My younger sister is doing some renovating in her home in Montana.
This is the sales receipt for a five-gallon can of white primer paint. There is no sales tax in Montana.
Note the new charge, something neither of us had ever seen in Montana (or anywhere else for that matter) -- a "supply chain charge" of four percent.
Texas canines: owners can no longer chain dogs outside. Wow.
McDonald's McRib: is back.
Equities:
Here it comes, transitory surcharges:
Note: in a long note like this, there will be typographical and content errors. If this is important for you, go to the source. In addition, much of this was done on the fly, watching various streaming sources, and my data may have errors. Some companies have similar sounding names and their may be errors in names listed below. This is done for my benefit and is not designed to be used by others.
US equities: all three major US indices closed at record highs today. Jim Cramer:
Wheat: over $8/bushel, first time since 2012.
Football, from social media: It's November 1, which means there's going to be an NFL or college football game available on your TV tonight, tomorrow night, the day after that, the day after that, and every single day or night for the next twenty-four days. The next empty night is three Wednesdays from now.
Tesla: opens charging network to other EVs for the first time. It's a pilot program / test in the Netherlands only. Link here. TSLA was up 8.5% during normal trading hours and another 1.17% after hours.
Oil: Bank of America suggests Brent at $120 a barrel by June, 2022.
Europe's energy crisis: Russia's Gazprom cut its daily natural gas exports to key markets in October to the lowest for this time of the year since 2014: 419 mcm/day, about thirteen percent less than September's average, as Gazprom concentrates on replenishing its own inventories at home. Link here. Russia looks to capitalize on the global energy crisis; while others attending meaningless meetings in Rome and Glasgow, Russia playing "natural gas" chess with Europe. Link to Haley Zaremba.
Zillow: "The more you dig into this Zillow thing, it's just unbelievable incompetence" -- social media.
Zillow’s unexpected announcement in October that it was temporarily pausing its home-buying activities raised many analysts’ eyebrows. Now, the company is reportedly offloading thousands of homes at a discount.Some argue that more concerning trends could be on the way.
The company’s Zillow Offers division is what’s known as an “iBuyer” — it purchases and sells homes directly to consumers, typically renovating them in between.
Following a report in mid-October from Bloomberg, Zillow confirmed that its Zillow Offers division would not be signing any additional new contracts to purchase homes through the end of 2021.
In explaining the move, Zillow said the company was facing a backlog of renovations and dealing with operational-capacity issues.
Now, though, Bloomberg is reporting that the company is selling off roughly 7,000 homes, looking to claw back $2.8 billion in the process.
A separate report from KeyBanc analyst Edward Yruma found that two-thirds of the homes Zillow has listed for sale feature an asking price below what Zillow paid for the property, with the average discount being 4.5%.
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Back to the Bakken
Active rigs:
| 84.05 | 11/1/2021 | 11/01/2020 | 11/01/2019 | 11/01/2018 | 11/01/2017 |
|---|---|---|---|---|---|
| Active Rigs | 31 | 14 | 57 | 68 | 53 |
No new permits.
One permit renewed:
NDIC did not update the "active rig" list.
COLA, military: there it is, it's official -- a 5.9% COLA for military retirees. Whoo-hoo. Apparently announced on / about October 28, 2021.
Biden on climate change: I'm not listening to any COP26 speeches, so I am very, very happy readers are doing that for me. From a reader moments ago:
I just listened to Biden talk about climate. For some reason it made me remember what an old cowboy said, "Pepper corns and rat turds look a lot alike but its good to know the difference."
From the man who shut-out affordable, accessible, dependable crude oil from the nation's largest trading partner and one of only two nations that shares a long border with the US, Biden is begging for help from Russia and OPEC. Headline from oilprice.com at the G20 meeting in Rome, Italy:
Why Big Oil or the GOP is not making this a huge "marketing" campaign is beyond me. Is anyone seeing any ads on television wondering why the president killed the Keystone XL, is denying drilling on federal land, and will require new environmental statements on BLM land?
Brandon, MN:
Note: done quickly. There will be content and typographical errors.
Updates
Reporting today/tomorrow:
Last Thursday, October 29, 2020:
October 20, 2021:
Later, 11:08 a.m. CT: wow, look at this, DVN up almost 5%, up $1.88, now trading just four cents below $42.00. Other oils:
Original Post
Ten-year treasury goes below 1.6%: 1.593%.
A few US equity notes:
Cheesecake-to-go: how it saved the Cheesecake Factory. Link to The WSJ. This is such a cool story. This is exactly what I've said before. Some folks used the lockdown to their advantage, using the year to re-think strategy.
With its massive menu offering everything from crispy chicken sandwiches to coconut cream cakes, Cheesecake Factory Inc. already ran among the most complicated operations in the restaurant industry. It’s emerging from the pandemic with a model that’s even more sprawling and complex.
When Covid-driven closures cut deeply into sit-down business in Cheesecake Factory’s cavernous, lavish dining rooms, the 208-restaurant chain emphasized to-go orders to help buttress sales. It worked: The chain is averaging more than $3 million in to-go orders per location this year, more than double its typical amount before the crisis.
Cheesecake, in particular, travels well, and people order it at all hours. The company said it sold more cheesecake as a percent of sales last year than it did before the pandemic. “You have a few more people who are just getting slices at nine o’clock at night delivered to their house,” said David Gordon, the chain’s president.
Now more customers are returning to Cheesecake Factory’s 10,000-square-foot dining rooms too. And the combination has stretched the company and its workers, some of whom say they are at a breaking point.
Personal interest in the Cheesecake Factory: pending.
InDepthNH.org, the New Hampshire Center for Public Interest Journalism, as reported by Garry Rayno, October 26, 2021: natural gas issues could impact New England this winter.
Federal energy regulators predict natural gas may be in short supply for New England this winter.
New England electric generators are more dependent on natural gas than any other fuel, with about 52 percent of generation produced by natural gas facilities.
According to the Federal Energy Regulatory Commission’s annual assessment of winter energy markets and reliability, in extreme winter conditions the region’s commercial and industrial sectors may have to curtail activities and there may be outages in the natural gas and electric sectors.
But the report notes there should be ample fuel supplies to produce enough power to meet demand under expected conditions.
ISO NE: spiked again to nearly $90 earlier this morning. Expensive hydro spiked at 0600 hours, or 6:00 a.m. Renewable energy doing very well contributing 15% of demand, more than the 12% provided by nuclear.
Mom-and-pop retail investors, take heart.
Bob Pisani, over at CNBC just reported the same thing last week:
It may seem like a stock picker’s market, but long-term data still backs the buy-and-hold crowd. A majority of active managers failed to beat their passive benchmarks in the last year and only 11% of large-cap fund managers outperformed over a 10-year period, Morningstar said in a report last week.
Much, much more at the link.
Without question, the biggest investing mistakes I've made over the years? Selling shares of stock in great companies.
I'm going to re-post, in its entirety, an earlier post on Russia, Germany, and natural gas.
For the next ten days, every world leader except the leaders of Russia and China are going to tell "us" that "we" can no longer afford to depend on fossil fuels. It will be interesting to see if Mr Putin might want to call "our" collective bluff, cut off natural gas to Germany and ask them if Ms Merkel really believes fossil fuels are no longer needed.
Remember: Nord Stream 2 has not yet been "approved," as far as I know. Fact check me on this.
I doubt that will happen, that Putin would cut off natural gas to Germany, but it's an interesting story, and for that reason, am re-posting an earlier post in its entirety.
Re-posting:
Updates
November 1, 2021: Europe's gas prices soar again on lower Russian supply. This seems to confirm an earlier tweet: flows of natural gas at the Mallnow entry point in Germany of the Yamal-Europe pipeline dropped to zero on Saturday. Link to Tsvetana Paraskova.
November 1, 2021: Is Russia 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
Russian pipeline changes direction: energy politics come to the fore. Link to DNYUZ.
Tesla: will open higher again today, setting new records.
Coca-Cola: $8 billion deal; will buy BODYARMOR Sports Drink.
US equity markets: if the market opens where the futures are now, we could see new records set
WTI: flirting with $84; most oil stocks up slightly. There still seems to be a disconnect between price of crude oil in the US and what the fundamentals are showing (inventories).
US oil: demand was at 20.5 million bopd in August, up almost 2 million bopd or 10.5% y/y and only down a half million bopd of 3% compared to August, 2019, pre-covid. Link here.
days supply, crude oil, last week of the following months:
So, tell me again, with 26.5 days of crude oil supply, why does OPEC need to pump more oil; why is there talk that we have to release more oil from the SPR?
AAPL, AMZN: huge silver linings with regard to recent quarterly earnings reports. Link to The Motley Fool. My thoughts exactly.
Contagion? LUV winds hit AA. A thousand-plus flights canceled over weekend due to "staff displacement" and high winds. Link to The WSJ. Tea leaves suggest the holidays will be even worse. CNBC reporting 1,700+ flights canceled.
Covid-19 and Australia:
Covid-19 and the US:
Oil analysts:
US LNG feedgas:
Sabine Pass Train 6 commissioned. Same link as above.
This guy follows energy? Tells me all I need to know about his understanding of US shale: Randy Brown at SpotMonthEnergy said,
"I was at a party Saturday night in Dallas and an engineer was telling me that one of the major drilling in the Permian can drill 10,000 feet down and two miles horizontally in ten days, "spud to TD." Randy commented: "That seems impressive."
This is scary that someone who follows US oil did not know this. Oil companies have been doing that for several years in the Bakken and I've been reporting it all that time; in fact, now I'm beginning to think I was among the first outside the industry that spotted it.
And, oh, by the way, the gold standard is now five to seven days, spud to TD: one day for the vertical; one day for the curve; and three days for the lateral. Randy is definitely a nominee for the 2021 Geico Rock Award.
How low can you go? China's oil stockpile is as "low as it can go" ahead of OPEC+ meeting. Giovanni. Direct to Bloomberg. From Alexander Stahel, "we covered this last week. China's low crude stock will require substantial buying in the coming weeks and months. Link here.
Focus on Fracking, Halloween edition: posted. Lede:
WTI: flirting with $84, again.
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Back to the Bakken
Active rigs:
| $83.97 | 11/1/2021 | 11/01/2020 | 11/01/2019 | 11/01/2018 | 11/01/2017 |
|---|---|---|---|---|---|
| Active Rigs | 31 | 14 | 57 | 68 | 53 |
Three wells coming off confidential list --
Monday, November 1, 2021: 3 for the month, 3 for the quarter, 254 for the year:
| 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 |
| Date | Oil Runs | MCF Sold |
|---|---|---|
| 8-2021 | 31795 | 21165 |
| 7-2021 | 27800 | 19030 |
| 6-2021 | 30927 | 20890 |
| 5-2021 | 28213 | 12767 |
| 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 |
Sunday, October 31, 2021: 28 for the month, 28 for the quarter, 251 for the year:
Saturday, October 30, 2021: 28 for the month, 28 for the quarter, 251 for the year:
RBN Energy: midstream conundrum threatens gas production growth long term.
The U.S. natural gas market is primed for supply growth. The Lower 48 supply-demand balance is the most bullish it has been in years. Exports are at record levels and poised to increase with additional terminal expansions on the horizon, while international prices have recently notched record highs. Henry Hub gas futures prices are at the highest in over a decade. So, producers will unleash a torrent of natural gas, triggering a midstream build-out like we’ve seen in the past, right? Not so fast. The world has changed. For additional capacity to be built, you need producers or utilities to commit to use it. But Wall Street has drawn a hard line when it comes to capital and environmental discipline in the energy industry and regulatory approvals can also be an uphill battle. Therein lies the conundrum. More midstream capacity is needed for production to grow, but it’s harder than ever for that infrastructure to get built, which means constraints for some period of time are all but a certainty. Natural gas may not be as constrained as crude oil, but it is already butting up against capacity in parts of the Permian and Marcellus/Utica. And in the crude-focused Permian, those gas constraints will also cascade to crude production. In today’s RBN blog, we consider the implications of the new world order.
It used to be that higher prices meant higher production. If production outgrew transportation capacity and constraints trapped supply in the basin, then supply prices cratered and price spreads to downstream markets blew out, providing the economic incentives for midstream developers to swoop in and expand or build pipeline capacity to increase connectivity and balance the market again. Unable to grow volumes, producers were resigned to pay up for firm, long-term capacity to get the pipelines built. We saw this play out again and again over the past several decades, and during the Shale Revolution, midstream expansions were one of the stars of the show. During this time, the master limited partnership (MLP) model, in particular, became the mainstay of midstream infrastructure development for its ability to provide access to lower-cost capital and a great acquisition vehicle, primarily due to its tax benefits.
As shale drilling and production activity ramped up, it called for dramatic changes in the natural gas infrastructure. MLPs mushroomed and accelerated midstream development across the shale landscape, including the Haynesville and later the Marcellus/Utica shales, which, in the latter case, drove the Great Flow Reversal — a mid-decade phenomenon that flipped gas flow patterns across just about every legacy long-haul pipeline in the eastern U.S. Without this midstream renaissance, Lower 48 gas production volumes would be nowhere near where they are today.