Week 17: April 25, 2021 -- May 1, 2021

Top story of the week:

• Joe Biden is still president.

Top international non-energy story:

• Significantly worse: Saudi Arabia's foreign exchange reserves;

Top international energy story:

Top national non-energy story:

• Census: Texas gains two US House seats; California, NYC each lose one seat;
• NYC to "fully re-open" July 1, 2021;
• Covid-19 vaccine hesitancy; and, here; and, here; and, here;
• New jobs, April, 2021: analysts made biggest miss in 23 years; forecast one million + new jobs; came in at 266,000 new jobs;
• California loses population for first time in history;
  

Top national energy story:

• The Newsom announcement; and, here;
• $80-oil by the end of the year -- Goldman Sachs;
• WTI breaks through $64; later, $65;
• Vitol acquires 44,000 acres in the Permian;
• US electricity demand will reach pre-pandemic levels by July, 2021;
• oil companies reporting huge profits for first time in several quarters;

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top North Dakota energy stories:

• Quick connects.

Operators:

• CLR ramping up Bakken operations;
• RimRock with eight new FBIR Johnson permits;
• Elvis has left the building;

Operations:

• Enerplus active on its "Igneous Rock" pad;

Wells:

• CLR has completed the Angus Federal wells;
• BR CCU Gopher wells fracked;
• MRO reports a huge Jonah USA well in the Sanish-Antelope;
• MRO reports a huge Three Forks second bench well, the Daniel USA well, in the Sanish-Antelope;
• MRO's huge Kolba USA well;
• Two huge MRO wells: the Thorson USA and the Pelarske USA; and, here;
• A BR Chuckwagon well back on line after being offline for almost a year;
• Two EOG Hawkeye wells updated;
• The Whiting Finsaas wells in Hay Creek seem to be producing nicely after a period of sporadic production;

Fracking:

Pipelines: 

• Operator / owner wants DAPL case to be heard by US Supreme Court.

Natural Gas:

• Oil-rich Bakken shale shows promise of natural gas growth despite fewer rigs;

Bakken economy:

Commentary: 

Flashback:

• One well, one millionaire;

Daily Breitbart Economic Note -- April 30, 2021

Breitbart Business Digest, April 29, 2021, 1Q21:

John F. Kennedy once said that "a rising tide lifts all boats." 

The aphorism was intended to express the idea that we all share a common interest in an improving economy. Now, however, it may be true in a more literal sense. NBC Connecticut reports that demand for boats is at unprecedented levels as Americans scramble to make summer plans in a country still inflicted with covid restrictions and mask requirements even as actual covid infections fall. 

In fact, demand is outpacing supply, and boat salesmen say they are having a hard time getting their hands on product for customers.

That's becoming widespread through the economy. Microchips are in short supply, and as a result, automakers are having trouble producing enough cars to meet demand. That's sent so many buyers into the used car market that recent vintage used cars are actually appreciating in value, with many models from the last five years worth more today than they were when they were two years newer. Demand for housing has outpaced supply, pushing up home prices even as sales volumes drop and sending builders scrambling to break ground. That, in turn, has caused a run on lumber, sending prices skyrocketing.

The last round of stimulus payments, arising from President Biden's $1.9 trillion American Rescue Plan, pumped household incomes up a record 21.1 percent in March, the Commerce Department said Friday. While some of that money is finding its way into the hands of home sellers, boat marketers, and auto dealers, much of it is being saved. 

The savings rate jumped to 27.6 percent, the highest ever recorded apart from last April's lockdown and stimulus-induced record of 33.7 percent. Prepandemic, this tended to run around 7 percent.

The Fed's Jerome Powell has repeatedly assured us that any price rise from all this money sloshing around through the economy will be "transitory" and not lead to the kind of sustained high inflation that would trigger a sudden rate hike. 

On Friday, however, Richard Curtin—the venerable doyen of the University of Michigan's Survey of Consumers—raised doubts about that. 

"While temporary price hikes are anticipated, the robust increases in consumer demand will act to lengthen and heighten inflation above the modest increases now anticipated," Curtin wrote in his analysis of the better than expected rise in consumer sentiment in April.

The market seems convinced right now that Team Powell will be proven right, and so asset prices do not seem to reflect much inflation risk. That's likely a reflection of the fact that inflation has been so low for so long and that predictions of coming inflation have made fools of many prognosticators for at least two decades. 

But that also means that it's likely more investors will be caught without a life-preserver to keep them afloat if a rogue wave of inflation hits.

– Alex Marlow & John Carney
Breitbart News Network

Transportation: A 2021 Theme -- April 30, 2021

At the sidebar at the right, near the top, I track "Themes - 2021."

At the first post there, at the top is a link to "Investors."

And from there, well down the list:  

• Rail: link here.  

This story will be add at that site.

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. 

From today's Wall Street Journal: rally in transportation stocks nears 122-year-old record streak. Gains underscore investors' expectations that rebounding economy will boost companies carrying goods, raw materials.

The Dow Jones Transportation Average on Friday notched a weekly advance of 1.4%—its 13th consecutive week of gains. That marks the index’s longest such streak since it rose for 15 straight weeks ended in January 1899.

The transportation average has gained 23% this year to record levels, beating the Dow Jones Industrial Average’s 11% climb to its own recent highs.

Some analysts say transports might still have some open road ahead, as passengers return and freight volumes increase. Adam Scheiner, industrials analyst at UBS Global Wealth Management, said his group expects railroads and airlines in particular to benefit from the return to normal activity.

From late last night, re-posting:

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Dow Transports

I think I heard today that "Dow Transports" hit an all time high. Whether it did or not, the DJTA chart is pretty amazing.

Years ago I subscribed to a financial newsletter called "Dow Theory." It's long-running thesis was this: if the Dow Transports confirmed the Dow Industrials (going up) it was going to be a bull market, or the bull market would continue. So, I learned to watch "Dow Transports," although to this day I have no idea if that theory holds water. 

Tonight, looking at US equity futures (over at CNN and CNBC) I noted the "pre-market movers" (up and down) over at CNN. 

And look at this: one of my favorite companies to follow, UNP is at the top of the list of movers. Whoo-hoo.

The 52-week high for UNP is $228, so if "that" holds, it will be quite a day tomorrow. It's been my experience that futures at 7:30 p.m. never reflect what's going to happen the next day, unless it's bad news. LOL.

I have found no story explaining why UNP might be surging (of course, the railroads are of more interest right now simply due to the KSC story) but there was this press release nine hours ago:

Union Pacific today announced that it is building a state-of-the-art grain transload facility within its Global IV intermodal terminal in Joliet, Illinois that will reduce supply-chain costs for agricultural producers and processors. The Union Pacific Global IV Transload facility will be managed by JCT, which is a 50/50 joint venture between Consolidated Grain and Barge Co. and Gavilon Grain, LLC.

Rigs Don't Matter -- Not To Be Taken Out Of Context -- April 30, 2021

Link here. This article is archived.

Natural gas processing plants in North Dakota are tracked here.

From the linked article:

Although oil production in most US shale basins is not expected to reach pre-coronavirus levels until at least late 2023, additional processing and higher gas-to-oil ratios might still lead to natural gas growth in the oil-rich Bakken.

Oneok increased its first-quarter natural gas and natural gas liquids volumes processed in the Williston Basin and plans to bring another 200 MMcf/d of processing capacity online before year-end, which will further reduce flaring in North Dakota.

Gas volumes processed in the Rocky Mountain region increased 5% while NGL raw feed throughput volumes grew 20%, the company reported in its first-quarter 2021 earnings call on April 28. This occurred despite winter storm production freeze-offs in February and lower year-over-year drilling activity in the region.

"The Williston Basin continues to surpass our expectations," Oneok CEO Terry Spencer said. "Our increased operations were not reliant on increased rig activity or commodity prices. Instead, it is based on DUC inventory, rising gas to oil ratios and increased ethane demand."

Oneok chief operations officer Kevin Burdick said: "There are 350 DUC wells on our dedicated acreage. With eight completion crews, there is no need for additional drilling or completion crews to maintain our volumes throughout the year. Any additional activity would provide upside."

With more than 200 MMcf/d of natural gas still being flared in the Bakken, according to the latest data by the North Dakota Industrial Commission, more volumes of gas can still be captured even if production stagnates for the foreseeable future, especially with wells demonstrating higher gas-to-oil ratios.

The company is moving forward with its 200 MMcf/d Bear Creek natural gas processing plant expansion and related infrastructure in the Williston Basin, which is slated for completion in the fourth quarter of 2021.

Notes From All Over; The Friday Late Afternoon Edition -- April 30, 2021

Vitol: largest independent, privately-held, energy trader in the world. Wiki entry.

• just bought 44,000 acres in the Permian from Hunt Oil Co.
• purchase price not disclosed
• earlier, Hunt said its acreage could command a price of $1 billion
• so, that's all we have to go on
• $1 billion / 44,000 acres = $23,000 / acre which seems to be in the ballpark for Permian mineral acres
• currently the Hunt acreage is producing about 1 boe per mineral acre.
• this is Vitol's first step into the USL48 = US lower 48 -- the continental US, excludes Hawaii (no oil) and Alaska (lots of oil but producing increasingly trivial amounts)
• I guess the L48 also excludes federal offshore production but I don't know;
• it just seems that all of a sudden the writers and analysts are using L48 as if it's a new term for them
• for me, the L48 is only applicable if reporting from Alaska
• from Hawaii: it's the mainland
• from NYC it's fly-over country (California isn't producing much oil any more)
• our very clever younger adult daughter would argue that "lower" 48 suggests there's an "upper" 48 somewhere?

Alaska: what great timing. Up above I noted that Alaska oil production is becoming increasingly trivial. Literally, less than 30 minutes after writing that, I come across this Rigzone article: 

Crude oil production in Alaska fell to about 500,000 bpd last year, the lowest level since 1976 and down 75% from the peak of 2 million bpd in 1988. [In fact, that 500,000 bopd may be an average rounded up; by the end of the year, I think production had fallen slightly below 400,000 bopd.]

Carbon capture projects, by country. Link here. Readers each get three guesses which country has the most carbon capture projects in the works, and the first two guesses, if wrong, don't count. Hint: the country is not China, Russia, Germany, Norway, Saudi Arabia, or Lichtenstein. 

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Back to the Bakken

Active rigs:

$63.58	4/30/2021	04/30/2020	04/30/2019	04/30/2018	04/30/2017
Active Rigs	15	31	64	61	49

No new permits today.

Ten permits renewed:

• BR (5): two Shafer permits; two Sandie permits; and, one Ole permit, all in McKenzie County;
• Whiting (3): three Lacey permits in Mountrail County;
• Lime Rock Resources: one Robert Sadowsky permit in Dunn County;
• SHD Oil & Gas: one War Eagle permit in McLean County;