Let The Rumors Begin -- The Timing Is Very, Very Suspicious -- April 26, 2018

Link here. Explosion rocks Wisconsin refinery.

A tank containing crude oil or asphalt exploded at a large refinery in Wisconsin on Thursday, injuring several people and causing a blast that one worker described as sounding like a sonic boom.

No fatalities have been reported, but at least five people have been taken to hospitals in Duluth, Minnesota, following the explosion at the Husky Energy oil refinery at about 10 a.m., Superior Fire Chief Steve Panger said in a statement.

Panger didn't have details about the extent of their injuries. Others were walking wounded.

A contractor who was inside the building told WDIO television that the explosion sounded like "a sonic boom" and that it happened when crews were working on shutting the plant down for repairs.

Panger said the fire was out by 11:20 a.m., although smoke could be seen rising from the plant. Panger said a small tank exploded containing either crude oil or asphalt.

A reader tells me that Enbridge "feeds" this refinery. On Monday of this week, a Minnesota administrative judge ruled that Enbridge's plan to expand its Line 3 pipeline could go forward.

Holy Mackerel! Amazon, Huge Beat -- No Wonder It's Called "Amazon" -- Trading At All-Time High -- April 26, 2018

Disclaimer: this is not an investment site.

Starbucks meets/exceeds and yet shares are down significantly -- giving back its entire recent gain. But look at Amazon! Delivers huge profit surprise. "We've never seen companies of this size grow at this rate." Shares up 4% at the market close, and after results released after hours, Amazon up almost 7%.

• EPS of $3.27 versus ... are you sitting down? ... $1.27
• revenues: $51 billion; vs expectations of $49.96
• but look at that -- revenues beat expectations -- okay -- but look at EPS -- huge jump -- much greater than revenues would suggest -- this tells me that Bezos has "huge" control of costs

A snarky note: Expedia, among the "travel" sites, did very, very badly. Shares are up, but the story is quite bad. If there's one television ad that I dislike the most: Trivago.

****************************

Amazon HQ2

CNBC poll for Amazon HQ2 site:

• Pittsburgh: 44%
• Dallas: 42%
• Denver: 4%
• Toronto: 2% 

I can't argue with Pittsburgh -- a good choice. For fulfillment centers -- yes, Pittsburgh seems high on the list -- location, location, location. But for a headquarters -- need to be near a) the nation's movers and shakers (Washington, DC - northern Virginia area); and, b) the nation's bankers, Boston. So as much as I  would like to Amazon HQ2 in north Texas, my bet is somewhere along the northern I-95 corridor. 

Natural Gas Fill Has Not Yet "Turned The Corner" -- April 26, 2018

So, from yesterday (Wednesday, April 25, 2018):

The next natural gas fill/withdrawal data will be released by the EIA tomorrow (Thursday, April 26, 2018).

This is what is/was forecast.

• this Thursday (tomorrow), we expect EIA to report 1,287 bcf of working gas in storage for the week ending April 20.
• 2e anticipate to see a draw of 12 bcf, which is 83 bcf larger than a year ago and 72 bcf larger vs. 5-year average.

How did that forecast work out? Actual results:

• working gas in storage: 1,281 bcf (net change: - 18 bcf)
• a draw of 18 bcf (vs 12 bcf predicted)
• the forecast: almost spot on

As predicted by Platts, it looks like this will be the "longest stretch" for natural gas before "turning the corner."

Thoughts On BP's Comments That It Underestimated Renewable Energy -- April 26, 2018

I posted this about an hour ago, but it's worth re-posting.

Don't get fooled by the headline: BP admits it underestimated renewable energy growth. Near the end of the story --

China’s solar race could start sputtering some time in the future. This should be a safe enough prediction: sooner or later the local energy market will become saturated with solar power capacity.

When I think of shale oil, about the last company I think of is BP. I very, very seldom see BP involved with shale oil.

My hunch with regard to the the BP/CEO stating unequivocally that "BP underestimated renewable energy growth" is this: this is his attempt to get investors to look at what BP really, really underestimated -- how fast US shale oil would grow.

It's an old media trick.

BP's expertise? Oil and gas. Not renewable energy. They can be excused for underestimating how fast renewable energy grew. But BP's expertise is in oil and gas exploration and production. There is no excuse for underestimating US crude oil shale.

Two stories side-by-side. First, this Financial Times story less than six months ago: "BP chief says shale will have limited effect on global market. Bob Dudley says technical challenges reduce ability to rival conventional output. On December 20, 2017 --

There is a limit to how big a role US shale can play in the global oil market, according to the chief executive of BP, who said traditional producers such as Saudi Arabia would continue to exert more influence over crude prices. 

Bob Dudley said he had become less worried about the extent to which US shale resources could hold down prices as more was learned about their geology. “There are cracks appearing in the model of the Permian being one single, perfect oilfield,” he told the Financial Times, referring to the region of Texas and New Mexico at the centre of the shale revolution.

Yes, both Mark Papa (former CEO/EOG) and Bob Dudley talk about the challenges in the Permian -- but they are all logistical (mostly takeaway capacity) and those challenges will be addressed. Successfully.

Now, the second story, the Permian is projected to be the largest oil patch in the universe. Data points from Bloomberg:

• growing into the largest oil patch in the world
• will hit record production in May, 2018 (3.2 million bopd)
• will produce more than 5 million bopd by 2020 (previously reported; another source)
• Saudi Arabia, Iran, Iraq, the Permian now
• Saudi Arabia, the Permian, Iran, Iraq by the end of the year
• Iran and Iraq each produce less than 5 million bopd
• Iran: produced about 3.81 million bopd in March, 2018

What was not said, about the Permian:

• terror-free
• once built, infrastructure tends not to be blown-up the next day
• located in an oil-friendly state 

It looks like BP underestimated renewable energy and the US shale oil revolution. 

The Market, Energy, And Political Page, Part 2, T+57 -- April 26, 2018 -- COP Crushes Expectatioins

Wow! "ConocoPhillips crushes earnings views ahead of Exxon, Chevron results." Link here. Wow, wow, wow ... this will please Warren -- transcript here --

• COP easily beat 1Q18 profit forecasts
• estimates:
• estimates: earnings of 76 cents vs a loss of 2 cents/share a year ago
• estimates: revenue up 11% to $8.6 billion
• actual:
• EPS: 95 cents (vs 76 cents) -- wow, wow, wow
• revenue: $8.98 billion
• production:
• from the Eagle Ford, Bakken, and the Delaware (Permian) jumped 20%
• but total output dropped to 1.22 million boe (1Q18)
• forecast: slightly less in 2Q18 )1.17 million to 1.21 million boepd
• full-year production at 1.2 million bopd is higher than previous estimate of 1.95 million boepd
• pricing:
• boe jumped to $50.49 vs $36.18/bbl year-over-year

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

Don't get fooled by the headline: BP admits it underestimated renewable energy growth. Near the end of the story --

China’s solar race could start sputtering some time in the future. This should be a safe enough prediction: sooner or later the local energy market will become saturated with solar power capacity.

TSLA: continues to fall (even on an "up" day for the market). Now trading at $280. 52-week high -- $390. TSLA has fallen almost 30% off it's 52-week high.

************************************* 

The Opium Wars

I've finished The Opium Wars, Hanes, c. 2002.

Truly amazing what our high school history textbooks left out. It would be hard to find a period in British history that would be worse than what the Brits did to China in the first half of the 19th century. Not to be taken out of context, but the Holocaust comes to mind.

Kodachrome, Paul Simon