Odds And Ends -- January 3, 2023

Before we get started, grocery prices in NYC. 

Stories of importance but those I won't have time to cover.

S&P Global wrap: 2022 exploration drilling review and 2023 High Impact well (HIW) drilling outlook. Archived.

• link here.

Natural gas:

• Tokyo Gas to buy US natural gas producer
• $4.6 billion deal
• Reuters link.
• Japan looking for energy independence.

Natural gas: doubtful if Henry Hub will ever see $2 - $3 again. Link here.

Making America great again:

• US speeds up timeline in China firms delisting threat
• Bloomberg link.

Oh-oh, link here:

Wow, link here:

ISO NE -- Snapshot In Time -- January 3, 2023

Renewable energy and wind as sources for electricity generation, this evening:

Percent of electricity generated by renewable energy: all of 5%!

Percent of renewable energy generated by wind: only a paltry 16%!

So, from all sources, wind provides (0.16 * 0.05) = 0.008 or 0.8%. 

Zeropointeightpercent. 0.8 percent. 

Not even one percent tonight. 

Market: Initial Thoughts -- January 3, 2023

Investors:

• for those with a 30-year horizon, this is going to be another great year for investing;
• at the rate the Fed initiated and continued the increases in the Fed rate, Schwab data suggests 550 days (range 500 - 650) before the market get back to "where it was";
• start: March 20, 2022; days remaining in 2022 -- 286
• end, "back to where were" range:
• 500 - 286 = 214 = August 2, 2023 (summer doldrums; dog days of summer)
• 650 - 286 = 364 = December 30, 2023 (Santa Claus rally)
• long-term investors can keep investing at least until mid-year, 2023, picking up shares at deep discounts;
• in other words, this "story" -- at best -- is just mid-cycle. There is a lot of time left before we "get back to where we were." 
• universities and other magnets for donations will probably feel the effect the greatest as donors cut back.
  

Two questions:

• the bottom: how low and when?
• does the Fed pivot sooner than expected?

Additional comments:

• for retirees, RMDs are going to be very, very low this year; and will probably remain very low in 2024 if the Fed stays "higher for longer" [confirmed Wednesday, January 4, 2023, when JPow said there would be more rate raises in 2023].
  
• dividend-paying stocks are looking very, very good
• the 15% minimum corporate tax will scare investors; that will be a huge jump for some companies, used to paying $0 in federal taxes, will now have a 15% tax based on "booked income."

Further reading:

• https://www.everycrsreport.com/reports/R47328.html. 
• https://www.sidley.com/en/insights/newsupdates/2022/08/new-15-percent-corporate-minimum-tax.  
• https://www.forbes.com/sites/taxnotes/2021/01/14/which-large-us-corporations-would-pay-bidens-15-minimum-tax/.

From The WSJ:

Last year, 236 companies in the S&P 500 index reported more than $1 billion in GAAP pretax income, and more than 60 of them reported effective tax rates, or tax expense as a share of pretax income, below 15% in 2019 or 2020, according to a Wall Street Journal analysis.

Among them: Amazon, Pfizer Inc., Stanley Black & Decker Inc., Archer-Daniels-Midland Co. and Xcel Energy Inc. Not all of these companies would ultimately be subject to the minimum tax, even if it passes as drafted, thanks in part to the effects of other tax provisions and differences between tax and GAAP accounting.

Again, upon further reading, more bark than bite? 

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The Book Page 

Too Big for a Single Mind: How the Greatest Generation of Physicists Uncovered the Quantum World, Tobia Hürter, c. 12021.

Unless you know everything there is to know about the history of quantum mechanics, this is a must read. 

This book is a joy to read. Very, very readable. One could probably read it in one sitting but that would take the joy out of reading this book.

If your knowledge of quantum mechanics is somewhere between what you learned in middle school and what you learned in your first two years of college, and you want to know more, this may be the best book in which to begin. It's that good and that easy to understand.

I plan to read the book a second time and then follow it up with The Age of Entanglement: When Quantum Physics Was Reborn, Louisa Gilder, c. 2008, which I read some years ago. 

End-Of-Day Report -- January 3, 2023

UK: may cut energy subsidies in half for businesses; getting too expensive to fund. Link here.

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Back to the Bakken

Active rigs: 43 -- link here. One can cut and paste data at that website into one's own spreadsheet. CLR with nine rigs.

WTI: $77.16. Down almost 4%; down $3.10.

Natural gas: $4.004.

No new permits.

Thirteen permits renewed:

• BR (8): five Stafford permits; one Ole permit, one Mary Swanson permit, all in McKenzie County; and, one Manchester permit in Dunn County
• Hess (5): two AN-Double Bar and three AN-Lone Tree permits, all in McKenzie County.

One permit canceled:

• 37257, Whiting, PNC, Roggenbuck Federal 41-24-2XH, Mountrail County

One well name changed suggesting a permit was canceled:

• 24782, PNC, Petro-Hunt, Terres 144-98-13B-24-1H PNC (was Terres 144-98-13B-24-1H), Billings County;

Migration To Texas -- U-Haul 2022 Data

Link here. 

Preferred destinations:

• Texas,
• Florida,
• the Carolinas

States where demand for equipment to go out of state was the greatest:

• California
• Illinois
• New York

Texas is the No. 1 growth state for the second consecutive year and the fifth time since 2016. 

Florida, which ranks second, has been a top-three growth state seven years in a row. 

South Carolina, North Carolina, Virginia, Tennessee, Arizona, Georgia, Ohio and Idaho round out the top 10 growth states. 

Virginia and Alabama are the biggest risers, climbing 26 spots from their respective 2021 rankings. 

New York, Massachusetts, Michigan, Illinois and California are the bottom five states for growth in 2022.

California and Illinois ranked 50th and 49th, respectively.

By the way:

• folks come to Texas to work;
• folks go to Florida to retire.

EVs -- Tickers -- First Trading Day Of The New Year -- January 3, 2023

The tickers:

• TSLA: $107. Down 13%; down $16.
• RIVN: $17. Down 6%; down $1.
• RIDE: $1.13. Down 0.95; down 1.5 cent.
• LCID: $6.20. Down 9%; down 62 cents.
• GOEV: $1.26. Up 2.4%; up 3 cents.
• ARVL: 18 cents; up 12%; up 1.8 cents.
  
• F: $11.70. Up 0.5%; up 6 cents.

Different people see Tesla's sales for 2022 differently than others. The stories about EVs and the recent "North American early winter freeze" won't help sales. 

This is how some people see Tesla sales.

William LeGate, he links The WSJ article from today:

Stanphyl Capital:

Comparing "Bakken" With WTI -- January 3, 2023

I'm always curious to compare what "Bakken oil" price is compared to the televised WTI closing price.

A reader sent me "snapshots" of relevant portions of production statements from two different operators in the Bakken:

WTI during same two periods:

First Day Of The New Year -- Natural Gas Breaks Below $4 -- January 3, 2023

What we'll be talking about this week:

• market down again; JPow and the Dems in a panic. 
• market will re-set to 2020.
  
• US auto sales: 2022 -- worst year in over a decade;
• US Honda sales slump 33% y/y.
• Ford's numbers come out January 5, 2023. 
• Tesla: record number of deliveries.
  
• the Simon-Ehrlich wager.
• Covid-19: new variant. 
• the GOP circular firing squad in the US House.
  
• US catches up with Qatar as #1 LNG exporter (despite Freeport LNG export facility being down)
• first US LNG tanker arrives Germany this week; huge story; links everywhere; here's one.
  

 

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Back to the Bakken

The Far Side: link here. 

Active rigs: 46.

WTI: $78.64.

Natural gas: $3.997

Tuesday, January 3, 2023:
38413, conf, Whiting, Kannianen 11-5-3HU,
27878, conf, CLR, Jerey FIU 16-16H1,

Monday, January 2, 2023:
38531, conf, Whiting, Kannianen 43-31XH,
38198, conf, Hess, EN-Rehak A-155-94-1423H-5,

Sunday, January 1, 2023:
38955, conf, Ovintiv, Anderson Federal 152-96-9-4-6H,

RBN Energy: scorecard -- the top ten RBN energy prognostications. Archived.

As we bid adieu to 2022, it’s once again time for the Top 10 RBN Energy Prognostications, our long-standing tradition where we look into our crystal ball to see what the upcoming year has in store for energy markets. And unlike many forecasters, we also look into the rearview mirror to see how we did with last year’s predictions. Ouch. No, we did not predict a lingering, hot war in Europe in 2022, and that had a variety of ramifications for our scorecard this time around. Even so, we actually feel pretty good about those market calls. Most turned out to be spot-on, and for the others, well, it’s informative just to see what we thought was going to happen in 2022, pre-Ukraine. Then tomorrow we’ll take on the challenge of predicting the energy markets of 2023. But today it’s time to look back. Back to what we posted on January 2, 2022.