Global Crude Oil Supply And Demand -- October 31, 2021

Link here.

In the graphic below:

• the double bars are quarterly; most recent is 3Q21;
• the bars are "supply" --
• the darker grey/blue bars: EIA estimate
• the lighter blue bars: OPEC estimate
• the lines are demand --
• the red line is demand, EIA estimate
• the blue line is demand, OPEC estimate
• comments:
• prior to CY19: supply/demand pretty much balanced
• huge production overhang when demand plummeted first quarter - second quarter, 2020
• for the past five quarters, demand has exceeded supply and the gap is fairly consistent
• a reminder: the price of the last bbl of oil determines the price of oil

Investopedia: note the date of this article and the authors' comment about OPEC's price target.

Say What? October 31, 2021

It was my understanding that the US, Japan, and others have been pushing for OPEC+ to produce more. 

Now this: 

Apparently he has one speech writer for the overseas crowd and another speech writer for the stateside folks.

We'll see WTI futures soon.

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Halloween

The twins, nineteen months old, are getting their final instructions before going out to trick or treat. 

I assume "socks and shoes" were part of the briefing. 

Two EOG Mandaree Wells Hit Milestone -- Four-Well Pad Updated -- October 31, 2021

The wells:

• 32514, 1,355, EOG, Mandaree 31-0706H, Squaw Creek, , t12/16; cum 633K 5/20; intermittent production in 2020; full production back as of 10/20; cum 693K 8/21; producing over 4,000 bbls oil per month this well went over 700,000 bbls of oil in October, 2021; 
• 32513, 1,910, EOG, Mandaree 24-0706H, Squaw Creek, t12/16; cum 546K 5/20; intermittent production in 2020; full production back as of 10/20; cum 599K 8/21; this well has gone over 600,000 bbls as of September, 2021 

The other two wells on this pad:

• 19004, 1,440 EOG, Mandaree 12-07H, Squaw Creek, t11/10; cum 212K 8/21;
• 32512, AB/1,505, EOG, Mandaree 30-0706H, Squaw Creek, t12/16; cum 310K 9/19;

No Update Regarding This Pad; One Monster Well; Waiting For The Other Three -- October 31, 2021

The well:

• 19296, 2,388, SHD, Golden 22-31H, Deep Water Creek Bay, TF Bench 1, 62 stages, 15 million lbs, t3/15; cum 781K 4/20; cum 828K 8/21;
• 31109, conf, SHD, Charging Wildcat 22-31H, Deep Water Creek Bay, no production data,
• 31110, conf, SHD, War Eagle 22-31H, Deep Water Creek Bay, no production data,
• 31111, conf, SHD, Luke Neset 22-31H, Deep Water Creek Bay, no production data,

Methane-To-Methanol -- A Halloween Treat For Pennsylvania And Texas-- October 31, 2021

In a long note there will be content and typographical errors, but there are plenty of links to the original sources.

A reader alerted me to this story. Several links. 

We start with this one: Nacero to build a $6 billion "gas to gasoline" plant in Luzerne County, Pennsylvania. 

For those of us in North Dakota, I had to look it up: northeast Pennsyvania, the largest city is Wilkes-Barre. I had forgotten all about this but years ago when our older daughter's family was moving from South Carolina to Boston, to avoid the Washington-Baltimore corridor, we swung to the west, traveling north on I-81, and staying overnight in the Wilkes-Barre area on the last leg to Boston. Wow, what a beautiful area of the country. There just is not enough time in one's life to enjoy everything this wonderful country has to offer.

But I digress.

Back to Houston-based Nacero, Inc. Data points:

• site of a former coal mine;
• $6 billion project;
• 3,500 construction jobs;
• 450 permanent high-tech jobs paying $85,000 / year
• methane to zero sulfure, 100% domestic, low- and net zero-carbon gasoline in existing ICEs without modification;

And, then look at this: Nacero will also build, what appears to be an identical Pennsylvania unit near Odessa, TX.

• announced April 22, 2021
• $6.5 - $7.5 billion Penwell GTG (see Pennsylvania story above)
• Penwell, Ector County, TX: Penwell is seventeen miles southeast of Odessa
  
• would be the first in the US to produce gasoline from natural gas, as well as the first in the world to incorporate CCS;

Nacero has let a contract to Haldor Topsoe AS to license the necessary technology to utilize more than just natural gas for its Penwell/Odessa project. Data points:

• contractor: Haldor Topsoe AS
• GTG (gas-to-gasoline)
• Topsoe Improved Gasoline Synthesis (Tigas) GTG technology
• will use a feedstock of low-cost natural gasoline, biomethane captured from farms and landfills, and mitigated flared natural gas from the Permian basin to produce 100,000 b/d of finished gasoline;
• that finished gasoline component will be ready for blending to US commercial grades
• much more at the link

More on Topsoe's TIGAS technology: link here.

Nacero has done this before: proven results in an identical unit of scale operating since 2019 at state-owned Turkmengaz's GTG complex at Ovadan-Depe near Ashgabad, Turkmenistan.

Other links:

• Motortrend, September 8, 2021, with graphics.
• Advanced Biofuels USA, June 1, 2021.
• Methane-to-Methanol, University of Michigan ties in with ARPA-E. Project term, January, 2014 - March, 2017. Also, Penn State, same project.
• And, of course, wiki.

If it works, could we see such a plant in the Eagle Ford or the Bakken?

Initial Production Data For Wells Coming Off Confidential List This Next Week -- Octobder 31, 2021

The wells:

• 36071, conf, Enerplus, Andesite 147-93-09C-04H, Moccasin Creek,
  

Date	Oil Runs	MCF Sold
8-2021	13876	7061
7-2021	9468	4972
6-2021	7541	4840
5-2021	21424	15123

• 37979, conf, Hess, EN-Joyce-LE-156-94-1721H-6, Manitou,
  

Date	Oil Runs	MCF Sold
9-2021	21832	0
8-2021	29596	51121
7-2021	33442	54380
6-2021	20926	26026
5-2021	47307	27719

• 35486, conf, Oasis, Nikolai Federal 5397 42-33 2B, Banks,
  

Date	Oil Runs	MCF Sold
8-2021	24135	80743
7-2021	27012	82939
6-2021	27616	79445
5-2021	11954	43355

• 36070, conf, Enerplus, Granite 147-93-09C-04H, Moccasin Creek,

Date	Oil Runs	MCF Sold
8-2021	18984	9664
7-2021	20278	10659
6-2021	20718	13337
5-2021	13032	9199

• 37365, conf,  Whiting, Sorenson 21-6-3H, Bully,
  

Date	Oil Runs	MCF Sold
8-2021	14575	34972
7-2021	19778	36866
6-2021	19790	40588
5-2021	20935	40594

• 36773, conf, Hess, CA-Russell Smith-155-96-2425H-8, Capa,
  

Date	Oil Runs	MCF Sold
9-2021	9319	0
8-2021	15160	23897
7-2021	13576	1435
6-2021	5312	9341
5-2021	17177	28008

• 36068, conf, Enerplus, Rhyolite 147-93-09C-04H-TF, Moccasin Creek,
  

Date	Oil Runs	MCF Sold
8-2021	15697	7991
7-2021	14516	7630
6-2021	15168	9764
5-2021	10507	7417

• 36772, conf, Hess, BL-A Iverson-155-96-1312H-10, Beaver Lodge,
  

Date	Oil Runs	MCF Sold
9-2021	16523	0
8-2021	14399	10811
7-2021	20373	14051
6-2021	8887	14211
5-2021	18246	27764
4-2021	5	812

• 36069, conf, Enerplus, Gabbro 147-93-16B-21H, Moccasin Creek,
  

Date	Oil Runs	MCF Sold
8-2021	31795	21165
7-2021	27800	19030
6-2021	30927	20890
5-2021	28213	12767

• 36066, conf, Enerplus, Pumice 147-93-16B-21H, Moccasin Creek,
  

Date	Oil Runs	MCF Sold
8-2021	17349	11524
7-2021	18884	12879
6-2021	15655	10574
5-2021	9677	4332
4-2021	2773	1476

Wells Coming Off The Confidential List This Next Week -- October 31, 2021

Monday, November 8, 2021: 10 for the month, 13 for the quarter, 264 for the year:
36071, conf, Enerplus, Andesite 147-93-09C-04H,

Sunday, November 7, 2021: 9 for the month, 12 for the quarter, 263 for the year:
37979, conf, Hess, EN-Joyce-LE-156-94-1721H-6, the EN-Joyce wells are tracked here;
35486, conf, Oasis, Nikolai Federal 5397 42-33 2B,

Saturday, November 6, 2021: 7 for the month, 10 for the quarter, 261 for the year:
38194, conf, CLR, TRex SWD,
36070, conf, Enerplus, Granite 147-93-09C-04H,

Friday, November 5, 2021: 6 for the month, 9 for the quarter, 260 for the year:
37365, conf,  Whiting, Sorenson 21-6-3H,
36773, conf, Hess, CA-Russell Smith-155-96-2425H-8,

Thursday, November 4, 2021: 4 for the month, 7 for the quarter, 258 for the year:
36068, conf, Enerplus, Rhyolite 147-93-09C-04H-TF,

Wednesday, November 3, 2021: 3 for the month, 6 for the quarter, 257 for the year:

• None.

Tuesday, November 2, 2021: 3 for the month, 6 for the quarter, 257 for the year:

• None.

Monday, November 1, 2021: 3 for the month, 3 for the quarter, 254 for the year:
36772, conf, Hess, BL-A Iverson-155-96-1312H-10,
36069, conf, Enerplus, Gabbro 147-93-16B-21H
36066, conf, Enerplus, Pumice 147-93-16B-21H,

Sunday, October 31, 2021: 28 for the month, 28 for the quarter, 251 for the year:

• None.

Saturday, October 30, 2021: 28 for the month, 28 for the quarter, 251 for the year:

• None.

Clearing Off The Desk -- October 31, 2021

Lana Del Rey: wow, wow, wow -- on the front page of National Review's online magazine.  Amazing.

US equity markets hit all-time highs; caps a winning October.

Speed: a reader sent me an interesting article on methamphetamine. An article in Dynomight had more background. Two things:

• see if you can come up with the 30-second soundbite why things suddenly got worse? It might surprise you.
• what product might you have in your house right now that (legally) contains metamphetamine? This will surprise you, unless you already know.

Canines: move over Taylor Swift. Country-western singer Eric Church is out-touring Taylor Swift despite Covid-19. How does he do it? Link to The WSJ. 

Global warming: the left's climate humiliation. They were expecting mandates, but they will have to settle for more corporate welfare. By the way, even Greta is skipping COP26 this year. She has moved on: to vaccine inequality. LOL. Link to The WSJ. Apparently her gig was getting stale. Looking for a new line. And then this: the empty spectacle of the UN climate-change summit: nothing will get done.

Glasgow: diesel generators will provide the electricity to charge twenty-six EVs.

MLB's worst nightmare: one of the following will get the trophy -- link here to The WSJ:

• the Houston Astro sign-stealing cheaters; or
• the Atlanta Braves: chop, chop; and the city from which the "woke" commissioner moved the All-Star Game to all-white Denver

Bitcoin, Texas-style: link to CNBC. From a reader, thank you. Key words:

• Rockdale, TX, population, 5,600; rural Texas; 
• it may be rural, but it's only an hour northeast of Austin, TX
  
• Bitdeer: a firm spun off from Chinese bitcoin mining giant Bitmain; steeped in mystery; hates visitors;
• Rio Blackchain: one of the biggest publicly-traded mining companies in America; transparent; loves visitors;
• both are tenants of property once occupied by Alcoa

*****************************************
Tiny Dancer

This is LA.

Tiny Dancer, Elton John

Apple Notes -- October 31, 2021

Microsoft: unseats Apple as most valuable company. Market caps:

• MSFT: $2.48 trillion;
• AAPL: $2.475 billion;

Desktops:

• if you are in the market for upgrading your desktop, one word of advice: wait.
• Apple has discontinued its smallest model (the 21.5") and now offers only the 24" and the 27" (the right thing to do, by the way -- if you want a smaller screen, buy a laptop; if you are buying a desktop, you want as big a screen as you can afford or for which you have space)
• the current Apple desktops are still Intel-based; Apple's laptops have the new M1 chips and have already improved those chips
• tea leaves suggest Apple will move to M1-based desktops next cycle;
• if you can afford it, the new M1-based desktops will be worth the wait; but,
• if you are looking for an incredible buying opportunity, the older Intel-based desktops will come down in price -- significantly
• in the old days, I always upgraded to an older model just as the new models came out; Apple computers "last forever"
• Later, November 2, 2021: as predicted. iMac Pro coming in 2022 with M1 Pro / Max chips. Link here. And, yes, I will upgrade.

Models: here are the two Apple desktop models: link to Apple.

MacBook Pro 2021 review: Sunday morning reading, from Joanna Stern, The WSJ: full-size ports, real function keys and other retro features, plus cutting-edge M1 Pro and M1 Max Chips, make the new MacBook Pro modesl the laptops to beat. 

Using my typical apps on the baseline $1,999 14-inch model with M1 Pro chip and 16GB of RAM, I couldn’t get the thing to slow down. Even when I simultaneously exported a video in Adobe Premiere, listened to music in Apple Music, played the racing game “Asphalt 9” and launched 30-something Chrome tabs, the thing never revved its fans.

***************************
That's The Way It Goes

A George Harrison cover.

That's The Way It Goes, Joe Brown

Planning To Fly Over The Holidays? I Wouldn't -- October 31, 2021

I just flew back to DFW from visiting our grandsons in Portland, OR. Once at PDX I checked the departure board and noted that one of the three flights to DFW was canceled. My flight was on time. I assumed AA re-scheduled those passengers on the canceled flight to the two flights still on time for DFW.

It turns out AA canceled over 1,000 flights over the weekend (link to The WSJ) due to "LUV winds" and staffing snafus.

Reuters also has the story. 

The airlines are hardly meeting current travel demand -- and it's well before Thanksgiving -- and are no way ready for that holiday, much less Christmas. Then, throw in the vagaries of winter weather. By the way, it appears the airlines may be "working" staffing issues by looking at "LUV winds." 

From SchrodingersTrades over at twitter: winds did delay my flight to Nashville by a few hours the other day. We stayed on the runway for almost 45 minutes. Huge line of planes. 

*************************************
Walk On

Roy Orbison.

Walk On, Roy Orbison

US Oil Economy; Investing Odds And Ends -- October 31, 2021

Clearing off the desk of items that have accumulated over the past three days.

Happy Halloween: from Nicole Saphier, MD, at twitter --

My kids' school sent a note saying they can wear Halloween costumes to school tomorrow as long as they don't cover the face because it will "hinder the learning environment."

Comment: she got a lot of push back on that: amazing how many people struggle with irony.

Investors: are buying oil on inflation fears, pushing prices even higher. Fund managers are buying energy futures to protect against inflation and creating a self-fulfilling prophecy in the process. From The WSJ. This may explain why there was not the usual sell-off in October.

Exxon Mobil: by raising its dividend, it maintains its status as a "dividend aristocrat," but don't be fooled. Exxon did not want to do that. 

For all the headlines, XOM raised its dividend by a measly 1.1%, raised its dividend one penny from 87 cents to 88 cents. Instead, increased its share buyback plans. May be good for long-term investors; traders can't be particularly happy. From The WSJ. And there are doubts XOM's current strategy is the right strategy.

From WAR52 over at twitter:

Some E&P top technicals: OAS, CVX, CRC, XOM, SD, ERF, EOG, CNX, MGY, BCEI/ XOG. These trading much lower might cause traders to flip short (?) 

Bottom technicals: VNOM, CLR, HES, EQNR, NOG, MCF, ESTE, GPOR, WTI, SBOW. Swing traders would be looking for these to turn up.

From $tockBaron over at twitter: 

I think there is more money that anyone cares to admit in the hands of very young inexperienced traders. But markets to generally elevate in times of inflation. If the markets returns stay higher than the inflation rate, is it really a problem?

The Permian: the world's swing oil producer. Re-posting. Link to Sankey Research at twitter.

This is what really struck me about XOM, CVX results today. Massive Permian growth while all other US basins decline and Canada shows no growth next year. Massive US, Texas economy. History of oil implications. Consider the number and capex outlooks.

White House briefing: what the heck are they even doing? Link here to Javier Blas at twitter.

Merck's planned acquisition of Acceleron Pharma, update: Merck will extend the deadling by about one week for shareholders to tender their shares. Link here.

China: Releasing Gasoline, Diesel From Reserves -- October 31, 2021

Something they probably wouldn't do if preparing for any major armed conflict. 

Link here.

If anyone can identify a better twitter feed for breaking news in global oil and gas than Giovanni Staunovo, let me know.

President Xi has not left China in twenty-one months; Covid is only part of the reason. Link here.

Mr. Xi’s recent absence from the global stage has complicated China’s ambition to position itself as an alternative to American leadership. And it has coincided with, some say contributed to, a sharp deterioration in the country’s relations with much of the rest of the world. 

Instead, China has turned inward, with officials preoccupied with protecting Mr. Xi’s health and internal political machinations, including a Communist Party congress next year where he is expected to claim another five years as the country’s leader. As a result, face-to-face diplomacy is a lower priority than it was in Mr. Xi’s first years in office.

Happy Halloween! October Surprise! Putin Does Have A Sense Of Humor! Perfect Timing! Graphic Of The Year? Let's Go, Brandon -- October 31, 2021

Updates

November 1, 2021: Russia is actually moving gas east out of Germany? "EU demand met in full." Gazprom says EU demand met in full after Mallnow flows reversed. Link here.  

Original Post

Link here.

Russian pipeline changes direction: energy politics come to the fore. Link to DNYUZ.

A weapon? From Reuters, "Russia is close to using natural gas as a weapon in Europe's gas crunch" -- a Biden administration energy advisor. The advisor may be a nominee for the 2021 Geico Rock Award. Don Trump saw this coming two years ago.

Saudi Is Back! Foreign Exchange Reserves And 3Q21 Earnings -- No October Surprise -- October 31, 2021

Link here. Released overnight:

No indications Saudi will raise output any time soon:

• they've been burned twice before on flooding the world with oil;
• they've voiced concerns about a new Covid variant slowing the global economy again;
• perhaps they cannot even if they wanted;
• to do so would require, lots of capital;
• they're doing incredibly well as things are; why spend more, to make less? See below.
• more than once Saudi has voiced concerns about depleting their one resource, taking it away from their grandchildren
• most recently, why would Saudi bail the world out when everyone else has cut back fossil fuel.

Aramco posts 3Q21 net income of $30 billion, up from $12 billion for same quarter one year ago.

Aramco said its stunning 160% jump in net income reflects the impact of higher crude oil prices and volumes sold and stronger refining and chemicals margins.

OPEC+ November meeting starts this week; no indication any member wants to relax quotas. Most have failed to even produce to their quotas. 

Later, November 1, 2021, from Argus Media: Saudi Arabia recorded its first quarterly budget surplus for more than two years in the third quarter on the back of higher oil revenues.