XOM Has Partial Solution For More California Oil Production; California Says "No" -- March 10, 2022

Article for the day: some much needed substance on the Russian oil debate, link to David Messler. More of the article here.

• Biden’s decision to ban Russian oil imports to the U.S. had a predictable effect on oil prices, but the long-term impact on the U.S. oil industry is less clear.
• While the volume of oil imported from Russia wasn’t significant, the quality of the oil was as it was used to improve the API gravity of the throughput from U.S. refineries.
• To replace this heavy oil, the U.S. is now looking to Iran, Saudi Arabia, and Venezuela, not countries that the U.S. would want to rely on in a crisis.

XOM: solution for more US oil production. California says "no." This story first came to light several years ago. Several links, and there are probably more. A google search of "Santa Barbara" on the blog will probably find those posts, but this is probably all you need:

• June 24, 2015; production shut down "temporarily"; that was seven years ago; still shut down. LOL. 
• June 5, 2015: buried in this post. 
• August 18, 2021: just last year, the map.
  

Huge light bulb went on: there are two reasons US SecEnergy, US Transportation Secretary and President Biden seem to tone deaf when it comes to high gasoline prices:

• one: two of the three are simply nuts; the third one is from Delaware
• second: Biden's poll numbers are incredibly low; incredibly low; without their cult base who absolutely hate Big Oil their numbers would be even worse; they need to keep their cult base and the only way? Keep bashing Big Oil, no matter how expensive oil gets
• link here.

New Hampshire voters: surprised and frustrated that heating oil now costs more than $5 / gallon. Perhaps time to re-think a) hydro electricity from Canada; 2) natural gas from Pennsylvania.

Ford EV: previously posted. Reminder. Ford's new mega campus in Tennessee and battery plants in Kentucky. 

Bait and switch: Rivian faces lawsuit after price hike on R1T, R1S preorders. Link here. 

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Saudi Arabia -- Diesel Buy

Updates

Later, 10:55 a.m. March 10, 2022: see comments. Reader has figured it out, why Saudi would be buying diesel fuel.

Just a thought on Saudi's buying 1.2 million to 4.6 million bbls of low sulfur diesel for delivery to several ports in Saudi Arabia by mid-March to April. 

In years past, when the Saudi's talked about putting more oil on the market, the usual joke was they were trying to market a very low grade, high sulfur crude they
have been unable to sell. 

Apparently, it would make a very low grade road tar! Maybe, just maybe, they are going to try to blend this "Gunk" with low sulfur diesel and get a marketable product. We'll have to wait and see. 

Original Post

Diesel: rare buy tender from Saudi Arabia. Paywall at Bloomberg. For those who have forgotten, Saudi Arabia is the country with a lot of oil; and, Saudi has also been spending a gazillion dollars on building new refineries. And so, what are they doing now? Buying diesel. Something smells. No paywall at Mint.

• buying 1.2 million to 4.6 million bbls of low sulfur diesel for delivery to several ports in Saudi Arabia by mid-March to April
• does one suppose that Saudi is getting ready to dump huge amounts of oil on the global market;
• those tankers run on low-sulfur diesel
• Saudi is usually an exporter of diesel
• Saudi would not have a lot of storage capacity for this diesel; they are going to use it in the short term;
• but traders say Saudi will have trouble finding this amount of diesel, and it will be quite expensive
• markets are sharply backwardated
• bears watching

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More

Japanese SPR: will lower requirement from 70 days to 66 days.

• for US, back-of-the-envelope:
• US: 700 million bbls in SPR
• US demand: 20 million bbls per day, but could be cut back significantly if necessary
• let's say 15 million bopd US demand
• 700 / 15 = 46 days
• at 20 million bopd = 35 days
• commercial storage: 450 million bbls
• 27 days of US crude oil in non-SPR storage
• 450 / 27 = 17 million bopd demand
• I wonder if US SecEnergy knows this off the top of her head, as they say
  

Fidelity: Johnson family wealth surges to $48 billion on back of trading boom, link here;

• no word yet from Pocahontas on windfall profits tax
• two largest investment bankers: Fidelity and Schwab
• some numbers
• global stock market, by value: $95 trillion
• Fidelity: $5 trillion
• Schwab: $3 trillion

Odds and ends to clear out the in-box:

• EIA hikes Brent forecast; link here:
• just one month ago, EIA forecast Brent to average $83 / bbl
• now, one month later (March, 2022): one-year forecast, average: $105 / bbl
• for March, the forecast is an average of $117 / bbl
• for 2Q22: $116
• for 2H22: $102
• for 2023: $89 (Brent)

Thanks to Duolingo, I can now read the subtitles. The women, unfortunately, are distracting.

• The 43-year-old genius behind the $3-billion language app, Duolingo. I love it. Link here.
  
• at 24 year of age, he was already a millionaire: CAPTCHA
• phrase coined by Carnegie Mellon University research team
• CAPTCHA was a pain; a lot of folks couldn't handle (see GEICO robot ad)
• he simplified it with two matching pictures
• Duolingo:
• a free app, ad-supported
• subscription plan available (which I pay for; it's worth it)
• market cap: $2.8 billion earlier this year
• what I find most remarkable: he too on one or two large language-teaching programs
• in technology, it seems no moat is wide enough
  

Spare capacity: a myth.

• OPEC agreed some months ago to increase production by 400,000 bopd month-over-month, rolling forward
• we all thought they would cheat, and we'd see 600,000 bopd
• until most recently, they had not been able to hit 400,000 bopd
• fourteen of the OPEC members have not been able to hit their quotas

Linda Ronstadt: I try every day to find a better video than this; so far unsuccessful. Observations:

• incredibly mediocre vocal and instrumental support
• smartest thing the producer did: told her to rise above the background support
• either that or the sound engineer pushed the levers in opposite directions
• a most unappealing outfit by the lead vocalist
• where did she come from? Simply incredible. When did she know she was something special?
• lots of cowbell, especially noticeable, starting at 1:24.