Rambling -- June 27, 2022

If you have time to click on only one link in the next twenty-four hours, this is it. There is so much packed into this link, the video, but be sure to read the comments / replies. Same exact subject, different thread. 

There must be at least fifteen comments one could make, but the first? These guys still don't get it. 

"More oil" is not the answer.

If you have time to read only article in the next twelve hours, I doubt you could find a better one: US gulf coast crude exports are breaking records. By now, even President Biden should realize how downright ridiculous / crazy / ill-advised it was to release 180 million barrels of oil from the SPR, one million bopd between now and the midterms. 

The only reason -- well, there are two reasons -- the two reasons why we're not seeing $200 oil right now:

• "people" still don't get it -- why gasoline is so pricey; and, 
• fear of recession.

Isn't this a crazy thought: even if there is a recession, oil demand will butt up against supply. I think Macron of France gets it. And maybe Boris of the UK. I don't know who's the German chancellor, otherwise I would include him/her in the mix. 

By the way, speaking of recession, there are a few folks that argue we won't see a recession -- I posted a link / graphic early along that line. 

How about this one? Griffon Corporation? For the longest time, Griffon has paid a quarterly dividend of nine cents. A penny less than a dime. Today Griffin (GFF) announced a special dividend of $2.00 / share. 

Hardly sounds like something a publicly traded corporation would do facing an impending recession.

So, a link to twitter, a link to oilprice. What else? What other recommendations? A book recommendation? Read Zeihan, c. 2022.

By the way, did you all notice this, from the oilprice link above:

The government’s unprecedented support for the domestic crude system has accelerated US supply, with levels expected to hit 13 million bpd this summer for the first time since November 2019. But the unintended consequence of federal intervention is that more barrels than ever before are being sold to international buyers.

13 million bpd.

Just a month ago, an "analyst" over at my twitter energy feed was quibbling whether the US had reached twelve million bpd. LOL. Soon to be thirteen million bopd. 

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Most Narcissistic SOB Ever

Link to SD AG -- Jason Ravnsborg -- has asked state ethics board to investigate Republican governor Kristi Noem. 

Clinical diagnosis? Borderline, narcissistic personality. 

I can't wait until his fifteen minutes of fame are over. 

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The New Yorker

Back to serious reading.

One new book a week.

I just subscribed to Science. 

Now, I'm going to try The New Yorker again. Twenty-six week cover price, $224.75, now being offered for $26 for twenty-six weeks. So, we'll see. I'll probably subscribe for one year, $52. I assume a lot of articles on the US Supreme Court. 

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A Musical Interlude

Eileen, Dexys Midnight Runners

Twenty-Four Permits Renewed; One New Permit -- ERCOT -- Texas Grid Easily Holds -- June 27, 2022

ERCOT: Texas grid easily held.

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Back to the Bakken

WTI: $109.60

Active rigs: 44

One new permit, #39055:

• Operator: Ovintiv
• Field: Westberg (McKenzie County)
• Comment: Ovintiv has a permit for a Clear Creek Federal well in SESE 36-152-97; 
• to be sided 804 FSL and 747 FEL;

Twenty-four permits renewed / reinstated:

• Rimrock (8): eight Skunk Creek permits in Dunn County
• Spotted Hawk Development (SHD) (6): each of the following permits in McLean Couonty: Poseidon, Narcissus, Zeta, Delta, Demeter, Cheetah
• Oasis (5): five Slagle permits in McKenzie County
• Kraken (3): three Sidney permits in Williams County
• Petro-Hunt: a USA permit in McKenzie County; NWNE 24-153-95;
• Enerplus: a Ridley permit in McKenzie County

The number of renewed / reinstated permits we are seeing this year confirms something I said years ago about the Bakken: a cancelled / expired permit does not mean a whole lot. Some / many / most are renewed or reinstated.

Keystoning And Gaslighting America -- June 27, 2022

A new tag: keystoning and gaslighting America.

Will be tracked here.

A reader wrote:

A friend of mine who is in the oil drilling business had a thought about the SPR releases and framed it this way: "Releasing oil from the SPR is like going into the piggy bank to "borrow" some coins" and with prices this high there is a good amount of coin that the Biden administration has put into their actual coffers, to be paid back later by some other administration. Follow the money they say....

What makes anyone think President Biden or any future president will refill the SPR?

Folks who think that are misreading the "green energy" movement.

The SPR is not going to be refilled. Why would it be? By 2025 we will only need wind and solar energy. At best, the SPR will be kept at statutory minimums.

Oh, back to the piggy bank analogy: has anyone ever re-filled a piggy bank? LOL.

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Putin's War

If there's ever a movie made about Putin's War, Daniel Craig will play Putin. 

Speaking of which, Zelenskyy has submitted his budget request to NATO: $60 billion. 

Why not?

Monday, June 27, 2022

Updates

 

July 3, 2022: there appears to be an easy explanation for the huge increase in royalty payments noted in the first post below. The company "found" two wells going all the way back to 2013 on which the owner was due royalties.

Original Post

The Bakken: I honestly cannot explain this. 

A reader asked me if I might know something:

This particular reader generally receives less than $500 / month on his mineral holdings from a particular company. 

The last two months have been running about $350 / month. 

This month his royalty check was for $1,300.

The reader sent me a list of the operator's wells in which he owns minerals. 

Total production has decreased slightly but only slightly.

My hunch: the reader has wells of which he/she is unaware. 

Or the operator is doing very, very well with unhedged sales. LOL. 

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Not The Bakken

And no one cares (except for a few creditors): Russia defaults on foreign debt for first time in 104 years. Raise your hand if you think Putin cares. LOL. 

Peter Zeihan, c. 2022: if you're not reading his book ... well, my heartfelt condolences.

• France is in deep doo-doo, but in the short term, Germany is in even worse trouble

Apple subscribers: could be a lot more than we might think. 

WTI: previously posted, but now with a link --

WTI is up 2.2%, up $2.36, trading at $110.10 on the news that:

• EIA won't be posting weekly data today
• strange that the "systems" malfunction didn't affect reporting natural gas fill rate
• OPEC has no spare capacity; OPEC is producing "flat out" -- French Macron after phone call to Mideast energy minister; 
• since OPEC won't talk directly to Biden, he goes through his French intermediary

China re-opening. Link here.

Enbridge update and global implications: S&P Global.

Recession? Really? Link here. Apparently US manufacturers haven't gotten the memo. US core CAPEX order backlog at record high: FRED.

EIA Won't Be Reporting Weekly Petroleum Data For The Foreseeable Future -- Systems Malfunction Affected Everything But The Natural Gas Fill Rate -- Strangely Enough — If You Believe The EIA, I Have A Bridge To Sell You -- June 27, 2022

This is pretty cool. All things being equal, the fact that the EIA "delayed" its weekly petroleum report will push the oil to new high. Traders know "something is up." So, what is WTI doing? 

WTI is up 2.2%, up $2.36, trading at $110.10 on the news that:

• EIA won't be posting weekly data today
• strange that the "systems" malfunction didn't affect reporting natural gas fill rate
• OPEC has no spare capacity; OPEC is producing "flat out" -- French Macron after phone call to Mideast energy minister; 
• since OPEC won't talk directly to Biden, he goes through his French intermediary

https://twitter.com/EIAgov/status/1541424400708280320.

Incredibly fishy. Occurs during G-7.

If this has ever happened before, no one is aware.

https://twitter.com/DoombergT/status/1541438324795138048.

https://twitter.com/Josh_Young_1/status/1541426184269008897.

https://twitter.com/staunovo/status/1541424375693512705

Time for API to start reporting concerns.

https://twitter.com/CouldBeMistaken/status/1541427499648688129.

Same IT service as Dept of Energy:

https://twitter.com/UrTokenCorgi/status/1541448556761972736.

Wow: school prayer:

https://twitter.com/SCOTUSblog/status/1541421786759413760

SCOTUS-Reversed-Prior-SCOTUS Decisions -- June 27, 2022

SCOTUS has reversed prior SCOTUS decisions. Link to be provided later after poll at the sidebar at the right is removed.

My two favorites:

Fanny Hill, link here:

Schooner Catharine, link here:

Several Wells Coming Off Confidential List; Forty-Five Active Rigs; WTI Holding -- June 27, 2022

ERCOT: in Texas today, it could be close but in the last hour or so things are looking better. 

Focus on fracking: Link here.

No new EIA oil data; lowest DUCs on record; DUC backlog at 4.4 months; completions 16% below 2019 average. This week's EIA oil data was not updated; natural gas rigs at a 33 month high; DUCs lowest on record; 4.4 month DUC backlog is lowest in 7 years; completions still 16% below the prepandemic average..

Also, from the link: 

The Latest US Oil Supply and Disposition Data from the EIA (not) as you know, I've been covering the Weekly Petroleum Status Report from the EIA in this weekly newsletter for several years now. but this week there wasn't any; the header on the report's main access page (https://www.eia.gov/petroleum/supply/weekly/) simply says Next Release Date: TBD the following notice was on top of all the EIA oil websites I usually access all week: 

Several U.S. Energy Information Administration product releases scheduled for the week of June 20, 2022, will be delayed as a result of systems issues.

My hunch: EIA has hired the same IT service used by the NDIC.  

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Back to the Bakken

Far Side: link here.

WTI: $107.20

Active rigs: 45 or thereabouts.

Tuesday, June 28, 2022: 39 for the month, 177 for the quarter, 336 for the year 

• 38659, conf, CLR, LCU Reckitt Federal 9-22H1X, 

Monday, June 27, 2022: 38 for the month, 176 for the quarter, 335 for the year 

• None.

Sunday, June 26, 2022: 38 for the month, 176 for the quarter, 335 for the year

• 38601, conf, Murex, Borstad 34-10H-1 1MB,
  
• 38179, conf, Hess, AN-Norby-152-94-0409H-8
• 38003, conf, Hess, CA-E Burdick-155-95-2932H-8,
  

Saturday, June 25, 2022: 35 for the month, 173 for the quarter, 332 for the year

• 38660, conf, CLR, LCU Reckitt 10-22H1X, 

RBN Energy: US refinery shutdowns a major contributor to refined products squeeze and high prices.

As the price of gasoline continues its seemingly never-ending upward path in the U.S. (not withstanding a bit of a pause in the past week), the cause (or blame, if you prefer) continues to shift. Of course, the Biden administration has heavily promoted the phrase “Putin’s price hike,” and the Russian president can certainly claim some of the blame. His invasion of Ukraine and the subsequent sanctions on the world’s second-largest exporter of refined products (after the U.S.) have led to the loss of several hundred thousand barrels per day of product supply. However, prices for refined products were already rising before his late February invasion due to a variety of other factors, both on the supply and demand sides of the equation. Perhaps the most important factor has been the loss of significant U.S. refining capacity over the last few years, which is limiting the ability of refiners to respond to the strong demand recovery and loss of supply. In its highly publicized June 15 letter to U.S. oil executives, the administration acknowledged this as it demanded refiners reactivate lost capacity and increase production. In today’s RBN blog, we summarize the shutdowns which have taken place in the U.S. and discuss the reasons behind those closures.