A Record -- And Not Mentioned By Mainstream Media? America’s Century — March 5, 2023

Link here.

The 21st Century -- Energy -- America's Century -- Happy Birthday, Elvis -- January 8, 2023

Themes for 2023.

The Over-Riding Themes

Global energy: the 21st century is America's century.

Medicine: it's all about CRISPR, mRNA.

Information: it's all about semi-conductors, automation, robotics. 

From today, over at oilprice.com:

*********************
Happy Birthday, Elvis

Wow, wow, wow -- currently playing on TCM -- "Elvis On Tour (1972)" -- and where was it filmed?

In San Antonio.  At least that's where the documentary opens. I don't know if they spliced in segments from other venues for this documentary. I assume they did. Oh, yes ... now a studio recording session.

His birthday: January 8, 1935. 

Link here. And, here.

1972: I was a junior in college in Sioux Falls, SD.

Distillate Fuel -- August 27, 2020

 From last month, July 22, 2020, Reuters:

U.S. crude oil and distillate inventories rose unexpectedly and fuel demand slipped last week, the Energy Information Administration said on Wednesday, as a sharp outbreak in coronavirus cases hit U.S. consumption. [As a sharp outbreak in coronavirus cases hit US consumption? Say what? The coronavirus pandemic has been going on since at least March, 2020, in US.]

U.S. crude production ticked higher and refined products supplied, a proxy for fuel demand, declined. The market has recovered from the doldrums of April, when U.S. prices briefly dropped to more than negative-$40 a barrel, as producers trimmed supply due to a slump in demand amid lockdowns to control the pandemic. [The "-$40/bbl" has become a meme -- in reality it was an anomaly reflecting the imperfections, the chaos, the imbalances of an energy revolution. The issue was quickly resolved.]

Crude inventories rose 4.9 million barrels in the week to July 17 to 536.6 million barrels, compared with analysts’ expectations in a Reuters poll for a 2.1 million-barrel drop. Production rose to 11.1 million barrels per day, up 100,000 bpd.

Distillate stockpiles, which include diesel and heating oil, rose 1.1 million barrels to 177.9 million barrels, their highest since December 1982, data showed. Analysts had expected a 618,000-barrel drop.

Can anyone really take any of this seriously? Do folks really think analysts have such incredible precision, such incredible crystal balls? Distillate in storage is trending toward 200 million bbls; week-over-week, inventories rose by 1.1 million bbls (1.1 / 176.8 = 0.6% increase week-over-week). But even worse, the forecast was for a change of 618,000 bbls from 176.8 million = 0.3% change.

The takeaway is simply this: US distillate stockpiles are at their highest since 1982, almost forty years ago, Ronald Reagan was in his second year of his eight-year presidency. And this week, the US distillate inventory rose once again.

Wednesday US Crude Oil Data In Three Charts -- August 2, 2017

Making America Great Again -- Huge Story -- July 20, 2017

.... and this is why: https://www.reuters.com/article/us-usa-gasoline-kemp-idUSKBN1A52CJ.

***********************************

In My Whisky Phase

The Energy And Market Page, T+115; Huge US Distillate Export Story Being Reported -- May 15, 2017

Disclaimer: this is not an investment site. Do not make any investment, financial, job, relationship, or travel plans based on what you read here or think you may have read here. If this stuff is important to you, go to the source. 

Mid-day trading: both the Nasdaq and the S&P 500 hit new record highs. 

Opening: NASDAQ hits new record high. 

Futures looking good. Up 54 points about an hour before the opening. It could be a wild day on Wall Street. Already futures suggest some new records will be set. AAPL could set a new record. I think one can learn a lot by looking at companies whose shares fall on a strong day on Wall Street, and those companies whose shares rise on a bad day for Wall Street. With futures looking to rise today, what is Tesla doing? Down over 2% in pre-trading, losing over $7 on a $320-stock.

Saudi Arabia, Russia agree to extend cuts into 2018.

Oil "surges": according to Reuters. The surge: oil prices almost 3% higher. Saudi and Russia agree to extend production cuts (wink, wink) for nine months. Considering Saudi burns more oil domestically during the hot summer months to run air conditioners it will be interesting to see how Prince Salman threads that needle.

WTI vs Brent: with price of oil "surging," it's important to watch the "oil" that one is referencing. I saw a headline that said "oil" surged to over $52. Considering a week ago "oil" was as low as $43 that's quite a surge. In fact, the former was Brent, the latter was WTI. The drop to $43 was also due to a "flash crash" that most folks did not notice, happening overnight in the states. The "oil" that is over $52 today is Brent oil; WTI is up almost 4% but still below $50 ($49.55). Regardless, WTI looks like it's headed back to the sweet spot: trading in a range between $50 and $55.

Making America great again. From the EIA today:

Distillate exports from Central Atlantic states totaled more than 103,000 barrels per day (b/d) in February, a record high for the month.

Distillate fuel is usually imported into the Northeast during the winter months because 22% of households in the Northeast use distillate fuel for home heating, a higher proportion than in any other U.S. region. However, because temperatures were warmer than normal in February 2017, domestic demand was relatively low.

Europe received 50% of the total distillate exported from Central Atlantic states in February 2017. The remainder went to Central and South America (28%) and Africa (22%). Total motor gasoline exports from Central Atlantic states totaled more than 31,000 b/d in February, much more than the 1,000 b/d average of the previous five Februarys.

Nearly all of the gasoline exports from Central Atlantic states went to countries in Africa. --- EIA

*******************************

Tesla -- We Should Know In The Next Six Months Or So

Analyst:

• Tesla will blow through $3.1 billion (vice earlier estimates of $2.3 billion) in 2017
• will not be profitable until 2019 
• Amazon and Apple seen as competitors

The Energy And Market Page, T+46 -- March 7, 2017

 Closing

5:30 p.m.

Down: both the Dow and WTI closed down a bit by the end of the day. The Dow down 30 points (inconsequential); WTI down 40 cents, again, below $53 -- which is really bad news for Saudi Arabia: a) the actual price; b) the "stubborness" of the price to move; and, c) the trend (down).

The Permian: on that note, those companies paying $40,000/mineral acre in the Permian were also betting on a better price / better trend with regard to WTI. I'm not so sure folks are going to look back on some of those deals and wonder "what in the world were they thinking?" Even at $100 oil, one wonders if one can make the math work at $40,000/acre; and, at $50 -- well, I've said all I should say.

***************************

Opening

Tea leaves: lots of talk coming out of the global oil conference being held in Houston this week. It sounds like Saudi Arabia is in a heap of financial trouble. Saudis seem to be admitting that cuts in OPEC / non-OPEC production (outside the US) have not resulted in price changes as fast as they would have liked (or possibly even predicted). They warning other countries not to take advantage of Saudi's cuts by increasing their own production, and that OPEC would meet again in May, 2017, to discuss the production cuts which are scheduled to end at the end of June, 2017. My hunch is that it will depend on the "mood" of the Saudi king (or the will of Allah) whether the cuts are extended. Saudi really, really, really doesn't want to extend the cuts (for any number of reasons, but they have little room to maneuver.

WTI: for some reason, oil is moving up a bit today in early trading. Up about 30 cents, to $53.50. Perhaps nothing more than traders staying within a narrow trading range.

Exxon Mobil: The big story today appears to be the ExxonMobil $20 billion investment along the Gulf Coast, previously reported. The Wall Street Journal reports. Talking head on Fox Business News suggests this plan had been under development for many years, but it was expanded and given the go-ahead when Trump was elected. Will create 45,000 jobs. This is a huge, huge story; will be under-reported by the mainstream media.

This naturally follows: US Oil Industry Becomes Refiner to World as Exports Boom -- from Bloomberg.

When PBF Energy Inc. scooped up a refinery from Exxon Mobil Corp. on the Mississippi River in 2015, it wasted no time sprucing up the plant with an eye toward quickly resuming lucrative fuel exports.

Within three months, PBF was ready to load its first tanker for shipment abroad.

By late last year, the New Jersey-based company was exporting 22,000 barrels a day of fuel, or 16 percent of that refinery’s output. Now, it wants to boost that to almost 25 percent.

PBF isn’t alone in this push. From major producers such as  Chevron Corp. to specialized refiners including  Valero Energy Corp., the U.S. refining industry has shifted its game over the last five years, taking advantage of gaps left by struggling refiners in Latin America, Africa and Asia. Along the way, it’s transforming what had long been a largely domestic business into a new global venture.

"U.S. refiners are now the refiners for the world," said Ivan Sandrea, head of Sierra Oil & Gas, which is planning to build infrastructure to import U.S. fuels into Mexico.

U.S. companies last year exported a record 3 million barrels a day of refined products, more than double the 1.3 million barrels a day shipped a decade ago, according to data from the Energy Information Administration.

Gasoline led the surge, with exports hitting an all-time high of almost 1 million barrels a day in December, up ten-fold from a decade ago.

Pipeline: meanwhile, the pipeline story of the year (so far) is the Enbridge-Spectra Energy story but the DAPL may be close behind. A reader sent me a link to the court-mandated update. The company thinks oil will be flowing through the pipeline by mid-March. The court requires 48-hour notice before oil actually starts flowing, allowing the court time to make a "final" ruling on the case. The link will take you to a pdf:  https://www.indianz.com/News/2017/03/06/04515967273.pdf.

Snap: Snapchat shares drop below offering price. The shares fell 12% in price yesterday and are down 4% in pre-trading today.

American Airlines Announces New Direct Flights To Billings, MT -- January 10, 2017

In DFW-area news this morning: American Airlines announces more direct flights to Billings, MT.
It looks one-way prices during low-season is about $200/one-way. From LAX to Billings, MT, about $175 during low season. Interesting. I'm planning a Montana-SD-ND trip later this spring. Possible include Colorado, but with direct flights at relatively low cost, may fly directly to Billings, skip Denver. To Bozeman from DFW, about $350 during low-season, one way.

************************

Two Under-Reported Stories In The Energy Sector

Based on fairly extensive surfing of the net over the past month or so, there seem to be two under-reported international energy stories: India and Mexico.

Both counties are reporting surging demand for fossil fuel energy.

Platts is reporting a podcast today ...

Mexico’s higher gasoline prices for consumers is having a ripple effect through North American gasoline markets as the US exports more product to its neighbor.

... which links to a earlier story:

US gasoline exports to Mexico hit record high on refinery issues, strong demand. 

When I say under-reported, I mean these stories are not often found in print editions of US "national" newspapers nor in regional newspapers.

From the earlier story at Platts:

Mexico's record-low refinery production and growing consumer demand helped push US gasoline exports there to a new high in October, a trend that has boosted prices in both countries.

Gasoline exports to Mexico climbed 1.86 million barrels to 12.08 million barrels in October, according to US Energy Information Administration data released Friday, the highest total since that data started being tracked in 1993.

The previous peak was 11.42 million barrels in December 2010.

Mexico is by far the largest importer of US gasoline, taking in 45.8% of the 177.4 million barrels of finished gasoline the US exported through October of this year.

With regard to India, a John Kemp graphic, via Twitter, is worth ten-thousand words. This is not a projection; this is "real":

*************************** 

EVs Sold In 2016

Bingo Blackout! The 2016 table is complete.

Note the huge jump in month-over-month (December-over-November) deliveries for Tesla Models S and X. One would like to see a bit more about these numbers. Assuming the numbers are "real," and/or "accurate," it is due to Tesla's business model: subscriptions or ordering ahead-of-time, sight-unseen.

More Data On Mexico's Gasoline Imports -- December 31, 2016

The original story was at this post.

Now, additional data is provided, from Platts. Data points:

• Mexico's record-low refiner production and growing consumer demand: pushed US gasoline exports there to a new high in October
• gasoline exports to Mexico climbed 1.86 million bbls to 12.08 million bbls in October
• the previous peak was 11.42 million bbls in December, 2010
• Mexico is by far the largest importer of US gasoline; take 46% of the 177 million bbls of finished gasoline exported by the US in October, 2016
• exports push the price of gasoline higher
• outright price of Gulf Coast pipeline-delivered conventional gasoline, $1.71, highest price since August 18, 2015
• prime reason for increased exports to Mexico: chronic underinvestment in downstream investments over the years
• Mexico's refined product production is at its lowest point since Pemex started tracking data in 1995
• this, despite domestic sales climbing to a record high
• Mexico is expanding its main import terminal, the port of Tuxpan on Mexico's east coast

This won't be the top energy story of 2016, and it may not even make the top ten list, but it's a huge story and it's going to get much bigger. 

US Gasoline Exports Surging -- November 19, 2016

From FuelFix, an update on surging US gasoline exports, some data points:

• Valero Energy Corp shipped excess supplies to Canada instead of Colombia
• Phillips 66 sent the first gasoline shipment in 16 months to Egypt
• Mercuria Energy Group is storing 60,000 tons of gasoline blending components produced in India at an offshore site in the Bahamas
• lower refinery utilization in Latin America + abundant US export capacity = bad news for those foreign refineries
• US gasoline exports reached 1.07 million bpd, week ended November 4, 2016; first time the figure has topped 1 million bpd (somewhat of an anomaly due to two Colonial Pipeline spills which resulted in closure for six days in October; and in closure for 12 days in September)
• shipments rose 35% in the week ended November 4, 2016; have almost doubled since the September 9, 2016, Colonial outage
• the latter move corresponds with a late-August adjustment in how the EIA calculates its export data: the agency shifted to using near-real-time Customs data rather than extrapolating from monthly estimates
• two other records set simultaneously:
• US refiners and gasoline blenders churned out 10.5 mllion bbls of gasoline/day
• Gulf Coast inventories of gasoline climbed to the highest seasonal level ever
• driving demand slid about 2%

Another Open-Book Test For Energy Investors -- 2020 Is Only Four Years From Now -- October 29, 2016

A couple of days ago I posted this little gem:

Watch the price of gasoline in November: indications suggest the price of gasoline could spike in Europe in November, 2016.

Now, yesterday this story over at Platts:

Global gasoline demand will rise as long as crude stays below $60/b, and a shortage of Asian gasoline refining capacity will drive US exports higher, [according to an analyst].

"Any way that we look at the future refineries under construction [in Asia], they cannot produce enough gasoline." Fesharaki expects US net exports of refined products to keep rising.

Cool, huh?

Other data points in the Platts article:

• in one decade, the US has made a dramatic swing from 3.9 million b/d of net imports to 2.3 million b/d in net exports (July, 2016) -- insert "Bakken" or "shale revolution" here
• this was the decade in which Obama famously said, "we can't just drill our way to lower prices" 
• as time goes by, there is a gasoline shortage worldwide that only US refiners can supply -- analyst
• expect huge amounts of exports of US gasoline to all over Asia, without which Asia cannot balance its system
• in addition, ocean-going tankers must reduce sulfur-containing fuel

Now get this -- that last bullet, regarding ocean-going shippers (you will see this posted again):

• currently, ocean-going tankers bunker 4 million b/d, which is using 3.5% to 4% sulfur fuel oil
• "If God almighty comes from the heavens, He cannot make 0.5% fuel oil by 2020" -- analyst
• thus: cheating, rampant noncompliance, use of US LNG for bunkering and blended diesel
• the price of fuel oil will collapse and refinery economics will go through the roof

Is this an open book test for investors or what?

Saudi Arabia has announced plans for new refineries; the only question is whether they will locate those refineries in Saudi Arabia (lack of skilled labor force); Europe (unlikely); Asia (possibly); along the Texas/Louisiana coast (very likely).

With regard to fuel oil, by the way, it will be interesting to read the tea leaves -- New England -- fuel oil or natural gas?

***********************************

A Note For The Granddaughters

This has been quite a day for the oldest granddaughter, Arianna, age 13.

Last year she was the only flutist in her symphonics band to audition for honors band, and she made it. She plays second chair in honors band.

Today, she auditioned for District Band, and she made it. A huge honor. This is really quite exciting for an eighth grader in her last year at middle school before moving to high school next year.

Now, she is playing water polo in Denton, TX, at a north Texas water polo tournament. Hoo-ahh!

Gasoline Demand Update -- RBN Energy -- July 5, 2016; Active Rigs In ND Back Up To 31

I've only read a little bit of today's RBN Energy post today, but it looks like another great analysis. My hunch is that it may be the best "energy" post to read today and there's going to be a lot posted today. The title of today's RBN Energy update: petroleum product exports riding high. Archived.

The upswing in U.S. gasoline demand is nothing new.

RBN blogged about it this time last year and covered issues related to delivering gasoline, diesel and jet fuel to Northeast markets a few weeks back.

In the Energy Information Administration’s (EIA) June 2016 Short-Term Energy Outlook, gasoline consumption this summer was projected to average 9.5 MMb/d, a solid 1.9% higher than the summer of 2015, which was a strong demand season itself. 

What really stands out, though, is that even with high domestic demand for gasoline, net U.S. export volumes remain impressive. [Data is presented] showing the huge shift of the U.S. from a net importer of about 1.5 MMb/d in 2006 to a net exporter of about 1.2 MMb/d over the past six months. The graph on the right in Figure 1 focuses on the 2012-16 timeframe and splits net exports into gasoline (green line) and distillates (brown line). Both gasoline and distillate exports are still trending higher, but the big news is gasoline, which has moved well into the net export category since late 2015.

I'm not going to look for it now, but a few weeks ago I opined whether the refinery strikes in France might drive US gasoline exports. In addition, gasoline demand is outpacing domestic gasoline production on the west coast of South America.

The "coolest" thing in that article: the Panama Canal was not mentioned. The expansion of the Panama Canal can only add to overall exports, all else being equal. Even if gasoline and distillates are not transported in the new larger tankers, just the fact that the canal has been widened will increase the pace of all exports.

********************************

Back To The Bakken

Active rigs back up to 31:

	7/5/2016	07/05/2015	07/05/2014	07/05/2013	07/05/2012
Active Rigs	31	76	191	188	215