Idle Rambling -- Day Zero: The Biden Surge -- March 31, 2022

Earlier I said that I would explain later my thoughts regarding Nancy Pelosi and the Biden Surge, why I, as an investor see the Biden Surge as bullish. Well, it turns out I don't have to: a contributor over at ZeroHedge has done an incredible job.

In the near term, expect the price of oil to drop, the sweet spot being $90 - $100 but then to move higher. These buying opportunities don't come around often.

It will be fascinating to watch the price of oil. I never really thought the problem was a lack of oil but having said that, it seems that flooding the US market with oil is going to have a lot of folks saying, "please, no more oil. We don't need it." And prices dropping much farther and faster than we thought likely. Again, I don't know. Are we sailing uncharted seas?

Beyond The Sea, Bobby Darin

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. 

This data has been out for awhile -- US January crude oil production -- but either I was unaware or had forgotten: US oil production fell to its lowest since September, 2021. Source. This particular report was issued today, March 31, 2022. I assume the White House had this data for a few days and may have been the tipping point for the administration -- frustrated with "lack" of US oil production. One wonders.

I didn't pay much attention to the market today; it was looking fairly good earlier in the day, but now I see it had a particularly remarkable sell-off. Last day of the quarter; funds locking in whatever profits they might have. I don't know. Just a thought. Certainly, cheap oil should have been good for the market (other than the oils).

Right now, futures look good for tomorrow.

Oh, back to flooding the market with one million bopd. I wonder what the Saudis think of this? LOL.

Stephen Covey: Seek First To Understand -- March 31, 2022

This is so incredibly cool. Based on source and comments, one gets the feeling that Ms Pelosi is being misunderstood.

This is so incredibly fascinating.

This explains everything. 

The discussions leading up to decision to release a million bbls of oil every day from the SPR must have been absolutely fascinating. 

From social media today with video:

Nancy Pelosi: "We cannot use high gasoline prices as an excuse to produce more American energy."  

That explains why we are emptying our SPR. Emptying the SPR will force faster energy transition to renewable energy. 

I did not listen to the video. I only posted how she was quoted.  

For oil bulls, that is an incredibly bullish exchange. My hunch: Warren Buffett knew immediately what her words meant.

That took a lot a lot of energy out of me (no put intended). I'm not sure I will blog any more tonight. I'm sure I will but for now, taking a break. 

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Take My Breath Away

Take My Breath Away, Berlin

Latest Russian Camouflage Technology Makes Military Vehicles Virtually Invisible -- March 31, 2022

Putin's War is tracked here.

Source:

"Secondary" draft called up. Having lost already more men that Russia did in ten years in Afghanistan, Putin is now calling up more draftees.

• Source: Putin ordering draft of 135,000 amid difficulties in Ukraine war.

Two New Permits; SPR Release: One Big Rube Goldberg Debacle -- March 31, 2022

Union rejected: Amazon workers in Alabama reject unionization for second time.

Auto dealers: not being talked about, but my hunch is that a lot of auto dealers are going to declare bankrupty or "go under" before the year is over. 

I don't get out much any more but driving past one of the biggest Chevrolet dealers in the United States, not just Texas, but in the entire US, the lot is practically empty. They have nothing to sell. There were six new Bolts available but that was it in the EV area which used to be packed. There was no activity; the sales signs were in disrepair; one almost wonders if this section has been vacated for the time being to try to save cash. I don't know but it looked deserted. 

From CNBC earlier today: with few cars on lots, US auto sales likely fell sharply in the first quarter, analysts say. Ya think! I don't need an analyst to tell me that. It's obvious. 

From ArgusMedia: GM, Ford will cut sedan production.

"I don't get out much any more." I'm in excellent good physical shape and no medical ailments, and no aches and pains when I get up in the morning.

I bike as long and as much as I want, but "I don't get out much any more" in terms of getting in my car and going places. The Covid-19 lock down did me a world of good. I've learned that I don't need Starbucks, restaurants, movies, zoos, malls, or anything else to stay entertained. I literally have no desire to go anywhere any more. It's wonderful. I'm getting more done than I ever did.

I'll post my mileage for the two cars I have to corroborate what I've just said. Maybe tomorrow. More on this whole topic later this summer, perhaps.

SPR release: biggest on record. One million bbls / day for the next six months. Observations:

• several market participants suggest the maximum flow rate from the SPR is around one-half million bopd; source; 
• the SPR and drawdown rates; source;
• folks forget that the price of oil is not determined by the first bbls released by the SPR but the last bbl produced by oil companies.
  
• even if cavern pumps can support it, takeaway capacity -- pipeline, truck, rail, ship -- is grossly inadequate to take away an additional one million bopd; think about it; this will be the next story;
• how bad is it? The administration is going to have suspend the Jones Act; source; the administration says they will process Jones Act waiver requests within two days to get oil to refiners from the SPR if necessary.
  
• how much will consumers save at the pump? From President Biden himself: "The SPR release could cut anywhere from 10 - 35 cents a gallon, but it depends on how much allies release." The allies can't come close to releasing anything like the US promises to release.
• even if oil can get to the refineries, they are already operating at 92% capacity; not much room for additional oil;
• in round numbers, the SPR has 450 million bbls of crude oil; if 180 million bbls released by mid-term elections, will still leave the SPR in great shape;
• punitive actions on oil sector will cause smaller, under-financed operations to go out of business; Big Oil to do just fine; expect more consolidation;
• one would assume drillers would cut back on CAPEX, take SPR oil at cost; save on CAPEX;
• bottom line: when one looks at all this "stuff," the only way one can read this is that the White House is absolutely in a panic. Will it really matter if they are able to get price of gasoline at the pump down from $4.50 to $4.10 / gallon? 
• worse, everything suggests the SPR can't possible replace the Russian oil affected by sanctions;
  

President Biden: to paraphrase, "energy transition is dead."

• drill, drill, drill; source;
• "The bottom line is, if we want lower gas prices, we need to have more oil supply right now."

Nancy Pelosi: "We cannot use high gasoline prices as an excuse to produce more American energy."  

That explains why we are emptying our SPR. Emptying the SPR will force faster energy transition to renewable energy. 

Mexico:

• taking advantage of high-priced oil;
• will "temporarily" suspend self-sufficiency goal;
• will refine 850,000 bopd daily instead of one million; export the rest; source;

Investment portfolio:

• my oil-overweighted portfolio outperformed all my other portfolios; corroborated here;
  
• I don't buy oil; I buy shares in oil companies; big difference;
• from Dan Pickering:
• front month WTO down 3.5%
• FY23 and FY24 is up 0.6% and 1.8%
• more supply near tear but more demand (SPR refill) down the road:

Julianne Geiger over at oilprice.com:

• "I don't see it, I guess."
• "Calling on Congress to levy on US oil companies for land they are hoarding and not drilling on."
• "Calling on Congress to speed up the energy transition."
• I didn't care much for the tweet itself, I'm just glad to see Julianne Geiger tweeting.

Oil, sweet spot:

• WTI: $80 - $90

Is the SPR release more valuable to drillers than "Alpine High"?

• memo to self: take another look at APA
• source: APA raised to buy;
• I am not directly invested in APA and am diversifying out of energy, but once the dust settles from today's SPR announcement, it make be time to take another look at APA; compare P/E with others;

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.

Rubles or roubles, who will blink first? Putin says natural gas flow will halt tomorrow, April 1, 2022, if consumers refuse to pay in rubles. Get out the popcorn.

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Back to the Bakken

Active rigs:

$100.80	3/31/2022	03/31/2021	03/31/2020	03/31/2019	03/31/2018
Active Rigs	33	14	43	66	60

Two new permits, #38862 - #38863:

• Operator: Sinclair Oil & Gas
• Field: Little Knife (Dunn)
• Comments:
• Sinclair has permits for two Hovden Federal wells in NENE 29-146-97; 
• to be sited 1186 FL and 821; and, 1163 FNL and 854 FEL;

Destination Of US Crude Oil Exports

Destination of US crude oil exports, EIA link:

Baseline, December 2021, monthly, in 1000's of bbls: more complete list here; top ten destinations:

• Brazil: 11,944
• Canada: 26,436
• China: 14,345 
• France: 5,766
• India: 25,061
• Japan: 18,538
• Korea, South: 18,082
• Mexico: 43,160
• Netherlands: 16,082
• UK: 10,725

March 31, 2022:

The Biden Surge -- Refined Products; Refineries; Where Will Product End Up -- March 31, 2022

The Biden Surge is tracked here.  

Data points of interest to be followed monthly for the next six months:

• days of supply of US crude oil;
• amount of distillate in storage;
• refiners percent of operating capacity;
• US exports of crude oil; refined products;
• destination of US crude oil exports; refined product exports;

If the one-million-bopd-SPR-release is announced, data points that will be of interest:

• refiners operating at 92% operating capacity; will that percentage increase?
• what product is most critical right now? diesel fuel
• will refiners get the "right" oil to optimize diesel fuel production?
• I don't think it's a zero-sum game, but some suggest refiners could produce more diesel at expense of gasoline
• currently there's a 26.6 day supply of crude oil; at the mid-point

First Quarter Closes Out -- March 31, 2022

Jobless claims:

• weekly
• remain at 50-year lows, but rose "modestly"
• 202,000 vs 196,000 expected
• 188,000 previous week -- lowest level since September, 1969
• continuing claims
• 1.307 million vs 1.340 million expected

Insulin: US House votes to cap price. About time. True travesty. 

• Senator Joe Manchin clearly on wrong side on this one. 
• opponents call it government price fixing. 
• my suggestion: release one million doses daily from the insulin strategic reserve for the next six months. 
  

Amazon: sticks with Jamie Dimon, JPMorgan after flirting with AMEX.

Open book test: Walgreen's beats earnings expectations; omicron-fueled demand for tests, boosters.

Putin's War: head fake. Those who thought Putin was withdrawing ... never mind.

• ruble: has recovered most of its losses 
• following the ruble and ignoring the bigger picture
• having said that, Russia likely to "miss" it's April 4, 2022, debt payment
  
• I'm sticking with Zeihan.

Nord Stream 2:

• $11 billion to build;
• now unused and abandoned.

The "slap":

• Smith Will facing suspension, expulsion from the Academy;
• my hunch: a one-year suspension
• Chris Rock: ticket prices soaring; he's coming out looking pretty nifty

Augusta, next weekend:

• Tiger?

No Wells Coming Off Confidential List; Tellurian's Driftwood LNG -- March 31, 2022

Putin's War:

• misled;
• Switchblades;
• hybrid war: wiki entry;
• hybrid war: Small Wars Journal;

Amazon: union vote, Alabama. Matches Biden's polling numbers.

Chips: Apple considering more chip suppliers, including China;

• NAND flash memory chips made Yangtze Memory Technologies.

Cramer: flashback from social media today. 

Biden Surge: unlikely to be enough. Reuters.

• the Biden Surge is tracked here.

Oil:

• Brent: down 5.64%; down $6.40; trading pre-market at $107.00
• WTI: down 6.4%; down $6.90; trading pre-market at $100.90
• sweet spot: $90 - $100

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Back to the Bakken

Active rigs:

$$100.90	3/31/2022	03/31/2021	03/31/2020	03/31/2019	03/31/2018
Active Rigs	34	14	43	66	60

No wells coming off confidential list today.

RBN Energy: with construction beginning, is Tellurian's Driftwood LNG a done deal, part 3. Archived.

Russia’s invasion of Ukraine has pushed U.S. LNG into the spotlight as Europe seeks to wean itself off Russian natural gas. In the short term, U.S. LNG to Europe is constrained by liquefaction capacity on the LNG output side but also by Europe’s own import capacity and pipeline grid. Very little can be done to quickly increase global LNG production, and while many export terminals will operate at peak capacity for longer to boost output, LNG terminals take time to build, so capacity for this year and the next few years is already set.

Further out, however, there is no shortage of new projects hoping to capitalize on the current clamor for LNG and reach a final investment decision (FID), and the U.S. could be headed toward its biggest year for new LNG capacity ever. In today’s RBN blog, we continue our series examining key U.S. projects, turning our lens to what is arguably the most discussed and reported-on project on our list — and one that is moving forward potentially without a formal FID — Tellurian’s Driftwood LNG.

Breaking: California Votes Reparations For African-Americans -- March 30, 2022

Mideast heats up: Gulf oil producers seek US military support against Yemen attacks. Link to Charles Kennedy. Several story lines here. How bad is it? The UAE is asking Israel for help in convincing the US to help. Okay.

Uinta: Crescent Energy closes $690 million acquisition of EP Energy Uinta assets. Source. At the time of the announcement, February, 2022, the total cash deal was said to be $815 million. The Uinta is tracked here. BusinessWire:

• 145,000 contiguous net acres
• $690 million / 145,000 = $4,750 / acre
  
• 30,000 boed (~ 65% oil)
• $690 million / 30,000 =$23,000 / boepd

Drought:

from earlier today --

Lake levels:

• Lake Mead: link here.Low. Really low.
• Lake Powell: link here. Low. Really low.

Now this, from the EIA: electricity at California's hydropower plants in 2021 was almost 50% below the 10-year average. In the Pacific Northwest, hydropower generation was almost 15% below the 10-year average. Full report here.

Drought, April 1, 2022, Sierra Nevada:

• California's all-important April 1 water measurements: Sierra Nevada snowpack at 38% of long-term average
• despite a massive late-December storm;
• but then the state's driest January through March on record;

The Biden Surge -- Why Now? March 30, 2022

The Biden Surge is tracked here. 

Why now, what changed? What prompted the Biden administration to release of one million bopd for an extended period of time and rebates for drivers to cushion the cost of gasoline at the pump?

So far, this is just a rumor, but it "feels real." 

If the Biden administration does announce the Biden Surge, the first question is what prompted that now? 

Obviously, the short answer is the mid-term elections.

Earlier, the administrations said the rise in the price of gasoline a) would be short-lived; b) would not cause all that much pain; c) if it did cause too much pain, folks could buy a Tesla.

My hunch is that the administration can now see that the rising price of gasoline a) will not be short-lived; b) that it will cause a lot of pain for those who plan to vote in November; and, c) the Tesla option is not an option at all. 

So, what changed? 

I'm too tired to go write much tonight, so I will address just one issue.

Everyone will argue if there will be buyers for Russian oil. Of course, there will be. 

But sanctions on Russia are going to get worse, and for the most part have not yet begun to be felt. The fact is that Russian oil production is very much dependent on western technology and western resources. We won't see that impact for several months. But if you thought a shortage of toilet paper was a problem for Americans during the early days of the pandemic, the shortages that Russia begins to experience will make those toilet paper shortages pale in comparison. 

No matter how much one sugar coats it, Russian production is going to fall significantly. And Russia is not like Kashagan or Libya when it comes to temporary losses in production. 

The Biden Surge -- Will One Million Bbls Of "New" Oil Per Day Make A Difference -- March 30, 2022

The Biden Surge is tracked here. 

That's the million-dollar question, or as we used to say, the $64,000-question: will one million bbls of "new" oil per day make a difference?

This takes me back to a "not-ready-for-prime-time" post, February 19, 2018.

Buried in that post is a link to (I suppose it's the most recent) March 8, 2022, EIA short-term energy outlook. That means the analysts took into consideration Putin's War. 

Look at the "World Liquid Fuels Consumption" graphic:

• 2020: 92 million bpd the year of the plague
• 2021: 97 million bopd
• 2022: 101 million bopd
• 2023: 102.5 million bopd

Then look at the "World Crude Oil and Liquid Fuels Production" graphic:

• 2020: 94 million bpd
• 2021: 96 million bopd (demand-supply deficit of one million bpd)
• 2022: 102 million bopd (demand-supply deficit of one million bpd)
• 2023: 102.5 million bopd

Some argue the demand-supply deficit will be much larger. 

Earlier today, it was being argued that global supply is already short three to four million bopd on supply. OPEC+ does not have enough spare capacity to make up the shortfall, even with Iran. 

That "summer of '22" graphic at that link is pretty startling.

At this moment my thoughts: a release of one million bopd from the SPR is a wash. It could have a huge short-term (six months) psychological impact, but long term (one year) it won’t amount to much.

We've had this discussion before. Saudi is not going to let oil get below $80 / bbl, and may in fact move quickly to keep it from dropping below $90 / bbl. I have trouble believing that OPEC+ would react quickly to the Biden Surge but they will be watching closely. 

Bottom line:

• global consumption / global demand: 100 million bpd
• the Biden surge: one million bpd; one percent
• the Keystone XL: in round numbers, one million bopd

The Biden Surge -- Officially Announced March 31, 2022

Updates

April 11, 2022: the SPR release announced by President -- "smoke and mirrors."

April 6, 2022: week 0.

April 5, 2022: jet fuel, east coast, soaring.

April 4, 2022: futures. And, here.

April 3, 2022: futures. Days in storage.

April 2, 2022: commentary. Production: US, Saudi, Russia.

April 2, 2022: the graphic.

April 1, 2022: RBN Energy weighs in. 

March 31, 2022: one big Rube Goldberg debacle. 

March 31, 2022: Day Zero -- the Biden Surge.

March 31, 2022: the Biden administration is in deep trouble. Huge, huge release announced; how much might Americans see in savings at the gas pump? From President Biden himself: "The SPR release could cut anywhere from 10 - 35 cents a gallon, but it depends on how much allies release." The allies can't come close to releasing anything like the US promises to release.

March 31, 2022: it is now being reported that President Biden will release one million barrels of oil from the SPR on a daily basis for the next six month. WTI over night had dropped to $100/bbl (or thereabouts) but is now back up to $103/bbl. We've talked about this before, why a release of SPR oil could have a paradoxical effect on the price of oil.

Original Post 

I assume everyone saw the sell-off of oil today -- March 30, 2022.

The buzz is that the administration will release a million bopd for an extended period of time, and, at the same time, offer rebate coupons to help with high gasoline prices at the pump. 

There are so many story lines here, but we now have a new tag: the Biden Surge, just as we had the Saudi Surge tag when Saudi Arabia, 2014 - 2016, flooded the world with oil in an attempt to "break" (bankrupt) US shale. 

This is the post where updates for the Biden Surge will be tracked.  

Will it make a difference?

• March 31, 2022: unlikely to be enough. Reuters. 
  
• March 30, 2022.

Why now?

• March 30, 2022.

Data points of interest to be followed monthly for the next six months, baseline, March 31, 2022:

• US production of crude oil: 
• baseline: pending
  
• days of supply of US crude oil:
• baseline: 26.6 days; almost four weeks;
  
• amount of distillate in storage -- percent relative to 5-year average:
• baseline: -16.0% (that's a minus sign)
  
• refiners percent of operating capacity:
• baseline: 92.1%
  
• US imports of crude oil,
• US imports from Russia; tracked here.
  
• US exports of crude oil, EIA link:
• baseline, December, 2021: 3.452 million bopd
  
• US exports of finished motor gasoline, EIA link:
• baseline, December, 2021: 941,000 bopd
  
• destination of US crude oil exports; EIA link:
• baseline, December 2021, monthly, in 1000's of bbls: more complete list here; top ten destinations:
  
• Brazil: 11,944
• Canada: 26,436
• China: 14,345
• India: 25,061
• Japan: 18,538
• Korea, South: 18,082
• Mexico: 43,160
• Netherlands: 16,082
• UK: 10,725
• France: 5,766

Political analysis:

• The energy transition is dead. Tracked here. 
  
• ESG is dead, too. Tracked here.

 

Three New Permits; Seven Permits Renewed -- March 30, 2022

Gasoline demand: GasBuddy keeps telling us, almost daily, how much gasoline demand is picking up compared to last year, and, yet, the EIA data is not corroborating GasBuddy's statistics. Something doesn't add up. From today's weekly EIA data:

The "slap": one of the highlights of the Academy Awards the other night was Reba McEntire. I'm re-watching her performance and then reminded of the "crassness" of the penultimate award presentation Truly, truly sad. Everything "good" about the show was completely forgotten after the "slap." Pretty sad.

Lake levels:

• Lake Mead: link here.Low. Really low.
• Lake Powell: link here. Low. Really low.

No GoM leases through 2023: Biden administration. This tells me all I need to know how serious the "crude oil" shortage really is. 

US LNG export: already draining US natural gas supplies and lifting prices. Overseas shipments of shale gas are replacing Russian supplies in Europe and boosting prices at home. But no new GoM leases per the Biden administration. Source.

US petroleum inventories, source. But no new GoM leases per the Biden administration.

Summer draws are going to be epic. Source. The market is already short three to four million bopd on supply. OPEC+ does not have enough spare capacity to make up the shortfall, even with Iran. 

Dumb and dumber. And no new GoM leases through 2023 per the Biden administration. Like canceling the Keystone XL, one dumb decision after another.

Investing: I'm going to have to reconsider my plans to diversify out of oil. LOL

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. 

For investors: this is outstanding -- it's a two-fer.

• first of all, it makes these on-shore permits all that more valuable; and,
• Big Oil is not wasting money on CAPEX in the Gulf of Mexico; will result in greater FCF.
• as a reminder, XOM just spent big bucks to drill a DRY hole off Brazil
  

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Back to the Bakken

Update on Murex Borstad wells, Patterson 280 rig: here. All explained.

Active rigs:

$107.40	3/30/2022	03/30/2021	03/30/2020	03/30/2019	03/30/2018
Active Rigs	34	14	44	66	60

Three new permits, #38859 - #38861, inclusive:

• Operator: Petro-Hunt
• Field: East Tioga (Burke County); 
  
• Comments:
• Petro-Hunt has permits for three Setterlund wells in East Tioga, SESW 34-159-94, 
• to be sited between 30 FSL and  265 FSL and 1520 FWL;

One permit canceled:

• 35683, Liberty Resources, Albertson, in Mountrail County;

Seven permits renewed:

• Enerplus (4): an Addax, a Camel, a Genet and a GNU permit, all in Dunn County
• RimRock Oil & Gas (3): three Two Shields Butte permits in Dunn County;

North Carolina Certainly Looks Like Ground Zero For EV Production In The US -- March 30, 2022

Although it's difficult to keep up with new developments, and impossible to confirm everything's accurate, I do have a rudimentary "scorecard" keeping track of the the three major components for EVs. 

Today, it was announced that VinFast will be building EVs in North Carolina with first delivery scheduled for 2024. Links everywhere including: https://www.foxbusiness.com/markets/vietnamese-carmaker-to-build-electric-vehicles-in-north-carolina.

Elsewhere it is being reported that VinFast will use Nvidia chips. NVDA is well off its highs even as US Congress is going to lavish the semiconductor chip sector with financial incentives, yet to be finalized, but they're coming. 

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. 

For the record, I am diversifying out of fossil fuel. I am not selling my current holdings but will add very little new fossil fuel assets and will concentrate on technology.

RMDs

Updates

January 12, 2023: regional bank provides update. 

August 9, 2022: changing age to age 75 years old?

August 9, 2022: the "new" rules, still up in the air --

• Forbes: not yet finalized, but likely they will be;
• gobankingrates: "horribly complex"
• Yahoo!Finance: a real mess;

April 4, 2022: Investopedia -- the rules now.

December 14, 2021: Forbes -- the rules now.

March 30, 2021: tea leaves suggest the "72" age will be increased to 75. The only question is whether Congress will get it done this year or next. This year is mid-term elections; now or never.

RMDs

Original Post: April 7, 2019

Baby boomers. Richest generation in US history.

Greatest generation: the parents of the boomers. The greatest generation: the first generation to leave money to their children, the boomers.

The baby boomers: 1946 - 1964.

I was born very, very early in the boomer generation.

I will start taking RMDs from IRAs soon -- not this year, not next year, but soon. Once we start taking RMDs, we will take RMDs for 26 years. And I'm at the beginning of that bow wave of those taking RMDs; I was among the early boomers.

I will most likely re-invest those RMDs.

But Uncle Sam will start to collect taxes on those RMDs.

We don't hear much talk about that, but my hunch is that by the time the peak of that bow wave hits, let's say ten years from now, the amount of money Uncle Sam collects from taxes on RMDs will not be trivial.

I thought about that (RMDs) when I read the Barron's headline and part of the story: the bull market could last another decade. 

World's Best Surfing, 2017

NASCAR Wheel Changer -- How Hard Can It Be? March 30, 2022

You had one job. 

Bubba Wallace's NASCAR  crew suspended four races for loose wheel. 

Yes, I saw that live. There is one ... one, count them -- lug nut -- just one lug nut on a NASCAR wheel -- and one was not tightened, resulting in a wheel coming off Bubba Wallace's car last weekend, another DNF for the driver. 

Well, I suppose three out of four ain't bad. 

*************************
Biggest Story At The "Oscars"

Well, it would have been Apple. Financial Times, paywall.

But not to be. 

Top story stolen by "the slap."

Regardless, it's a huge story:

After a movie year often light on crowds, the Academy Awards named an unabashed crowd-pleaser, the deaf family drama “CODA,” best picture Sunday, handing Hollywood’s top award to a streaming service for the first time in a ceremony that saw the greatest drama when Will Smith strode onstage and slapped assaulted Chris Rock.

Sian Heder’s “CODA,” which first premiered at a virtual Sundance Film Festival in winter 2021, started out as an underdog but gradually emerged as the Oscars’ feel-good favorite. It also had one very deep-pocketed backer in Apple TV+, which scored its first best picture Academy Award on Sunday, less than three years after launching the service.

It also handed another near-miss defeat to Netflix, the veteran streamer that for years has tried vainly to score best picture. Its best chance, Jane Campion’s “The Power of the Dog,” came in with a leading 12 nominations. It won one, for Campion's direction.

Netflix has been around for decades: no "best picture Oscar."

Apple TV+: two, maybe three years: first "best picture Oscar."

 *****************************
The Movie Page

It is absolutely amazing how much content for so little money is now available. It blows me away.

Basic cable, no bundling. Hulu. Amazon Prime. Firestick. Apple TV+. And I guess we get some Disney with the Hulu subscription. 

My evening pretty much runs like this:

• 4:00 p.m. - 7:00 p.m.: with Sophia -- flashcards, Duolingo, biking, reading, some writing (journal), Legos, piano, Bat Cave, hoverboard, maybe an episode of Psyche with Sophia;
  
• 7:00 p.m. - 10:00 p.m. Perry Mason re-runs
• 10:00 p.m. -- 1:00 a.m. Movie night, every night -- last night, Midnight in Paris

Obviously the movies are in the background, while I'm blogging and/or reading.

Now today, over at Literary Hub, Beth Parker's 14-month-long communion with Robert Ebert. Takes two minutes to read and provides some nice movie suggestions. 

Another suggestion, just found it last night: Ramen Heads, Osamu Tomita -- ranked #1 ramen in Japan three years running. First question, how does one even top the list one time in all of Japan, not to mention three years running. This is my third "ramen movie." The Clint Eastwood spaghetti western ramen movie is still the best. I'm not sure where it streams; I wasn't on Hulu but easily found it again this morning, but forgot to note "network." Whatever. IMDB.

Can't remember where "unconditional love" showed up in one of the movies. I misheard "unconditional" and thought I heard something else. Unrequited love, unconditional love, uncompleted love, unknown love, unbelievable love, unquestionable love, unlikely love, unending love. Most interesting: uncompleted love.

Weekly EIA Petroleum Report -- March 30, 2022

Link here.

• US crude oil in storage decreased by a modest 3.4 million bbls last week.
• US crude oil in storage now stands at 409.9 million bbls, 14% below the five-year average and at least twice that amount needed in current environment based on days of supply in storage;
• US crude oil imports averaged 6.3 million bopd (yawn), down by 227,000 bopd from the previous week;
• US crude oil imports averaged 6.4 million bopd, 11.9% more than the same four-week period last year;
• US refiners are stepping up their game; now operating at 92.1% of their operable capacity
• distillate fuel inventories increased by 1.4 million bbls last week; still 16% below the five year average
• jet fuel supplied up was up 39.1% compared to same four-week period last year.

Finance -- Economy -- Rambling -- March 30, 2022

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. 

Jobs:

• private payrolls rose by almost half a million; topped expectations --- yeah, that was the headline; LOL:
• estimate: 450,000 jobs
• actual: 455,000 jobs
• so, yes, headline technically correct; but more accurate, "in line"
• giving the Biden administration a little extra help with this headline
• perhaps this should be the headline:
• job growth in the U.S. private sector has decelerated in every month since December, when nearly 800,000 payrolls returned in a single month

GDP, 2021: story here.

• for all of 2021, the nation’s gross domestic product — its total output of goods and services — jumped by 5.7%, the fastest calendar-year growth since a 7.2% surge in 1984 in the aftermath of a brutal recession.
• previous estimate was a 7% jump
• the writer downplays it, but a drop from 7% to 5.7% is not trivial
• a 23% downgrade, as it were
• the "small" downgrade (23%) reflected a smaller increase in consumer spending and fewer exports, both of which could worse going forward
• this strengthens the argument for those who see stagflation around the corner
• but look at that: strongest calendar-year growth since 1984 when US coming out of a brutal recession
  
• having said that, the post-Covid surge has not yet begun

EU energy crisis: Germany warns of natural gas rationing

Proxies: developing a list of one ticker for each sector as a proxy of overall trend

• Big Oil: CVX
• shale: DVN
• rail: UNP
• auto/EV: F
• semiconductor: up for grabs; perhaps AMD by default;
  
• chip foundry: TSM
• graphic cards: NVDA
• midstream: SRE
• value: BRK-B
• wow factor: AAPL

Old people and Covid: okay to get additional booster. Starting to lose count, but those that need to know, know

More later: taking Olivia to school

Two Wells Coming Off Confidential List; What's Oil Doing? March 30, 2022

Watch this space: RMDs.

Essay: if you have time for just one essay today, read today's "Ross Rant" sent to me by a reader;

• pretty much something for everyone
• I think "Ross" was too "negative" on Biden; not "hard enough" on the EU
• I think he forgets that "no one" pays attention to Biden, except for the gaffes
• the gaffes telegraph what Biden is really thinking 
• as far as giving away classified information, the Russians already know
  
• humanitarian crisis already in Poland, next Germany; Macron watching

Bill Ackman:

• has annualized 17%, net of fees, over the last eighteen years - source;

Ukraine:

• food basket to much of Europe
• half of the food for the World Food Program comes from Ukraine
• 2022-2023: Ukraine will become a net importer of grain - source;

Sanctions starting to bite:

• first real signs of well-head production declines are starting to be seen; source;
  
• one-two punch:
• some countries will quit buying from Russia; others will take up some of that slack
• production in Russia: relies on foreign expertise, equipment: that's a much bigger obstacle
• analogy: US supply chain issues the past 24 months
• now Russia: the supply chain issues writ large
• we will soon see that Russia relies on rest of world much more than world relies on Russia
• unsold oil forces Russian operator to cap pipeline flows; source;  
• fields will start to cut back on production
• risk of losing shut-in wells;
  

Oil, data points:

• OPEC+ now forecasts 600,000 bopd surplus 1Q22; previously, one million
• first 27 days of March: OPEC crude oil exports fell on average 363,000 bopd; averaged 21.421 million bopd
• Saudi looking to raise May crude prices to Asia to new record levels;
• if so, OPEC basket record: $110 going back to 2012; OPEC Basket;
• this speaks volumes about all those stories about all that cheap Russian oil getting to China, India;
• my hunch: Saudi knows all about Russia's need for foreign investment to keep oil flowing
• proxy for US shale: DVN
• up 6 cents yesterday
• up 72 cents in pre-market trading today
  

Oil:

• Brent: up 2.8%; up $3.12; trading pre-market at $113.30;
• WTI: up 3.1%; up $3.23; trading pre-markeet at $107.50
• Note: what's "oil doing?"

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

Active rigs: 

$106.90	3/30/2022	03/30/2021	03/30/2020	03/30/2019	03/30/2018
Active Rigs	34	14	44	66	60

Thursday, March 31, 2022: 47 for the month, 156 for the quarter, 159 for the year

• None.

Wednesday, March 30, 2022: 50 for the month, 159 for the quarter, 159 for the year

• 38547, conf, Ovintiv, Wisness State 152-96-16-21-21H, Westberg, no production data,
• 38293, conf, CLR, Springfield 11-8HSL, Brooklyn, no production data,

Tuesday, March 29, 2022: 48 for the month, 157 for the quarter, 157 for the year

• 37860, conf-->loc/drl, CLR, Clear Creek Federal 10-35H2, Westberg, no production data,

RBN Energy: crude oil prices, drilling activity and the new energy-world order. 

Just a few years ago, when the Shale Revolution had matured into the Shale Era, the world settled into a nice groove, with crude prices generally rangebound between $40 and $70/bbl. As the U.S. looked to assume OPEC+’s role and evolve into the world’s swing supplier of oil, ramping up production when prices rose and slowing it down when they fell, it seemed reasonable to expect that market-driven responses would help maintain stability. Well, things haven’t turned out that way. 

COVID, the emphasis on ESG, a hydrocarbon-averse administration, and Russia’s war on Ukraine combined to put “reasonable expectations” in the trash. An entirely new set of expectations is emerging, and few metrics explain it better than today’s different-as-can-be relationship between crude oil prices and the U.S. rig count, as we discuss in today’s RBN blog.

Putin's War -- Five Unintended Consequences -- CNBC -- March 29, 2022

I generally don't care for these articles, but this is a pretty good synopsis. It certainly puts things into perspective. 

March 29, 2022: CNBC, five unintended consequences for Russia:

• Russian casualties are high
• estimates: from 1,351 (Russia) to between 8,000 and 15,000 (NATO) 
• Russia lost 15,000 soldiers during the 10-year war in Afghanistan in the 1980s
  
• Ukrainians now loathe Russia
• Ukraine is the ancestral home for Russia; Ukraine is Russia
  
• economic ruin
• besides an impending recession, this war will "wipe out five years of economic growth"
  
• Europe is dropping Russian energy
• to be replaced by US energy
  
• Russia has united the West
• the West's reaction is unprecedented 
  

**********************************
The Book Page

We haven't heard yet; waiting. Olivia's soccer team in the second round Texas girl's high school championship. 

 Woody Allen's Lost In Translation in the background. I never tire of watching it.

Thinking about W. G. Sebald's The Rings of Saturn.

The "chapter" on Joseph Conrad is probably some of the best writing I've ever read. The chapter helps, again, to put Putin's War in perspective. 

Later: Olivia's team wins 5 -1. A more competitive game than the score might indicate. Olivia's team advances to the third round. First round to championship game: six games. This was the second game; the sixth will be the championship game.

One New Permit -- March 29, 2022

Interesting: the "slap" appears to have generated an intra-Hollywood "Romeo-and-Juliet-like-family war" with "everyone" choosing sides. 

An informal, non-scientific, anecdotal look at the tweets suggests .... well, I'm gonna stay out of this one. Based on the headlines, it appears "The Academy" has moved on, nothing to see here. Apparently it's the new normal to walk on stage during an awards ceremony, assault someone, and then get a standing ovation. 

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

Active rigs:

$104.20	3/29/2022	03/29/2021	03/29/2020	03/29/2019	03/29/2018
Active Rigs	33	13	45	67	60

One new permit: #37860

• Operator: WPX
• Field: Mandaree (Dunn County)
• Comments:
• WPX has a permit for a Samuel Packineau well in NWNW 17-149-93;
•  to be sited 1172 FNL and 1221 FWL

Eleven permits renewed:

• BR: five George permits; a Rollacleetwood, a Phantom Ship, a Mazamaphantom, and Cleetwood, all in McKenzie County; two Gorhman permits in Dunn County.

One permit canceled:

• 28988, Prima Exploration, State permit in Divide County

ISO NE Was Trending Toward $1,000 / MWh Earlier This Morning -- March 29, 2022

Updates

Later, 7:27 p.m. CT: a reader explains how to read the graphics at ISO NE:

 It is tough keeping up with all these rapidly evolving events. 

If you click/tap on the top of that spike on the 5 Minute LMP graph, the precise number will show/display. 

Alternately, one can click/tap the 3 grey horizontal lines atop the graph (the default 'chart' icon is next to it), and one can scroll through all the exact pricings which are recorded in ~ 5/10 minute increments. 

From 5:05 to 5:20 AM this morning, spot wholesale prices were $896/Mwh. Simply insane. 

I checked neighboring PJM's site for comparative purposes, but they have changèd the format so as to be difficult to navigate. However, Real Time wholesale spot at 5:15 PM was $74 in PJM region while New England was over $250. 

[My hunch: this is where the wind turbine companies really make their money.] 

ISO NE: I posted the rush hour commute numbers earlier this morning.

But I missed this. 

Note that electricity costs spiked trending toward $1,000 / MWh:

Currently, ISO NE demand is a paltry 13,000 MW and electricity is still over $100 / MWh. 

Boston will get down to 26°F overnight.

Sinclair Reports A Nice Well In Lone Butte -- March 29, 2022

Updating the wells coming off the confidential list two years ago (2Q20). 

The well:

• 36791, drl/drl-->drl/A, Sinclair, Harris Federal 4-32H, Lone Butte, first production, 11/21; t--; cum 93K 1/22;

Production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	1-2022	31	27325	26871	40662	51668	21531	30020
BAKKEN	12-2021	31	28528	28403	45517	51685	21162	30406
BAKKEN	11-2021	23	36910	35978	64473	62849	0	62762

Notes From All Over -- March 29, 2022

Temperature in Boston at noon? Freezing. 32°F. 

Link here to ISO NE.

• at noon, demand is down to an amazingly low 12,691 MW;
• unfortunately, the price of electricity is now climbing, after an earlier mid-morning reversal;
• electricity now at the sixth decile, trending toward $110 / MW. Later: moved from <$110 at noon to >$130 in Boston early afternoon;
  
• oil contribution has dropped from a max of 3% to only 1%, now 
• the interesting thing, coal is back on the chart, albeit barely
  

Oil stocks:

• lesson learned: priced right when penciling in $100-WTI

WTI: back to $102.80 after causing early morning heart attacks and strokes among perma-Perman bulls.

****************************
Energy Transition is Dead

Link here. 

This happened faster than expected. 

Translation: Greater oil production is compatible with energy transition [if it means I'm more likely to keep my job after the mid-term elections.] 

EPA chief just saw this chart -- cost of batteries, link here:

Run, Don't Walk, If You Get A Large Envelope From St Augustine, FL -- March 29, 2022

Unless you are interested in investing in the "Permanent Basin."

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. 

Just Having A Market Cap That Exceeds VW Or Toyota Blows Me Away -- March 29, 2022

From social media today:

This data point is even more amazing when you consider high-flyers like Lucid, Rivian, Nio, and Li Auto are on the list of twenty. 

But, at least we now have the list of auto manufacturers that make up the A-20.

Market To Surge Today -- March 29, 2022

OIL: WTI drops below $100. Recovered slightly before trending back below $99. 

Now, maybe folks will start to understand why US shale not eager to spend billions to increase production.

• if EU won't ban Russian oil, it opens the door for China, India to buy Russian oil;
• and no one can criticize / fault China or India buying Russian oil if the EU still openly buys Russian oil
  
• Russian oil selling at huge discounts;
• Biden knew exactly what he was doing or he was very, very lucky: but starting today, folks should start to see lower gasoline prices; 
• US WTI sweet spot: $90 - $100?
  

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. 

War in Europe.

Bond curves invert: recession all but guaranteed.

The Fed to get even more hawkish.

Biden's budget will include huge new taxes on the wealthy. 

Tech industry to get huge subsidies from US government. 

Oil prices surging.

Starbucks employees are unionizing.

America is short of workers.

House prices out of reach for all but the most wealthy.

Antarctic ice shelves falling into sea; scientists say oceans could rise 160 feet  but they keep buying water-front properties. And US government still offers catastrophic flood insurance.

Actors slapping each other on live television during awards ceremony.

Energy transition is dead. 

Indices hit six-week highs, and today, the market is going to open even higher.

Kamala Harris is next in line.

Highest appointments in US are now based on sex, race.  

Bacon: $9 / pound.

If anyone can explain this market to me, I would be forever grateful.

The market:

I will be ferrying grandchildren to school this morning when the market opens so I won't see it until I get back, but pre-market:

• BRK-B: up anotheer $3.13 after already hitting new highs;
• AAPL: announces huge smart-phone production cut; unprecedented; shares up $1.21 after small jump yesterday;
• UNP: this one actually makes sense, hitting new all-time highs; new advances slowing;
• QCOM: up an astounding $3.34 in pre-market trading; up over 2%; investors must like the subsidies these tech companies are about to get from US Congress
• SRE: somehow related to natural gas; this $124-company (share price) is now trading for $164;
• T: continues to melt up; pays 4.65%;
• F: up 2%;
• TSLA: announces huge share dilution and shares surge
  

I'm not even going to look at oil. No one likes oil companies when WTI fails to hit $150.

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. 

*********************************
Nothing Like A War To Learn Geography

Link here.

One Well Coming Off Confidential List -- EU Hasn't Banned Russian Oil -- Nothing To See In Ukraine -- March 29, 2022

Grass is always greener: Exxon again finds no oil in Brazil, but wants to sell its assets in the Bakken. 

Venezuela: rumors Chevron getting closer to pumping, marketing, shipping Maduro oil. Apparently the only thing holding this up is trying to figure out how to explain it to President Biden so he can explain it to the American public.

Austin airport: piss-poor planning. Not enough jet fuel for scheduled flights. This cannot possibly be rocket science. 

Operators must be furious, to say nothing of the passengers. Apparent some inbound flights are landing at Houston first to re-fuel so they have enough for take-off after arriving at Austin. This is truly bizarre. Link here. I wasn't going to post this, but readers have sent me links so I have no choice.

ISO NE: hitting an all-time record for March? Link here.  $500 / MWh electricity.  

OPEC: re-prices -- to the upside -- despite Russian oil being sold at huge discount? Isn't Russia part of OPEC+? Asking for a friend.

Oil:

• Brent: $113.60, in the sweet spot; at risk of overshooting;
• WTI: $106.70, in the sweet spot; at risk of overshooting;

No short-term solution to Europe's oil addiction: link to Irina Slav. The EU continues to finance Putin's war.

• every time oil trends lower, oil bulls panic;
• price of oil no longer matters (don't take that out of context);
• truly unfortunate: while the US and UK have both announced bans on Russian oil imports, the EU has not been able to agree on any such boycott
• but wow, they are fast to fine Apple, Inc, for "app" policies
• Russia provides 29 percent of the crude oil that Europe consumes, as well as 51 percent of the oil products that the continent consumes. And Europe consumes a lot of oil and oil products despite its eager energy shift. But that's not all. Two years ago, the European Union received almost 97 percent of the oil and oil products it consumed from external sources
• in other words, the EU is more import-dependent than India when it comes to oil.
• wow, I remember that post more than ten years ago that Europe would find itself in trouble with regard to this very issue
• this is so incredibly bad, it's beyond the pale; bad decision after bad decision after bad decision; 
• my hunch: Greta won't be on the EU lecture circuit this month; by the way, where's John Kerry?
  

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

Active rigs:

$99.60	3/29/2022	03/29/2021	03/29/2020	03/29/2019	03/29/2018
Active Rigs	34	13	45	67	60

Tuesday, March 29, 2022: 48 for the month, 157 for the quarter, 157 for the year

• 37860, conf, CLR, Clear Creek Federal 10-35H2,

RBN Energy: could the US alone meet Biden's call for 15 Bcm more LNG to the EU? 

The Biden administration said last Friday it would help ensure deliveries of an additional 15 billion cubic meters (Bcm) of LNG to the European Union (EU) market in 2022. A frenzy of media articles followed and the targeted increase was widely cited. The April CME/NYMEX Henry Hub futures contract rallied nearly 3% to $5.55/MMBtu on Friday, and the stock price for Cheniere Energy, the largest LNG producer in the U.S., jumped 5.5% the same day. But U.S. liquefaction facilities have already been running full tilt and sending record volumes to Europe. So, what does the news really mean for U.S. LNG exports and the domestic gas market? In today’s RBN blog, we put that 15 Bcm in perspective and distill the key takeaways for U.S. LNG production.

OPEC Basket -- Happy Days Are Here Again -- March 29, 2022

Link here.

And This Is When The Wind Turbine Consortiums Make Their Money -- March 29, 2022

Link here. 

Holy mackerel! I was wrong. In the twelve+ years that I have blogged I have always said that we will never see the price of electricity get into the ninth decile. Wow, was I wrong. Boston did it overnight. 

Look at the overall demand: not all that much.

Oil! 3%. 

Wind contribution is at the highest I've ever seen. Renewables at 12% -- very respectable -- and of that 12%, wind is accounting for 64%. I've never seen wind contribution that high. This is where wind is making its money. Wind is sold on a sliding scale and at this level, the margins are "to infinity and beyond." The other components, oil, natural gas, nuclear, I assume are pretty flat-lined at contractural prices.  A reader might know more about pricing.

Boston, MA: 20°F this morning. Link here.
Bangor, ME: 18°F

From Max Gagliardi:

ESG Is Dead, Too

Link here. 

Inside the above tweet / link, is the link: ESG's Russia test -- trial by fire crash and burn?

A keeper.

It begins: 

My views on ESG are not a secret.

I believe that ESG is, at its core, a feel-good scam that is enriching consultants, measurement services and fund managers, while doing close to nothing for the businesses and investors it claims to help, and even less for society. That judgment may be harsh, but as the Russian hostilities in Ukraine shake up markets, the weakest links in the ESG chain are being exposed, and as the same old rationalizations and excuses get rolled out, I believe that a moment of reckoning is arriving for the concept. 

If you remain a true believer, I will leave it up to you to decide how much damage has been done to ESG, and what comes next.

What I love most! The author actually proposes "what comes next":

So, what will the next big thing be? 

I don't know for sure, but I am willing to make a guess, since so many ESG experts and advocates have slipped into already using it as an alternative. 

It is "sustainability", a word that can mean whatever you want it to mean. In its most benign form, I believe that it is just another word for "long term," though the only benefit of replacing one set of words with another is that it offers a chance for those using the new and updated word to state the obvious, claim the outrageous and charge the absurd. 

In its more malignant form, it becomes a way to try to keep corporations alive forever, a dreadful idea, where zombie and walking dead companies suck up capital and resources, and drag the rest of us down into the abyss with them. 

The writer's conclusion:

When I first wrote about ESG two years ago, I did so because I was skeptical of the unquestioning belief that people had in its success. I initially believed that it was a flawed concept that needed fixing , but after two years of interactions with people who claim to know the concept really well, but don't seem to be capable of making solid cases for it, and witnessing its takeover by well heeled entities with agendas, I am convinced that there will soon be room for only two types of people in the ESG space. 

The first will be the useful idiots, well meaning individuals who believe that they are advancing the cause of goodness, as they toil in the trenches of ESG measurement services, ESG arms of consulting firms and ESG investment funds. The second will be the feckless knaves, who know fully well the void behind the concept, but see an opportunity to make money. I know that those are not edifying choices, but I don't see any good ones, other than leaving the space completely. Good luck!