The Mystery Of The Missing Oil -- January 5, 2023

Regular readers of the blog, and particularly those that follow "Focus on Fracking" every Sunday/Monday night, are familiar with this weekly data point:

And always the most fun:

So, based on that reported & estimated data, the crude oil figures from the EIA for the week ending December 16th appears to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 1,054,000 barrels per day less than what our oil refineries reported they used during the week.

To account for that ​obvious ​disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+1,054,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet in order to make the reported data for the daily supply of oil and for the consumption of it balance out, a fudge factor that they label in their footnotes as “unaccounted for crude oil”, thus suggesting there must have been an omission or error of that magnitude in this week’s oil supply & demand figures that we have just transcribed.

Moreover, since last week’s  “unaccounted for crude oil” was at a record (+2,259,000) barrels per day, that means there was a 1,204,000 barrel per day difference between this week's balance sheet error and the EIA's crude oil balance sheet error from a week ago, and hence the changes to supply and demand from that week to this one that are indicated by this week's report are off by that much, thus rendering those comparisons virtually meaningless....​​

However, since most everyone treats these weekly EIA reports as gospel, and since these weekly figures often drive oil pricing, and hence decisions to drill or complete oil wells, we’ll continue to report this data just as it's published, and just as it's watched & believed to be reasonably accurate by most everyone in the industry...(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer) ...

Every week for as long as I can remember, the author of that website discusses the "missing oil" and how the EIA simply inserts "a figure" to compensate for it. 

Hold that thought.

With that in mind, this, without question, is the most interesting item to pop up on my twitter feed earlier this evening:

 Reading the thread will provide a few more details

A Geography Lesson -- January 5, 2023

Seasonal Flu Update -- January 5, 2023

Updated data should be reported tomorrow, though due to the holiday, could be delayed until Monday, next week.

The graph below: laboratory-confirmed seasonal flu hospitalizations, a respiratory illness for which we have a vaccine, and appears to have been "pushed out" by Covid-19.

The gray area is subject to change as reports come in (see note at bottom of screen shot). 

By posting this tonight we will get an idea of the degree to which reports are delayed, particularly over holidays.

Link here. 

Outpatients visits for all respiratory illnesses: URI, Covid, influenza, RSV, unspecified:

Stellantis Introduces Pickup EV Prototype -- January 5, 2023

Investors.

EVs: link here. Scorecard. 

RAM here.

Ukraine -- January 5, 2023

Remarkable "news" coming out of Ukraine.  

• Putin request for cease fire
• armored vehicles: links everywhere; here's one.

Stories:

 Huge policy shift, huge: will have major impact on course of the war.

Simply amazing how one "small" country is destroying Russia's conventional army. Truly amazing.

Wall Street Analysts: No More Good Drilling Sites In The Bakken; Staale Gjervik: "Here, Hold My Beer" -- XTO Rough Federal Wells -- One With 100K/Month -- January 1, 2023

From today's daily activity report:

For now, the XTO Rough Federal wells are tracked here.

One producing well (a DUC) reported as completed 

• 34302, 2,451, XTO, Rough Federal 44X-23D, Banks, t--; cum 155K 11/22; at the wellhead, $70 x 155K = $10.850 million -- the well is paid for, LOL; how long does it take for a HIW deep-water well to pay for itself; asking for a friend: 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2022	29	53164	53232	21184	87599	83548	4051
BAKKEN	10-2022	31	82981	82881	36988	151941	148611	3330
BAKKEN	9-2022	9	18663	18264	12302	28332	26600	1732

Bio, link here:  

**************************
The XTO Rough Federal Wells 

The wells:

• 34308, PNC, XTO, Rough Federal 44X-23A, North Fork,
  
• 34307, PNC, XTO, Rough Federal 44X-23E, North Fork,
• 34306, SI/NC-->SI/IAW-->SI/NCW, XTO, Rough Federal 44X-23B, North Fork,
• 34305, SI/NC-->SI/IAW-->SI/NCW, XTO, Rough Federal 44X-23F, North Fork,
• 34304, SI/NC-->SI/IAW-->SI/NCW, XTO, Rough Federal 44X-23C, North Fork,
• 34303, SI/NC-->SI/IAW-->SI/NCW, XTO, Rough Federal 44X-23G, North Fork,
• 34302, SI/NC-->SI/IAW-->SI/NCW--> 2,451, XTO, Rough Federal 44X-23D, Banks, t--; cum 155K 11/22; at the wellhead, $70 x 155K = $10.850 million -- the well is paid for, LOL; how long does it take for a HIW deep-water well to pay for itself; asking for a friend: 
• 34301, SI/NC-->SI/IAW-->SI/NCW, XTO, Rough Federal 44X-23H, North Fork,
• 34558, SI/NC-->SI/IAW-->SI/NCW, XTO, Rough Federal 44X-23DXA, North Fork,

Early production;

• 34305: note -- 50K at 15 days extrapolates to 99,842 bbls crude oil.
  

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2022	28	44167	44109	23090	62961	60052	2909
BAKKEN	10-2022	15	49921	49628	23228	71010	69093	1917
BAKKEN	9-2022	3	282	276	2097	667	0	667

• 34304:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2022	29	25743	25844	10068	51463	49064	2399
BAKKEN	10-2022	31	51536	51504	29440	102840	100578	2262
BAKKEN	9-2022	8	13000	12722	10795	19235	18429	806

• 34302:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2022	29	53164	53232	21184	87599	83548	4051
BAKKEN	10-2022	31	82981	82881	36988	151941	148611	3330
BAKKEN	9-2022	9	18663	18264	12302	28332	26600	1732

• 34301: 

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2022	28	51112	51233	28579	88497	84395	4102
BAKKEN	10-2022	31	89036	88959	38985	151027	147729	3298
BAKKEN	9-2022	10	21441	20982	12065	29022	27597	1425

A Most Amazing Moment In History -- January 5, 2023

Headlines:

• Damar Hamlin: "Who won the game?"
  
• Remarkable "news" coming out of Ukraine.
• Putin to declare unilateral cease fire
  
• armored vehicles
  
• Bed, Bath and Beyond: to file for bankruptcy?
• McCarthy: fails on tenth eleventh vote
• Crypto: another files for bankruptcy
• SNOW: if he still holds this position, he's down 50% for the year (for SNOW)?
• Has market re-set?
• New trading range?
• New era of 5% overnight interest rates?
• Is that bad? Or just something new from which we can profit?
• How did it happen that we dropped to "free money" in the first place?
• Is cash now king? What does that mean for a company with billions in cash?
• High rates --> high monthly mortgages --> housing market crushed.
• Is auto market next? If so, the canary in the coal mine?
• EVs?
• South Carolina: state supreme court nullifies ban on abortion.
• 60 Minutes: why Paul Ehrlich now?
  
• Oil
• has gasoline demand re-set?
  
• CVX: oil company in "a sweet spot"?
• XOM: also in "a sweet spot"?

Gasoline demand, link here.

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

Active rigs: link here.

WTI: $73.90.

Natural gas: $3.756.

Four new permits, #39545 - #39549, inclusive:

• Operator: Hunt (3); Petro-Hunt (2)
• Field: Clear Water (Mountrail); Little Knife (Billings)
• Comments:
• Hunt has three Redmond permits; NWNE 19-157-89; 
• to be sited 325 FNL and between 1743 FEL and 1803 FEL
  
• Petro-Hunt has two Terres permits; NENW 13-144-98; 
• to be sited 590 FNL and one at 1903 FWL and one at 1938 FWL
  

One producing well (a DUC) reported as completed 

• 34302, 2,451, XTO, Rough Federal 44X-23D, Banks, t--; cum 155K 11/22;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	11-2022	29	53164	53232	21184	87599	83548	4051
BAKKEN	10-2022	31	82981	82881	36988	151941	148611	3330
BAKKEN	9-2022	9	18663	18264	12302	28332	26600	1732

Two permits canceled:

• Oasis: two MHA permits in Dunn County;
  

"Mandate Entanglement" -- What A Great Country When The Fed's Mandate Is "No More Jobs" -- Sort Of Like "No More Drilling" -- Such Unprecedented Riches -- January 5, 2023

This is not a criticism, it's not a political comment, it's just an observation.

The Fed has a dual mandate.

Using a term from quantum theory: entanglement. 

Particle theory.

So, here, JPow and the Fed has two "entangled mandates": jobs and inflation.

Inflation is "something" with which "we" definitely need to be concerned.

But.

In my entire adult life, beginning when I was in high school, without exception until recently, there has always been a concern by high school students, college graduates, and young adults entering the workforce, and then some decades ago, women entering the workforce in large numbers, about the unemployment rate and the strength or weakness of the job market, and whether everyone who wanted a job could find one. 

There were many, many summers during my high school years and college years when it was almost impossible to find a job. After joining the military I never had that concern again, but I remember reading newspaper articles almost every spring about the job prospects for new college graduates. More often than not, it was often a grim picture. 

Now, for the first time in my adult life -- fifty-five years? -- we have a "Fed" that is actively trying to destroy the job market, drive the unemployment rate higher, and Wall Street takes a tumble when the Fed's policy fails to result in more lost jobs, higher unemployment.

Truly amazing. 

Good, bad, or indifferent, that's how I'm reading it. What a great country. This country is doing so well, it's government is actually trying to "kill" the economy and "kill" jobs. 

"Kill" may be hyperbolic but that was the first word that came to mind.

From earlier:

Data points:

• Dow down 400 points after jobs report;
• JPow telegraphed no rate decrease in 2023;
• he most likely had job data at time of his statement

From CNBC:

• ADP: jobs added in December, 2022: 235,000
• forecast: 150,000 new jobs; a huge miss;
• November numbers unrevised; 127,000 jobs added
• questions: adjusted? seasonal hires? offset anticipated job losses in 2023?
• if this is not seasonal but similar numbers hold through 2023, it suggests exactly how much "free money" and fear of Covid kept folks from returning to work 
• fear of Covid keeping folks from returning to work much less a factor than "free money"
  
• weekly jobless claims, also came in less than expectations
• JOLTS: job market remained strong

Note: from Reuters:

The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the Labor Department's Bureau of Labor Statistics' more comprehensive and closely watched employment report for December on Friday. It has been a poor predictor of private payrolls in the BLS employment report.

Jobless claims:

• 204,000
• a drop of 19,000
• from The Washington Examiner:

While the number of new jobless claims has remained low enough to avert fear that the country is already in the throes of a recession, most economists anticipate that the U.S. economy will enter a Fed-induced recession at some point in the new year. That is because rate hikes can take a while to filter through the broader economy and create recessionary conditions and job losses.

It is expected that as the rate hikes begin to ripple across the economy, jobless claims begin to tick up, and then monthly jobs reports will begin to turn negative.

Defiinitely Not On My Bingo Card: That Hydrogen Fusion Story? Who Will Benefit? Chevron And Amazon -- December 14, 2022

Being reported multiple sources. One link. 

Can't even imagine.

Later: turns out to be a non-story, for now.

Copper -- December 15, 2022

Copper could soar: link here. 

Global Production -- For The Archives -- January 5, 2023

Iraq: link here.

Russia overtook Iraq to become the single-largest oil supplier to India in November, as Indian refiners raced to stock up on Russian oil ahead of the December 5 price cap and associated bans on transportation services for Russia’s crude.  

Saudi production:

When this graphic is updated one year from the December 5, 2022 (D5S), sanctions on Russia: January, 2024, it's going to be quite remarkable. We might see:

• Saudi Arabia: flat 
• Russia: significant decrease
• US: continued increase

If global demand does increase after the much-talked about anticipated-recession, and, Saudi production does not exceed 12 million boepd, this will speak volumes about Saudi's production capacity. So, we'll see.

Saudi: link here.

US crude oil production, link here:

From 2021:  

One year, also link here:

Ten years:

From the EIA, Annual Energy Outlook 2014 (AEO2014), red line (s) and red dots added to the EIA graphic:

RBN Energy: you gotta have this map in your hands. Archived.

Over the past few years — and with a big boost from Permian production growth — the South Texas coast has transformed itself into a top-tier hub for hydrocarbons.

Crude oil exports stand out, of course, with marine terminals in Corpus Christi/Ingleside accounting for 60% of U.S. export volumes in 2022. But Corpus also is home to the nation’s second-largest LNG export terminal (which is now being expanded), as well as a half-dozen refineries, and the broader region has the Agua Dulce natural gas hub, nine NGL fractionation plants, and four massive, NGL-consuming ethylene plants, including ExxonMobil/SABIC’s giant new steam cracker in San Patricio County.

All of these assets are interconnected by a maze of crude oil, natural gas, NGL, “purity product,” and ethylene pipelines. And the region is well-positioned for additional growth as crude, gas, and NGL production in Texas continues to increase. In today’s RBN blog, we discuss our latest product: a digital, interactive map that helps makes sense of a spaghetti bowl of pipelines, plants and related assets in South Texas.

When discussing Corpus Christi and the rest of South Texas, it’s important to begin with two undeniable facts: (1) the region was already a noteworthy energy center before the Shale Revolution, with extensive upstream, midstream and downstream infrastructure already in place “pre-Shale”; and (2) South Texas didn’t become an energy “superhub” overnight or without a lot of planning and hard work — instead, producers, midstream companies, economic-development folks and others saw the opportunities and challenges presented by the Shale Era and made it all happen.

It hasn’t hurt that Texas is perhaps the friendliest state when it comes to developing energy-related projects, and that South Texas and Corpus officials have been aggressive in competing for new business, including energy, petrochemicals, and now clean hydrogen.

ProFrac -- January 5, 2023

ProFrac: adds six frack fleets

• Rockies and Bakken
• acquired REV Energy and Producers Services
• link here:

Ford -- January 5, 2023

From IBD:

Q4 sales estimate: 466,447 vehicles, down 7.5% year over year.

Full-year 2022 sales estimate: 1,837,603 vehicles, down 2.9% vs. 2021.

Results: Ford reportedly sold more than 1.9 million vehicles in 2022, down 2.2%. A monthly sales release Thursday showed that total December sales increased 3.2% but retail sales fell 2.3%. The release did not provide sales totals for the year or fourth quarter.

Previously on Tuesday, Ford announced that the F-Series trucks retained the title of America's bestselling vehicle in 2022 for the 41st year. Ford said Thursday it sold 653,957 F-Series trucks in 2022, capped off by a strong December with 75,076 trucks sold.

Full-year EV sales hit a record 61,575 units, making Ford the No. 2 EV maker in America behind Tesla, Thursday's sales release said. Ford EV sales vaulted 223% in December and soared 126% in 2022, the release added. Ford touted a strong sales performance for the fully electric F-150 Lightning truck, Mustang Mach-E SUV and E-Transit vans.

From CNBC:

PS5 On Wheels -- January 5, 2023

Investors: link here.

EVs: link here. Scorecard. 

Add "Afeela" to the mix.

Honda, Sony.

The scorecard a year ago:

• Sony -- SUV announced -- link here.
• June 17, 2022: link here. Sony-Honda partnership: Mobility, Inc.

A feela PS5 on wheels.  

Natural Gas Trendiing Toward $3.75 -- January 5, 2023

Table-talk:

• EV: Sony, Honda introduce a new EV.
• Jobs report: huge.
• CVX, Venezuala: something to talk about 
• Ford sales: incredible.

ProFrac: adds six frack fleets

• Rockies and Bakken
• acquired REV Energy and Producers Services
• link here:

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

The Far Side: link here.

Active rigs: link here.

WTI: $73.86. Held. Up 1.4%; up $1.02.

Natural gas: trending toward $3.75.

Friday, January 6, 2023:
None.

Thursday, January 5, 2023:
36900, conf, Bowline, Shaffer 155-102-27-22-6H,

RBN Energy: you gotta have this map in your hands. Archived.

Over the past few years — and with a big boost from Permian production growth — the South Texas coast has transformed itself into a top-tier hub for hydrocarbons.

Crude oil exports stand out, of course, with marine terminals in Corpus Christi/Ingleside accounting for 60% of U.S. export volumes in 2022. But Corpus also is home to the nation’s second-largest LNG export terminal (which is now being expanded), as well as a half-dozen refineries, and the broader region has the Agua Dulce natural gas hub, nine NGL fractionation plants, and four massive, NGL-consuming ethylene plants, including ExxonMobil/SABIC’s giant new steam cracker in San Patricio County.

All of these assets are interconnected by a maze of crude oil, natural gas, NGL, “purity product,” and ethylene pipelines. And the region is well-positioned for additional growth as crude, gas, and NGL production in Texas continues to increase. In today’s RBN blog, we discuss our latest product: a digital, interactive map that helps makes sense of a spaghetti bowl of pipelines, plants and related assets in South Texas.

When discussing Corpus Christi and the rest of South Texas, it’s important to begin with two undeniable facts: (1) the region was already a noteworthy energy center before the Shale Revolution, with extensive upstream, midstream and downstream infrastructure already in place “pre-Shale”; and (2) South Texas didn’t become an energy “superhub” overnight or without a lot of planning and hard work — instead, producers, midstream companies, economic-development folks and others saw the opportunities and challenges presented by the Shale Era and made it all happen.

It hasn’t hurt that Texas is perhaps the friendliest state when it comes to developing energy-related projects, and that South Texas and Corpus officials have been aggressive in competing for new business, including energy, petrochemicals, and now clean hydrogen.

Investors -- The Fed -- The Job Report -- No Recession Yet -- January 5, 2023

Data points:

• Dow down 400 points after jobs report;
• JPow telegraphed no rate decrease in 2023;
• he most likely had job data at time of his statement

From CNBC:

• ADP: jobs added in December, 2022: 235,000
• forecast: 150,000 new jobs; a huge miss;
• November numbers unrevised; 127,000 jobs added
• questions: adjusted? seasonal hires? offset anticipated job losses in 2023?
• if this is not seasonal but similar numbers hold through 2023, it suggests exactly how much "free money" and fear of Covid kept folks from returning to work 
• fear of Covid keeping folks from returning to work much less a factor than "free money"
  
• weekly jobless claims, also came in less than expectations
• JOLTS: job market remained strong

Note: from Reuters:

The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the Labor Department's Bureau of Labor Statistics' more comprehensive and closely watched employment report for December on Friday. It has been a poor predictor of private payrolls in the BLS employment report.

Jobless claims:

• 204,000
• a drop of 19,000
• from The Washington Examiner:

While the number of new jobless claims has remained low enough to avert fear that the country is already in the throes of a recession, most economists anticipate that the U.S. economy will enter a Fed-induced recession at some point in the new year. That is because rate hikes can take a while to filter through the broader economy and create recessionary conditions and job losses.

It is expected that as the rate hikes begin to ripple across the economy, jobless claims begin to tick up, and then monthly jobs reports will begin to turn negative.

Thoughts on investing: unchanged. 

Weekly EIA Production Report -- January 5, 2023

Link here.

• US crude oil inventories increased by 1.7 million bbls; inventory at 420.6 million bbls now only 4% below the five-year average; while gasoline inventories are soaring and refiners were operating at less than 80% of their capacity
• US imports (yawn)
• US refiners operating at 79.6% of their operable capacity; this is a one-off due to Gulf coast refiners shut down during the polar vortex last week
• distillate inventories decreased by 1.4 million bbls; now 14% below the five-year average; again, this is a one-off
• finished gasoline inventories increased, while total motor gasoline inventories decreased by a paltry 0.3 million bbls 
• jet fuel product supplied was up 5.1% 
• gasoline demand will be posted later today