Gasoline Prices At Their Lowest July Level In 12 Years -- July 21, 2016

Updates

July 22, 2016: Over at Twitter, John Kemp has put together a number of slides, a number of data points, and a number of tweets to make a case that mild weather in February and March (2016) "caused the market to over-estimate US gasoline consumption growth in 2016." It's hard to say, of course, but the data certainly explains half the story: why there is such a glut of gasoline right now. However, the other half of the story is not explained. There was a huge jump in US vehicular traffic in February / March (compared to previous year) but that growth dropped off significantly in April / May. Or perhaps no explanation is needed. Perhaps John Kemp's argument that mild weather in February/March was an anomaly that "global warmists" bought into and refiners followed that line of thinking.
 

Original Post

 

On July 14, 2016, I wrote:

Gasoline selling for $1.68/gallon at QT service stations west of DFW. I think these prices will go down at least another 20 cents based on prices elsewhere in the immediate area ($2.09/gallon). 

Now, today, from AAA and USA Today:

Even with the peak travel season in full swing, gasoline prices are stuck in reverse.

Gas prices have plunged to their lowest July level in 12 years, according to AAA, even as Americans are racking up more miles.

In fact, gas prices have dropped in 39 out of the last 40 days, lopping 20 cents a gallon off in total during that span, according to AAA.

"Gas is getting cheaper as we're moving into the busiest part of summer travel," AAA spokesman Michael Green said. "Those are real savings that add up...And we've seen that cheaper gas prices are motivating people to drive more and to take long trips this summer."

Fathomless ignorance:

"We can't just drill our way to lower gas prices." -- March 1, 2012

The Mideast On The Brink -- A Big Story -- January 2, 2016

For newbies, I am aware of events in Saudi Arabia but am not posting them as a stand-alone post for now. But that doesn't mean I'm not following them. I am following this story over at "Big Stories" and more specifically, "Mideast On The Brink."

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Fathomless Ignorance

I had completely forgotten this quote: "We can't just drill our way to lower gasoline prices." -- December, 2014.

[Update, January 3, 2016, 6:10 a.m.: LOL.]

GDPNow -- Latest Forecast -- November 13, 2015

GDPNow (dynamic link)

The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2015 is 2.3 percent on November 13, unchanged from November 4. The forecast of real growth increased to 2.9 percent last Friday after the employment situation release from the U.S. Bureau of Labor Statistics.

It has since retreated to 2.3 percent as the forecast for the contribution of inventory investment to fourth-quarter GDP growth fell from -0.3 to -0.8 percent after Tuesday's wholesale inventories release from the U.S. Census Bureau and this morning's retail inventories release (also from the Census).

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JV Or Not JV

Updates

June 30, 2016: after the ISIS attack on the Istanbul airport, this comment:

Bob Baer, a former CIA intelligence officer who specializes in Middle East security issues, said there is no foolproof way to preventing a similar airport attack. 

"You cannot protect these airports 100% ... especially in a place like Turkey, where ISIS has cells everywhere," he said.

And this is the organization that Obama called the "JV." Fathomless ignorance."

Original Post

 

I hope these two links are never broken: fathomless ignorance --

That JV team in the Mideast? ISIS? ISIL? It looks like they were misunderestimated.

The President says a minimum of three years and a gazillion dollars and another war will be needed to (maybe) defeat the JV team, despite A-team from Jordan finally joining the fight.

Are any links needed? We'll see. This one will do. The only phrase Chuck Todd did not use in that interview: "fathomless ignorance."

And then today, read the first paragraph below which was the second to last paragraph at this link:

Asked about Republican presidential candidate Ben Carson’s suggestion that eliminating ISIS would be easy, the president said Carson “doesn’t know much about it.”

“Over the last several years I've had access to all the best military minds in the country and all the best foreign policy minds in the country, and I'm not running for office. And so my only interest is in success,” the president said.

Fathomless ignorance. I wish I had thought of that one. 

File Under: "The Horse Is Already Out Of The Barn"

Although the article is dated August 19, 2013, I think this is pretty old news (like about a month or so) -- or maybe it's just an update to anticipated action by the county. I forget. Whatever. The horse is already out of the barn.

The StarTribune is reporting:

After issuing more frac sand mining permits than any other county in Minnesota or Wisconsin over the past 36 months, Trempealeau County will take a hiatus to consider possible adverse health effects on citizens.

The County Board, applauded by an overflow crowd, Monday night voted overwhelmingly in favor of a moratorium of up to a year on permitting new sand facilities or allowing existing sites to expand.

“I’m very pleased,” said Sally Miller, the board member who authored the resolution. “This is going to slow things down and give us a chance to catch our breath.”

Proponents of the plan had argued it would allow the scenic county that sits across the Mississippi River from Winona, MN, to evaluate whether sand mining has a human cost. Those types of questions have largely gone unanswered as the county has approved 26 companies mining and processing silica sand on a total of 4,733 acres — and counting. County officials say interest in forming new mines remains strong.

Check back in a year.  My hunch is they ran out of workforce. And trucks. And acres.

North Dakota State Approves Almost $7 Million For Schools In Oil Patch

The Bismarck Tribune is reporting:

Nearly $7 million in grant dollars for immediate school district needs was approved by state officials during a special meeting Thursday morning.

The North Dakota Board of University and School Lands approved $6.8 million from the Oil and Gas Impact Grant Fund for emergency needs to 23 kindergarten-through-grade-12 school districts. The five-member board approved the recommendations unanimously.

State Land Commissioner Lance Gaebe told the board the recommended grants before them were chosen from a total of 42 applications amounting to $21.4 million in requests.
The grants were awarded to requests relating to school safety, teacher housing and temporary classrooms.

“Some of the needs aren’t known until school starts,” Gaebe said.

He said a second K-12 grant round is to be held in the fall to address additional needs.
The largest individual grant awarded was $1.79 million to McKenzie Public School District No. 1. Grant dollars for the district are for school safety upgrades, employee housing, security and lockers.

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In other news, a piano tuner by trade is trying to stop the oil industry in North Dakota; he is concerned about his grandchildren going to school in hazmat suits. I wasn't sure if he was talking about his current grandchildren or grandchildren in the future. I don't know where his grandchildren live but they probably don't live in North Dakota. I know Homer's son Bart freely rides his skateboard without a protective suit. But I digress.

The Simpsons

Wow, Talk About A McGuffin; A Real Forrest Gump

FoxBusiness is reporting:

Obama said ... the evidence was that TransCanada Corp's Keystone XL pipeline, which would carry 830,000 barrels per day of crude from Canada's oil sands and the Bakken shale in North Dakota and Montana to refineries on the U.S. Gulf Coast, would not be a big jobs generator.

He said it might create 2,000 jobs during the construction for a year or two and then 50 or 100 jobs thereafter. 

[His own] State Department's analysis in March was that Keystone would support 42,100 direct and indirect jobs.

But, of course, that was the same State Department advising him on Benghazi.

I wonder if the US interstate system (except for a few toll roads) has any permanent employees. The interstate system was a huge jobs program with a great strategic purpose, not unlike the US natural gas and crude oil pipeline system.

For O'Bama to say the Keystone, with 50 permanent jobs, is not a jobs program, reveals just how much of a Forrest Gump he really is.

But again, TransCanada made a mistake by opening the door to that argument: arguing that the Keystone was a jobs program. 

This Is For Becky, Who Was Surprised By The Disappearing Lake In The Arctic; The Arctic Sees Shortest Summer On Record

IceAgeNow is reporting:  Unprecedented July Cold – Arctic Sees Shortest Summer On Record

“Normally the high Arctic has about 90 days above freezing. This year there was less than half that,”  says Steven Goddard website.

“The Arctic ice extent is showing a remarkable recovery from the great oscillations of 2012,” says Guimaraes. “Compare with the previous years listed there, you’ll see that 2004 is the year that is closest to 2013 in terms of average temps during the summer.”

I'm glad President O'Bama is on top of this. 

Note: to repeat -- this is the shortest Arctic summer on record. Not just the shortest summer in that past few years, or the past decade, or the past century, but the shortest summer on record. And it should be noted Vikings were in the Arctic a long, long, long time ago.

My hunch is they didn't keep records. But the tree rings won't lie.

This Is When Bloomberg Loses Its Credibility

Bloomberg is reporting:

Climate change will probably trigger more human conflict, according to an article in the journal Science.

An examination of 60 separate studies, including one stretching back to 10,000 B.C., found that individuals, groups and nations are “substantially” more likely to become involved in physical conflict in hot weather and heavy rain.

Climate change is expected to drive up temperatures in many regions, which will “systematically increase the risk of many types of conflict” ranging from barroom brawls and rape to civil wars and international disputes, according to the article. 

The writer has a great pseudonym: Justin Doom. Just-in Doom. Just in, breaking news, doom. And gloom. Global warming.

Along with Becky and Josh, Justin will now join the Forrest Gump group. 

Do you ever wonder how these research topics get funded? Yes, you are correct.

I've Added A New Tag: Forrest Gump ...

... at the suggestion of a reader. Thank you.

Josh and Becky (see tag) deserve each other.

Josh notes Bakken operations were disrupted by spring weather (2013); he had predicted major flooding in the Bakken earlier BECAUSE OF PREDICTIONS OF RED RIVER FLOODING.

These were my thoughts to his initial post predicting gloom and doom in the Bakken.

KOG is trading at new highs today, and Halcon reported net production for the period increased 646% year-over-year to an average of 29,165 barrels of oil equivalent per day.

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read at this site or anything you think you might have read at this site.

Europe's Renewable Romance Fades -- The WSJ ...

... just as President Obama's infatuation with wind soars....

The WSJ op-ed piece here.

Europe has bet big on wind and solar energy, and many environmental advocates would like America to follow. Wind and solar have a role in the U.S. energy economy, but we would be wise to see the cautionary tale in the European experience and adjust our plans accordingly.

Wind and solar generate 3.5% of America's electricity today, but Denmark gets 30% of its electricity from wind and hopes to produce 50% by 2020. Germany, Europe's largest national economy, produces roughly 12% of its electricity from wind and solar today, and it wants renewable energy to account for 35% of electricity generation by 2020.

Clean energy powered by renewable resources is understandably attractive. But the honeymoon with renewables is ending for some Europeans as the practical challenges of the relationship become clear.

The first challenge is cost. Germany has reportedly invested more than $250 billion in renewable energy deployment, and its households pay the highest power costs in Europe—except for the Danish. On average, Germans and Danes pay roughly 300% more for residential electricity than Americans do.

Another challenge of Europe's growing dependence on renewable energy is far more serious: the potential loss of reliable electrical supply. It's one thing to ask consumers to pay more for cleaner energy; it's another to force them to endure blackouts. 

I used to have strong feelings about renewable energy in this country, but I have pretty much lost interest. "Fool me once, shame on you. Fool me twice, shame on me."

Americans should now be aware of the scams, the cost, the futility of solar and wind, but if Americans don't mind paying higher utility bills for opportunity to burn candles during rolling blackouts, that's their prerogative.  We have a democracy and if folks want to approve these projects, that's their right.

I'll continue posting links/stories about global warming (which stopped some 15 years ago) and renewable energy for archival purposes, but I've pretty much lost interest in the whole subject.

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This one is almost too good to pass up. This sounds like Becky never took a science course after eighth grade. An entire "science" article with about as much science in it as saying "the sun came up in the east today."

Apparently Becky was very, very impressed with a "lake" in the Arctic that disappeared earlier this  summer. But then this:

The lake, about the size of an Olympic swimming pool, started forming in mid-July, LiveScience first reported on July 23. The size and timing of the lake are typical for this time of year and location, the researchers said.

A reader suggests Becky is padding her resume for a future application as Director, EPA.

SeekingAlpha Is Slipping --

I wouldn't pay any attention to this one.

The first tip-off is the headline: Great ready for the big one -- Bakken flooding coming this year.

"Great ready." Say what?

On a more substantive basis: suggesting that the Bakken might flood because the Red River might flood this year is inanity.  The writer has no clue. Not even worth saying anything more. Most likely the writer is shorting Bakken stocks.

For newbies, a very, very wet spring in the Bakken will make things difficult, for about a month. And roads are always a problem. But the Bakken will do just fine. Unlike Libya or the Mideast, I don't expect to many wars or terrorist events in the Bakken. Unlikely, as well, is an off-shore oil spill. There are plenty of things to worry about when investing in the oil and gas sector. Worrying about the Missouri flooding is not one of them.

By the way, when someone talks about flooding in the Bakken, it suggests to me the individual does not know much about the Bakken. A much, much bigger problem impacting increased oil production is inadequate natural gas takeaway capacity. Oil companies have to choke back production if they can't get their natural gas into the pipeline.