Wednesday, July 28, 2021
Note: Internet Connection Will Be Poor -- Maybe Non-Existent -- For Next Eighteen Hours -- July 28, 2021
Ford Earnings -- July 28, 2021
Earnings surprise:
- EPS: 13 cents vs estimates of a ten-cent loss
- revenue: $26.8 billion vs estimates of $24.7 billion
- increases its full-year guidance
- says chip shortage is easing
No New Permits; Whiting Renews Nine Permits; CLR Reports Two Completed DUCs But No Data -- July 28, 2021
| $72.39 | 7/28/2021 | 07/28/2020 | 07/28/2019 | 07/28/2018 | 07/28/2017 |
|---|---|---|---|---|---|
| Active Rigs | 23 | 12 | 59 | 62 | 60 |
- Whiting: four Holmberg permits, one Foreman Federal permit, and one Pennington permit, all in Mountrail County;
- Whiting: three Link permits in McKenzie County
- 36803, drl/NC, CLR, Florida Federal 9-11H1, Camp, no production data,
- 32474, drl/NC, CLR, Florida Federal 8-11H, Camp, no production data,
Apple Supplier TSMC Readies 2-nm Chips For 2024 -- MacRumors -- July 28, 2021
Tag: 2-nm, 3-nm, 5-nm, 7-nm, 10-nm
This is all about the size of the "chip": 10 nm, 7 nm, 5 nm, 3 nm, and now the 2 nm.
The last update:
- March 1, 2021: TSMC -- Apple's main chip supplier -- ready to mass produce 3nm chips. Huge.
Now today, this story: Apple supplier TSMC readies 2 nm chips for 2024. Link here.
2 nm chips for Apple.
Intel is having trouble managing 10 nm.
From the linked article:
Apple chip supplier TSMC is planning to manufacture chips with a 2nm fabrication process by 2024.
TSMC plans to build a new factory for two-nanometer chips in Hsinchu, Taiwan.
Construction has been cleared to begin in early 2022, with equipment being installed in 2023.
..... we may tentatively expect the first 2nm Apple chips to be the "A18" or the "M5."
... it seems inevitable that the company will do so in tandem with TSMC since it is Apple's sole processor supplier with an expansive manufacturing capacity.
TSMC's manufacturing capabilities are also considerably more advanced than rival companies like Intel, which have been mired by delays and stagnation with older manufacturing processes, enabling Apple, as a major TSMC client, to maintain a competitive edge with its custom silicon chips.
Earlier this week, Intel announced plans to make chips for Qualcomm.
The A14 and M1 chip debuted in devices last year and were Apple's first chips to be manufactured with a 5nm fabrication process.
Apple is believed to have already booked an order with TSMC for 4nm custom silicon chips, which are due to begin production this year, ahead of the supplier offering 3nm chips from 2022.
2nm chips in 2024 would be another progression of this miniaturization process.
TSMC is undergoing a rapid global expansion to meet demand, building a 5nm chip facility in Arizona and expanding its 28nm factory in Nanjing, China, while also weighing up the possibility of opening new factories in Japan and Germany.
Notes From All Over -- July 28, 2021 -- IN PROGRESS
Refiners: top three US refiners expected to report first profit since pandemic began. Link to Tsvetana Paraskova. But is it sustainable? LOL. From the linked article:
The second quarter of this year, however, will likely see decent earnings results from all three largest refiners in the U.S.—Valero Energy, Phillips 66, and Marathon Petroleum Corporation. That's thanks to higher fuel demand in America, increased run rates at refineries, and rising refining margins.
These three refiners are expected to report on Thursday and next week around $675 million in combined net profit for the second quarter.
But this estimate has been nearly halved over the past month—analysts expected at the end of June $1.3 billion in combined net earnings. The lower projections in recent days are the result of high oil prices in recent weeks, which dent profits for refiners, as well as sliding industry margins in June.
Concerns about the resurging COVID cases could mean that Q2 could be the 'peak profit' quarter for American refiners this year.
For Q1, Valero, Marathon Petroleum, and Phillips 66 all reported losses, but their managers were upbeat about fuel demand and refining margins going forward.
Crude oil days supply, US: drops from 27.3 days to 27.2 days. Link here.
Enterprise: 2Q21 earnings -- S&P Global Platts.
- growth spending increases as more projects sanctioned
- record rise in second quarter profit July 28, 2021, as an ongoing recovery in demand spurred increasesin natural gas pipeline and processing volumes
- 50 cents/share vs 47 cents/share a year earlier (2020 -- pandemic lockdown)
- revenue jumped 64% to $9.45 billion from $5.75 billion;
- but look at this: total costs and expenses rose 83% to $8.12 billion in the latest quarter; say wha?
- major projects remain on time and in progress:
- 4Q21 completion:
- Gillis natural gas pipeline: to connect Haynesville shale production with LNG markets in southwestern Louisiana
- a natural gasoline treated in Chambers County, TX
Notes From All Over -- The China Map Edition -- PXD Insanity -- July 28, 2021
Olympics: I am very particular about whom I follow over at twitter. It's limited to energy for the most part but having said that, it includes some very well-read folks and some very broad-ranging media outlets. I can expect at least one tweet on any given subject every day. Most remarkable: no one -- literally no one -- is tweeting about the Olympics, except the occasional "woke" Bismarck Tribune. And wow, is that editorial staff "woke"!
No scientific sense: government says folks still need to get vaccinated even if they've had the disease. So many questions.
Trucking shortage: the other day I noted that the shortage of truckers may have nothing to do with government checks keeping folk at home. This story connects a lot of dots. Reno Airport sees fuel shortage as fires draw away truckers. Dots to connect:
- global warming (FWIW);
- fires across the west;
- shortage of truck drivers;
- KMI
British natural gas: natural gas has just hit "nearly" $14 per mBtu, first time in sixteen years. For the "shoulder summer demand season," UK natural gas prices are absolutely eye-watering.
Pioneer Natural Resources: will be hit by an "almost" billion-dollar derivatives loss. I remember years ago the same thing happened to Harold Hamm and Continental Resources. Harold Hamm took Continental Resources in a different direction after that. He got back to the basics. Link to Reuters.
And worse? They did the same thing last quarter, though not quite as much: $691 million hedging loss, 1Q21. What was that definition of insanity? Oh, that's right, doing the same thing over and over, and expecting a different result.
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.
AMD: surging today. Earnings crushed expectations.
- EPS: 63 cents vs 54 cents;
- sales: $3.85 billion vs $3.6 billion
- as good as 2Q21 was, the next quarter might be better;
ENB: TETCO natural gas pipeline waiting for regulators to give the "all-clear" sign. Link here. Why am I not holding my breath?
China/XOM: $1 billion natural gas terminal -- construction begins. Guangdong.
XOM, 2Q21 earnings: to report end of the week.
CVX, 2Q21 earnings: to report end of the week.
Saudi Arabia: value of Saudi oil exports jumps 147% in May. Link to Tsvetana Parasova.
Notes From All Over -- The Summertime Sadness Edition -- July 28, 2021
$1 trillion infrastructure bill: will be signed before "summer recess." Trust me on this one.
Summertime sadness: back to masks. Imagine. The winter months are the severe months for "colds" and "seasonal flu." Imagine. If we're going back to masks now -- in the middle of summer -- imagine, what this winter is going to be like. I can only imagine. Do government agencies shut down again. Vote by mail only.
Back to masks: government agencies now requiring all employees mask, regardless of vaccination status.
New narrative: young people will now die from delta variant. Hunch: teachers already preparing for more remote learning this fall.
$100: that's what NYC will pay for any New Yorker who gets the vaccine.
Brazil: earlier this morning I pointed out that Brazil was soon to go from being an energy exporter to an energy importer. Now this, Brazil's June oil production was 2.903 million bopd, down 1% m/m; and get this: down 3.6% y/y.
False narrative: US crude stocks at Cushing fell last week to lowest since January 2020.
US crude oil imports, in 1,000's bpd
- Canada: from -135 to 3,476
- Mexico: from -176 to 621
- Russia: from +143 to 449
- Saudi Arabia: from +4 to 363
- Brazil: from +71 to 139
Kremlin says Biden is wrong, to say that Russia only has nuclear weapons and oil. I agree with Putin. Russia also has vodka.
UK road use (all motor vehicles): now exceeds that of 2019 -- that would be pre-Covid.
Looking for that needle in a haystack:
YouTube. Need I say more?
Re-posting, from June 4, 2021:
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Streaming: It's All About Content, Cost, and Ease of Use
Content, cost and east of use: but of the three, only content really matters. Ease of use is pretty much a non-issue any more, and, same with cost.
Hulu: until recently I did not understand Roku. Last night I spent a bit of time reading about Roku (a hardware business) and streaming businesses, like Hulu, Amazon, etc. I'm about the last person one wants to listen to when it comes to technology but, wow, I can see where the world is headed.
Facetime: about a year ago I bought Apple's largest desktop iMac. Our dining area is configured in such a way that the iMac sits perfectly for Facetime calls with family. In addition, it is absolutely perfectly placed for watching television. I use the word "television" loosely because, yes, it's "television" as most of us understand it, but it's not my dad's "television." It's all streaming. I will have to ask our high school granddaughters if they and their peers watch "television" any more, or if they watch Hulu, Roku, Disney+, etc.
Apple TV+: I've talked about Apple TV+ many, many times. It's a huge disappointment. So, what's better, Hulu or Roku? You can't ask that question: the former is a software / streaming / content entity; the latter is a hardware company that streams "things" like Hulu. So, what's better, Hulu or something else? Quick, name a direct competitor with Hulu.
Google: what is best streaming tv service hulu roku. Link here for a CNET answer to that question that was posted just two days ago: best live TV streaming service for cord-cutters. Only five make the cut: AT&T TV, FuboTV, Hulu Plus Live TV, Sling TV, and YouTube TV.
What's missing: Disney+, Apple TV+, Netflix. HBO Max. Pluto TV, Amazon. Yes, I know many of these are a bit like comparing apples and oranges, but unlike Roku none of these are hardware companies (except possibly Apple to some extent, and maybe even Amazon, to a very small extent, if you want to be a purist.)
The five: AT&T TV, FuboTV, Hulu Plus Live TV, Sling TV, and YouTube TV. How did CNET
rate them. It appears the panel did not want to upset any of the
companies. Depending on which metric was being compared, each of the
five won out in one category or another.
- I was not surprised to see YouTube TV come out on top overall. I don't subscribe to YouTube TV but I've always had a hunch that You Tube TV would be the best.
- Hulu, which I do use, is either as good as YouTube TV or a close second; long term, Hulu will have a huge challenge fending off YouTube TV
- FuboTV? I bet it's gone or absorbed by another streaming company within five years
- AT&T TV: I have no idea. CNET says AT&T TV is best for channel flippers and sports fans. It also also allows up to 20 devices to stream simultaneously where the others allow only three (or two in come cases) devices to stream simultaneously on one account; think about that -- on one account, twenty devices can be used simultaneously.
- Sling TV: it will have to change drastically (and when it does, it will have to double its subscription price) to survive.
Apple, Inc. -- July 28,2021
From MacRumors overnight:
- double digit growth in iPhone upgraders and switchers in 3Q21 (June quarter);
- wearables, home, and accessories category sets new June quarter revenue record; almost $9 billion;
- services revenue reaches $17.5 billion; sets new all-time record;
- Apple's Mac and iPad sales continue to surge in June quarter; Apple Mac brought in $8.8 billion, up from $6.5 billion one year ago;
The two biggest Apple, Inc., stories:
- the number of folks switching from Android phones to iPhones
- services revenue
Most under-reported story: Apple is now inside Elon Musk's mind (Tesla's conference call). Does Elon know something about Apple's "car" project that the rest of us don't?
Hunch:
- iPad and Mac laptops will surge in August as public schools issue iPads to first-time kindergarten/first graders entering public school;
- huge re-supply for all elementary students returning to school this September;
- incoming college students have spent past few months putting together tuition plans, course schedule, transportation needs, etc., but now as we come close to moving into dorms, focus will be on new laptop computers
- we're going to see huge supply shortages of iPads and laptops by October, if not sooner; folks will accept whatever is left on the shelf and worry about upgrading to what they want later; if not shortages, delivery delays;
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Getting Into The Weeds
Highlights from the linked articles above.
iPhones:
Apple experienced "strong double digit growth" in the number of iPhone users who were upgrading an older device or swapping to an iPhone from an Android device, Apple CEO Tim Cook said during today's earnings call covering the third fiscal quarter of 2021.
Cook said that it was the largest upgrade quarter for Q3 ever, and that the iPhone 12 upgrade cycle on the whole was "very strong." Sales of the iPhone 12 Pro and the iPhone 12 Pro Max were "particularly strong."
Going forward, Cook said that Apple feels "really good" about the future of the iPhone because 5G penetration remains "very low" and there's a lot of opportunity for sales growth in the 5G market. "We're in the very early innings of 5G," Cook said. "There are only a couple countries that are in the double digits."
Wearables:
The category brought in $8.8 billion, up 36 percent from $6.5 billion in the year-ago quarter. According to Cook, the category set a new all-time June quarter revenue record.
Wearables, Home, and Accessories includes the Apple Watch, AirPods, AirPods Pro, AirPods Max, HomePod, Beats headphones, and more. AirTags is in this category, and Cook said that the response to AirTag has been "enthusiastic" and "very strong."
Nearly 75 percent of customers who purchased an Apple Watch during the quarter were new to the Apple Watch, and Apple Watch is one of the main drivers of wearables revenue.
Services:
Apple's services category, which includes the App Store, Apple Music, Apple Pay, AppleCare, Apple TV+, Apple Arcade, Apple Fitness+, and more, saw another quarter of incredible growth according to Apple's earnings results for the third fiscal quarter of 2021 (second calendar quarter).
Services brought in $17.5 billion during the quarter, up 33 percent from $13.2 billion in the year-ago quarter and up from $16.9 billion last quarter.
Cloud services, Apple Music, advertising, video, and payments saw all-time revenue records, while the App Store saw a new June quarter revenue record.
During the earnings call announcing the results, Apple CFO Luca Maestri said that Apple's install base of devices hit a new all-time high as well, which helps drive services growth.
Apple now has more than 700 million paid subscriptions, which is up 150 million from last year, and is four times the number of subscriptions that Apple had four years ago.
Paid accounts on digital content stores reached a new all-time high across each geographic segment, and paid accounts increased by double digits.
Mac and iPad:
Sales were just a bit down from the second fiscal quarter of 2021, when Apple's Macs brought in $9.1 billion in revenue. iPad revenue was at $7.4 billion, up from $6.6 billion in the year-ago quarter and again, just barely trailing Apple's second quarter earnings results.
The iPad had its best June quarter in nearly a decade, while the Mac set a new June quarter revenue record. Apple CFO Luca Maestri said the last four quarters have been the Mac's best four quarters ever.
EIA's Weekly Petroleum Report -- July 28, 2021
Later: WTI pushes just above $72 -- at 7:49 a.m. PT, WTI is at $72.03.
EIA's weekly petroleum report posted. Link here.
- US crude oil in storage decreased by 4.1 million bbs;
- US crude oil in storage now stands at 435.6 million bbls; 7% below the five-year average;
- US
crude oil imports averaged 6.5 million bbls per day; decreased by 0.6
million bpd; averaged about 6.4 million bopd; 6.9% more than same
four-week period last year;
- refiners are operating at 91.1%;
- distillate fuel inventories decreased by 3.1 million bbls; 7% below last week;
- jet fuel supplied was up 39.4% compared to same four-week period last year;
- comment: we need to stop 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.
Data points that caught my attention:
- huge jump in crude oil imports: California? decrease in Alaska oil? more heavy oil to balance all the US-produced light oil?
- distillate fuel inventories decreased significantly; is there a heavy oil story here -- distillates and crude oil imports? I don't know?
WTI: now up ever so slightly at 0.28%; up 20 cents; trading at $71.85. Anything below $72-WTI does not excite me. Number one driver of short-term "inflation" in the US: energy or wages? For the tourist driving cross-country this summer, what will be most noticeable? Increase in prices at McDonald's or increase in prices at the gasoline pump? Lodging expenses?
No Wells Coming Off The Confidential List -- July 28, 2021
Top story: benchmark European continental natural gas Dutch TTF has surged this morning to €38.75 per MWh, the highest since the contract started trading in 2005. Russia controls this market. Link here. Trump warned them.
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.
Harold Hamm: over at ArgusMedia.
Weber (as in grilling): IPO to sizzle. Link to ZeroHedge.
ENB: to report before market opens, July 30, 2021.
EPD: 2Q21 results. Transcript here.
F: to report after market closes today.
GOOG: big, big winner. Why? YouTube. We discussed this previously.
Brazil: from energy exporter to energy importer?
Pfizer: huge money on the vaccine.
Dividend announcements today:
- WMB: no change
Dividend announcements yesterday:
- AAPL, BKH: unchanged
- Wells Fargo: increased; doubled from ten cents to twenty cents; link here;
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.
Humor for the day: Elizabeth Warren is worried about the "un-banked" and the "under-banked"-- those without traditional checking accounts. She says cryptocurrency would be an alternative. LOL. Folks who won't open a standard banking account have the assets to "trade" in cryptocurrency. What planet is she on?
DUOLINGO GOES PUBLIC TODAY! Sophia and I have been using Duolingo to learn Spanish the past two years. We have not missed one day of instruction. I love it. Sophia is getting tired of the daily five-minute course, but wow, she learns a lot. Just five minutes every day. Nothing irritates me more than public schools not providing ten minutes every day of Spanish in the classroom starting in kindergarten. Part of the problem for Sophia, too much repetition; she wants to go faster.
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Back to the Bakken
Active rigs:
| $72.01 | 7/28/2021 | 07/28/2020 | 07/28/2019 | 07/28/2018 | 07/28/2017 |
|---|---|---|---|---|---|
| Active Rigs | 23 | 12 | 59 | 62 | 60 |
No wells coming off the confidential list.
RBN Energy: Canada's energy industry steps up carbon capture efforts in the oil sands.
New and expanded efforts to reduce greenhouse gases, most notably carbon dioxide, have been making headlines globally on a daily basis for a while now. Canada’s energy industry has been increasingly contributing to that newsfeed this year, with two large projects announced in Alberta that will capture, use, and sequester large volumes of CO2 generated from the oil sands as well as other sources of oil and gas production in Western Canada. In today’s blog, we review the emissions profile of the Canadian oil and gas sector and discuss two of the largest carbon capture, use, and sequestration projects announced to date.