Week 33: August 9, 2020 -- August 15, 2020

Who are they trying to kid?

• OXY warrants.

Top story of the week:

• Ninth Circuit court strikes down California gun law;
  

Top political story of the week:

• Joe Biden picks Kamala Harris
• NBA re-brands itself as BLM;
  

Top investing story of the week:

• Buffett sells banks, buys gold;
  

Top energy story of the week:

• Rotating power outages in southern California

Most under-reported story:

• The low, low price of gasoline (outside of California);

Most out-of-touch public official:

• Kash-&-Kari;

Top international non-energy story:

• Saudi Armaco's publicly traded company in deep doo-doo; here; and, here;
  

Top international energy story:

• Hyundai shares soar 15% in Seoul; announced dedicated EV brand --Ioniq;
  

Top national non-energy story:

• College football's fumble; and, here;
• Waffle House is back;
  
• Sturgis rally goes on as planned; and, here;
  
• The stock market; and, here;
  

Top national energy story:

• Rotating power outages in southern California; renewable energy doesn't show up;
• Mass transit is dead; electric golf cars are in;
• Gasoline demand stalls out;
• Distillate volumes remain sky-high;
  

Top North Dakota non-energy story:

• Bakken golf course ranked #35 in the US;
• North Dakota launching exposure-notification apps;
  

Top North Dakota energy story:

• DAPL: judge asks parties to continue to work with each other in good faith; and, here;
• Bakken oil prices 400% increase over recent low, from $7/bbl to $33/bbl;
  

Geoff Simon's top North Dakota stories:

• Oil production rises slightly in June; new completions needed to maintain level of production (not more rigs);
• ND airline boardings continue to improve;
• State set to intervene in lawsuit over mineral rights
• MHA Nation condemns state effort to intervene in lawsuit
• Big name oil companies owe state millions in old royalties; link here;
• WBI planning to add more than 500 MMcf/d of natural gas pipeline capacity;
• Watford City looks at $2.84 million deficit in preliminary budget;
• Districts 1 and 8 both vote to approve reorganization plan;
• EPA to issue oil and gas methane emissions regulation rollback this week;
• "Green energy" reality check: expansion will require a lot more mining; link here; Manhattan Institute

Operators:

• MRO reports two incredible DUCs;
• MRO reports a monster DUC;
• XTO well expands Heart Butte field;
  

Operations:

• Petro-Hunt Charlson well production jumps 10x;
  

Fracking:

• No sand in two fracks?
• Enerplus: marked reduction in water in fracks?; and, here;

Flaring:

• Fall in US flaring cause of optimism -- Financial Times;

Network Business News -- Inability To Respond Quickly -- June 20, 2017

I've talked about this before. CNBC has challenges with "turning on a dime."

When big stories break, CNBC reacts, but it's takes a few days or even weeks to flesh out the story.

For example, today, without question, the big story is WTI dropping below $43. But yet, the network is spending an inordinate amount of time on the "tax story" and "manufacturing in the US." Apparently, today's CNBC theme is "Manufacturing in the US."

Like any network show, the producers need time to put it together. The deadline is a "rolling deadline." The general theme for any day is being developed one to two weeks before the day the show is aired. About a week before the program is to be aired, interviews are set up, and 48 hours to 72 hours those interviews are finalized. Finally, on the date the program airs, the interviews go live. The journalists are on-scene -- locations were scouted out one to two weeks earlier. That's why networks "love" hurricanes, not tornadoes. The former provide one to two weeks for networks to prepare; tornadoes allow no preparation.

So, today a lot of time is spent on stories that are the old, old stories: tax reform, Tesla, REITs, infrastructure, manufacturing, etc.

But, in fact, the big story is WTI going below $43. That story trumps (no pun intended) every other network story right now. No one really believes we will see any meaningful tax reform this year (although "no one" could be really, really long). But regardless of what any talking head says about "tax reform" the fact is WTI below $43 is the big story of the day.

One talking head said oil below $43 is a mixed bag: some manufacturers will love it; their raw material costs much less. Others -- those in the E & P and shipment of oil will be hit hard.

But this is the rub: it may be a "mixed bag" but some parts of the sector will be hit harder than others. Users of crude oil / energy will see little change with $43-oil vs $50 oil. Contracts for $48 oil were made months ago.

On the other hand, E & P and oil shippers will see cash flows change fairly quickly; yes, contracts are already in place, but contracts only cover part of their commitments.

My hunch: next week about this time, we will start seeing stories on $40-oil.

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First World Problems

Illinois may lose contract with Powerball and Mega Millions lotteries.  The state needs to pay the lottery upfront, every June 30th -- and with literally no money for discretionary spending, Illinois may have no other choice but to end its association with the regional and national lotteries.

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So Out Of Touch

White trash.