Weekly US Days Of Supply Of Crude Oil Excluding SPR -- 42.0 Days -- EIA -- May 14, 2020

Re-posting.

Link here. The amount of crude oil in storage, excluding the SPR, now equals 42.0 days of supply.

This is unprecedented. That's more than twice what would be healthy for the oil industry.

By the way, I was wrong on this. I thought "days supply" would max out at 38 days. Maybe 39 days. I forget what I wrote about a month ago.

There are two variables; I forgot about the second variable. I was only looking at the first variable.

Actually, the first variable is not a variable at all: it is a fixed number -- relatively fixed -- the amount of onshore storage. Of course that is not "completely" fixed but week-to-week it should not change much.

The second variable is a true variable and requires a talent for very sophisticated calculus and a crystal ball -- neither of which I have -- and that's "demand."

If one assumes "steady demand," then "storage" becomes the only "relative" variable.

But if demand for the foreseeable future drops to zero, a ludicrous proposition, then any amount of oil in storage would be "an infinite number of days in storage."

And as long as I've digressed this much, the on-shore US storage greatly under-estimates the amount of oil that affects the EIA's "US days of supply." Certainly those twenty or so VLCCs/ULCCs off the coast of Long Beach holding Saudi oil would have some effect. Like so many data points, the US days of supply is simply one data point, and I guess, not a very good one at that, either.

A reader by the way, via comments suggests there may be some under-reporting of US production. To back him up:

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Meanwhile

US Crude Oil In Storage -- April 14, 2020

US crude oil storage: I have no idea how accurate this graphic is but if accurate, it's very helpful.

Days US supply: link here. This data will be updated by the EIA on April 15, 2020, tomorrow.

The EIA weekly petroleum report will be released tomorrow, April 15, 2020. Link here.

These graphics are a week old; the new data will be posted tomorrow.

So, we wait until 9:30 a.m. CT tomorrow. 

For The Archives -- March 22, 2020

From March 13, 2020:

I haven't watched any of the news in the past 24 hours but a reader says "Trump hit a home run today." The reader mentioned two things. I'm sure I'm taking this out of context and the devil will be in the details but if this is accurate and this is how President Trump is thinking, wow, again, from the perspective of a businessman and not a politician.

With regard to Saudi flooding the market with oil for $25 - $35/bbl, President Trump says the US will buy up all that it has room for (think, SPR -- strategic petroleum reserve). Wiki says capacity of the US SPR is 727 million bbls; currently about 635 million bbls.

SPR: At an extra two million bbls/day from Saudi Arabia, let's see -- (727 - 635)/2 = 46 days. Fairly biblical. Forty days and forty nights. Unloading Saudi Arabia oil for $25/bbl into our US SPR. Gotta love it. [Later: apparently the SPR can receive about 685,000 bopd.]

Cushing: 85 million bbls capacity.

Corpus Christi / Gulf of Mexico: has been adding a lot of storage for quite some time.

It looks like if given the go-ahead, the US public and private entities could soak up a lot of $35-Saudi oil. Sure, eventually it comes to an end, but that's not how traders and businesswomen think. Gotta love it. Even if it doesn't do much for the price of oil, we can let the Saudis know we love the price at which they are willing to give their lifeblood away.

From a google search today. Again, The Washington Post, in another anti-Trump op-ed piece, completely misses the point.

Saudi Arabia Crude Oil Storage -- July 18, 2019

From twitter, source not linked:

In very round numbers:

• US storage: 500 million bbls
• Saudi storage: 250 million bbls
• global demand: 100 million bbls/day
• daily production:
• US: 12 million bopd
• Russia: 11 million bopd
• Saudi Arabia: 10 million bopd

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

A Graph Is Worth A Thousand Bbls -- April 27, 2017

Updates

Later 7:47 p.m. Central Time: after weeks of not much being said about the price of oil, there were a flurry of stories today on this subject. I find it fascinating. There are experts on both sides of the coin. I find it fascinating that despite an "OPEC cut in production," the price of oil is trending lower, although tonight futures have WTI back to just over $49 after flirting with $48. It's a fool's errand to predict the price of oil, but I will say again, that once the price of oil starts to move, it can move quickly.

Later, 7:43 p.m. Central Time: Saudi Aramco CEO says peak oil demand is a misleading theory -- Bloomberg. Data points:

• Saudi says those who think crude oil demand will peak by 2030 are wrong
• Saudi says crude oil demand will continue to grow well into the middle of the century
• this is what Saudi is worried about:

Rather than being concerned about peak demand, the world should focus on the “grave threat” to oil supplies resulting from the cancellation or deferral of about $1 trillion of energy projects amid the slump in crude prices, he said.

It would be interesting to know what Saudi's timeline is: when will the cancellation or deferral of about $1 trillion in energy projects begin to affect the actual daily supply of oil and the actual price of oil? This year? Next year? Ten years from now. I still say it's going to take a long time to burn off the discoveries made in 2009, 2012, and 2014.

Later, 7:31 p.m. Central Time: CNBC has the same story and says "it will get worse."

While conventional oil activity is in freefall, U.S. shale drilling is on an upswing, thanks to American companies halving the cost of production, IEA notes. U.S. crude production has recovered to more than 9.2 million barrels a day, the highest level since late 2015.

Producers in the U.S. shale patch rely on an expensive method called hydraulic fraction in which they inject water, minerals and chemicals at high pressure into wellbores to break up shale rock and release oil and gas. More efficient "fracking" will help these producers grow output by 2.3 million barrels a day by 2022, IEA projects.

But shale cannot make up the shortfall in conventional oil development: Conventional sources account for 69 million barrels a day of the current global output of 85 million barrels a day.

I think this is a fascinating story. There are so many permutations. One must remember, crude oil reserves are a function of the price of oil. Recoverable reserves change considerably when oil moves from $40/bbl to $100/bbl.

The real question is how much shale could be produced in the US with WTI at $80/bbl? or $100/bbl? At the sidebar at the right is a long, long list of shale plays in the US. For all practical purposes there are only three crude oil shale plays that matter right now: the Permian, the Bakken, and the Eagle Ford, and some might argue only two really matter.

Original Post

This story has been told several times in several places over the past few days. I have not posted the story nor linked the story until now. There were several reasons why I did not post/link it.

But now, with this graph, perfect for posting:

I think the graph would have been even more "effective" had they drawn the x-axis to 75 billion bbls to accurately capture the 60-billion-bar for 2009. Folks are concerned that low discovery rate in past two years will mean severe supply/demand imbalance sooner (2018) than later (?).

Maybe, maybe not. But when I see the graph above, and note the 2009 bar, as well as the 2012 and 2014 bars, my hunch is it will take a few years to work that off, as well as the three billion bbls of crude oil now being stored globally.

US Crude Supplies Post Biggest Weekly Fall Of The Year -- Third Week In A Row For Falling Inventory -- April 26, 2017

Link here.

But that didn't help oil prices which actually fell back. Why? Unexpected inventory increases for gasoline and distillates.

How much did oil inventories fall? Remember, the US has over 500 million bbls of inventory and 32 days of supply. Historically, the US has done just fine with 350 million bbls of inventory and 21 days of supply.

So, how much did crude oil inventories fall? Threepointsix (3.6) million bbls. This was the largest weekly decline so far this year. The forecast ranged from a about a one-million bbl gain to a one-million bbl decline.

The gasoline inventory increase is described as "glaring." Gasoline stockpiles rose by 3.4 million bbls; distillage stockpiles were up 2.7 million bbls. At least one senior petroleum analyst said "this is rather early to see such large builds."

So, I assume the price of gasoline will drop this week. LOL.

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Meanwhile, The Permian Is Expected To Keep Growing

From the EIA:

Crude oil production in the Permian Basin is expected to increase to an estimated 2.4 million barrels per day (b/d) in May, based on estimates from EIA’s Drilling Productivity Report.

Between January 2016 and March 2017, oil production in the Permian Basin increased in all but three months, even as domestic crude oil prices fell.

As production in other regions fell throughout most of 2015 and 2016, the Permian provided a growing share of U.S. crude oil production.

With rising oil prices over the past year, the Permian continues to be attractive to drillers, as reflected in rising rig counts. As of April 21, 2017, the number of rigs in the Permian Basin reached 340, or 40% of the 857 total oil- and natural gas-directed rigs operating in the United States. The Permian rig count reached as high as 568 in late 2014 before falling to a low of 134 in spring 2016. --- EIA

Five Largest Crude Oil Storage Fields In The US -- Random Look -- April 14, 2017

Updates

April 23, 2017: when you look at the graphs below -- production vs stored crude oil, remember this from an earlier post:

The world is drowning in oil: Reuters data shows that the volume of crude oil plying the world’s oceans hit a record high 47.8 million barrels per day in April, a 5.8 percent jump compared to December levels. That is a worrying sign given that December was the month before OPEC began reducing, so if global crude oil shipments are above even those elevated levels, then supply is probably higher right now than many believe.

Original Post 

From New Orleans Times-Picayune, the five largest crude oil fields in the US, from an article posted back in March, 2015 (does not include the SPR):

• Cushing, OK: 82 million bbls
• Louisiana Offshore Oil Port: 67 million bbls
• Houston, TX: 36 million bbls
• Beaumont-Nederland, TX: 30 million bbls
• St James, Louisiana: 30 million bbls

However, Houston Public Media says the amount of crude oil stored in and around Houston is about 66 million bbls; and, could expand to 100 million bbls in a few years.

It would be nice if RBN Energy would provide an update. I assume EIA has the data somewhere.

To the above add another 10 million bbls of storage in Houston. From Houston Biz Journals, another 10 million bbls will be added by the end of this year or thereabouts. Data points:

• Fairway Energy Partners LLC
• first phase of its Pierce Junction crude oil storage facility has opened
• it is the only independent salt dome crude oil storage terminal int he Houston area
• project first announced in 2015 (amazing how fast when there is a favorable regulatory environment)
• three underground salt caverns; currently holds about 1 million bbls of crude oil
• so far about 7.5 million bbls of storage facility is available
• direct connection to the Permian and the Eagle Ford plays

If the 66 million bbls for Houston was accurate, adding another 10 million puts Houston near 80 million and one can assume other storage facilities have been added that are not mentioned above.

The exact numbers aren't important. I just needed some ball-park figures to put the new data in perspective.

On another note, look at the surge in US crude oil storage in the last couple of years (previously posted). One can only wonder what this all means and where this is all headed:

The other interesting data point, of course, is "the EIA's weekly US days of crude oil supply data" (link here). At 34 days, the US is clearly setting new records.

US Crude Oil Production Climbs To Highest Level In More Than A Year -- April 12, 2017

Apparently for US producers, $55-oil is just fine. From Bloomberg:

Crude retreated for the first time in seven sessions after a government report showed U.S. production climbed to the highest level in more than a year, offsetting data on declining stockpiles.

If you look really, really, really closely, you can just barely see the "retreat" in US crude oil reserves (white line) (LOL). On the other hand, even without reading glasses one can spot the increase in production (blue line):

This is the first time I've paid attention to the crude oil reserves graph. Look at that surge in 1Q15. That was the first quarter after the Saudis declared the end to quotas, I believe.

Chesapeake Energy -- Still On The Edge -- December 15, 2016

This was posted on the blog on October 21, 2016:

From Bloomberg/Rigzone: Chesapeake Energy declares "Propageddon" with record frack. Data points:

• first it was the single stage frack; then the multi-stage frack; then, the mega-frack; now it's the monster frack
• the era of the monster frack has arrived in North America -- Chesapeake singing its praises
• 25,000 tons of sand down one Louisiana natural gas well -- "propageddon"
• Black 2 & 11-15-11 1H: 50.185 million lbs of sand in the Haynesville shale region of Louisiana; the well's lateral length = 9,764 feet (typical for a Bakken well) 

More at the link.

In tomorrow's WSJ: Chesapeake Energy drills deeper for profit. Data points:

• Caddo Parish, LA
• Prop-a-geddon
• Haynesville Shale, near Shreveport, LA
• 2 miles deep, 2 miles horizontally (routine in the Bakken, not a big deal)
• 51 million pounds of sand -- Chesapeake thinks that's a world record

So, why in WSJ now?

• the article is about Chesapeake's viability -- recently sold 78,000 acres in the Haynesville to an unnamed private company fro $450 million (about $6,000 / acre)
• plans to sell an additional 50,000 acres in the same field in the coming months
• Chesapeake would retain roughly 250,000 acres

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Cushing Filling Up

Bloomberg update on Cushing. Data points:

• creeping near an all-time high
• currently at 66.5 million; within "a whisker" of  previous record, 68.3 million
• 1.22 million bbls added last week; 3.78 million bbls added the week before
• jump in inventories at end of year: oil companies looking to lower end of year taxes
• US refineries typically use less oil at beginning of year
• Saudi's cut will take time to be felt; Saudi won't start cuts until January, 2017; and, it takes 45 days for Saudi oil to reach the US

Oil Futures, Pricing -- June 26, 2016; Fossil Fuel Center Of Gravity Clearly Shifted From Mideast, Russia To North America

The price of oil will be affected by the plummeting pound (London, sterling) and the surging dollar following Brexit. For us on the sidelines it will be interesting to watch. For Prince Salman, it has huge implications. Just when he saw the price of oil rising, it dropped on Brexit. I assume the price of oil will drop due to anxiety about Brexit (short term) and the surging dollar (short to medium term).

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Swing Producer

The following was put together in an ad hoc manner, but reading through it, one starts to see tectonic changes occurring in the oil market. Clearly, things are changing; the center of gravity for fossil fuel has clearly moved from the Mideast and Russia to North America. 

From an earlier post:

• October, 2015: Saudi's inventory at record levels; have since fallen almost 40 million bbls
• over same period, US crude oil inventories have increased by slightly over 60 million bbls

Saudi policy appears to be to continue inventory drawdowns for the foreseeable future.

Saudi says they won't increase production -- note, they said they won't increase production. They said nothing about exports. For newbies: Saudi's domestic use of oil surges in July and August to provide electricity for air conditioning. Saudi imports to the US won't decrease: most of their US imports are to supply their Gulf Coast refinery and they won't cut that).

The price of oil is determined by the value of the last bbl produced or sitting in storage -- if that makes sense.

Which brings us to storage. First this article from February, 2016:

US crude oil inventories are at an 80-year high at this time of the year. Crude oil storage capacities have been increased due to rising crude oil inventories and long-term oversupply concerns. So, limited crude oil storage facilities caused crude oil storage costs to rise to $0.90 per barrel on February 9, 2016—compared to $0.10 per barrel in August 2015. Crude oil storage costs rose nine times in six months. The costs are even more than the long-term storage costs in the Gulf Coast.

The Louisiana Offshore Oil Port (LOOP) and Matrix launched the first innovative ETF contract based on the crude oil storage capacity at the LOOP Clovelly Hub in the CME Globex. The first trading started on March 30, 2015. The first listed and delivery month was May 2015. The trading floor would be NYMEX. The electronic platform would be CME Globex. This crude oil storage contract will help consumers store crude oil for 1–12 months. Also, it provides transparency for crude oil storage costs over the short term. The contracts provide access to storage at Gulf Coast facilities. Each crude oil storage contract gives the buyer the right to store 1,000 barrels of LOOP sour crude at the LOOP Clovelly Hub for any calendar month.

So, where do crude oil futures stand now? For August, 2016: 45 cents (if I'm reading the chart correctly).

See recent post on increasing storage capacity in the US, and increasing utilization of that storage. 

June 22, 2016: US Crude Oil Capacity Grows; Utilization Has Surged Since 2014

If market is up today, credit it to FedEx to some extent.

The EIA graphic today is really quite remarkable: US crude oil storage capacity utilization rises even as storage capacity grows.

From September 2015 to March 2016, the United States added 34 million barrels (6%) of working crude oil storage capacity, the largest expansion of commercial crude oil storage capacity since EIA began tracking such data in 2011…Despite the large expansion in crude oil storage capacity, the net effect of capacity growth and increased inventories resulted in high storage utilization rates. Storage utilization at Cushing, Oklahoma, averaged 87% over the past four weeks (for the week ending June 10), compared with 81% for the same period last year. U.S. Gulf Coast region storage utilization rates averaged 72% over the past four weeks (for week ending June 10), after never being more than 70% in the previous four years. --- EIA

The good news: if Hillary is elected president, and she is able to follow through on her pledge to ban fracking, there should be plenty of storage capacity at Cushing.

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Fracking Without Water

From Bloomberg:

Then there are the much-debated environmental trade-offs. Hydraulic fracturing, or fracking, requires copious water. And while gas-fired power plants produce less CO2 than coal-fired plants, environmentalists are quick to point out that methane itself is a potent greenhouse gas and leaks needlessly from aging infrastructure.

An Australian researcher and two scientists from France, which has banned fracking, now suggest there may be a better way. And it's a twofer, at least.

Their germ of an idea, published today in the journal Nature Communications, would simultaneously reduce or eliminate drilling's water footprint, make wells more productive, and trap carbon dioxide underground. How? Substitute high-pressure CO2 for water.

For newbies: I've always said there is no shortage of water for fracking in the Bakken. The bigger problem is getting rid of all that water. The above linked article has to do with fracking shale for natural gas, not fracking oil from dolomite/limestone/sand.

A completely different issue is "water-flooding" dolomite/limestone/sand -- which has been discussed rarely but will become more interesting with time.

Tuesday, April 12, 2016; The Chinese Love Ford SUVs; GM? Not So Much

Bloomberg: China is no longer the epicenter of global market activity. So which country is? Article doesn't say. Let's see if comments help: nope. Worthless article. Don't waste your time.

AP: demand for SUVs boosts China auto sales by 10 percent in March. Let's see which auto manufacturers stood out. Only three companies mentioned:

• GM: deliveries slipped 0.6%
• Ford: deliveries rose 5%, with SUV sales surging 29%
• BMW: delivers rose nearly 11%

I guess even the Chinese don't like Government Motors

Tea leaves suggest this is going to be a stellar year for investors. But note, this is not an investment site. Do not make any investment, financial, travel, or relationship decisions based on what you read here or think you may have read here. I think the market hinges on the outcome of Doha, April 17, 2016 and the outcome in the rigged election scheduled in the US on/about November 7, 2016.

Oh, by the way, all those stories over the past year about lack of crude oil storage at Cushing, OK, and elsewhere? Never mind or is it, "nevermind?" The free market capitalistic economy that Bernie Sanders disparages has solved the storage problem, also.

Let's go back to that article to post these data points. The storage at St James, LA, which is crucial for North Dakota crude oil:

• two midstream operators have added at least 13 million bbls of crude storage to the St James ub during the past 8 years
• there are 12 refineries supplied by the St James hub
• total crude oil storage at St James is currently just under 32 million bbls with an additional 3 million in maintenance (compare with 80 million bbls at Cushing)
• NuStar is using 76% of its 9 million-bbl storage capacity
• Plains is using exactly the same percentage, 76% of their 11 million-bbl storage capacity
• NuStar is in the process of adding almost another 3/4 million bbls of storage capacity
• most of NuStar St James terminal is designed for light crude oil (WTI, Bakken)
• the first rail terminal (70,000 bopd) is mostly contracted to one shipper: EOG; EOG has exclusive use of 50,000 bopd; its rail-loading terminal is at Stanley, ND; EOG's use of CBR has declined; EOG hardly used this terminal in 2015 -- delivering 19 trainloads in 2015 
• Plains will add another 1.5 million bbls of storage capacity in 2016
• remember: Texas/Bakken condensate can be sent to western Canada as a diluent; however, Canada might be using natural gas as a diluent rather than Texas condensate
• EOE's SPR, 2.8 million bbls storage; used by Shell/Saudi Aramco at a cost of $2 million/year to lease
•  (70 cents/bbl/year)
• Ergon Terminal: 2 million bbls storage capacity; can handle Aframax size vessels (up to 750,000 bbls)
• MRO: has a huge 539,000 bopd refinery 20 miles away in Garyville, LA; linked by a company-owned 630,000 bopd pipeline
• XOM: 400,000 bbls of storage capacity; utilizing only 43% right nw
• LOCAP: 2.6 million bbls of operational storage; only 32% utilized
• Capline: 3.5 million bbls of operational storage; 61% being utilized
• Petroplex: construction of a proposed 10 million bbl storage terminal tied up in court over alleged lack of progress developing the terminal

Cushing Crude Oil Storage At All-Time High For Week Ending January 1 -- January 4, 2015

Penn Energy is reporting: Cushing crude oil storage at all-time high for week ending January 1.

Crude inventories at Cushing, OK, reached an all-time high for the week ending January 1, 2016, surpassing the previous all-time high set April 14, 2015, by nearly 347,000 bbls.

West Texas Intermediate (WTI) prices fell $1.65/barrel to $36.60/barrel in the first two hours after the report in reaction to the growing Cushing supply.

The most recent record high was due in part to increasingly favorable storage economics in connection with a widening 12-month price contango structure for WTI. In addition, year-end tax reduction strategies added incentive to move crude into storage tanks at Cushing. The April 2015 storage high was also reached when the WTI price was in a 12-month contango structure.

Capacity utilization at Cushing is currently two percent below the all-time high set in March 2011. Since that time, close to 32mn bbls of storage capacity has been added to the storage hub.

Seven operators at the Cushing tank farm are now above 80 percent capacity utilization, indicating that most of their storage volumes are likely merchant, or leased to others, rather than operational. Genscape considers 80 percent capacity utilization to be an operational maximum.

These seven owners, representing 31.184mn bbls of operational capacity in total, have only 4.745mn bbls of available capacity. Four terminals are currently 70 to 80 percent full with only 6.302mn bbls of remaining capacity.

The final five terminals that are still below 70 percent utilization represent just 32 percent of Cushing’s total capacity and have 9.473mn bbls of capacity available for storage. The available capacity amount does not account for operationally necessary empty space (for blending, pipeline operations, etc.) or contingency tank top space.

At this time, three different companies are expanding their storage infrastructure at Cushing with a combined 1.93mn bbls of capacity under construction. All of these projects are expected to be online by the end of Q1 2016. Currently, 2.276mn bbls of storage capacity is in maintenance. Tanks returning from maintenance could add incremental space in the interim.

Thank goodness for relaxation on rules exporting US crude oil. 

Mega-Storage Projects Scheduled For Canada -- April 21, 2015; New MacBook Selling Beyond All Expectations

Mega-storage projects scheduled for Canada. Platts is reporting:

The cost of constructing a crude oil and NGL storage tank in Alberta is about $85/b and $25/b respectively, said Steven Paget, a vice-president of institutional research with First Energy Capital.

At the end of 2014, total capacity at Hardisty and Edmonton (Alberta’s two main storage hubs) was estimated to be 22 million barrels and 15 million barrels respectively, according to Paget.

As a rule of thumb, total storage space in the hydrocarbons industry should ideally be the equivalent of five to eight days of production.

This means given Alberta’s combined oil sands and light oil output of nearly 2.7 million b/d there should be 13.5 million barrels to 21.6 million barrels of storage—well under the existing 37 million barrels.

However, with an ambitious long term forecast to double oil sands production to 4.7 million b/d by 2025, companies are tackling the storage issue with vigor, and cash.

Gibsons Energy is due to start up a new 500,000-barrel crude oil storage tank in Hardisty on the back of another 400,000-barrel tank that it completed in February at the same site. And it recently announced it received enough shipper support for another 900,000 b/d storage facility in Hardisty.

And then there’s the Keyera Energy and Kinder Morgan venture unveiled in late March of a 4.8-million barrel facility near Edmonton expected to start in 2017. The mega project is also expandable by another 1.8 million barrels.

More crude oil storage build-up is also in the works, including TransCanada’s 2.6- million barrel Keystone Hardisty Tank Terminal and another 350,000 barrel facility by Enbridge at Athabacsa.

These new project’s come on the back of Kinder Morgan and oil sands producer MEG Energy completing the construction of their 5.2- million barrel and the 900,000-barrel tank in Alberta in the recent past.

Located in the Canadian hinterland that has one of the world’s largest crude oil storage facilities and with nearly 95% of its output being exported south of the border through a largely uninterrupted and well-established network of delivery systems, construction of major crude oil storage facilities in Alberta had not been on the priority list.

Much more at the link which will probably be archived at the source. 

This tells me that the one-two punch (killing the Keystone and Saudi Arabia's decision to give away their oil at $50/bbl) has resulted in this interesting outcome: Saudi Arabia may be dealing with several years of $60 oil due to their own miscalculations.

Remember: this Canadian storage comes on top of at least a temporary 'maxing out' of capacity at Cushing. Consumers should be the winners. Certainly the refiners.

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Apple Page

Apple again reiterates its policy on Apple Watch sales but of interest is the word that the new MacBook is selling beyond all expectations.

From MacRumors:

The video also covered the MacBook, which has been highly limited even in first wave launch countries. Ahrendts said the response to the MacBook has been "overwhelming" and that it was one of Apple's best MacBook launches yet.

Demand for the Space Gray and Gold MacBooks was described as "off the charts," and she said MacBooks are rolling out to Apple Stores that do not currently offer them on display.

Both the Apple Watch and the MacBook are in very short supply. Apple Watch orders placed today won't ship out until June or later, and MacBook orders for standard configurations carry shipping estimates of four to six weeks.

The new MacBook is insane. As in insanely interesting. My first look, I said "eventually, but not today." It's slightly ahead of its time. One of the local Apple retail employees I really like said the same thing: he was really, really impressed with the new MacBook, probably his favorite version.

It is so thin, it a) had to give up a bit of battery life (only 9 hours); and, b) gave up every last port, except one which can do everything -- power and accessories. Plus, from that port, one can re-charge one's iPhone. I'm not sure about the Apple Watch but if not, that, too, will come. I rely heavily on the Sandisk port on my laptops so the lack of a Sandisk port on the new MacBook is problematic, but that was all that concerned me.

On another note, I doubt Tim Cook is happy with this huge miscalculation on the Apple Watch. I doubt Ms Ahrendts decided to do this video on her own; my hunch is she got a memo from Tim telling her to get ahead of this huge blunder on Apple's part with regard to the Apple Watch.

The demand/supply issue for the MacBook -- hard to say. I think they can ramp up easily on that -- there are very few choices: a) 3 colors; b) two specs based mostly on flash drive storage = 6 choices. On the other hand, it looks like there are 22 basic watch choices (with countless bands to choose from). 

Pundits, critics, analysts can bad-mouth Apple on the Apple Watch blunder, but its competitors certainly aren't going to point out that Apple can't keep up with demand.

Oh, all those kids that weren't interested in the Apple Watch (reported earlier); they saw the new MacBook -- space grey or gold.

"They" Found "New" Storage For All That Crude Oil -- FuelFix -- April 5, 2015

Back to the crude oil storage discussion.

Before we get to the "new" article, let's post a couple of numbers so we can put things into perspective (some numbers rounded):

• Cushing, Oklahoma, PADD 2: 150 million bbls
• nationwide "additional" shell capacity: 20 million bbls
• US strategic petroleum reserve: 700 million bbls

Okay, now the "new" article on crude oil storage. FuelFix is reporting:

Louisiana’s offshore oil port, with huge underground storage caverns, was built to handle imported oil but is now leasing space to traders who need to store U.S. crude.

The Louisiana Offshore Oil Port (LOOP) recently auctioned 11.3 million barrels of monthly storage space and has scheduled another auction Tuesday [April 7, 2015].

Global production now exceeds consumption by about 1.5 million barrels a day.

Storage fees:

• ocean-going tankers: around $1/bbl/day
• Cushing: 30 cents/bbl/day -- but will change with the market; some charging as much as $1/bbl/day -- but no takers, yet, at that price
• LOOP: highest price: 10 cents/bbl/day

The caverns:

LOOP and the CME Group, formerly the Chicago Mercantile Exchange and Chicago Board of Trade, are offering contracts to store up to five grades of oil in LOOP’s eight caverns. The facility will auction 7 million barrels of storage space per month, or a total of 84 million barrels’ worth for the year.

The article also stated that oil companies would begin constructing more storage capacity if necessary.

A huge "thank you" to a reader for finding this article. A lot of data points which helps me put the Bakken into perspective.

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A Private Enterprise "Strategic Petroleum Reserve"

I find this incredibly fascinating. It will be interesting to see how much oil will be put into non-SPR storage.

It's hard for me to believe we won't see some kind of "oil-shock" coming out of the Mideast sometime in the next ten years but with all that is in the US SPR and all the crude that appears to be filling the "new" non-SPR, private-enterprise storage facilities, it seems an "oil-shock" in the near future will be nothing like the "oil-shocks" of the past. However, nothing surprises me any more.

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69 Years Later

I normally don't post these links, but this one is particularly good.  If the link breaks, it's a 2014 comparison of Hiroshima and Detroit "69 years later."

Reason #35 Why I Love To Blog -- March 24, 2015

 Updates

March 25, 2015: more on that crude oil storage shortage -- Bloomberg is reporting:

Just as Wall Street says the U.S. is running out of room to store oil, it turns out there’s another 20 million barrels of empty space. 

Where? Right at the top of the tanks. 

A supply glut has dragged U.S. crude for May delivery almost $10 a barrel below contracts a year out. This market structure, known as contango, has encouraged traders to shove the most oil in 80 years into storage so they can sell it for more in the future. The problem is, tanks are filling up, according to banks from Bank of America Corp. to Citigroup Inc. and Goldman Sachs Group Inc. That’s where the extra space comes in.

There’s the normal “working” capacity. And then there’s “contingency” space, a buffer between the working storage and the tank tops that typically sits empty to keep oil from spilling out. The company that built most of the tanks at Cushing, Oklahoma, the biggest U.S. oil hub, says the buffer is about 3 to 5 percent of storage space. That’s equivalent to about 20 million barrels of room in tanks across the country.

Original Post

 

On March 8, 2015, I was curious about all that talk about US crude oil storage reaching capacity by May, 2015, if not by April, 2015.

The post at the link had this screenshot:

 So, now we have this story today, Business Insider is reporting:

Crude oil storage inventories in the US are at their highest levels in decades. Is that going to cause the price of West Texas Intermediate crude to crash?

Probably not, according to Robert Rapier of Energy Trends Insider.

In fact, we're not even close.

Rapier writes that "oil producers could continue to add a million barrels a week (which is about the average over the past year) for nearly four years before crude oil storage is actually full."

The best-known storage facility, in Cushing, Oklahoma, would run out of space much sooner than that at the current rate (about four months from now). But that still isn't going to happen, according to Rapier:

We are currently in the season when refinery utilization is lowest. Refiners take equipment offline in fall and spring to do maintenance, so they use less crude oil at this time of year. This maintenance usually peaks in March, and then crude oil demand picks back up as refiners gear up for the summer driving season. The difference in refinery demand between this time of year and summer is generally around a million barrels per day, so even if nothing else changes that storage build should start to flatten.

In other words, we may have already hit peak crude storage here in the US, and if not, we're getting very close. 

So incredibly interesting.

Random Post On PADD Capacity -- March 8, 2015

Over the next few weeks, we are going to hear more and more stories (especially on CNBC) that "Cushing has reached full capacity." Those betting on (hoping to profit from) lower oil prices will be particularly vocal.

Others have been saying "the bottom (for the price of oil) is in."

So, there's going to be a media "tug of war" -- the price of oil has at least another leg down when Cushing reaches full capacity vs the price of oil has bottomed; it is in a trading range, but will gradually trend up.

Is the oil glut a myth?

Storage capacity by PADD:

This data is released twice a year. The September, 2014, data was released November 26, 2014, so I assume the March, 2015, data will be released around  May 26, 2015, just before Memorial Day and the beginning of the US driving season.

Cushing, Oklahoma, is in PADD 2. 

There are a number of story lines in the simple bar graph above.