The Market And Streaming -- Monday, October 31, 2022

Link here.

Posted earlier but tomorrow is going to be a huge day for earnings.

Tomorrow, ticker (forecast earnings):

• LLY ($1.97), PFE ($1.47), MCK ($6.13),
• BP ($1.94), MPC ($6.80), EPD ($0.61), ET ($0.30)
• DVN ($2.13), PSX ($4.98)
• OKE ($0.93), CNP ($0.31), SUN ($1.14)
• UBER (a loss of $0.17),
• AMD ($0.55),
• and so many more

******************************
Streaming

This technology is just amazing. 

Within seconds of getting back from "trick or treating" with the grandsons, I was on the MacBook Air -- I'm traveling -- and watching the Bengals vs the Browns. Probably less than ten seconds to log on to Hulu which connected me directly to the game. Amazing. 

The technology is so good, this is what is important for folks streaming at home, perhaps in this order:

• size and resolution of the screen;
• how fast one can connect, but also how fast one can find what one wants to watch;
• size and resolution of the screen;
  
• how often one's programming is interrupted by ads -- that's a trade-off with price of the streaming bundle;
• size and resolution of the screen (did I already mention that?)
  
• content;
  
• pricing of the bundle

Pricing has pretty much become least important -- for basic content, one can find very inexpensive options, and if one wants, one can spend quite a bit for a la carte programming on top of the basic bundle, but the point is, once someone logs into to start viewing, no one thinks about the price they're paying.

Likewise, content has practically become a non-issue. Folks sign up for different streaming bundles based on the content they want, and as long as they have the content they want, they stick with what they have. And there is so much content, it is simply amazing. And the content keeps growing.

Most important is how fast one can connect and how fast one can find what they want. Today, I had a devil of a time finding a live event that was not part of the regular programming. "Networks" need to do a better job capturing these pop-up events. I ended up signing off; I couldn't find the event. Not what advertisers want.

Which brings us to advertising. This is a real challenge. I am quick to discontinue any programming -- even sports -- if there are too many ads. "Networks" and advertisers are going to have to become more innovative to make interruptions less irritating. Sixty-second ads are a deal killer and even thirty-second ads are too long for me; I can only imagine how "long" they seem for GenYers and GenXers. Fifteen-second ads may become the norm. Six-second and five-second ads on YouTube seem about right. Advertisers are going to have to learn to get their message out in five seconds or less. 

That thirty-second elevator speech is quickly become fifteen seconds.

But, wow, once one gets the right-sized screen and the bundle one wants, the technology is incredible.

By the way, getting back to price. Apple unapologetically raised their fees from $4.99 to $6.99 per month. That's a 40 percent jump in price just for Apple TV. I'm not convinced it's worth it but I doubt many who already subscribe will drop Apple TV. Most interesting, Apple is really, really adding original programming and that jump in the monthly subscription might be worth it. We'll see. Remember, Apple has the exclusive rights to major league soccer for eternity. And they're going after the NFL Sunday Night ticket (?) -- is that correct? Something like that.

From NBC Sports:

Apple had emerged as the favorite to secure the NFL’s Sunday Ticket franchise. After securing the rights to the Super Bowl halftime show for five years and upwards of $250 million, signs seem to be pointing even more clearly to Apple becoming the new home of Sunday Ticket.

Via Tripp Mickle of the New York Times, negotiations between the NFL and Apple have “dragged” due to the price the league seeks. Reportedly, the NFL wants $2.5 billion per year for the out-of-market games package.

I think Amazon paid $1 billion / year for Thursday Night Football. 

Right now, the NFL Sunday Night Ticket is exclusively an Apple app. 

You know, if Apple gets the SNF ticket, that $6.99 / month is going too look very, very good.

CLR's Arthur / Hegler Wells In Little Knife

When I first started blogging ten years ago, I said if you "had" one oil well, you would eventually have four wells, very likely eight wells, and possibly many, many more. 

The permits / wells: 

December 5, 2022:

• 39458, conf, CLR, Arthur 4-12H, Little Knife,
• 39459, conf, CLR, Arthur 5-12H1, Little Knife,
• 39460, conf, CLR, Hegler 4-13H, Little Knife,
• 39461, conf, CLR, Hegler 5-13H1, Little Knife,

October 31, 2022: 

• 39359, conf, CLR, Arthur 3-12HSL1, Little Knife,
• 39360, conf, CLR, Hegler 3-13HSL1, Little Knife,
  

October 21, 2022: In today's daily activity report, CLR with ten new permits, #39328 - #39337, inclusive:

• 39328, conf, CLR, Arthur 6-12H, Little Knife,
• 39329, conf, CLR, Arthur 7-12H1, Little Knife,
• 39330, conf, CLR, Arthur 8-12H, Little Knife,
• 39331, conf, CLR, Arthur 9-12H1, Little Knife,
• 39332, conf, CLR, Arthur 10-12H, Little Knife,
• 39333, conf, CLR, Hegler 6-13H, Little Knife,
• 39334, conf, CLR, Hegler 7-13H1, Little Knife,
• 39335, conf, CLR, Hegler 8-13H, Little Knife,
• 39336, conf, CLR, Hegler 9-13H1, Little Knife,
• 39337, conf, CLR, Hegler 10-13H, Little Knife,
  

Wells of interest:

• 18748, 718, CLR, Arthur 2-12H, Little Knife, t9/10; cum 242K 9/22; cum 243K 10/22;
  
• 18513, IA/718, CLR, Arthur 1-12H, Little Knife, t9/10; cum 149K 9/22; cum 243K 8/22; off line as of 8/22;
  

The graphic:

Back To The Bakken -- CLR With Two More Permits -- Arthur/Hegler -- October 31, 2022

WMB:

• higher 3Q22 earnings; driven by natural gas demand;
• forecast: 44 cents
• actual: 49 cents GAAP; adjusted, 48 cents
• cash flow of $1.5 billion, up 656 million or almost 80% y/y
• trading at $33; 52-week high, $38
• p/e: 26, compare with AAPL, also at 25 - 26;
• yield: 5.2%
• dividend unchanged;
  

Tomorrow, ticker (forecast earnings):

• LLY ($1.97), PFE ($1.47), MCK ($6.13),
• BP ($1.94), MPC ($$6.80), EPD ($0.61), ET ($0.30)
• DVN ($2.13), PSX ($4.98)
• OKE ($0.93), CNP ($0.31), SUN ($1.14)
• UBER (a loss of $0.17),
• AMD ($0.55),
• and so many more
  

While waiting for the daily activity report, this with regard to Apple:

Recession? What recession? Link here. And October is supposed to be the worst month for the market (e.g., Black Friday decades ago that everyone remembers). And, this, despite META, a most widely held stock.

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Back to the Bakken

Active rigs: 43.

WTI: $86.10.

Natural gas: $6.289.

Two new permits, #39359 - #39360, inclusive:

• Operator: CLR
• Field: Little Knife (Dunn County)
• Comments:
• CLR has permits for one more Arthur well and one more Hegler well, SWSW 12-146-97; 
• to be sited 500 FSL and one at 887 FWL and one at 1022 FWL

One producing well (a DUC) reported as completed:

• 36182, n/d, XTO, Olaf 42X-11C, Capa, 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2022	0	0	89	0	0	0	0
BAKKEN	7-2022	1	0	433	0	0	0	0
BAKKEN	6-2022	3	522	0	7964	1055	0	1055

President Biden To Tell Us After The Market Closes How Punishing Oil Companies Will Fix This Problem -- October 31, 2022

Later

Later, 4:56 p.m. ET: wow, was I wrong. Link here.

Later, 4:13 p.m. ET: I'm sure President Biden will note this in this 4:30 p.m. remarks:

**************************
Original Post

I'm wondering how "punishing" the oil companies will fix this problem. Details at 4:30 p.m. ET today when President Biden releases his plan. 

Europe starting to run out of diesel. I guess that 25-day supply was an exaggeration. Link here.

So, I'm curious. Did anyone read the Forbes article. Probably not. 

There are four reasons for the diesel shortage this year. Two of them apply every year.

The third, relatively unimportant, unless one asks why they were unprofitable -- several unprofitable refineries closed over the past couple of years, so this third reason is also a bit overplayed.

The fourth and real reason:

But the primary reason is the cutoff of Russian imports. Prior to Russia’s invasion of Ukraine, the U.S. was importing nearly 700,000 barrels per day (BPD) of petroleum and petroleum products. Most of those imports were finished products and refinery inputs that boosted distillate supplies in the U.S. 

Let's fact-check, link check.

US imports by country of origin, goose eggs from Russia:

Russian imports:

And interestingly enough, most of those Russian imports are off-loaded in New England (needs to be fact-checked) and that's where the biggest shortage has occurred.

In addition, the fastest way to get petroleum products to destination is by pipeline, and New England activists hate pipelines; they appear to prefer diesel-burning trucks on the road. Probably reminds Bernie Sanders of his days in Russia.

And, of course, Joe Biden knows something about trucks -- he started out in life as a truck driver. Or so he says.

Oil Traders: Prepare To Be Shocked -- There's Only One Reason The Speech Is AFTER Market Close -- October 31, 2022

Updates

Later, 4:56 p.m. ET: wow, was I wrong. Link here.

 Original Post

Link here. 

Prepare for hard crash Tuesday morning.

More On That I-10 Electric Vehicle Charging Corridor-- October 31, 2022

Right now, west coast from Oregon to Los Angeles (think the San Pedro Bay - Port of Los Angeles, Port of Long Beach; and, California to Texas, the ones to watch: Daimler and TeraWatt.

Link here

Daimler Truck North America (DTNA), BlackRock Renewable Power and NextEra Energy Resources announced in February a $650 million joint venture to build truck-charging infrastructure. So far, no details are known.

Separately, DTNA earlier this month unveiled the Megawatt Charging System direct-current (DC) fast-charging connector for heavy-duty vehicles under the auspices of the Charging Interface Initiative (CharIN).

Daimler plans to offer megawatt charging at the Electric Island it operates with Portland General Electric near its Oregon headquarters.

NFI Industries plans to install high-speed 350kW chargers next year at a depot in Ontario, California, but it will recharge trucks at 175kW in the early days. Vehicle architecture must change to accommodate higher-power charging.

TeraWatt burst onto the scene with its September billion-dollar funding announcement with funds managed by Vision Ridge Partners, Keyframe Capital and Cyrus Capital. San Francisco-based TeraWatt has been plenty busy in the background.

“We’ve been at this for almost four years now in terms of assembling pieces of properties along corridors,” Palmer said. “The amount of demand that you’d see if you have all of the vehicles start to electrify, it will be a hockey stick of demand for charging capacity. We’re going to need a lot of solutions.”

Navistar CEO Mathias Carlbaum suggests that it can happen around 2026. TeraWatt is starting with 350-kilowatt chargers, too powerful for most trucks to fully utilize today. Charging as a service is an apt description for TeraWatt.

The company wants long-term commitments from customers when it starts building out the corridor, ultimately placing a charging location every 150 miles. The first locations open in 2023. The corridor should be complete by 2024 with fill-in locations added as electric truck adoption grows.

The sunny climes of the American Southwest host testing of numerous battery-electric and autonomous trucks. It doesn’t snow. It’s rarely cold. So batteries perform better. But the density of freight coming out of Long Beach and north from Mexico drove TeraWatt’s decision to begin buying up properties in 2018.

One estimate puts the cost of electric vehicle infrastructure for cars and trucks globally at $1 trillion by 2040.

That won’t be enough, Palmer said.

Laser-Focused On Dividends -- October 31, 2022

Link here.

Market -- October 31, 2022

Last day for taxes losses for most mutual funds?

500 days: rare opportunity to keep accumulating inexpensive shares. 

President Biden to make speech on obscene Big Oil profits. Won't mention AAPL. 

A number of oil companies have turned lower in late morning trading, some even going -- OMG -- red.

Link here.

I came to the same conclusion late in life. And enjoying that little factoid more than ever. I do believe, in retirement, I am still exceeding that 50%, although it depends how one "counts."

EIA Shenanigans Last Summer -- October 31, 2022

Updates

Later, 1:39 p.m. CT: sometime tries to explain this --  

Original Post 

Link here.

This is a 3% adjustment.

Those Missing Barrels -- "Focus On Fracking" Has Noted This For Several Months -- October 31, 2022

Updates

Later, 1:39 p.m. CT: sometime tries to explain this --  

Original Post 

The bigger question: how many other Biden agencies are providing inaccurate data for political reasons?

More missing barrels and adjustments:

Link here.

This is a 3% adjustment.

Missing barrels, Reuters link here:

Missing barrels, link here:

Link to "Focus On Fracking."

The Latest US Oil Supply and Disposition Data from the EIA 

US oil data from the US Energy Information Administration for the week ending October 21st indicated that due to two and a quarter million barrels per day of extra US oil supplies that could not be accounted for,

we had oil left to add to our stored commercial crude supplies for the 5th time time in 8 weeks, and for the 21st time in the past 48 weeks, despite record ​shipments of crude​ oil​ exports....

Our imports of crude oil rose by an average of 273,000 barrels per day to average 6,180,000 barrels per day, after falling by an average of 156,000 barrels per day during the prior week, while our exports of crude oil rose by 991,000 barrels per day to a record of 5,129,000 barrels per day, which together meant that the net of our trade in oil worked out to an import average of 1,051,000 barrels of oil per day during the week ending October 21st, 718,000 fewer barrels per day than the net of our imports minus our exports during the prior week.

Over the same period, production of crude from US wells was reportedly unchanged at 12,000,000 barrels per day, and hence our daily supply of oil from the net of our international trade in oil and from domestic well production appears to have averaged a total of 13,051,000 barrels per day during the October 21st reporting week…

With our oil exports at a record high, we'll include a historical graph of them below, where you can see that prior to the end of 2014, US oil exports, except for those allowed under NAFTA, had been negligible because they had been banned 40 years earlier, in the wake of the Arab oil embargo. The ban on US oil exports was lifted in a spending bill that Congress passed during the last week of 2015, part of a compromise that Obama agreed to in order to avoid a government shutdown...​as you can see, ​th​e recent ​export spike​s​ clearly beat ​the ​previous ​oil export ​highs by a large margin.​..​​

ISO-New England Looking To Biden For Help -- Two Arrows Left In His Quiver -- October 31, 2022

From multiple sources, including NBC:

Eversource CEO Joe Nolan wrote a letter to President Joe Biden last week warning of the possibility of power outages this winter if steps aren't taken to expand the country's natural gas supply.

In his letter, dated Oct. 27, Nolan said New England might not have enough natural gas to meet the region's electricity supply if this winter is colder than anticipated.

"ISO-New England, the region’s electricity grid operator, and the Federal Energy Regulatory Commission have acknowledged for many months that New England will not have sufficient natural gas to meet power supply needs for the region in the event of a severe cold spell this winter," he said. "This represents a serious public health and safety threat."

"Consumers in New England are already experiencing skyrocketing electricity and gas costs given supply constraints and global price pressures following the Russian invasion of Ukraine," Nolan added. "As the governors of the New England states mentioned in their letter to the Administration on July 27, New England’s energy situation will have significant implications for customers of all types."

He urged Biden to use the federal government's emergency powers to take steps to ensure that adequate fuel resources will be available in the event of a colder than expected New England winter.

I assume the only arrow left in Joe Biden's quiver is a US ban / limit on LNG gas exports to Europe. There are now a glut of LNG tankers headed to Europe to destinations that no longer have storage capacity. 

I expect Joe Biden to make a speech along this line. No doubt, his folks drafted the letter for the EverSource CEO to write, to give Biden cover for the next executive order.

There is one last arrow in the Biden quiver but that would cost the Dems a lot of votes, so don't expect that to ever happen: waive the Jones Act.

This Will Be THE Energy Story Of The Year -- Diesel -- October 31, 2022

Europe starting to run out of diesel. I guess that 25-day supply was an exaggeration. Link here.

So, I'm curious. Did anyone read the Forbes article. Probably not. 

There are four reasons for the diesel shortage this year. Two of them apply every year.

The third, relatively unimportant, unless one asks why they were unprofitable -- several unprofitable refineries closed over the past couple of years, so this third reason is also a bit overplayed.

The fourth and real reason:

But the primary reason is the cutoff of Russian imports. Prior to Russia’s invasion of Ukraine, the U.S. was importing nearly 700,000 barrels per day (BPD) of petroleum and petroleum products. Most of those imports were finished products and refinery inputs that boosted distillate supplies in the U.S. 

Let's fact-check, link check.

US imports by country of origin, goose eggs from Russia:

Russian imports:

And interestingly enough, most of those Russian imports are off-loaded in New England (needs to be fact-checked) and that's where the biggest shortage has occurred.

In addition, the fastest way to get petroleum products to destination is by pipeline, and New England activists hate pipelines; they appear to prefer diesel-burning trucks on the road. Probably reminds Bernie Sanders of his days in Russia.

And, of course, Joe Biden knows something about trucks -- he started out in life as a truck driver. Or so he says.

Mercedes -- EVs -- Profit Margins Not Provided -- September, 2022, and 3Q22

Link here:

Mercedes-Benz Cars reports 520,100 global car sales during the third quarter of 2022, which is 20% more than a year ago. The number includes 517,800 Mercedes-Benz Passenger Cars (up 21%) and a small number of vans.

The German manufacturer clearly is recovering from the weaker first part of the year.

The most important thing for us is that Mercedes-Benz's all-electric car sales more than doubled in Q3 to 30,000. That's almost 6% of the total volume.

[Profit margins unstated; compared to ICE profit margins, also unstated.]

September was an especially strong month, which brought a new record of 13,100 BEVs, including 3,400 Mercedes-Benz EQBs.

Overall, plug-in electric car sales (BEVs and PHEVs) in Q3 amounted to 75,900 (up 23% year-over-year), which is nearly 15% of the total volume. In Europe, the xEV share is much higher, at 34%.

Mercedes-Benz global plug-in car sales in Q3 2022 (preliminary numbers, including smart BEVs):

BEVs (excl. smart): 30,000 (up 115% from 14,000 a year ago) including 5,400 EQS and 3,500 EQE

PHEVs: 45,900

Total plug-ins: 75,900 (up 23%) and close to 15% share

**********************************
McKinsey -- September 2021

Link here.

However, the study points out that there is a problem: today, most OEMs do not make a profit from the sale of EVs. In fact, these vehicles often cost $12,000 more to produce than comparable vehicles powered by internal combustion engines (ICEs) in the small- to midsize car segment and the small-utility-vehicle segment.

What is more, carmakers often struggle to recoup those costs through pricing alone.

The result: apart from a few premium models, OEMs stand to lose money on almost every EV sold, which is clearly unsustainable.

Halloween -- 2022

President Biden's Halloween:

Tickers:

• DVN: up 2.7%; up $2.03; trading at $78.04; near a 52-week high;
• CVX: up 1.5%; up $2.62; trading $182.44; hit a 52-week high at opening;
• XOM: up 1%; up $1.06; trading at $111.72; hit a 52-week high at opening;
• EOG: up 2.83%; up $.379; trading at $137.51; well off its highs:
• HES: up 1%; up %1.51; trading at $142; still below its 52-week high;
• OXY: up 2%; up $1.54; trading at $73.39; still below its 52-week high;
• BRK: smiling
  

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Back to the Bakken

The Far Side: link here.

Active rigs: 44

WTI: $87.20.

Natural gas: $6.342

Tuesday, November 2, 2022: 1 for the month, 37 for the quarter, 482 for the year.
None.

Monday, November 1, 2022: 1 for the month, 37 for the quarter, 482 for the year.
38891, conf, Lime Rock Resources, Hansen B 18-19-2TFH,

Sunday, October 30, 2022: 36 for the month, 36 for the quarter, 481 for the year.
38892, conf, Lime Rock Resources, Hansen B 18-19-3TFH,
38400, conf, Hess, EN-J Horst-154-93-1112H-4, EN-J Horst wells (Hess, Robinson Lake)

Saturday, October 29, 2022: 34 for the month, 34 for the quarter, 479 for the year.
38893, conf, Lime Rock Resources, Hansen B 18-19-4TFHL,
38817, conf, CLR, Bonneville 11-23HSL,Bonneville / Bridger Wells (CLR, Rattlesnake Point) 
38399, conf, Hess, EN-J Horst-154-93-1112H-3, EN-J Horst wells (Hess, Robinson Lake)

RBN Energy: growing LNG flotilla has big implications for European gas market. Archived.

The European gas year commenced October 1 with expectations of high winter demand and commensurate gas and LNG prices. However, in recent days the press — both trade and mainstream — have remarked on the number of laden LNG carriers that have been circling, anchored or drifting around the Mediterranean and East Atlantic. This flotilla, currently numbering about 30 cargoes, or 2.1 million metric tons (MMt) of LNG, has been growing since late September and includes some cargoes that have been at sea for over a month. Although floating storage ahead of winter demand is nothing new, the scale of the current phenomenon is unprecedented. In today’s RBN blog, we explore the implications for European gas pricing and market dynamics.