Global Oil: Production And Demand -- July 13, 2023

Locator: 45124OIL

Production. Link here. 80 million bopd.

Demand. Link here. 100 million bopd.

The Oil 2023 medium-term market report forecasts that based on current government policies and market trends, global oil demand will rise by 6% between 2022 and 2028 to reach 105.7 million barrels per day (mb/d) – supported by robust demand from the petrochemical and aviation sectors.

Despite this cumulative increase, annual demand growth is expected to shrivel from 2.4 mb/d this year to just 0.4 mb/d in 2028, putting a peak in demand in sight.

In particular, the use of oil for transport fuels is set to go into decline after 2026 as the expansion of electric vehicles, the growth of biofuels and improving fuel economy reduce consumption.

Market, Companies Reporting Tomorrow, Update On Apple Loyalty -- July 13, 2023

Locator: 45123INV.  

Market today:

Earnings tomorrow:

• UnitedHealth Group (UNH)
• JPMorgan
• BlackRock
• Citi
• State Street
• WTER
• Wells Fargo

****************************
Apple iPhones and iPads

Link here.

New market intelligence data reveals that the U.S. iPhone market share experienced a significant increase during the first quarter of this year, defying the overall decline observed in the smartphone market. The report indicates that while the smartphone industry faced challenging times, with a sharp decrease in U.S. smartphone shipments, Apple maintained a strong position and expanded its market share.

The figures from Counterpoint’s latest market estimates show a concerning 17% year-on-year drop in U.S. smartphone shipments during the first quarter. Analysts attribute the decline to two primary factors: a correction in high channel inventory by original equipment manufacturers (OEMs) and a decline in consumer demand because of macroeconomic pressures. This downward trend affected all major smartphone brands after a robust performance in the first quarter last year.

The high channel inventory can be partly attributed to an overestimation of demand during the holiday season, suggesting that it is not an entirely separate factor but rather a consequence of the overall market conditions.

Despite facing the challenges of a declining market, Apple weathered the storm more effectively than its competitors. While iPhone shipments experienced a decrease, the decline was slower compared to the overall smartphone market, enabling Apple to bolster its market share from 49% in the first quarter of 2022 to 53% in the same quarter this year.

Counterpoint’s report highlights a significant trend of U.S. smartphone users switching from Android devices to iPhones, contributing to Apple’s market share growth. This Android-to-iOS migration continues to pose a key challenge for Android OEMs. Apple’s ability to increase its market share despite a year-on-year drop in shipments is a testament to the brand’s enduring appeal and customer loyalty.

The global tablet market experienced a similar decline of 18% year on year, with Apple surpassing the average performance. Counterpoint’s report emphasizes that the iPad remains unrivaled in both the short and long term, maintaining its first-place spot in the tablet market. The most recent monthly data on smartphone market share in America clearly establishes Apple and Samsung as the leading brands, with impressive market shares of 56.82% and 29.47%, respectively. This indicates that iPhones accounted for more than half of the total earnings generated from smartphone sales in the U.S.

Motorola secures the third position with a 4.74% market share, while Google follows closely behind in fourth place with 2.1%. LG takes the fifth spot with a market share of 1.81%.

Looking specifically at the most recent quarter, Apple continues to dominate the market share of mobile phones in the U.S., capturing an even higher percentage at 57.22%. Samsung follows suit with a notable 29.12% brand share. The remaining phone brands collectively contribute less than 15% to the total revenue generated from smartphone sales in the U.S.

WTI Jumps Due To Libyan News -- Hess With Six New Permits -- July 13, 2023

Locator: 45122B. 

Active rigs: 36.

WTI: huge surge after hours -- Libya's largest field goes offline, trading at $77.25

• Bakken proxy: $81.98

Six new permits, #40034 - #40039, inclusive:

• Operator: Hess.
• Field: Beaver Lodge (Williams)
• Comments:
• Hess has permits for four BL-Svor and two BL-Hersel wells, NWNW 9-156-95, 
• to be sited between 482 FNL and 647 FNL and at 746 FWL.

Two producing wells (DUCs) reported as compled:

• 39009, 823, CLR, Rhonda 8-28H1, Dunn County,
• 38929, 1,065, Grayson Mill, Timber Creek 13-24 6H, McKenzie County;

NVDA And AMD Today -- July 13, 2023

Locator: 10001SUPCOMP.

Key words:

• blades: black boxes, made by AMD, Nvidia; 
• systems: designed by IBM, Cray
  
• dragonfly topology: link here; simply the "way" the black boxes are wired together
• google it; many sites;
• one of the better sites;
  
• nodes: self-explanatory; where multiple blades (black boxes) "meet"
  
• switches: self-explanatory
  

Locator: 45121CHIPS.  

Why are these important today? Answer: later. Stay tuned.

Chips, semiconductor: link here.

• Home page for tech: link here.
• The cloud: link here.  
• Streaming: link here. Streaming wars.

From wiki:

 We still haven't gotten to the answer to the question.

***************************
Supercomputers

Locations:

• China?
• Japan
  

• US:
• NSA?
  
• Tennessee: Oak Ridge, nuclear
  
• California: Lawrence Livermore National Laboratory, nuclear
  

Frontier

Hewlett Packard Enterprise Frontier, or OLCF-5, is the world's first and fastest exascale supercomputer, hosted at the Oak Ridge Leadership Computing Facility (OLCF) in Tennessee, United States, and first operational in 2022.

It is based on the Cray EX and is the successor to Summit (OLCF-4).

As of March 2023, Frontier is the world's fastest supercomputer.

Frontier achieved an Rmax of 1.102 exaFLOPS, which is 1.102 quintillion operations per second, using AMD CPUs and GPUs

Measured at 62.86 gigaflops/watt, Frontier topped the Green500 list for most efficient supercomputer, until it was dethroned (in efficiency) by Flatiron Institute's Henri supercomputer in November 2022.

Design: Frontier uses 9,472 AMD Epyc 7453s "Trento" 64 core 2 GHz CPUs (606,208 cores) and 37,888 Radeon Instinct MI250X GPUs (8,335,360 cores). They can perform double precision operations at the same speed as single precision.

"Trento" is an optimized 3rd Gen EPYC CPU ("Milan"), which itself is based on the Zen 3 microarchitecture.

It occupies 74 19-inch rack cabinets. Each cabinet hosts 64 blades, each consisting of 2 nodes.

Blades are interconnected by HPE Slingshot 64-port switch that provides 12.8 terabits/second of bandwidth. Groups of blades are linked in a dragonfly topology with at most three hops between any two nodes. Cabling is either optical or copper, customized to minimize cable length. Total cabling runs 90 miles

Frontier is liquid-cooled, allowing 5x the density of air-cooled architectures.

Each node consists of one CPU, 4 GPUs and 5 terabytes of flash memory. Each GPU has 128 GB of RAM soldered onto it.

Frontier has coherent interconnects between CPUs and GPUs, allowing GPU memory to be accessed coherently by code running on the Epyc CPUs.

Frontier uses an internal 75 TB/s read / 35 TB/s write / 15 billion IOPS flash storage system, along with the 700 PB Orion site-wide Lustre filesystem.

The original design envisioned hundreds of thousands of GPUs and 150–500 MW of power.

Oak Ridge partnered with HPE Cray and AMD to build the system.

The machine was built at a cost of $600 million. It began deployment in 2021 and reached full capability in 2022.

It clocked 1.1 exaflops Rmax in May 2022, making it the world's fastest supercomputer as measured in the June 2022 edition of the TOP500 list, replacing Fugaku.

El Capitan 

Hewlett Packard Enterprise El Capitan, is an upcoming exascale supercomputer, hosted at the Lawrence Livermore National Laboratory in Livermore, California, and projected to become operational in 2023. It is based on the Cray EX Shasta architecture. When deployed, El Capitan is projected to displace Frontier as the world's fastest supercomputer.

El Capitan has been announced to use an unknown number of AMD Instinct MI300 accelerated computing units (APUs). The MI300 consists of 24 AMD Zen AMD64-based CPU cores, and CDNA 3-based GPU integrated onto a single organic package, along with 128GB of HBMe RAM.

The floor space and number of racks for El Capitan have not yet been announced.

Blades are interconnected by HPE Slingshot 64-port switch that provides 12.8 terabits/second of bandwidth. Groups of blades are linked in a dragonfly topology with at most three hops between any two nodes. Cabling is either optical or copper, customized to minimize cable length. Total cabling runs 90 miles.

El Capitan has coherent interconnects between CPUs and GPUs, allowing GPU memory to be accessed coherently by code running on the Epyc CPUs.

Capitan was ordered as a part of the Department of Energy's CORAL-2 initiative, intended to replace Sierra (supercomputer), an IBM/NVIDIA machine deployed in 2018.

The original design envisioned hundreds of thousands of GPUs and 40 MW of power. LLNL partnered with HPE Cray and AMD to build the system.

So, when Japan, France, and the UK need to upgrade / update their supercomputers, with whom do youu think the partner?

*******************************
The Wagner Group

Less than a month ago, there were numerous stories suggesting the US intelligence apparatus completely missed the Wagner Group mutiny and subsequent events.  

The story quickly fell off the front pages as the US intelligence agencies closed ranks.

But when something this serious happens in Washington, DC, how do "they" solve those problems?

They throw money at the problem(s).

My hunch, NSA, CIA and the intelligence agencies looked for faster and more capable computers.

Just saying.

This slide continues to haunt me.

Gasoline Demand -- July 13, 2023

Locator: 45120GASOLINE.  

Link here.

Ronald Reagan's Misery Index -- Lowest Since Trump Left Office (?) -- July 13, 2023

Locator: 45119ECON.  

Link here.

Inflation + unemployment.

*************************
The Book Club

I can only remember two books that brought me to tears: this was one of them.

1989: The Struggle to  Create Post-Cold War Europe, Mary Elise Sarotte, c. 2009. 940.55SAR.

Notes.

Author: professor of international relations at the University of Southern California (DBA USC).

XOM To Buy DEN -- Biden, IRA, MAGA -- July 13, 2023

Locator: 45118B. 

Not the airport.

Updates

Later, 11:23 a.m. CT: these things immediately come to mind:

• on the heels of the BRK-Cove Point announcement
• made possible by Biden's IRA (MAGA) signed August, 2022
• XOM's roots go deeper into the Bakken: XOM already owned DNR's mineral acreage; and, XOM also owned XTO, one of the bigger operators in the Bakken
• it's less expensive to buy a pipeline company, than to build a pipeline
• all "this CO2 stuff" will offset XOM's other emissions; a huge PR stunt that may or may not make money down the road; but XOM now has a huge seat at the CCUS table

DEN (DNR) ticker:

• now down almost 2% today; now down about $1.62 / share
• I have no idea why any small mom-and-pop retail investor would sell DRN today
• if they got in right after DNR/DEN came out of bankruptcy, they could have gotten in at $20 / share;
• now, selling at $86, they will incur a heavy capital gains tax
• hold the DEN and get XOM stock with no tax consequences as far as I know (?)
  

Original Post 

Link here.

DEN's 1Q23 presentation. I assume this "will disappear" within the next six months.

DEN (DNR) and XOM have had close relationship for a long, long time From the blog:

September 20, 2012: XOM to buy all DNR acreage in the Williston Basin Bakken (North Dakota and Montana); $1.6 billion deal; 196,000 Bakken acres; but DNR gets XOM acreage in Wyoming and Texas.

XOM had been ready to pounce, at least since October, 2022, but it was the IRA signed by Biden in August, 2023, that "allowed" XOM to pull the trigger.

I don't know if I own any DEN. Don't plan on looking. I tend not to look at individual stocks in portfolio unless interested in buying / selling. Don't take that out of context. There are exceptions. Lots of exceptions.

 

From the blog back in July 2020:

Denbury Resources:

• market cap: $130 million
• cash on hand: $7 million
• total debt: $2.3 billion
• filed for bankruptcy in 2020;

****************************
Family Notes

Olivia turned 17 years old while taking flying lessons "with the USAF" this past summer.

She logged exactly 15 hours, as per "the contract."

At 14.1 hours, she was told that she would continue to fly -- there were still about two days left in the training schedule, but even if she went over 15 hours, she could only log 15 hours due to "contract language."

Her instructor signed her off at "first opportunity" to solo but she asked for one more flight with instructor before her solo flight.

She soloed on/about her 14th hour of flight time.

First Time Unemployment Claims -- Lower Than Forecast -- Fewer Than Previous -- July 13, 2023

Locator: 45117ECON.

Link here.

Earnings Season Begins -- July 13, 2023

Locator: 45116ECON.

Two days ago, there was a headline story on earnings season, 2Q23. The headline: earnings for 2Q23 were going to be awful.

MSFT: Azure cloud growth drops from 27% to 26%;

GOOG, note after-hours spike when earnings announced:

Big banks, Costco:

• big banks crushing earnings expectations
• BNY Mellon beats;
• Bank of America: profits rise 19%;
• Costco shares pop;
• profit growth for retail giant Costco Wholesale (COST) has risen sharply the last couple of quarters, from 4% three quarters ago to 18% last quarter, link here. 

Big banks, UnitedHeealth Group: all beat. Big banks with big beats. Link here.

JPMorgan, link here.

Delta, link here.

Pepsi, link here.

**********************
New Format

Note: this is, hands down, one of the most boring things I to do each quarter. I doubt anyone really looks at it but the day I quit doing this will be the day I miss posting something important. The word "important" is used loosely. Very loosely.

This is so boring that I actually didn't record a thing for 1Q20, but that was two years ago. Maybe things have changed. LOL.

This is linked at the top of the sidebar at the right during earnings season. After earnings -- pretty much after XOM and Apple posts their earnings -- this post will move back into obscurity.

Calendar. 

Whisper numbers.

Disclaimer: this is not an investment site.

India-Apple -- July 13, 2023

Locator: 45115AAPL.

After the Bakken, my favorite "story" is Apple.

The big story this year with regard to Apple: India.

I can't keep up with everything re: Apple and I don't understand India at all and of all the things I don't understand I am incredibly intrigued by India but for now, for me, India is simply overwhelming and I won't be posting many stories about India or about India-Apple. It's just too overwhelming for me, and ...

... I was going to say something else, about investing ... but we'll let it go.

Back to Apple-India, or is it India-Apple?

This is huge. 

Link here.

More: 

Users will be able to ask queries to ‌Siri‌ by mixing English and Hindi, starting with select Indic languages. Users can mix English with Telegu, Punjabi, Kannada, or Marathi.

India-based users often speak a mix of languages in daily conversations, so the ability to mix English with Hindi when querying ‌Siri‌ will be broadly welcomed.

• transliteration support on iOS for Tamil, Telugu, Kannada, and Malayalam. With this expansion, Apple now supports 10 indic languages. 
• users can sign into Apple ID using their phone number instead of an email ID on ‌iOS 17‌, ‌iPadOS 17‌, and ‌macOS Sonoma‌. 
• a new built-in Punjabi dictionary to get definition of words and phrases across platforms. 
• users will be able to see up to 2,000 calls in the call history section including Facetime and WhatsApp calls. 
• filtering messages by known and unknown senders on iPad.

Adios HULA? ESPN, Donde Estas Yendo? July 13, 2023

Locator: 45114DIS.

Link here.

ESPN? Link here.

Saudi Is In Deep Trouble -- How Could This Happen? July 13, 2023

Locator: 45113RUSSIA.

Updates

July 13, 2023: link here.

Original Post

Best part about this story? The article was written by Charles Kennedy, the best contributor over at oilprice. Probably the best writer on the oil sector of all those I follow.

Link here.

Saudi dropping behind Russia? This is not a 10-year projection, this is happening this year. Wow.

But it's actually been a "thesis" on the blog for ten years, if not long. I've long forgotten when it first became a topic on the blog, but the "tag" will give one an idea how long it's been and how often the story has been tagged.

Saudi Arabia will lose its status as the largest OPEC+ oil producer to Russia as it begins the unilateral cut of 1 million barrels per day (bpd), with the Kingdom pledging to pump around 9 million bpd in July and August—the lowest level in two years.  

Excluding the deep cuts during the pandemic, a Saudi production of just around 9 million bpd would be the lowest level the world’s top crude oil exporter has pumped since 2011.

 In case you missed it the first time:

***********************************
Russia

Current-account surplus collapses by 93%. Link here.

Russian foreign exchange reserves. Link here. 

Putin is cannibalizing Russia's future to fight Ukraine. Link here.

Cybersecurity: Russia is in bigger trouble than we will ever know.

I Was Surprised It Took This Long To See An In-Depth Analysis -- July 13, 2023

Locator: 45113WTI. 

 RBN Energy: Midland WTI surging into the Brent market. What does it mean for Brent? For Midland WTI? Archived.

Global crude oil markets are undergoing a profound transformation. But it is mostly out of sight, out of mind for all but the most actively involved players in the physical markets. On the surface, it’s a simple change in the Dated Brent delivery mechanism: Starting May 2023, cargoes of Midland-spec WTI — we’ll shorten that to “Midland” for the sake of clarity and simplicity — could be offered into the Brent Complex for delivery the following month. This change has been in the works for years. Production of North Sea crudes that heretofore have been the exclusive members of the Brent club has been on the decline for decades. Allowing the delivery of Midland crude into Brent is intended to increase the liquidity of the physical Brent market, thereby retaining Brent’s status as the world’s preeminent crude marker, serving as the price basis for two-thirds or more of physical crude oil traded in the global market. So far, the new trading and delivery process has been working well. Perhaps too well. For the past two months, delivered Midland has set the price of Brent about 85% of the time. The number of cargoes moving into the Brent delivery “chain” process has skyrocketed, and most of those cargoes are Midland. Is this just an opening surge of players trying their hand in a new market, or does it mean that the Brent benchmark price is becoming no more than freight-adjusted Midland? In today’s RBN blog, we’ll explore this question, and what it could mean for both global and domestic crude markets.

One Well Coming Off Confidential List Today; WTI-Brent -- RBN Energy -- July 13, 2023

Locator: 45112B.

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

WTI: $75.51.

• Bakken proxy: $80.89.

Friday, July 14, 2023: 67 for the month; 175 for the quarter, 430 for the year
39394, conf, Crescent Point Energy, CPEUSC Ruby 2-20-17-158N-100W-MBH,
38853, conf, Whiting, Littlefield 11-21H,
37923, conf, BR, Boxer 1B MBH-ULW,
37841, conf, Lime Rock, State B 3-25-36H-143-97,

Thursday, July 13, 2023: 63 for the month; 171 for the quarter, 426 for the year
37924, conf, BR, Boxer 2A TFH,

RBN Energy: Midland WTI surging into the Brent market. What does it mean for Brent? For Midland WTI? Archived.

Global crude oil markets are undergoing a profound transformation. But it is mostly out of sight, out of mind for all but the most actively involved players in the physical markets.

On the surface, it’s a simple change in the Dated Brent delivery mechanism: Starting May 2023, cargoes of Midland-spec WTI — we’ll shorten that to “Midland” for the sake of clarity and simplicity — could be offered into the Brent Complex for delivery the following month. 

This change has been in the works for years. Production of North Sea crudes that heretofore have been the exclusive members of the Brent club has been on the decline for decades. 

Allowing the delivery of Midland crude into Brent is intended to increase the liquidity of the physical Brent market, thereby retaining Brent’s status as the world’s preeminent crude marker, serving as the price basis for two-thirds or more of physical crude oil traded in the global market. So far, the new trading and delivery process has been working well. Perhaps too well. 

For the past two months, delivered Midland has set the price of Brent about 85% of the time. The number of cargoes moving into the Brent delivery “chain” process has skyrocketed, and most of those cargoes are Midland. Is this just an opening surge of players trying their hand in a new market, or does it mean that the Brent benchmark price is becoming no more than freight-adjusted Midland? In today’s RBN blog, we’ll explore this question, and what it could mean for both global and domestic crude markets.

Chips: Yesteday And Today -- July 13, 2023

Locator: 45111CHIPS.

Chips, yesterday close and pre-market this a.m., dollar gain / share

• AAPL: 1.69, 1.11
• SWKS: 1.66, 0.90
• AVGO:  7.90, 7.64
• QCOM: 1.81, 0.88
• AMD: 3.26, 0.83
• NVDA: 14.97, 5.68
• TSM: 2.64, 1.21