Great Example Of High-Price-Demand Destruction -- October 4, 2023

Locator: 45649GASOLINEDEMAND.

I'm sure there have been many examples of this over the years, but I do not recall seeing it to this extent. This is really quite something. Link here to Reuters.

And then look at the build of gasoline stores reported this month. One source suggested torrential rains in NYC area this past week -- I don't think so. I think it's all about the high price of gasoline in southern California. This has huge implications for the oil sector as EV penetration continues to increase in California. 

And, as long as I've digressed this far, let me re-ask the question I asked earlier today:

• poll: all things being equal -- price and range; would you rather buy:
• a Tesla
• a Ford EV
• if you answered Ford EV, you are not paying attention
• like the Barbie movie, let's ask the question again
  
• poll: all things being equal -- price and range; would you rather buy:
• a Tesla
• a Ford EV

Earlier, I asked this question.

Say what? Is $6-gasoline in California part of the problem?

Gasoline demand:

Then, taking my own advice, when no one offered a reason, I googled the question, and here's the answer.

And, then look at all the incredible data points in this story:

The Energy Transition Is Already Dead -- We Just Don't Know It Yet -- Peter Zeihan -- October 4, 2023

Locator: 45648ESG.

Saudi Arabia: killing the renewable energy sector. Link here. 

Also, "energy transition is dead, we just don't know it yet" -- Peter Zeihan, link here. 

Re-posting: Javier's observation is 99% of the reason for the re-post but the comments are very important. At the link (first link above).

Not enough folks are talking about the observation by some that Chinese dumping US Treasuries is contributing to the problem.

Amazing Drop In Gasoline Demand This Past Week -- October 4, 2023

Locator: 45647GASOLINEDEMAND.

Say what? Is $6-gasoline in California part of the problem?

Gasoline demand:

Hess With Four New Permits; Seven Permits Renewed; Four DUCs Reported As Completed -- October 4, 2023

Locator: 45646B.

Saudi Arabia: killing the renewable energy sector. Link here. Also, "energy transition is dead, we just don't know it yet" -- Peter Zeihan, link here.

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Back to the Bakken

WTI: $84.46.

Four new permits, #40238 - #40241, inclusive:

• Operators: Hess
• Field: Beaver Lodge (Williams)
• Comments:
• Hess per permits for four BL-Kerbaugh wells, lot 3, section 3-155-96; 
• to be sited 805 FNL and between 1888 FWL and 1987 FWL

Seven permits renewed:

• Enerplus: seven Fort Berthold permits; Eagle Nest oil field, Dunn County;

Four producing wells (DUCs) reported as completed:

• 39241, 1,423, CLR, Meadowlark 4-6HSL,
• 39239, 1,029, CLR, Skanchenko FIU 5-31H1,
• 27883, 746, CLR, Jersey Federal 21-6H,
• 39238, 1,410, CLR, Skanchenko 4-3HSL,

The Dreaded Bakken Decline Rate -- An Ovintiv Calhoun Well -- October 4, 2023

Locator: 45645B.

The well:

• 38721, conf-->drl/A, Ovintiv, Calhoun 149-98-3-10-12H, Pembroke, Three Forks, first bench; t--; cum 172K 8/23; stimulated 12/19/22; 32 stages; file report did not include amount of frack fluid/ pounds proppants; drilling was completed with 8 drill bits; 209.75 drilling hours; average penetration rate of 108.9 feet / hour; lateral was within the 20' target window for 80.46%; 12.48% drilled above zone; 7.06% drilled below zone.
  

Production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	8-2023	31	6786	6825	13842	38128	37129	999
BAKKEN	7-2023	31	8425	8331	15738	20783	20683	4
BAKKEN	6-2023	30	7946	8104	15308	26422	22120	4177
BAKKEN	5-2023	31	11727	11654	20759	38012	36146	1735
BAKKEN	4-2023	30	16364	16389	24271	43467	43056	279
BAKKEN	3-2023	31	23122	23143	32770	41839	41681	44
BAKKEN	2-2023	27	27864	27953	36132	43937	43452	369
BAKKEN	1-2023	31	53537	53648	62244	95326	94050	1077
BAKKEN	12-2022	14	16117	15703	17002	11180	8406	2497

Nvidia And Apple Updates -- October 4, 2023

Locator: 45644TECH.

Nvidia news:

Apple news over at Macrumors.

******************************
The Book Page

The First Queen of England: The Myth of "Bloody Mary" -- Linda Porter, c. 2007.

Notes.

Chevron Update -- Barron's October 4, 2023

Locator: 45643CVX.

Just Getting Started -- October 4, 2023

Locator: 45642ADLIB. 

Updates

October 6, 2023: her remarks on Trump no longer bother me.

October 6, 2023: I will never have anything more to do with the Republican Party after the way they treated Kevin McCarthy. 

For Donald Trump not to call the party out on this, there is no way I can ever support him again. Pure disloyalty. The whole party should be embarrassed.  Link: https://www.foxnews.com/politics/45-republicans-call-house-rules-overhaul-mccarthy-ouster-ashamed-embarrassed.

Almost embarrassing: the party did not embarrassed until "after the fact," "after the damage had been done." This is truly no different than bullying in high school.

Original Post

Kevin McCarthy; This will be a much longer note --- about all things non-Bakken, but only one thought now: Kevin McCarthy can hold his head high: he fought the good fight, and at the end of the day, he was one of the few adults in the room. To paraphrase an oft-quoted Hollywood aphorism, "there are no small political acts; there are only small thinkers." Kevin McCarthy was not one of them. 

I feel sad for the disenfranchised.  A millionaires' club was more interested in shutting down the US government to satisfy their egos rather than work to help the poor.

I do think that the torch was passed from Ronald Reagan to Kevin McCarthy, two Californians, a torch doused with a pail of water by small thinkers. 

Doused but not extinguished.

*****************************
0540 - 1000 Hours

********************
The Book Page

The Maniac, Benjamin Labatut, c. 2023.

***************************
The Venerable B-52

96th Bomb Squadron. Link here.

Time lines:

• B-52: 1952 -- present.
• B- 1: 1974 -- to be retired by 2036.
• B-2: 1989 -- to begin replacing the B-1 after 2025.
• F-15: 1972 -- present.
• F-22: 1997-- proposed by DOD to retire training F-22s by 2024 (blocked by Congress); and, to have all retired by 2030.
• F-35: 2006 -- present.
• the F-35 first flew in 2006 and entered service with the U.S. Marine Corps F-35B in July 2015, followed by the U.S. Air Force F-35A in August 2016 and the U.S. Navy F-35C in February 2019. The aircraft was first used in combat in 2018 by the Israeli Air Force. The U.S. plans to buy 2,456 F-35s through 2044, which will represent the bulk of the crewed tactical aviation of the U.S. Air Force, Navy, and Marine Corps for several decades; the aircraft is planned to be a cornerstone of NATO and U.S.-allied air power and to operate until 2070.

The UAW Strike -- An Update -- October 4, 2023

Locator: 45643UAW.

How to "gauge" the strike

• how fast and how wide Fain expands the work stoppage;
• company layoffs with factory closures due to "supply chain interruptions caused by strike"
• in other words, who blinks first.

UAW strike: update -- 

Ford and GM: argument to "drag their feet." Previously discussed. From Barron's:

From the Barron's article:

• with regard to EVs, a short lede with the good news; then --
• the bad news
• EV inventory building; demand dropping;
• inventories are running at 97 days of demand; compared with 57 days for traditional vehicles
• OEM's survived two years of Covid-19 lock down; the UAW strike won't last that long
• winter coming -- bad news for EVs for two reasons
• overall auto sales drop in dead of winter
• winter can cut range of EVs by 25%
  
• sales growth:
• F:
• US EV sales rose 6% y/y (through August)
• Tesla:
• US EV sales rose 30% over same time period
• geography:
• California: EV sales could account for 23% of new sales (wow!)
• Michigan and Ohio: same data point -- 3% (huge ouch)
• both GM and F have lots of assembly plants and employees in Michigan, Ohio
• locals aren't rushing to buy EVS: cold weather can cut EV range by 25%
• EV industry is well out of the early-adoption phase
• poll: all things being equal -- price and range; would you rather buy:
• a Tesla
• a Ford EV
• if you answered Ford EV, you are not paying attention
• like the Barbie movie, let's ask the question again
  
• poll: all things being equal -- price and range; would you rather buy:
• a Tesla
• a Ford EV

Why much is at risk if they "drag their feet." Auto manufacturers, global: I had never seen this graphic before. It's really quite astounding when you think about it. 

And again, one has to ask, how did do many companies get so much wrong. Ferrari with a market cap greater than both Ford and GM (individually, not combined). And Mercedes Benz with a larger market cap than VW, the biggest auto company in the world (by other measures) -- needs to be fact-checked. This graphic is nice to have for the archives. We can check market cap again after the UAW strike is resolved, and again in five years.

Weekly EIA Petroleum Report -- October 4, 2023

Locator: 45643WTI.

Weekly EIA petroleum report, link here:

• US crude oil in storage: down, 2.2 million bbls; at 414.1 million bbls; 5% below average;
• US crude oil imported: yawn; but up an astounding 9.6% over same period last year;
• US refiners: holy mackerel, well below 90% at 87.3%; this is about as low as it gets historically;
• distillate: decreased again; 13% below average;
• jet fuel supplied: up a remarkable 10.6% compared with same period last year;

WTI:

• before report released: $86.70.
• after report released: $86.45; so far today, down 3.12%.
• but it's just the strong dollar, right? Right?

Gasoline demand: pending.

The Energy Transition Price Tag Is Not Sustainable -- IMF -- October 4, 2023

Locator: 45641COSTRENEWABLES.

The energy transition story is tracked here.

As a reminder, it all started with a comment from Peter Zeihan, March, 2022, or thereabouts.

That post: not enough land.

Now, it appears, there is not enough money. LOL. From Irina Slav:

In this instance, surprise, surprise, the adults in the room? The IMF.

Economy -- October 4, 2023

Locator: 45640ECON. 

Trump's tax cuts: a reminder -- the act that cut taxes during the Trump administration "expires" in 2024 -- next year. If nothing gets done to change that, huge tax hikes for everyone.

Wind: if it weren't for the western Gulf of Mexico (Texas / Louisiana) would the US even have an off-shore wind program? Link here.

Auto sales: I keep hearing that cars are too expensive and sales are down and Americans can't afford new cars and we're in a recession and  yada, yada, yada .... it gets tedious ... link here:

Perspective:

• Tesla: about 500,000 vehicles / quarter?
• GM: aboout 700,000 vehicles / quarter?
• Ford: about a million vehicles / quarter / worldwide?
  

Tires. duration:

Tires, price:

Full service financial services: up and down the west coast; now moving to Texas. Can't say enough about the business model: Empirical Wealth Management. Also, love the "domain": net. Not com.

Well, This Could Be Embarrassing -- October 4, 2023

Locator: 45639NOBEL.  

 And to get our mind off McCarthy:

Nobel Prize in Chemistry: link here. Rumors are that Steve Harvey had nothing to do with this. The names named for the Nobel Prize in chemistry, though still subject to change: Moungi G. Bawendi, Louis E. Brus, and Alexei I. Ekimov.

• Bawendi: MIT; born in Paris; grew up in France, Tunisia; post-doc at Bell Laboratories under Brus
• Brus: Columbia University; began his career decades ago on a US Navy scholarship;
• Ekimov: Nanocrystals Technology, Inc. -- born in the Soviet Union (no longer on the map); moved to the US; in 1999 named chief scientist at Nanocrystals.

Now, twelve minutes ago, it's official? It's all about your holiday lights?

Auto manufacturers, global: I had never seen this graphic before. It's really quite astounding when you think about it. 

And again, one has to ask, how did do many companies get so much wrong. Ferrari with a market cap greater than both Ford and GM (individually, not combined). And Mercedes Benz with a larger market cap than VW, the biggest auto company in the world (by other measures) -- needs to be fact-checked. This graphic is nice to have for the archives. We can check market cap again after the UAW strike is resolved, and again in five years.

Little by little, getting this done: student loan relief --

• President Biden
• an additional $9 billion for 125,000 borrowers
• that works out to $72,000 for borrower
• comment: I'm not in favor of carte blanche debt relief but if economists say that the $200 billion price tag will destroy the entire $7-trillion US economy, by all means, go the full Monty. This seems like a no-brainer.
  

High speed rail: largest project not just in the UK but in the entire EU -- wow! Link here.

• decision soon on the "north leg": Birmingham to Manchester
• original plan: London to Birmingham, Manchester, Leeds
• I have a special spot in my heart for Leeds, Yorkshire, England, UK -- I flew into that city numerous times when deployed to a remote air base 
• my most visit memory of Leeds: four Starbucks cafes at one intersection -- one on/near each corner
  
• the plan: Brits would no longer need regional air transportation -- net-zero emissions
• but, like California's bullet train, spiraling costs could de-rail (no pun intended) the project
• scrapping the link to Manchester, and all we have is high-speed rail between London and Birmingham
• cost projections:
• 2015: 56 billion pounds ($68 billion)
• 2019: 98 billion pounds
• 2020: 106 billion pounds ($130 billion)
• just in: scrapped. So, we got a train between London and Birmingham. 
  

Gobsmacking: link here. These guys weren't living in Newell, SD, in 1936, were they? Whatever. We'll just appreciate October that much more, won't we?

Cattle: why I don't worry about the price of beef, either. From Bloomberg today. It begs the question, though: what are Australian ranchers doing differently than American ranchers?

UAW strike: update -- 

Ford and GM: argument to "drag their feet." Previously discussed. From Barron's:

WTI Drops Below $88; OPEC+ Indicates No Change In Supply Cuts -- Three Wells Coming Off Confidential List -- October 4, 2023

Locator: 45638B. 

McCarthy out. So apparently, back in power after the Pelosi era, the GOP spent that opportunity re-arranging offices. 

Military promotions: Meanwhile, I assume in the US Senate, all military promotions remain on hold. On this issue, Google is not helpful this morning. Having said that, apparently it's not that big a deal and perhaps the senator holding up promotions is in the right. He is not stopping promotions on an individual level; just stopping promotions in one big swoop.

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

WTI: $87.62

Thursday, October 5, 2023: 14 for the month; 14 for the quarter, 584 for the year
39359, conf, CLR, Arthur 3-12HSL1,
38035, conf, PetroShale, Tahu 3MBH,

Wednesday, October 4, 2023: 12 for the month; 12 for the quarter, 582 for the year
39689, conf, WPX, Augustus 8-26H,
38273, conf, Hess, BB-Olson-150-95-09H-5
38037, conf, Petroshale, Tahu 2TF2H

RBN Energy: surging hydrocarbon production increasingly links US to global markets.

U.S. oil, natural gas and NGL markets are more interconnected than ever — with each other and with global dynamics. The deep connections we see today have evolved in the 15 years since the start of the Shale Revolution, and in recognizing how the various segments have impacted one another, we can better explain how they are driving today’s markets. That was the focus of our Fall 2023 School of Energy and it’s the subject of today’s RBN blog, which (warning) is a blatant advertorial for School of Energy Encore, a newly available online version of our recent conference.