I was wrong. A new all-time record for gasoline demand.

Gasoline demand, EIA, link here, ten million bpd:

 

Weekly EIA petroleum report, link here:

• US crude oil in storage decreased by 6.9 bbls;
• US crude oil in storage now stands at 445.5 million bbls, 7% below the five-year average;
• US crude oil imports averaged 5.9 million bbls; decreased by 0.5 million bbls from the previous week (yawn)
• refiners are operating at 92.2% of their operable capacity (yawn)
• distillate fuel inventories increased by 1.6 million bbls; 6% below their five-year average;
• jet fuel supplied was up 81.9% compared with same four-week period last year.
• comment: we need to quit comparing this year's data with last year's date. We need to start comparing this year's data with same period in 2019. But that won't happen.

Import sources:

Gasoline demand: link here. Today's report pending.

One Well Coming Off Confidential List -- A CLR DUC -- July 8, 2021

Active rigs:

$71.85	7/8/2021	07/08/2020	07/08/2019	07/08/2018	07/08/2017
Active Rigs	22	10	59	64	56

One well coming off confidential list today -- Thursday, July 8, 2021: 3 for the month, 3 for the quarter, 183 for the year:

• 37400, drl/NC, CLR, Gale 9-32H, Cedar Coulee, no production data.
  

RBN Energy: propane headed toward uncharted territory.

Fourth of July skyrockets were not the only fireworks earlier this week. The price of propane skyrocketed up to 112 c/gal before the holiday weekend and held at that level through Tuesday, an increase of about 21 c/gal or 23% over the past month alone. To put that in perspective, that’s the highest price for propane since April 2014, back when crude oil was over $100/bbl. Although propane came off a few cents on Wednesday in sympathy with falling crude prices, both Mont Belvieu and Conway propane prices are still almost 135% higher than this time last year. Assuming crude prices don’t fall off a cliff, how high could propane prices go? Hard to say. The propane market is experiencing unusually low inventories, relatively modest production growth, near record-high export volumes, and unconstrained dock capacity. Consequently, if we continue to see strong demand, but U.S. producers stay focused on capital discipline, thus constraining production, propane prices could be headed considerably higher this winter. Today, we continue our series of deep dives into the U.S. propane market and, in a blatant advertorial, describe how you can keep up with this rapidly moving market with RBN’s new Propane Billboard report and dataset. 

We’ve been worrying about propane on a regular basis for over a year now, and it’s all about exports. Here’s the backstory. Most propane is a byproduct of oil and gas production, with a smaller volume a byproduct of oil refining.

Years ago, as the Shale Revolution was kicking in, the production of propane ramped up, with volumes doubling between 2011 and 2019.  But propane demand in the U.S. consumer (retail etc.) and petrochemical sectors was flat, so there was only one way to balance the market: exports. The problem was, in the early days of shale-driven propane production growth, U.S. dock capacity was insufficient to export all of the surplus and international demand was only experiencing modest growth. The result was restrained exports. That pushed U.S. propane prices into the doghouse. For the next five years, propane production tended to stay ahead of international demand and export dock capacity, resulting in surplus market conditions most of the time. U.S. propane consumers — everyone from backyard BBQ-ers to huge petrochemical plants — enjoyed cheap propane, for a while.

Chick-fil-A Cow Appreciation Day, 2021, Has Been Postponed

Chick-fil-A's annual "cow appreciation day" has been celebrated annually since 2005 on the second Tuesday in July. That celebration,. this year, has been postponed. Note: postponed. Not canceled. Link here.