Time For A Movie Interlude -- July 5, 2025

Locator: 48672MOVIE.

The Coen Brothers film rankings.

Link here.

Ethan Coen (by himself) and Honey Don't -- opens in theaters August 22, 2025; trailer here:

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Iran: From July, 2025 -- The Next Decade

We're going to be overwhelmed by YouTube videos on this subject for the next year. Right, wrong, indifferent. Whether one agrees or disagrees with Trump's policies, these videos are going to be ubiquitous over the next well months. Victor Davis Hanson will probably have the best analysis.

How "the" war in Iran will completely cripple Russia. Link here.

Reminder:

Seven US B-2 bombers were used to strike Iranian nuclear facilities as part of Operation Midnight Hammer.

These bombers were tasked with delivering GBU-57 MOP bunker-busting bombs. The operation targeted the Fordow and Natanz nuclear enrichment facilities.

The U.S. Air Force has 19 B-2 Spirit stealth bombers in service. Initially, the U.S. had 21, but one was lost in a 2008 crash and another in 2022.In the operation against Iranian nuclear facilities, US B-2 bombers dropped a total of 14 GBU-57 "bunker buster" bombs. These bombs were used to target the Fordow enrichment facility and a second nuclear site. The operation, named "Midnight Hammer," also involved other precision-guided weapons like Tomahawk cruise missiles launched from submarines.

The Russian void in Iran will be filled by ... not China ... but Turkey, the US, and Saudi Arabia.

We're going to get a lot of "propaganda" that China will step in to fill the void (they won't). We will also get a lot of "propaganda" that Turkey will step in to fill the void. That's partly true, but Saudi Arabia and the US will be watching closely. The economic potential in the Mideast following the 35-minute US war on Iran will be huge for those countries rushing to fill the void left by Russia, and each will want a piece of that economic pie. My hunch: Saudi Arabia is most "needful" of that potential and won't let China step on the Muslims.

The Hormuz Strait:

• I generally disregard any analyst who raises this canard: Iran can shut down the Hormuz Strait.Fact: the Hormuz Strait has never been shut down and never will be by Iran.
• If, if, if, if --- the Hormuz Strait is shut down, "we" have bigger problems than oil in the Mideast.  
• any media outlet, particularly CNBC, that talks about the risk of the strait closing tells me that CNBC is not serious on this issue.
  

OPEC In A World Of Hurt -- June 6, 2023

Locator: 44849B.

If you have time for only one energy story today, this is is. 

From the link:

Saudi Arabia over the weekend slashed 10% of the kingdom’s oil output to boost prices, and the returns so far suggest it could be a costly bet.

After warning speculators that OPEC+ could cut oil production again, Saudi Energy Minister Prince Abdulaziz bin Salman announced Sunday that the world’s biggest crude exporter would reduce 1 million barrels of its own output in July after other cartel members refused to join the effort.

The Organization of the Petroleum Exporting Countries and its Russia-led allies account for close to half of the world’s oil production.

An output cut was expected to prop up prices amid concerns about a slowing global economy crimping energy demand. On Monday, oil prices opened sharply higher but gave up most of those gains. Brent crude, the international oil benchmark, rose 0.8% to settle at $76.71 a barrel.

Oil prices remain about 18% lower than they were when OPEC+ first jolted the market in October with output cuts, which some members, including Saudi Arabia and Russia, expanded in April.

Saudi officials familiar with the matter acknowledged that Monday’s increase in oil prices was less than expected by Abdulaziz, who privately defended the move to cut output and push back against short sellers after the contentious meeting, they said.

In other words, Abdulaziz remains an unhappy camper.

The two big stories today:

• OPEC+ is really, really in a world of hurt.
• Apple's headset.

OPEC+:

• Saudi's inability to raise prices. Link here.

• Citi: oil prices unlikely to hit $80 despite Saudi's production cut. Link here.

• Russia: takes huge hit in May, 2023. Link here. So much for all that talk about futility of sanctions. This is from Charles Kennedy so you know it's good and it's important.

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How Bad Is It?

Previously posted:

Locator: 44842SA. 

Link here.

The "y-axis" has been changed from last month's posting making things look better than they really area.

Today's one year view:

The five-year view is better and other time-spans also show how badly Saudi Arabia must be hurting.

Years ago, Saudi's budget was based on $100-oil. From there it went to $80-oil. Currently running about $75 but could be selling oil at greater discounts.

Russian Economy -- Update -- February 25, 2023

Link here.

France 24.

It's All About Free Cash Flow -- February 8, 2023

Updates

Later, 1:43 p.m. PT: TTE -- link below.

TotalEnergies saw its net profit double in 2022 to a record $36.2 billion and announced an increase in dividends and share repurchases after the best annual results for the company and for Big Oil ever. 

The French supermajor reported on Wednesday, February 8, 2023, $36.2 billion in adjusted net income for 2022, double from a year earlier, thanks to higher oil and gas production, higher prices, a jump in LNG sales, and what it described as a “historic” performance in the downstream segment.

For the fourth quarter of 2022, TotalEnergies reported cash flow of $9.1 billion, and an adjusted net income of $7.6 billion, up by 11% from Q4 2021. For the full year 2022, the company generated $45.7 billion in cash flow. 

4 x 9.1 = $36.4 billion, so an "actual" $45.7 billion in cash flow is ... well, stupendous. 

Let's put that in come perspective (remember, we're in a recession and an unprecedented supply chain snafu):

Original Post

For those that missed it:

• start here;
• then, here;
• then, here, and parse that headline;
• then, note that WTI is still below $80 this morning, even after adding another 1% to its price from yesterday;
• then, note that Iran expects $100-oil when Chinese demand rebounds;
• then, most important(ly) for investors, literally no profit-taking yet this morning, or very little:
• XOM: just added two cents:
• CVX: down 1.23%
• DVN: down 0.6%
• EOG: up 1%:
• HES: down 0.3%
• PXD: flat

Weekly EIA petroleum report, link here:

• US crude oil in storage increased by 2.4 million bbls;
• US crude oil in storage now stands 4% above the five-year average and WTI still goes up
• refiners operating at 87.9% of capacity;
• distillates remain 15% below the five-year average;
• jet fuel supplied was .... up a whopping 6.6%.

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Back to the Bakken

Active rigs: 46. Note comments in "Focus on Fracking" regarding rig counts and then consider:

• the number of active rigs in North Dakota; and,
• it's the middle of winter with some of the harshest weather ever;

Peter Zeihan newsletter.

WTI: $77.69.

Natural gas: $2.525.

Thursday, February 9, 2023: 23 for the month; 93 for the quarter, 93 for the year
39010, conf, CLR, Rhonda 7-28H,

Wednesday, February 8, 2023: 22 for the month; 92 for the quarter, 92 for the year
39020, conf, CLR, Rhonda 6-28H1,
38916, conf, Rampart Energy, Coteau 2,
38466, conf, Crescent Point, CPEUSC Riley Anne 8-36-156N-98W-TFH,
38465, conf, Crescent Point, CPEUSC Riley Anne 9-36-156N-98W-MBH,

RBN Energy: to survive DOE's hydrogen hub cutdown, certain factors may prove critical, part 2. Archived.

The U.S. is gearing up to provide billions of dollars in financial support for a series of regional clean hydrogen hubs and had what amounts to an informal cutdown at the end of December, announcing that 33 project proponents had been formally encouraged to submit a full application this spring. Although the Department of Energy (DOE) didn’t name any of the projects on the “encouraged” list, we’ve been able to identify many of the proposals — and add five more in today’s blog — even though a lot of project details remain under wraps. In today’s RBN blog, we’ll look at the new projects on our list and examine the major factors that are likely to influence a project’s viability.

A fifth project we can add to our list is the Heartland Hydrogen Hub, which is centered on a partnership between Bakken Energy and BNSF Railway, which could utilize clean hydrogen produced from natural gas across its rail network, which covers much of the U.S. west of Chicago. Planning began with a 2021 agreement between North Dakota-based clean hydrogen producer Bakken Energy and Mitsubishi Power Americas to develop a hydrogen hub in the state. North Dakota — along with its neighbors Minnesota, Montana and Wisconsin — agreed in October 2022 to work with Bakken Energy and BNSF on the hydrogen hub proposal. BNSF also signed a memorandum of understanding with Cummins Inc. and Schneider Carriers Inc. to work on incorporating the needs of long-haul trucking into the hub proposal.

Less Likely That China's Economy Will Overtake That Of The US -- September 3, 2022

Link to The WSJ. 

Another story in which I am no longer interested.

Posted for the archives. Tagged.

From the linked article:

HONG KONG—The sharp slowdown in China’s growth in the past year is prompting many experts to reconsider when China will surpass the U.S. as the world’s largest economy—or even if it ever will.

Until recently, many economists assumed China’s gross domestic product measured in U.S. dollars would surpass that of the U.S. by the end of the decade, capping what many consider to be the most extraordinary economic ascent ever.

But the outlook for China’s economy has darkened this year, as Beijing-led policies—including its zero tolerance for Covid-19 and efforts to rein in real-estate speculation—have sapped growth. As economists pare back their forecasts for 2022, they have become more worried about China’s longer term prospects, with unfavorable demographics and high debt levels potentially weighing on any rebound.

In one of the most recent revisions, the Centre for Economics and Business Research, a U.K. think tank, thinks China will overtake the U.S. as the world’s biggest economy two years later than it previously expected when it last made a forecast in 2020. It now thinks it will happen in 2030.

The Japan Center for Economic Research in Tokyo has said it thinks the passing of the baton won’t happen until 2033, four years later than its previous forecast.

Other economists question whether China will ever claim the top spot.

Having said that, an interesting graphic at the linked article:

From an earlier post:

These People Are Nuts -- June 9, 2022

Really?

Link here. 

Sweden is banning extracting coal, oil, and natural gas as well as tightening rules on extraction from alum shale as of July 1, 2022.

According to a statement by the Swedish government, it will be an important step in the process of transitioning to a fossil-free society.

And then this:

“The green and digital transitions will create more jobs and require more metals and minerals."

Exactly how do "they" think they will "come up" with those metals and minerals.

These people are nuts. 

I always thought Greta was an outlier in her own country. It turns out she was just the tip of an Arctic iceberg. 

The UN should help Sweden: ban all energy imports into Sweden. 

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Country Share Of Global GDP

Link here. 

2021.

Global economy: $94 trillion. 

Sweden: $0.62 trillion

• 0.62 / 94 = 0.7%

My Favorite Chart -- Money Market Monitor -- March 25, 2022

Before we get to the charts, being reported today: Vanguard reclaims top target-date fund manager spot, leapfrogs Fidelity and BlackRock. Link here.

• TDFs; target-date funds.
• personally, I would never invest in a TDF
  

There's a lot of money out there:

• ThomasPartners recently partnered with Schwab
• outside of Schwab, to qualify for a ThomasPartners dividend fund, one had to invest one million dollars.
• inside Schwab, one can qualify for a ThomasParners dividend fund for $100,000
• I can't see doing that, even with $100,000

Estate planning: there is still one opportunity to maximize capital gains tax free

• one has one opportunity
• the window of opportunity is less than a year

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The Charts

Link here.

Another favorite graph (down below). Take some time with this one. Note how few countries are actually “spelled out.”

At 24%, the US is five times greater than #2, Japan at 5%. And Japan is the poster-child for no-growth but known for great sushi. Also known for placing nuclear reactors on fault lines. 

• among the free:
  
• after Japan, it's just one big drop off the cliff:
• Germany: 4%, much of which will now be spent on Ukrainian refugees;
• only two at 3%: UK and France
• at 2%: Italy, Canada, Australia, Spain, South Korea, and Brazil
• among the "not free":
• China: 18% -- again, this is the share of global GDP by country
• China may overtake the US, but probably won't move into the "blue" column
• one at 2%: Russia -- which is now out of date; tea leaves suggest Russia's GDP has been cut in half, and, if so, Russia is at 1% -- less than most countries in western Europe, even Italy;
• at 1%: Iran: