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Friday, November 11, 2022

Week 45: November 6, 2022 -- November 12, 2022

Top energy story:

Top story:

  • Joe Biden is still president;
  • mid-terms: no "red wave"; a GOP debacle;

Top international non-energy story:

  • Russians withdraw from key city; biggest military rout since WWII -- Peter Zeihan

Top international energy story:


Top national non-energy story:

  • FTX -- $32 billion cryptocurrency -- crashes and burns.

Top national energy story:

  • Biden's "no more drilling" policy for the United States.

Javier Blas:

Focus on fracking: most recent edition.

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top North Dakota energy stories:

Bakken economy:

Commentary:

Entertainment:
  • USC football clobbers Colorado Buffaloes 

Two New Crude Oil Policies And China Opening Up -- November 11, 2022

Numbers rounded, and some numbers "cherry-picked" to make things look slightly better than they might actually be. But, go ahead, fact-check this stuff. It should make your head spin.

OXY:

  • up 5.5% today and was actually higher at one time; up $3.88 (ditto)
  • over last two days: from $67.60 to $74.29 = up almost 10% over two days
  • I heard Warren Buffett may drink an extra can of Diet Coke today and will stop by McDonald's on the way home.

Over two days:

  • COP: from $125 to $135
  • CVX: from $178 to $187
  • PSX: from $104 to $112
  • DVN: from $67 to $72

One day, today:

  • COP: up 4%; up $5.13.
  • CVX: up 3%; up $5.45.
  • PSX: up 4.88%; p $5.18.
  • DVN: up 4.15%; up $2.85; and was much higher at the top before profit-taking;

Twitter is quiet; nothing over at CNBC; Urkraine rout; could war be over; steep sanctions on Russia from December 5, 2022? What's going on? As noted Twitter is quiet, as is CNBC and had I not checked, I would have completely missed what's going on. 

The Dow is up only 74 points; at 0.22%, flat; certainly not reflecting what "oils" did.

Other indices up a bit more (S&P 500 up 1% and NASDAQ up 2%) but nothing to indicate the blowout (in a positive sense) the oils are showing.

This is quite incredible.

Only explanation: this time China is serious -- will finally "open up."

And, of course, the two major explicit oil policies by the largest oil producers in the world:

  • Saudi Arabia: "Saudi first."
  • the US: "no more drilling.

Maybe more on this later, but oil bulls are having an incredible two days.

Now that the midterm elections are over, the fog will clear.

Peter Linder, link here:

  • WTI back to $90, on its way too $100
  • NYMEX gas price over $6
  • winter is coming
  • US gas drilling faces Biden's "no more drilling" policy
  • buy what you like
  • favorite oil producer: Whitecap Resources: clean Canadian oil.
  • favorite gas producer: NuVista: Wapiti Montney.
  • no recommendation, not an investment site.

North Texas:

  • 36°F tonight; colder on Sunday -- and it's only mid-November

************************
And World Leaders Complain About Flaring In The Permian

Link here.

Ex-Everything And Inflation Is Zero -- November 11, 2022

Inflation: no inflation ex-shelter / food / energy / used cars / consumer goods / interest rates. Link here. In fact, crypto is now on sale. 

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The Apple Page

The 27-inch iMac.

I've had almost every "major" iMac computer.

This was, perhaps, my best buy and I almost didn't buy it.

I expect it to "last" another five years, and by then, I hope Apple introduces an even larger iMac.

Link here.

Oil's Other Strategic Reserve Is Running Low, Also -- WSJ -- November 11, 2022

Ukraine: Russians withdraw from Kherson. The timing is interesting. The announcement to withdraw was made by the Russians on Wednesday, November 9, 2022. Link here.

Russian oil production: could drop one million bopd (or more), to 9.0 million bopd, once the December sanctions kick in. Link here. With Baker Hughes leaving that pretty much ends all western oil field services technology responsible for Russian oil production. 

  • Russia's quota: 11 million bpd
  • actual production, October, 2022: 9.9 bpd, excluding condensate
  • and that was October; additional, more severe sanctions start in December, 2022
  • by which time pretty much all western OFS technology will have also exited
  • November quota: 10.5 million bpd 
  • EU to ban Russian imports of crude oil from December 5, 2022, and it's not likely that China, others have the storage facility to suck up all that "extra" oil
  • will it become Russia oil vs Saudi oil for China?

Trump:

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Back to the Bakken

DUCs, link here.

After seeing oil demand plunge in 2020, U.S. producers’ mantra switched to “frack, baby, frack” as they paused drilling new rigs in favor of completing—or fracking—wells that had already been drilled. Drilling is just the first step in shale formations. Fracking, a process that involves the injection of water, sand and chemicals into the drilled well, actually gets the oil out of the ground. 

Producers’ preference for completion over drilling has led to a steep decline in the number of drilled but uncompleted wells, or DUCs, since August 2020. That inventory is at five-year lows, according to Rystad Energy data. While the U.S. Energy Information Administration counts all available DUCs, Rystad and S&P Global Commodity Insights prefer to track wells that are no more than two years old, because they are likely to be completed at a later date. Any older, and the chances of completion get much slimmer.

The Far Side: link here.

NDIC office closed: I assume. Due to "inclement" weather and Veterans Day.

Active rigs: perhaps less than 35 with another epic storm in the Bakken.

WTI:

Natural gas:

Sunday, November 13, 2022: 23 for the month, 60 for the quarter, 605 for the year.
38381, conf, Oasis, Swenson Federal 5197 43-35 3B,

Saturday, November 12, 2022: 22 for the month, 59 for the quarter, 604 for the year.
38271, conf, Whiting, Platt 44-18-2H,

Friday, November 11, 2022: 21 for the month, 58 for the quarter, 603 for the year.
38725, conf, Slawson, Sauger Federal 5 SLTFH,
38380, conf, Oasis, Swenson Federal 5197 43-35 2B,

RBN Energy: mega rule puts all gas-gatherinng pipelines under federal scrutiny.

For decades, gas-gathering pipelines largely escaped the federal scrutiny that was primarily focused on much bigger pipelines in more populated areas. But all that has changed with final publication of the so-called Mega Rule, which applies federal pipeline safety regulations to hundreds of thousands of miles of gas-gathering pipelines — previously not subject to federal safety regulation — for the first time. In today’s RBN blog, we look at the history behind the three-part Mega Rule, what it’s designed to do, and the challenges pipeline operators will face to stay in compliance.

Today is Veterans Day, and we at RBN want to take a moment to thank all veterans for their service to our country.

Discussions about ways to improve natural gas pipeline safety go back many years but gained greater prominence after a deadly explosion in San Bruno, CA, in September 2010. In that incident, a 30-inch-diameter segment of a state-regulated intrastate natural gas transmission pipeline owned and operated by Pacific Gas & Electric (PG&E) ruptured in a residential area of San Bruno, a city just south of San Francisco. The released natural gas ignited, resulting in a fire that destroyed 38 homes and damaged 70 others. Eight people were killed and several dozen injured

According to the National Transportation Safety Board (NTSB), the explosion was caused by deficiencies in quality assurance and quality control during the pipe’s installation as well as an inadequate pipeline-integrity program that failed to detect the defective section of pipeline.

California Public Utilities Commission (CPUC) and U.S. Department of Transportation (DOT) exemptions related to pressure testing for existing pipelines, which likely would have detected the installation defects, were also cited as a factor, as was the CPUC’s failure to notice and address the inadequacies of PG&E’s pipeline-integrity program.