Huge Story -- Minimal Impact, Except For Mexico -- September 8, 2023

Locator: 45573MEXICO. 

 I don't know if I would have bothered posting this had it not been covered by Charles Kennedy.

Link here.

PEMEX Still Looks Bankrupt To Me -- January 13, 2023

Earlier this morning:

• New Mexico: out-producing Mexico. PEMEX to refinance debt; technically insolvent. Owes $105 billion; $10 billion due now. The check is in the mail.

12:14 p.m. CST: Pemex issues bond (singular) worth at least $1.5 billion to refinance debt -- sources.
a ten-year bond

• Pemex's debt payments due for the first quarter of 2023 stand between $5.5 billion and $6 billion
• The debt payments the company was due to make in January were being met with its own funds 
• Pemex had financial debts of some $105 billion at the end of the third quarter, when it posted losses of nearly $2.6 billion.
• yield not reported; 6%?
  

Still looks technically bankrupt to me. 

WTI Surges; Three Wells Coming Off Confidential List; Thirty-nine Active Rigs -- May 31, 2022

Firefox: now has one-click "cookie blocker." One click on the Firefox browser and all cookies are blocked. Ten minutes later: nope, not gonna use it. I have to re-sign in to every site every time, even if I move to a different site without signing out of the first. I guess I could keep opening new tabs. But, the feature definitely works. LOL. 

Netflix: one reason to subscribe for one month. Norm Macdonald's posthumous "Nothing Special."

Mexico: link to Charles Kennedy. Mexico's spend on fuel subsidy is double its oil exports revenue. And oil is running at incredibly high prices right now, exceeding $100/bbl. 

Kremlin:

• Russia says it will find other buyers after EU ban.
• Russia oil is selling at huge discounts.

Expensive: for those paying attention, it's going to be quite a summer for ISO-NE and ISO-NY. Nothing is ever so bad I can't make it worse. -- paraphrasing Joe Biden.

• for Queens, Brooklyn, Long Island (Nassau and Suffolk), think AOC, I've never seen the marginal cost of fuel over $100; right now it's $101.39. Later: marginal fuel is now over $107 / MWh
  
• wow, can you imagine what it would be had Amazon been allowed to build there?
  
• the entire state of NY is now over $100/MWh, except for North-D at $32.80 and the Mohawk Valley-E at $98.81.
• Later: Long Island is now over $181 / MWh. 
• At noon: Long island is $203.66 / MWh.
   

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

Oil surges:

• Brent: up 1.78%; up $2.17; trading at $123.80.
• WTI: up 3.02%; trading up $3.47; trading at $118.50
• earlier this a.m. had been up 4.04% trading above $119. 

Active rigs: 39 or thereabouts:

$119.10	5/31/2022	05/31/2021	05/31/2020	05/31/2019	05/31/2018
Active Rigs	39	22	11	64	61

Tuesday, May 31, 2022: 72 for the month, 137 for the quarter, 297 for the year

• None.

Monday, May 30, 2022: 72 for the month, 137 for the quarter, 297 for the year

• 38576, conf, Slawson, Howitzer 4-25H, Big Bend, no production data,

Sunday, May 29, 2022: 71 for the month, 136 for the quarter, 296 for the year

• 37100, conf, Zavanna, James 3-10 5H, Poe, first production, 12/21; t-- ; cum 120K 3/22;

Saturday, May 28, 2022: 70 for the month, 135 for the quarter, 295 for the year

• 36512, conf, Crescent Point Energy, CPEUSC Narcisse 3-8-5-158N-99W-MBH, Ellisville, no production data, 

RBN Energy: natural gas vs coal fuel costs, part 2. 

Natural gas futures prices have rocketed to 14-year highs in the past couple of months — during the lower-demand spring months, no less — and they are now trading at 3x where they were at this time last year. 

The CME/NYMEX Henry Hub futures for June delivery shot up to a high of $9.40/MMBtu in intraday trading last Thursday, the highest level we’ve seen since summer 2008, before expiring at $8.908/MMBtu, nearly $6 (~200%) higher than the June 2021 expiration settlement at just under $3/MMBtu. 

The newly prompt July futures retreated ~17 cents Friday to about $8.73/MMBtu, but that’s still nearly triple where July futures traded last year. It’s safe to say the low fuel cost of gas-fired power generation that defined the Shale Era has evaporated. Historically, at today’s sky-high prices, gas would have given up market share to coal in the power sector. However, the coal market is battling its own supply shortage and Eastern U.S. coal prices are at record highs. What does that mean for generation fuel costs and fuel switching? In today’s RBN blog, we break down the math for comparing gas vs. coal fuel costs.

A tight coal market and record-high coal prices in the Eastern U.S. have suppressed gas-to-coal switching in recent months, despite the gas market also contending with a supply squeeze and gas prices trading at Shale Era highs. The coal-market constraints have contributed to record, or near-record, gas demand in the power sector in most recent months, with gas gaining market share of total generation fuel demand — on top of wind and solar also increasing their share of the pie. Generation fuel dynamics were a driving factor in the tighter gas market balances this past winter and will continue to play a role during the injection season, including how power grids balance cost and reliability during times of extreme customer demand, such as the heat waves we’ve already seen this month in Texas and other parts of the country. With that in mind, it seemed a good time to revisit the basics of the fuel switching phenomenon, including the major factors behind it.

Initial production data:

• 37100, conf, Zavanna, James 3-10 5H, Poe, first production, 12/21; t-- ; cum 120K 3/22;

Date	Oil Runs	MCF Sold
3-2022	27157	76426
2-2022	28342	53877
1-2022	29169	29199
12-2021	31957	24184
11-2021	0	295

Two New Permits; SPR Release: One Big Rube Goldberg Debacle -- March 31, 2022

Union rejected: Amazon workers in Alabama reject unionization for second time.

Auto dealers: not being talked about, but my hunch is that a lot of auto dealers are going to declare bankrupty or "go under" before the year is over. 

I don't get out much any more but driving past one of the biggest Chevrolet dealers in the United States, not just Texas, but in the entire US, the lot is practically empty. They have nothing to sell. There were six new Bolts available but that was it in the EV area which used to be packed. There was no activity; the sales signs were in disrepair; one almost wonders if this section has been vacated for the time being to try to save cash. I don't know but it looked deserted. 

From CNBC earlier today: with few cars on lots, US auto sales likely fell sharply in the first quarter, analysts say. Ya think! I don't need an analyst to tell me that. It's obvious. 

From ArgusMedia: GM, Ford will cut sedan production.

"I don't get out much any more." I'm in excellent good physical shape and no medical ailments, and no aches and pains when I get up in the morning.

I bike as long and as much as I want, but "I don't get out much any more" in terms of getting in my car and going places. The Covid-19 lock down did me a world of good. I've learned that I don't need Starbucks, restaurants, movies, zoos, malls, or anything else to stay entertained. I literally have no desire to go anywhere any more. It's wonderful. I'm getting more done than I ever did.

I'll post my mileage for the two cars I have to corroborate what I've just said. Maybe tomorrow. More on this whole topic later this summer, perhaps.

SPR release: biggest on record. One million bbls / day for the next six months. Observations:

• several market participants suggest the maximum flow rate from the SPR is around one-half million bopd; source; 
• the SPR and drawdown rates; source;
• folks forget that the price of oil is not determined by the first bbls released by the SPR but the last bbl produced by oil companies.
  
• even if cavern pumps can support it, takeaway capacity -- pipeline, truck, rail, ship -- is grossly inadequate to take away an additional one million bopd; think about it; this will be the next story;
• how bad is it? The administration is going to have suspend the Jones Act; source; the administration says they will process Jones Act waiver requests within two days to get oil to refiners from the SPR if necessary.
  
• how much will consumers save at the pump? From President Biden himself: "The SPR release could cut anywhere from 10 - 35 cents a gallon, but it depends on how much allies release." The allies can't come close to releasing anything like the US promises to release.
• even if oil can get to the refineries, they are already operating at 92% capacity; not much room for additional oil;
• in round numbers, the SPR has 450 million bbls of crude oil; if 180 million bbls released by mid-term elections, will still leave the SPR in great shape;
• punitive actions on oil sector will cause smaller, under-financed operations to go out of business; Big Oil to do just fine; expect more consolidation;
• one would assume drillers would cut back on CAPEX, take SPR oil at cost; save on CAPEX;
• bottom line: when one looks at all this "stuff," the only way one can read this is that the White House is absolutely in a panic. Will it really matter if they are able to get price of gasoline at the pump down from $4.50 to $4.10 / gallon? 
• worse, everything suggests the SPR can't possible replace the Russian oil affected by sanctions;
  

President Biden: to paraphrase, "energy transition is dead."

• drill, drill, drill; source;
• "The bottom line is, if we want lower gas prices, we need to have more oil supply right now."

Nancy Pelosi: "We cannot use high gasoline prices as an excuse to produce more American energy."  

That explains why we are emptying our SPR. Emptying the SPR will force faster energy transition to renewable energy. 

Mexico:

• taking advantage of high-priced oil;
• will "temporarily" suspend self-sufficiency goal;
• will refine 850,000 bopd daily instead of one million; export the rest; source;

Investment portfolio:

• my oil-overweighted portfolio outperformed all my other portfolios; corroborated here;
  
• I don't buy oil; I buy shares in oil companies; big difference;
• from Dan Pickering:
• front month WTO down 3.5%
• FY23 and FY24 is up 0.6% and 1.8%
• more supply near tear but more demand (SPR refill) down the road:

Julianne Geiger over at oilprice.com:

• "I don't see it, I guess."
• "Calling on Congress to levy on US oil companies for land they are hoarding and not drilling on."
• "Calling on Congress to speed up the energy transition."
• I didn't care much for the tweet itself, I'm just glad to see Julianne Geiger tweeting.

Oil, sweet spot:

• WTI: $80 - $90

Is the SPR release more valuable to drillers than "Alpine High"?

• memo to self: take another look at APA
• source: APA raised to buy;
• I am not directly invested in APA and am diversifying out of energy, but once the dust settles from today's SPR announcement, it make be time to take another look at APA; compare P/E with others;

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

Rubles or roubles, who will blink first? Putin says natural gas flow will halt tomorrow, April 1, 2022, if consumers refuse to pay in rubles. Get out the popcorn.

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

Active rigs:

$100.80	3/31/2022	03/31/2021	03/31/2020	03/31/2019	03/31/2018
Active Rigs	33	14	43	66	60

Two new permits, #38862 - #38863:

• Operator: Sinclair Oil & Gas
• Field: Little Knife (Dunn)
• Comments:
• Sinclair has permits for two Hovden Federal wells in NENE 29-146-97; 
• to be sited 1186 FL and 821; and, 1163 FNL and 854 FEL;

PEMEX: The Road To Mexico -- March 2, 2022

PEMEX: how do they do it? Posts another $6 billion 4Q21 loss vs a profit one year ago. Link here. Can anyone make sense of this: their revenue almost doubled, and yet they lost money. Wow, that must be hard to do.Apparently due to currency exchange losses and higher taxes -- say what? 

Mexican state oil company Pemex reported a $6.05 billion fourth-quarter net loss on Monday, driven by higher taxes and currency exchange losses despite more oil output, with the firm set to require further big cash infusions from the government.

Pemex, which has long struggled to stay in the black,managed to turn a profit of nearly $5 billion in the year-ago period.

Revenue for the state-run company, known officially as Petroleos Mexicanos,rose almost 80% in the last three months of 2021, boosted by a jump in domestic sales and crude exports.

The country taxes them, they show a loss, and now the government needs to return that tax money plus more to keep Pemex solvent?

Observations From Twitter Accounts I Follow -- February 18, 2022

Before we get started, for cocktail trivia tonight, there are about 56 "tanks" in a battalion. 

• 125 "tank" battalions = about 7,000 "tanks"
• Russia has about 12,000 "tanks"
• the US has about 6,000 "tanks"
• Russia likely has more "tanks" on Ukraine's northern and eastern borders than the entire US Army "tank" inventory.
  

Two observations -- TODAY -- from the twitter accounts I follow:

• war: no one, here in in the US, absolutely no one, is concerned about Russia's imminent invasion of Ukraine
• Putin knows that sanctions will wreak havoc on Europe, not Russia;
• the US is in "spectator-mode"
• as long as it stays among "Russians," this is not a NATO issue; it might be a European issue;
• one of two likely scenarios:
• Russia stops with Kiev and there is a East Ukraine / West Ukraine standoff
• Russian generals on the ground race to Lviv
• oil: some perceived anxiety that US becomes a net crude oil importer starting as early as this year
• EIA suggests that:
• US net crude oil: about 4 million bopd net export
• US new petroleum products: about 4 million bpd net imports
• US net trade (oil out but refined products in): 0
• if I'm reading this correctly, US demand will be such that refiners will not keep up with US demand
• operators are currently operating at about 87% of their operable capacity

Link here.

*********************
Road to Mexico

Link here.

Mexico To Become Net Importer Of Crude Oil? Bloomberg -- February 17, 2022

On February 9, 2022, looking at global crude oil production, I wrote the following:

• Historically: higher prices have led to increased production; groups to watch as oil trends toward $90 / bbl:
• first tier:
• US
  
• US shale operators
• US offshore (ex: Guyana)
• Russia
• Saudi Arabia
• second tier:
• OPEC - some Africa (outside Saudi Arabia, Russia, Libya)
• Iran: in second tier only if one believes Biden will lift sanctions
  
• Mexico: I'm being generous not moving Mexico to background noise
  
• Canada: without Keystone XL and adequate seaports, pretty much flat-lined production;
  
• background noise:
• Ecuador -- not OPEC
• some Africa including Libya  -- OPEC

Being reported today:

PEMEX: previously reported that Pemex would begin curtailing exports of crude oil this year, and completely end exports in 2023. There may have been an explanation and, if so, it just got worse. From Bloomberg: forecasts now suggest that Mexico will have to import crude oil to produce enough fuel for its own country.  

So, not only is Mexico moving from being an exporter of crude oil but now becoming an importer of crude oil.

From February 13, 2022, this is what conventional oil production in terminal decline looks like, graphic might have been drawn by Hubbert:

Road To Mexico; Learning Spanish With Sophia -- January 21, 2022

Mexico refinery almost $4 billion over budget. 

This is a huge story.

PEMEX is heavy in debt; worst among all oil companies in the entire world.

Now this.

This is Mexico's mega-refinery: the Dos Bocas project.

• 340,000 barrel / day
• purpose: halt crude oil exports starting in 2023
• now, the project may fail to produce a single gallon of gasoline in 2022;
• may produce only limited amounts of fuel for several years after that;

Costs:

• original estimate: $9.0 billion
• new estimate: $13.0 billion
  

*******************************
Sophia And Spanish

Sophia and I are taking Spanish lessons on Duolingo together. 

 For a break, we are trying something different. One of Sophia's favorite books is Sisters.

We got identical "graphic novels" at Barnes and Noble, one in English, one in Spanish. Sophia "reads" the one in Spanish and I read the one in English. This is our first time through. It will take many iterations. 

Most interesting: the translations are matched up exactly in each book, but so many idioms. It will be a challenge, but it's great fun learning these idioms. Wish us luck. Here we go.

Don't laugh. Our pronunciation is horrible, but this is our first time going through the books. The good news: my wife, Sophia's grandmother's native language is Spanish -- well, actually, her first language was Japanese but she left Japan when she was about two years old. Her first home in America was in Texas and her next language was Spanish until she started school when she was seven years old. She knew no English when she started school. She spoke Japanese with her mom and Spanish with her dad. 

So, our pronunciation is horrible but Grammy will work with us and help Sophia. I'm a lost cause. LOL.

Pemex Fire In Gulf Of Mexico -- Shuts In 444,000 BOPD -- Reuters -- August 23, 2021

I think folks are aware of the Pemex fire in the Gulf of Mexico, previously posted. I was unaware how much oil was shut in due to the fire: 440,000 bopd? Not fact-checked. Link here. 

Direct link to Reuters.

Mexico, prior to the fire, was producing less than 1.75 million bopd. Link here.

*************************
The Sports Page

Monday Night Football is airing/playing in the background. I'm really not watching. It's the fourth quarter. New Orleans, 23, Jacksonville Jaguars, 6.

But then my ears perked up, as they say. Trevor Lawrence is not playing. Apparently he played the first half and was then pulled after a pretty mediocre start (and it sounds like I'm being generous).

Deep into the fourth quarter the commentators spent a good ten minutes on how "badly" Trevor Lawrence performed. They didn't use that "exact" word but that's what they were saying. Ten minutes of talking about how bad Trevor Lawrence played. A lot of cliches. A lot of trite statements. My favorite: "College football is different than the NFL." 

Reminds me of the Fitzgerald quote: "Let me tell you about the very rich. They are different from you and me."

It might be interesting to tune into First Take tomorrow morning. I haven't watched that television sports talk show in a long, long time.

Fossil Fuel Contracting -- Winners And Losers -- July 24, 2021

Mexico, oil production: link to S&P Global Platts --

• private companies: hitting production records;
• Pemex struggles (an understatement); twice revises production goals downward; this is much wrose than the headline would suggest

Norway: Exxon shuts down Norway Slagen refinery; link here. 

ExxonMobil has told Argus that its stopped operations at its 120,000 b/d Slagen refinery in Norway in June.

The company said in April that it would permanently shut the refinery over the summer, saying continued operation "is not economically viable over the long term" because of "strong competition, evolving regulatory measures, and falling demand."

Around 60pc of Slagen's products were exported. Its closure leaves state-controlled Equinor's 200,000 b/d Mongstad plant as Norway's only refinery.

Slagen is the fifth European refinery to halt completely since the Covid-19 pandemic, bringing the lost crude distillation capacity to more than 600,000 b/d.

TotalEnergies halted its 93,000 b/d Grandpuits refinery in France, and will convert it to process pure renewable fuels. Portugal's Galp and Finland's Neste have permanently stopped their respective 110,000 b/d Porto and 55,000 b/d Naantali refineries to focus on products imports.

Trading firm Gunvor has long-term mothballed its 115,000 b/d Antwerp refinery, and UK-Chinese Petroineos has done the same with one crude distillation unit (CDU) at the 210,000 b/d Grangemouth refinery. Gunvor has also permanently stopped both CDUs at its 80,000 b/d Europoort refinery in Rotterdam, though it continues to run secondary units.

Europe's refineries have for years been contending with competition from producers in the Middle East and Asia-Pacific, where capacity continues to grow rapidly, while local fuel demand growth slows.

Everything points to energy costs surging. And it won't be transitory. 

India: Got Coal? April 19, 2021

Reuters: India may build new coal plants due to low cost despite climate change. 

Obviously India is looking at what China is "getting away with" and asking, "are you kidding me?" 

John Kerry says China is committed to climate change.

It appears that according to Greta and John, the only country not doing enough is the US.

Oh, there it is, John Kerry says India is also committed to fighting global warming. Kerry's quote and I can't make this up:

"India was getting the job done on climate, pushing the curve." -- John Kerry, April, 2021

Look at the data points in the article re: India:

• coal's contribution to electricity generation in India fell for the second -- repeat, second -- straight year;
• marks a departure from decades of growth in coal-fired power;
• coal still accounts for three-fourths (75%) of India's annual power output
• India is the world's third-largest greenhouse gas emitter (a worthless metric, by the way)

India says if it adds new coal plants, the plants "should only deploy ultra super critical less polluting technologies or other more efficient technology."

I'm looking forward to that ultra super critical less polluting technologies.

My hunch: if India goes that route, China will add super-ultra super-dooper ultra-critical even less polluting technologies. 

More on India here, but until we get to post-Covid-19 normal, most of this data is meaningless as regards to the long-term trends. 

********************************
The War for Control of Mexico's Energy Industry

Editorial.

Link here.

Road To Mexico -- Pemex' Debt -- Update -- April 6, 2021

Pemex: is this one of those stories that we'll come back to in six months?

• telegraphing a "restructuring"?
• the state-owned vertically integrated oil company is apparently "woke"
• "it is clear that high indebtedness represents a structural problem, attention to which should not be delayed ... we do not rule out restructuring...."
• having said that, Pemex expects to maintain financial debt of $105 billion through 2025
• pays lip service to paying down debt (won't happen)
• will raise crude refining capacity from 1.1 million bpd (2021) to 1.6 million bpd by 2025;
• says it won't incur more debt by adding more obligations
• we'll see
• last year lost its "coveted" investment grade rating due to high debt and other concerns
  

Pemex debt is actually worse than being stated above. See this link.  

Notes From All Over -- Early Morning Edition -- March 25, 2021.

This is the problem, or should we say "challenge"? Link here.  

Unfair deductions? Link here.

• North Dakota's mineral owners are taking oil companies to court over royalty deductions;
• also, maybe I just haven't noticed, but it seems the Williston Herald webpage has improved immensely; but maybe I just haven't been paying attention;

The blog has really helped. Link here.

• had I not been blogging, I would not have been able to put this headline in context;
• Equinor makes Norway oil discovery of up to120 million bbls;
• said to be the biggest oil discovery this year to date on the Norwegian continental shelf;

Ovintiv to sell Eagle Fords assets. Link here.

• "old story"; previously posted;
• now over at Oil & Gas Journal:

Mexico:

• energy sector stagnates as AMLO's counter-reform plays out;
• surprised? not surprised;
• S&P Global Platts; March 24, 2021;

EVs: GM is worth the wait, Forbes, March 2, 2021.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.

Suez Canal: for the archives. Still stuck.

Tesla: link here.

• its dominance may be ending sooner than later; VW in the rear view mirror.

Outlook: link here.  Paywall, but easily accessed.

• Wall Street anticipates a surging GDP this year. As much as 8 percent.

Pop quiz: East Frisian edition.

CBR On Steroids -- March 21, 2021

Updates

March 23, 2021: further reporting from the Calgary [Alberta] Financial Post.

March 22, 2021: 75% chance regulators won’t approve it.

Original Post

The headlines:

• Canada's Canadian Pacific railway to buy Kansas City Southern: $25 billion. Reuters.
• Largest deal of 2021. ZeroHedge.
• Will link Canada, US, and Mexico. Yes, Captain Obvious. The Wall Street Journal. But will also link Pennsylvania-to-Florida corridor. Maybe change the name to Can-Am-Zephyr.
  

My not ready-for-prime-time reply to the reader who alerted me to the story early this morning:

I think I blogged about KSC a couple of times on the blog.

KCS's "monopoly" into Mexico is huge. I was tempted to invest in KCS for that reason alone years ago but there was huge risk that new Mexican president would put huge restrictions on KCS. I was happy with BNSF and UNP.

Deal:

• The KCS deal: $30 billion.
• Buffett's BNSF deal: $34 billion.

Track:

• Canadian Pacific: 14,700 miles
• KCS: 3,400 miles
• Buffett's BNSF: 32,500
• UNP:  32,100

In this case, the relatively few KCS miles of track make the Canadian Pacific a "much bigger" company than just adding the two: the sum of the parts is much greater than the whole.

So:

• CN buys 3,400 miles of track for $30 billion.
• Buffett bought 32,500 miles of track for $34 billion.

I must be missing something or have the numbers wrong. Folks can fact-check me on the numbers.

BNSF and UNP overlap / compete west of the Mississippi. BNSF and UNP are huge out of Chicago, south to Texas, west to California.

Regulators probably would have frowned on Buffett buying KCS, and if the money numbers above are correct, I doubt Buffett would have wanted to spend that much money on another railroad.

But this deal is huge. Besides the Canadian to Mexico angle, Canadian Pacific now has access to Norfolk Southern which is the entire east coast of the US (Alabama to Pennsylvania) through the Meridian Speedway.

This is simply huge.

CBR: Suggestion -- overlay the new CN-KCS route with the might-have-been Keystone XL. This is not rocket-science. 

This was almost a no-brainer in retrospect. With or without oil / CBR, this is a huge deal for CN -- Canadian wheat direct to Mexico. Several story lines here; maybe later.

When was the cherry placed on top of this sundae? When the Keystone XL was killed.

It takes "years" to put together a $30-billion deal -- this certainly suggests CN was ready to pounce if the Keystone XL was killed. 

Memo to self: what company manufactures oil tankers and hoppers for railroads?

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Graphics:

How long is the Meridian Speedway? 320 miles, from Meridian, MS, to Shreveport, LA. How big is the Meridian Speedway? It has its own wiki entry. This was a joint venture between KCS and a subsidiary of Norfolk Southern Railway.

Link here, also.

• Streamlined route when traveling from the Northeast to Dallas and back
  • Fastest route from the Northeast to Dallas
  • Minimal potential for winter weather delays through a more southern route
  • Limited exposure to congestion and crosstown hassles present in other interchange cities
• Rail-controlled and asset-based Trailer on Flat Car and Container on Flat Car service
• End-to-end steel wheel interchange for our intermodal customers
• Fastest route from southern California to the southeast portion of the U.S.

Link here. I like this map better for various reasons. 

If "they" can make money on shipping wheat by rail (WBR), certainly "they" can make money by shipping "crude" by rail (CBR). And look how that CP line runs right where the DAPL runs. This is not rocket science, and it's very, very good news. 

Retail Sales Collapse In February, 2021; And Then There's This -- March 16, 2021

Link here. More stimulus needed. 

And then there's this.

• Supercharged economy leaves global supply chain "stretched thin." Link here. 
• some containerships sent north as port of Los Angeles hits capacity; link here;
• new video shows massive scope of California box-ship traffic jam; link here;
• four charts show the effects of West Coast port congestion and supply chain delays; link here;
• Port Congestion: ports of Los Angeles and Long Beach, March 8, 2021; link here;
• detention and demurrage charges rise as regulators circle;
• container lines ordered to explain detention, demurrage assessment;
• LA-LB congestion to clear by late spring: terminal operators;
• LA-LB truckers urge suspension of detention and demurrage
• no let-up in e-commerce demand for expedited Asia services;
  elevated Asia import volumes won't let up;

**********************************
Miscellaneous

Top-ranked dividend champions, SeekingAlpha, March 15, 2021.

• top three: JNJ, PG, ADP
• 4 - 16: MDT, GD, PEP, CL, SYK, WMT, ECL, APD, ITW, KO, EMR, MMM, RTX

Warren Buffett: buybacks appear to be accelerating; round numbers? $2 billion / monthly?

FuelCell Energy:

• collapsed 8% yesterday; falls another 12% in early morning trading today; earnings disappoint, but that's just the headline; the real news is even worse;
• forecast: a loss of four cents; actual: a loss of six cents
• previous quarter (3Q20): forecast a loss of seven cents; actual, a loss of eight cells;
• a year ago: a loss of three cents;
• look at this: revenues --
• forecast: $18.8 million
• actual: $14.9 million (missed by 26.5%)
• one year ago: $16.3 million
• wiki;

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.  

******************************
Energy

US LNG exports: to Asia surged by 67% in 2020. Link to Tsvetana Paraskova. 

• during the pandemic
• will only "improve" in 2021;

Mexico's announcement of new oil discovery: political, non-story; 

Brent: North Sea oil and gas groups cut investment by £3 billion, $4.2 billion
something fishy going on with Brent?

Mexico (link above):

Despite the efforts of the government to stabilize Pemex operations by injecting roughly $17 billion in the last two years, the state oil company has been unsuccessful at increasing its crude production.

During 2020, the company managed to keep output close to 1.6 million b/d, but consistent underinvestment in exploration has led to a dramatic drop in the country's reserves from almost 45 billion boe in 2001 to less than 16 billion boe in 2020, according to CNH data.

According to S&P Global Platts Analytics, Pemex production is expected to average 1.66 million b/d through 2030.

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Southern Surge

I try to scan the LA Times headlines on a daily basis looking for articles on the Southern Surge. I have never seen any "southern surge" headlines over at the LA Times. Apparently, if it's a problem, only in Arizona and Texas. 

Tea leaves suggest this sets back the Dream Act. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

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"From The Before Times"

Link here.

The S&P 500 is surfing yet another all-time high, currently up over 70% from the worst depths of the coronavirus crash a year ago and around 17% up from the before times.

Covid isn’t over, and people aren’t all back to work, but BlackRock, the biggest money manager in the world, is bullish on stocks, even in the face of inflation concerns.

In a note Monday, the firm said that it was overweight U.S. equities and has a current view of an economy and market that’s beyond a “recovery.”

“We see the path out of the Covid-19 shock as a ‘restart’ – not a typical business cycle ‘recovery,’” a BlackRock note to clients said Monday. This is “a distinction that matters for markets.”

This outlook is leading BlackRock to push further into cyclical assets and “bolster our pro-risk stance over the next six to 12 months,” the firm said.

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here.  

WTI Trades Above $61; Oil Companies Push Dow Into The Green; Tech-Heavy NASDAQ Falls -- February 22 2021

Whoo-hoo!: WTI soars. Up over 3%; adds $1.80; trading above $61. Oil-related shares:

• ENB: up 1.70%
• EPD: up 0.70%
• KMI: up 1.4%
• CVX: up 3.62%; went over $99; next stop, $100?
• COP: up a whopping 6.63%; trading solidly over $51/share
• XOM: up 3.7%
• CLR: up almost 9%
• EOG: up 5.3%
• HES: up 4.4%;
• OVV: up an astounding 6.55%;
  

CLR: doing an incredible job building their inventory; managing assets very, very well. Fascinating to watch. 

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Petrobras: second CEO kicked out by President of Brazil; disagreement over diesel pricing; link here to Irina Slav;

• shares plunge 23%
• road to Mexico?

First group:

• 10-Year Treasury: link here. 1.343%; down very, very slightly;
  
• DXY: link here. $90.12, down very, very slightly;
  
• Silver: link  here. $27.90; continues to melt up;
  
• CBOE volatility index: link here. 22.84; up 3.6%
  

Second group:

• 30-Year Treasury: link here; 2.144% up very, very slightly;
  

Pemex's Oil Production -- Update -- February 21, 2021

Some years ago I was taken to task by a reader suggesting I did not know the difference between petroleum and oil (which, at that time, was true ... LOL). 

But it turns out I might not have been the only one.  Irina Slav is pointing out that Mexico is reporting its crude oil production has increased year-over-year.

It turns out there's a bit of smoke and mirrors here. 

Mexico’s Pemex reported its oil production grew last year, for the first time in fifteen years. However, there’s a big catch—the increase was only a result of how the company is counting barrels, Bloomberg reports.

And anyone trying to compare production figures from year to year will run into a problem of comparing apples to oranges.

The change in calculations is pretty straightforward; Pemex simply started adding gas condensate output to the total crude oil production it counts.

Without condensates, Pemex and its partners produced 1.66 million bpd of oil last year, down 1 percent on 2019.

With condensates, oil production was 0.23 percent higher last year.

The boost was made possible by new condensate discoveries that added 46,000 barrels daily to Pemex’s condensate production: a twofold increase. A positive as this is, it is questionable whether the condensate production increase should actually count towards the company’s total oil production, which it has been struggling to boost after a persistent decline.

More from the linked article:

• PEMEX: most heavily indebted oil company in the world; a burden of $100 billion;
• PEMEX has revised down its forecast of this year's production, from 2.027 million bpd to 1.857 bpd (an 8% cut in the forecast)
  
• Mexico has cut PEMEX tax rate from 65 percent to 58 percent and may cut it to 54 percent
• probably won't help  
  

Clearing Out The In-Box -- January 3, 2021

North Texas: wow, what an incredibly beautiful day. Bright sunshine, no clouds, shirtsleeve weather. Meanwhile, Dallas Cowboys ( 6 - 9), trailing New York Giants (5 - 10) in the first quarter by a field goal. Win or go home. Winner advances to playoff with a Washington loss, I guess. 

Rose Bowl: I think this is a bigger story than being reported. For those not paying attention, the Rose Bowl was played in Texas the other afternoon -- I actually forget the exact day -- LOL -- that's how much I follow college football any more -- by the way, was there a Rose Bowl parade today -- and, if so, where was it -- but I digress -- I think the Rose Bowl moving to Texas was a bigger story than being reported. This was only the second time in its history that the Rose Bowl game wasn't played in California.

And now the Rose Bowl, America’s most-attended football game, played continuously since 1916, moved to Texas—it was that or be shut down because California’s politicians, enacting increasingly draconian and apparently ineffective COVID-19 rules, wouldn’t allow a few friends and family attend a football game in a giant outdoor stadium capable of holding more than 92,500 people.

This is serious.

This is only the second time “the Granddaddy” of bowl games (so named because it is the oldest continuous contest) won’t be played in California. The other? In 1942, three weeks after the Japanese Empire attacked Pearl Harbor, fears of a Japanese raid caused the military and game organizers to shift the contest to North Carolina.

CRC:

• shares surge 9.23% on December 30, 2020. Link here.
• Todd A. Stevens out as CEO at CRC, December 22, 2020. Link here.

Ford, Mahindra go their separate ways. They call it quits. Blame it on the bossa nova. Who decided to cut its losses first? Ford or Mahindra? Mahindra has decided to focus on SUVs in the short term and focus on EVs in the midterm. This is huge. Absolutely huge as a tea leaf. 

Tesla: speaking of tea leaves. Tesla's delayed Semi tests Elon Musk's ability to scale up. In the  US, it appears Daimler Benz is leading the race for the first commercial production EV truck success. The Daimler Benz truck story seems to be off anyone's radar scope but if I'm reading it correctly, DB seems to be in the catbird seat. Yes, I have a huge dog in this fight. LOL.

US dollar, link here:

• great news for investors in 2021; it should drop further;
• US dollar suffers first annual drop since 2017

LNG: DOE extends fourth set of LNG export authorizations through 2050, December 31, 2020, link here.
this is huge; need to look at this more closely; I may be misreading this:

• US extends authorizations through 2050
• the Southern LNG export facility in Georgia
• the Cameron LNG export facility in Louisiana
• the Annova LNG project proposed in Texas
• Eagle LNG's two small-scal facilities in Florida

Meanwhile, Mexico will begin authorizing its LNG export facilities for only five years at a time. Link here. Is this a huge win for SRE? Does SRE have a de facto monopoly on US LNG export from Mexico? I don't know. It's Mexico. It's confusing.

New regulation over the permitting process involved in the importing and exporting of fuels in Mexico published in the country’s Official Gazette on December 26, 2020, could prove harmful to competition in the Mexican energy sector. 

One of the major changes in the published rules is the reduction in duration of refined fuel permits for private sector companies to five years, from twenty years. 

This reduces incentives to invest in long term transportation and storage infrastructure. 

The bill also establishes unclear and burdensome requirements for requesting permits and grants wide discretion to Sener in their ability to revoke them. It turns the granting of permits into “a public policy instrument” to control the makeup of the energy sector. 

In sum, the rules would essentially hand Petróleos Mexicanos (Pemex) a more dominant monopoly position in the marketing of refined fuels within Mexico. 

While natural gas remained essentially out of the criticism of the bill, the new rules stipulate that importers and exporters of gas in seeking permits need to provide Sener detailed information on volumes, infrastructure and also documentation supporting capacity on pipelines. 

In terms of exporting liquefied natural gas, Mexico would grant an export permit only for shipping out excess gas, or once domestic supply has been established, Mexico energy analyst Gonzalo Monroy told NGI’s Mexico GPI. “Given that Mexico imports 90% of its natural gas, this is a big problem for companies that want to export LNG.”

If I recall correctly, SRE was given a "regional" permit which minimizes the "federal excess gas rule." We'll see.

Pemex Issues $1.5 Billion Bond To Refinance Massive Debt -- October 10, 2020

Link here.

• first time since receiving a BBB- rating, Pemex raises new debt
• 6.875% coupon
• $10 billion bid for the bond
• already the most-indebted energy company in the world
• $100 billion in debt prior to this new bond
• despite efforts by AMLO to ameliorate debt crisis
• Pemex given tax relief
• reversal of liberalization measures taken by the previous government
• hope springs eternal
• bond substantially oversubscribed
• production:
• previous forecast: 2.027 million bpd
• new forecast: 1.857 million bpd on average
• most recent: 1.692 million bpd -- much below its forecast for the year
• will have to have spectacular months going forward to get back to forecast average

Road To Mexico -- September 30, 2020

Road to Mexico, link here: