NG Fill Rate -- Plummets To 40 -- November 14, 2014

Natural gas fill rate (see this post for background):

The number today: 40.

I don't think the polar vortex had yet arrived the week for this reporting; if it had, it was just beginning. The east, with 8, and the west, with 4, had incredibly paltry "fill" rates. Winter is still a month away. EIA comments:

Stocks were 220 Bcf less than last year at this time and 237 Bcf below the 5-year average of 3,848 Bcf. In the East Region, stocks were 102 Bcf below the 5-year average following net injections of 8 Bcf. Stocks in the Producing Region were 106 Bcf below the 5-year average of 1,251 Bcf after a net injection of 28 Bcf. Stocks in the West Region were 29 Bcf below the 5-year average after a net addition of 4 Bcf. At 3,611 Bcf, total working gas is below the 5-year historical range.

It is interesting the EIA did not provide "percent" below the 5-year historical range which they have done in the past. The overall/national storage appears to be about 7% below the 5-year historical average. The good news: the gap between this year's storage and the historical average seems to be narrowing (see graph at the link).  Next week's number, after a full week of the polar vortex, should be very interesting. For me, the number I am watching is the delta between the year's numbers and the historical average.

Apparently traders are not concerned; Bloomberg shows natural gas down a bit today (a dynamic link) and below $4.00 for a million Btu.

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Active rigs:

	11/14/2014	11/14/2013	11/14/2012	11/14/2011	11/14/2010
Active Rigs	186	185	189	200	158

RBN Energy: the spread between Western Canadian Select (WCS) and Gulf Coast equivalent heavy crude Maya has narrowed significantly, from $35/bbl last November to less than $12/bbl today. Great article on how Canadian oil is reaching US markets; you might be surprised.

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Speaking of WCS, this is interesting. There is a headline out there somewhere that says despite action in the House and the Senate, POTUS has not changed his mind on the Keystone. That's interesting. I thought he had not made a decision; it is clear he will not approve the Keystone. He will not throw Tom under the bus. On the other hand, Landrieu is toast. She would have been toast anyway. I suppose the toast is just a bit more burned.

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While waiting for data to be reported, this is kind of cool: yesterday I posted "tea leaves suggest that the wage growth (read: inflation) data is just not there for the Fed to raise interest rates."

This morning, this headline over at Fox Business, "Wage Growth Is The New Inflation Rate."

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For Investors Only

I've noticed the same thing: some funds are trailing badly; probably due to being overweighted in energy. It should keep the bull market intact. Funds are said to be chasing performance. Yahoo!Finance is reporting:

For Thomas Lee, founder of Fundstrat Global Advisors, this underperformance is a signal that stocks have a lot of firepower left. “Historically when fund managers trail - and this is really one of the three worst years in twenty - the October to year-end move is even bigger.” Lee notes that fund managers will be forced to chase the top-performing stocks. “Whatever has been working this year basically gets turbocharged and people pile into those names.”

This is not an investment site. Do not make any investment, financial, or relationship decisions based on what you read here or what you think you may have read here. Make no travel plans based on what you read here. I post quickly and frequently; typographical and factual errors are likely. If this information is important to you, go to the source.

Trading at new highs, but most of these highs were probably at the start of the day and have since pulled back: AAPL, BRK.A, BRK.B, MSFT, TGT, WMT.

Deepwater Gulf Production To Set New Record In 2016; Will Plateau After That -- Rigzone -- November 13, 2014

Rigzone is reporting:

Discoveries are being made in increasingly deeper waters and emerging plays that require complex drilling and more advanced, capital-intensive technologies.

To meet Wood Mackenzie’s production outlook, $17 billion in capital expenditures will be required, 30 percent higher than 2013. 

However, the region will face difficulty in growing over the next decade unless the oil and gas industry can overcome challenging economics due to high costs, technological limitations and low recovery rates.

“Not including yet finding reserves, we forecast that production will start to decline after plateauing out at 1.9 million barrels of oil equivalent per day in 2021,” said Imran Khan, GOM analyst at Wood Mackenzie, in a Nov. 13 press statement. “The current slide in oil prices does not help the long-term outlook either, especially if the downward trend continues for a prolonged period,” Khan noted.

Also at Rigzone:

The offshore rig market is a prime example with “a lot of supply” entering the market from “2014 through 2016 and to some extent 2017,” Gjerding explained.

The supply condition may differ across different segments of the oilfield services sector, but “in general, the decrease in demand is matched by an increase in supply.”

Seismic and exploration drilling will be the first segments experiencing spending cuts, according to DNB’s projection, even though supermajors and large cap independents have experienced the intent to carry on with their exploration activities.

Meanwhile, rig operating day rates in the ultra deepwater segment have experienced reductions, resulting in lower valuations for the offshore drilling asset class.

And later in that article:

The Saudis stand in the best position to benefit from additional demand created from sub-$100 oil prices, which are hitting offshore E&P as well as slowing down the spread of shale gas revolution from the U.S. to the rest of the world.

“Shale revolution will totally close down at $25 per barrel, but you only need to keep to $70 to $80 per barrel to get significant impact.”

“We don’t see clear signs [that] the Saudis want to remove the barrels to protect oil prices,” Kjus said.

Shale production contributed significantly to the growth in crude oil production in the United States, which is seen to have more than matched supply outages arising from political turmoil in the OPEC nations including Libya, South Sudan and Iran until 2014.

Kjus described U.S. crude producing states North Dakota, New Mexico, Oklahoma and Texas as the “new Iraq.” Oil production from the four states grew 3.3 million barrels per day since 2010, bringing U.S. monthly crude output to 8.7 million barrels per day, almost matching the level in the 1980s.

If oil gets down to $25/bbl due to supply/demand imbalance, a lot more than just the shale revolution is going to shut down. 

Train Derailment Near Casselton, North Dakota -- November 13, 2014

A reader just wrote to tell me there's been a train derailment near Casselton, ND.

Not a Bakken crude oil train.

Monitoring area for propane leak.

Will watch for news story and link.

The reader who sent me this is reliable.

Here's the link:  http://www.valleynewslive.com/story/27381049/train-derails-near-casselton-nd:

The Cass County Sheriff's Office says they believe the two trains involved are BNSF and both were traveling at very low speeds. The train going eastbound was hauling lumber and the train going west had empty oil tankers. Approximately 25 cars were derailed between the two trains.

No injuries or fire have been reported as of 6:30 p.m. Propane tanks on BNSF property were hit during the derailment, but do not appear to be compromised.

The reader's only question: what is it about Casselton, North Dakota?

Trivia: the propane tank on BNSF property part of the rail switch mechanism, I assume; more here. The reader tells me that the tank was knocked ajar but no leak. 

North Dakota To Require Producers To Treat Crude Before Shipping -- WSJ; November 13, 2014

The Wall Street Journal is reporting:

North Dakota plans unprecedented steps to ensure crude pumped from the state’s Bakken Shale oil producing region is safe enough to be loaded into railroad tank cars and sent across the country.

In the first major move by regulators to address the role of gaseous, volatile crude in railroad accidents, the North Dakota Industrial Commission, which regulates energy production in the state, said it would require Bakken Shale well operators to strip gases from crudes that show high vapor pressures.

Those changes could make the new rules more costly for the state’s smaller producers. Jack Ekstrom, vice president of government affairs for Whiting Petroleum Corp. said the rules don’t appear to be “a major material cost” he said. “This is perhaps more of a concern to a marginal or smaller operator.”

The state expects to issue final rules by December 11th.

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Just When You Thought It Was Safe To Go Home Again

Nebraska hospital prepares for new Ebola patient -- surgeon from Sierra Leone being brought back to the US for treatment. 

A surgeon infected with Ebola will be transported from Sierra Leone to The Nebraska Medical Center for treatment, a U.S. government official familiar with the situation said.
The doctor, a Sierra Leone national and legal permanent resident of the United States, is expected to arrive this weekend, most likely Saturday, the official said.

The official said it's not known whether the doctor was working in an Ebola treatment unit or some other type of hospital. The surgeon is married to a U.S. citizen and has children, the official said.

The Nebraska Medical Center in Omaha is one of four hospitals in the United States that have biocontainment units and years of preparation in handling highly infectious disease such as Ebola.

What We Will Be Talking About Friday -- November 13, 2014; NDIC -- Crude Oil Needs To Be "Treated" Before Shipping

The Wall Street Journal

Halliburton in talks to buy Baker Hughes. Previously reported. But no one (shareholders, customers, or regulators) likes the idea. DOA?

White House considers timing on executive action on immigration. Let me guess: next Friday night, after 7:00 p.m. ET.

Harry Reid nominates/party accepts Pocahantas as a top adviser to Senate Democrats' policy and communications arm. A lot of "they didn't build that" over the next two years.

Low-key rollout set for second year of ObamaCare. I don't even know who succeeded Sebelius. Oh, that's right. I don't recall her name, but I think the HHS director is female and a budget analyst. I think I recall in a past life she worked for Wal-Mart.

Why not, what could possibly go wrong? Military researchers weigh infecting volunteers with Dengue fever. How does one spell "Tuskegee syphilis experiment"? Tuskege or Tuskegee? Syphillis or syphilis?

Mission creep: Pentagon considering bigger US troop role in Iraq. Speaking of which, there's a new biography of Bob Hope out this month.

Nothing like a war to get folks to agree on something: Baghdad and Kurds reach deal on oil.

Eurozone inflation to remain low.

Liberia lifts state of emergency, just as epidemic may be shfiting to Mali.

Amazon and Hachette end book dispute.

FCC chief squeezed by POTUS and GOP.

Here it is: NDIC will require producers to treat crude before shipping. In case that link breaks, this post.

Gas savings flow to Wal-Mart's carts.

CDC: more teens smoking E-cigarettes. And I assume weed in Colorado, Alaska, and Portland.

Who wudda guessed: gun manfacturer Colt may default.

UPS sets ambitious long-term earning goals.

Buffett to trade P&G stock to buy Duracell. Previously posted.

US oil prices drop below $75/bbl.

Holiday spending should cheer retailers.

Global demand for gold declines as China's appetite wanes.

Dow posts another record....sixth record in seven days.

Tea leaves: the wage growth (read: inflation) data is just not there for the Fed to raise interest rates. [Cool: I posted this November 13; then on November 14, 2014, the next day, this article on wage growth = inflation.]

The Los Angeles Times

John Muir's legacy questioned as centennial of his death nears. One word: wow. 

California can't challenge ruling on concealed guns, court says.

My kind of guy: Dorian "Doc" Paskowitz obit -- this physician gave up a lucrative practice for surfing because he said he never felt right about taking money from people in pain.  Dead at 93.

More than one California surfer has dreamed about following the waves in an old camper, picking up occasional odd jobs by day and generally blissing out at night.

But only one did it year after year with his wife and nine children crammed into a 24-foot camper that ultimately gave each child something like three cubic feet in which to grow up.

Only one started what became a famous surfing school on the sands of San Onofre and preached the benefits of surfing so unrelentingly that Tommy Hilfiger applied the family's name to a line of beachwear; when it came to surfing, the designer explained in 1999, "there's no one more cool and credible than the Paskowitzes."

Dorian "Doc" Paskowitz, a physician who abandoned the prospect of a lucrative practice for surfing because he said he never felt right about taking money from people in pain, died Monday at a hospice in Newport Beach. He was 93.

And with that, I'm going to start my night of watching James Bond, Blu-Ray, Volume 2, "You Only Live Twice"; "Thunderball"; and, "Diamonds Are Forever."

From wiki:

Connery's breakthrough came in the role of secret agent James Bond. He was reluctant to commit to a film series, but understood that if the films succeeded his career would greatly benefit.

He played the character in the first five Bond films: Dr. No (1962), From Russia with Love (1963), Goldfinger (1964), Thunderball (1965), and You Only Live Twice (1967) – then appeared again as Bond in Diamonds Are Forever (1971) and Never Say Never Again (1983).

All seven films were commercially successful. James Bond, as portrayed by Connery, was selected as the third-greatest hero in cinema history by the American Film Institute.

Later: this is the first time I've ever watched Diamonds Are Forever. I was unaware North Dakota had a "leading role" in this movie. Ha.