China, Covid, And Finally Understanding The "Why" -- The New Yorker -- November 30, 2022

I finally understand it. It finally makes sense.

China. 

The lock downs. 

The craziness.

There two competing (?) theories:

• politics: this theory has to do with power; Xi's obsession with remaining in absolute control;
• medical: the other has to do with Xi's genuine fear of Covid-19 getting out of control.

In the big scheme of things, 

• there really aren't that many active cases of Covid-19 in the country; and, 
• even more interesting, the seriousness of the disease is minimal (as reported by others, the Chinese no longer fear the disease; and the mortality in China from Covid -- where healthcare is much less sophisticated than that in the west -- is 0.025%. 
• Compare that with a mortality rate of 1.1 percent in the US.

Okay, so I have flip-flopped on this issue. I initially thought it was a political issue -- Xi using Covid-19 as an excuse to lock up those who disagree / disagreed with him; even if that meant shutting down entire cities that might threaten his regime.

Most recently, I have stated on the blog that it is my opinion Xi is absolutely terrified of Covid-19 and what might happen to China if CCovid truly got out of control.

The media continues to oscillate around those two issues: are the lock downs a tool to maintain political power or a real (medical) concern for the implications for China if the disease gets out of control?

So, that's where most of us stand -- the "us" being who even follow the Chinese Covid story and care. 

Break, break.

I subscribe to The New Yorker. 

As part of that subscription I get a "daily New Yorker note." 

Today, (Wednesday, November 30, 2022) the "daily New Yorker note" had a long essay titled, "Why China's COVID policies led to protest." The full title: "How Covid's policies and party politics set the stage for the protests in China."

Whether the author of that essay -- Isaac Chotiner -- realizes it or not, he stumbled into solving the dilemma. Is it politics or is it medical paranoia that is driving the massive lock downs?

It's all politics. But the reasons remain obscure for almost all Americans, including me until now. 

Absolutely brilliant.

Xi is only part of the problem and it appears he's going to have a major, major challenge turning this ship around. A speech by Xi ending his "zero Covid policy" is not going to work. It's much, much more complicated than that. But very, very easy to explain / understand when one understands the Chinese political structure.

Nine New Permits; One DUC Reported As Completed -- November 30, 2022

Not ready for prime time: in response to an article that suggested that OPEC had cut production by 710,000 bpd in the month of November, a reader asked my thoughts on whether OPEC at some point would quit exporting oil to the US. My response, not ready for prime time:

1. The US exported record amounts oil and refined products this past week, almost 12 million bpd -- compare that to 710,000 bpd which is divided up among all countries to which OPEC exports and domestically consumes.

https://oilprice.com/Latest-Energy-News/World-News/US-Crude-Oil-Oil-Products-Exports-Hit-All-Time-High.html.

2. US imports approximately 1.5 million bopd from OPEC. https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTIMXX1&f=M

3. If OPEC were to cut us off, Permian, Eagle Ford, and Bakken could easily make up the difference. In fact, the Bakken might be able to do that on its own. Then there are the other half dozen shale plays onshore and all the federal offshore that could be opened if necessary. Then Canada. And now Venezuela is in play.

4. Global production is around 90 million bopd; that's an average. Can easily reach 100 million bopd. An OPEC cut of a million bopd is inconsequential, ...

5. ... but to answer your question, I doubt OPEC will ever quit exporting oil to the US. The more interesting question is when the US will say "no more OPEC oil for the US (NOPEC).

6. I no longer pay much attention to much of anything OPEC says or does. Unless they open the taps to drop oil to $20 / bbl which seems like something they would never do.

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Back to the Bakken

Active rigs: 40.

WTI: $80.48.

Natural gas: $7.017.

Nine new permits (Julianne Geiger, last week, "The shale boom is over."): #39438 - #39446, inclusive.

• Operators: Kraken (5); MRO (4);
• Fields: Burg (Willams County); Bailey (Dunn County)
• Comments:
• Kraken has permits for five Orbit wells, NWNE 25-159-99; 
• to be sited between 425 FNL and 557 FNL and at 2315 FEL;
• MRO has permits for four wells in Bailey oil field, SESW 33-146-94 -- Bunk, Luptak, Margery, and Claudia, 
• to be sited 360 FSL and between 1899 FWL and 2019 FWL

One producing well (a DUC) reported as completed:

• 38730, 1,511, Kraken, Fairbanks 17-20 6H,

The following wells were released from the confidential list (Julianne Geiger, last week, "The shale boom is over."):

• CLR: #37946; #37947; #38921; #37953; #38785; #37952; #37950; #37951; #37949
• Slawson: #38843;
• Petro-Hunt: #38933; #38859; #38860;
• Enerplus: #37966;
• Hunt: #38777; #38779;
• Kraken: #38730;
• Neset Consulting: #38890 (Halite 1);

So Many Bittersweet Memories -- November 30, 2022

Ms Christine McVie was 79 years old.

To think we were contemporaries ... it seems "just like yesterday."

What I would do to have those days back ... the late 70's.

Wow, Something Was Temporary -- November 30, 2022

CRASH, link here:

Staggering -- November 30, 2022

Weekly EIA petroleum report: staggering

• US crude oil inventories: decreased by a staggering 12.6 million bbls
• US crude oil inventories: at 141.9 million barrels, US crude oil inventories are 8% below their five-year average;
• refiners operating at a whopping 95.2% of their operable capacity;

WTI -- prior to release of report: up 3.06% right now; trading at $80.59. 

Market reaction:

• DVN: flat.
• XOM: down slightly
• EOG: flat.
• HES: flat.
• MNRL: up 1.3%; up 45 cents; trading at $35.30; pay an incredible 8.6%;
• ENB: up 0.8%; trading at $41.18; pays 6.3%

Social media reaction:

• Bullish Trend:

• Giovanni Staunovo:

• Giovanni Staunovo: large swing in net crude imports; way down; down 1.732 million bopd

Holy moly: nearly a three-standard deviation crude draw. 

Julianne: US crude oill, oil products exports hit all-time high. Time for an export ban?

Weekly EIA Petroleum Report -- November 30, 2022

API data yesterday: link here. 

WTI -- prior to release of report: up 3.06%; was trading at $80.59.

Weekly EIA petroleum report: staggering.

• US crude oil inventories: decreased by a staggering 12.6 million bbls
• US crude oil inventories: at 141.9 million barrels, US crude oil inventories are 8% below their five-year average;
• refiners operating at a whopping 95.2% of their operable capacity;
• distillate fuel inventories increased by 3.5 million bbls; but still 11 percent below their averagee;
  
• jet fuel supplied was up 3.7%
  

WTI -- after release of report; up 3.45%; up $2.70; trading at $80.90.

Gasoline demand: link here.

Prolific Renewables Are Key to Pacific Northwest Hydrogen Hub Plans -- RBN Energy -- November 30, 2022

RBN Energy: prolific renewables are key to Pacific Northwest hydrogen hub plans. Archived. Hydrogen is tracked here.

Today, we turn our attention to a pair of hydrogen-hub proposals in the Pacific Northwest, both of which focus on the region’s potential for producing clean hydrogen via electrolyzers powered by renewables — especially electricity from large hydroelectric plants in Washington state and Oregon, but also from new wind farms and solar facilities that would be purpose-built to power clean-hydrogen production. Washington is far and away the U.S.’s leading producer of hydropower, generating more than 70 million megawatt-hours (MWh) from its rivers and dams in 2021, according to the Energy Information Administration (EIA). Oregon was #2 in hydropower, with just over 28 million MWh last year (edging out #3 New York, home of Niagara Falls). And yes, despite Seattle and Portland’s reputation for long streaks of cloudy, rainy weather, many other parts of Washington, Oregon and Idaho are typically dry and sunny — windy too — offering a lot of potential for solar and wind power.

As we said earlier, there are two separate but overlapping hub proposals in the Pacific Northwest. One is advanced by the Pacific Northwest Hydrogen Association (PNWH₂), a public-private partnership led by the state governments in Washington and Oregon that also includes representatives from industry, universities and colleges, labor unions and Native American tribal interests, among others. The other proposal is being advanced by Obsidian Renewables, a Lake Oswego, OR-based solar developer that has been working with a range of port-agency, labor and tribal representatives on what it calls the Obsidian Pacific Northwest Hydrogen Hub — we’ll refer to it as the Obsidian plan. (Obsidian, by the way, is a dark natural glass formed by the cooling of molten lava — Oregon has lots of the stuff.)

Obsidian Renewables took the unusual step of making its hydrogen-hub concept paper public — few, if any, others have — and, given that the proposal is quite specific, we’ll begin with a description of it, then follow that up with a more general look at PNWH₂’s plan.

Several Wells Coming Off Confidential List Today; WTI Back Over $80 -- November 30, 2022

WTI: up 3.06% right now; trading at $80.59.

Note: the Biden administration will not re-fill the SPR. A floor has been set for the price oil, something the industry has dreamed of for decades -- a floor for the price of WTI, makes CAPEX plans so much easier

• WTI is back over $80; hopefully investors took advantage of the temporary, recent pullback in the price of WTI:
• with regard to the oil industry's response to Biden's comments about the administration's fossil fuel policies, the oil industry PR spokesperson is tone-deaf and will lose the argument; 
• DVN: up 1.72% in early trading; up $1.11; trading at $68.61; well off its 52-week high; pays an incredible 7.53%. 
• COP: up 1.54% in early trading; up $1.91; trading at $126.16; well off its 52-week high; pays  4.12%.

For investors: three top energy stocks to buy right now.

• XOM: a dividend aristocrat;
• DVN: a cash-rich company with an attractive dividend
• the company blazed a trail when it announced a fixed-plus-variable dividend policy, which allows investors to reap bigger rewards when oil prices spike.
• CNBC analysts added more; link here.
  
• OXY: reeduced debt --> more money for shareholders

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.  

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

The Far Side: link here.

Active rigs: 41.

WTI: $80.59.

Natural gas: $7.195.

Thursday, December 1, 2022: 3 for the month, 112 for the quarter, 656 for the year.
38174, conf, CLR, LCU Foster FIU 11-28H,
37964, conf, Enerplus, Omelet 151-94-16B-21H,
29285, conf, Slawson, Vixen Federal 4-19-30TFH,

Wednesday, November 30, 2022: 72 for the month, 109 for the quarter, 654 for the year.
38844, conf, Slawson, Vixen Federal 7-19-30TFH,
38819, conf, CLR, Bonneville 7-26HSL,
38728, conf, Kraken, Raymond 16-21 2H,
38173, conf, CLR, LCU Foster FIU 10-28H1,
37965, conf, Enerplus, Ham 151-94-16B-21H,
37945, conf, CLR, Brangus FIU 14-11H2,

RBN Energy: prolific renewables are key to Pacific Northwest hydrogen hub plans. Archived. Hydrogen is tracked here.

Today, we turn our attention to a pair of hydrogen-hub proposals in the Pacific Northwest, both of which focus on the region’s potential for producing clean hydrogen via electrolyzers powered by renewables — especially electricity from large hydroelectric plants in Washington state and Oregon, but also from new wind farms and solar facilities that would be purpose-built to power clean-hydrogen production. Washington is far and away the U.S.’s leading producer of hydropower, generating more than 70 million megawatt-hours (MWh) from its rivers and dams in 2021, according to the Energy Information Administration (EIA). Oregon was #2 in hydropower, with just over 28 million MWh last year (edging out #3 New York, home of Niagara Falls). And yes, despite Seattle and Portland’s reputation for long streaks of cloudy, rainy weather, many other parts of Washington, Oregon and Idaho are typically dry and sunny — windy too — offering a lot of potential for solar and wind power.

As we said earlier, there are two separate but overlapping hub proposals in the Pacific Northwest. One is advanced by the Pacific Northwest Hydrogen Association (PNWH₂), a public-private partnership led by the state governments in Washington and Oregon that also includes representatives from industry, universities and colleges, labor unions and Native American tribal interests, among others. The other proposal is being advanced by Obsidian Renewables, a Lake Oswego, OR-based solar developer that has been working with a range of port-agency, labor and tribal representatives on what it calls the Obsidian Pacific Northwest Hydrogen Hub — we’ll refer to it as the Obsidian plan. (Obsidian, by the way, is a dark natural glass formed by the cooling of molten lava — Oregon has lots of the stuff.)

Obsidian Renewables took the unusual step of making its hydrogen-hub concept paper public — few, if any, others have — and, given that the proposal is quite specific, we’ll begin with a description of it, then follow that up with a more general look at PNWH₂’s plan.

Investor Talk -- November 30, 2022

Investors.

Today at Bloomberg:

• cotton: has crashed; wholesale prices down almost 50% in the past six months
• in two years through May, 2022: cotton had more than tripled to $1.58 / pound
• US clothing inflation peaked at 6.5% earlier this year, only the fifth time in 75 years that it’s run above 6% (the others being in 1951, 1974, 1980 and 1991). Cotton wasn’t the only reason; higher shipping costs also contributed.
• coffee: is also crashing
• The reason? Forecasts for a better crop next year in Brazil, the world’s top producer.
• European LNG:  Liquefied natural gas imports from Russia are up about 40% in a year, and the EU is paying record amounts to keep them coming.
• temperatures are poised to plunge next month in northern Europe as cold air blows in from the Arctic in what will be the first proper winter test for the region’s fragile energy systems.  
• copper is poised for its biggest monthly advance since April 2021, as investors bet China may shift from Covid Zero policies and boost demand in the top metal-consuming economy. 
• gold headed for its best month since May 2021 after the dollar fell. 
• electric cars in the US have a charging problem, with not enough stations and spotty equipment, according to the Wall Street Journal. 
• The government is pouring billions of dollars into developing highway charging networks, but businesses aren’t sure how they’ll make money, and some rural stations could operate at a loss for years. 
• I think the writing is no the wall how this will play out
  

Then this, link here:

Elon Musk: his comments and the tone of his comments suggest his twitter revenue may be in deep trouble; certainly Tesla is in trouble. Apple accounts for 50% of twitter ad revenue, according to one source.

Market:

• so much is "on sale." On social media, so many are complaining about the market;
• however, if one has a 30-year horizon, looking good for investors;
  
• in addition, the market is very volatile: great for traders;
• what's not to like;
  
• folks seem to forget that once the Fed pivoted to higher interest rates, and at the aggressiveness this time around, the market would take 550+ days to recover, based on historical data;
  
• we are at day 243
• we have at least 200 more days, based on historical data, of nice buying opportunities
• have a plan
• stick to it

AAPL: only one stock as an investment interests me now -- AAPL

• "interests me": doesn't mean I'm buying; simply means I'm fascinated about what's going on with AAPL right now
  
• I'm sticking with my plan (posted numerous times)
• I thought I would never get the opportunity to buy more AAPL

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Covid-19 Snapshot -- November 30, 2022

mRNA: this guy gets it.

Covid-19: like seasonal flu, will probably be with us "forever" -- Pfizer. Clearly no big deal. 

But look at the graphs: posted down below.

Covid-19 deaths per million:

• South Dakota: 3,500
• US: 3,339
• North Dakota: 3,132

Covid-19 cases per million, one-third of the nation has "had" Covid-19:

• North Dakota: 360,471
• US: 303,802
• South Dakota: 302,590

Covid-19 mortality rate:

• US: 1.10%
• South Dakota: 1.157%.
• North Dakota: 0.869%

China's mortality rate during current surge: 0.025%.

US vaccinated, link here:

• at least one dose, percent:
• only Wyoming less than 60%; at 59.2%
• Massachusetts, DC: >95% (CDC caps at 95% to account for variability among vaccines)
• most states running: 70 - 80 percent
• fully vaccinated, does not include booster, percent:
• Wyoming: 51.9%
• all other states running 60 - 80 percent; some exceptions
• at least one booster:
• New England states running above 40%
• rest of nation: running around 20- 40% 
• North Dakota: 25.8
• South Dakota: 28.1%

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The Graphs

The graphs: