California Gasoline Price -- Hit All-Time High; Inflation, Oil, Ukraine -- The Three Top Stories Today -- Headlines From Social Media -- February 16, 2022

Opening thoughts: 

Say what you want but it's obvious energy demand is going to put a huge strain on supply; the US will be the global supplier of all things energy; Russia will remain a distant third but could give #2 Saudi a run for its money. Think about that: when it comes to energy, Russia is #2 or #3 and Russia's economy is smaller than the economy of Texas. 

Is Russia's pre-occupation with Ukraine related more to Russia's economy than "geopolitics"? Could it all be about wheat? China and India, forever, will be consumers. The current administration will do what it can to thwart US energy but it's hard to stop a train. But for anyone paying attention, the headlines are absolutely amazing. 

And the biggest mystery: the real reason US shale companies are holding back on more drilling?

Oil:

• sudden surge suggests incursion imminent
• earlier, Ukraine president (jokingly) said the incursion would begin February 16, 2022
• it appears, WTI is now settled into a $90s trading range
• from The WSJ: despite pleas from President Biden to increase production, Saudi says it will stick with deal it made with Russia to maintain existing quotas
• as predicted, California today hit an all-time high retail price of $4.719 / gallon, the highest price in US history; cost to fill a Hummer: $198 with is 42-gallon tank;
• geopolitical risk premium in oil this morning: $6; others say $7
• which on the other hand means WTI still sits comfortably at $87
• IEA's Birol: counting on additional oil output from the US and Brazil will ease pressure on prices; doesn't look to OPEC+ for any assistance, and IEA is OPEC
• IEA's Birol: tells OPEC it is lagging in meeting output targets
• IEA's Birol: almost starting to sound frantic
  
• India: demand for gasoline, diesel rises;

Russia:

• for those keeping track at home, the Texas economy is bigger than the Russian economy

Ukraine:

• US says no evidence of Russia pullback
• did any mainstream media outlet even cover the story that Russian Parliament this week voted to invade Ukraine -- not in so many words, but that was the "hidden message"
• over at FlightRadar24, four of the top five aircraft being followed are small Lear-like jets flying west from Kiev to eastern Ukraine; the fifth one is RC-135, River Joint, flying multiple tracks over Lviv, west Ukraine
  

Investing:

• analysts are still too conservative estimating profits, free cash flow going forward for Big Oil, shale oil; 

Investing Club:

• Devon

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. 

Popsicle stick measurements?

• the absurdity continues; we have data showing liinear <3 millimeters rise per year trend with 95% confidence (+/1 0.21 mm / year) from the NOAA dating back o the 1930. These scientists are suggesting 304 mm in 25 years.
• the reference is to the popsicle sticks I put in the sand at the San Pedro beach years ago to track rising sea levels; markings in 1-mm increments. That was before Sophia was born.
  

Covid:

• horrific increase in number of extreme poor throughout world ... pandemic has caused largest poverty reversal (+80 million) in three dacades -- FT
• Switzerland: to end all restrictions by end-March, including masking; back to normal.

Say what?

• US regulators will deny approval citing monopoly: link here.
• $1.5 billion deal

The Federal Trade Commission (FTC) has privately informed EP Energy and EnCap that it would sue to block their deal if they went ahead with it, the sources said. The regulator is concerned that EnCap - which owns XCL Resources, another Utah oil producer - would become too dominant a player in Utah's Uinta Basin, the sources added.

Utah

• $185 million deal
• Crescent Energy to acquire EP Energy Utah assets

Desperate:

• Dems, White House to eliminate federal tax on gasoline; talk
• exact opposite if want to push EVs
• once removed, will be near-impossible to reinstate
• huge opportunity for states to increase state taxes on gasoline but they won't
  

SPR release:

• for the archives only; incredibly unimportant; link here;
  
• 18 million bbls released:
• XOM: 0.5 million (are you kidding me?)
• Gunvor USA LLC: 1.5 million bbls; wiki entry here;
  
• MPC: 3.9 million bbls
• Motiva Enterprises: 3 million bbls
• Phillips 66: 1 million bbls
• Valero Marketing ...: 82 million bbls
• when I see XOM taking one-half million bbls this suggests the company simply gave an intern something to do to build her resume.
• when I see none of the top three oil traders in the world not have a winning bid, it tells me all I need to know how much excitement this release stirred. Can you imagine the contract hoops required by bidders? And then the history of the current US administration vacating permits.
  

 Gunvor?

Gunvor Group Ltd is a Cypriot-domiciled multinational commodity trading company registered in Cyprus, with its main trading office in Geneva, Switzerland.

Gunvor also has trading offices in Singapore, the Bahamas, and Dubai, with a network of representative offices around the globe. The company operates in the trade, transport, storage and optimization of petroleum and other energy products, as well as having investments in oil terminal and port facilities. 

Its operations consist of securing crude oil upstream and delivering it to market via pipelines and tankers.

The company, which was founded in 2000, is the fourth largest crude oil trader in the world after Glencore, Vitol, and Trafigura.

The company was co-founded and controlled by Gennady Timchenko together with Torbjörn Törnqvist (after whose mother the company is named); however, due to United States sanctions, Timchenko sold his stake in the company to Törnqvist in March 2014 (wink, wink).

Gunvor's largest single supplier of crude oil was once Russia, though the company now originates most of its crude oil from the Americas, with less than 13 percent coming from Russia.

It also trades African, Asian, and South-American crude and is active on all continents.

In 2011, Gunvor was trading less than 20% of Russia's seaborne oil.