- refiners are operating at an astounding 95.5% of their operating capacity;
Wednesday, December 7, 2022
Four Graphs / Charts From This Week -- December 7, 2022
D5S+2 -- December 7, 2022
From oilprice:
There's a heck of a lot of "stuff" packed into those two "headlines."
One can argue whether those two "headlines" are factual, accurate, likely to change, unlikely to change, but they certainly fit my "world myth" at the moment. I'm sure Peter Zeihan is watching closely, at least the Russian oil export story.
Two quick comments and then I'll bring up the links to the two articles. I haven't seen the articles yet.
First, I agree 1,000% that the downside to the oil markets is limited. Perhaps it plays out this way:
- short-term: a reset to $75 / $70 (Brent/WTI); and, then,
- mid-term: a return to prices oil bulls like
Second, if accurate that Russia's oil exports nosedive following a price cap,
- one can arguably say that nothing is going well for Mr Putin.
Drones attacking airbases deep inside Russia, southeast of Moscow are just the tip of his problems.
Earlier today Putin brought up the "nuclear card" again -- probably about the same time he was briefed that his crude oil exports were going "south" -- and I'm speaking metaphorically, not geographically or directionally.
Now the links.
Alex Kimani has been quite active the past few days; now again.
Now, the second link.
Well, well, well. Alex Kimani again. Just after I mentioned that Alex has been quite active the past few days.
Russian crude-oil exports have taken a serious hit since new sanctions and a price cap came into force earlier in the week, with the Wall Street Journal reporting that figures from two data providers on Russian crude both show a big fall, though their magnitudes differ.
According to one commodity-analytics firm Kpler, Russia’s seaborne exports fell by nearly 500,000 barrels per day on Tuesday, a 16% decline from the November average of 3.08 million bpd.
Meanwhile, TankerTrackers.com, which tracks sea vessels using signals and satellite images, has reported that Russia's crude exports fell by nearly 50%. With shipments from the Black Sea and Baltic ports accounting for most of the fall.
Some will immediately say this is all temporary -- due to the Turks -- and within a day or two, the Russians and Turks will sort it out.
So, we'll see.
But, can you imagine what oil traders are going through right now? Absolute pandemonium, confusion, no clue what's going on. There are so many moving parts. This is probably not a good time to be short oil.
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More
But Not Ready For Prime Time
I said this at the top (see above):
First, I agree 1,000% that the downside to the oil markets is limited. Perhaps it plays out this way:
- short-term: a reset to $75 / $70 (Brent/WTI); and, then,
- mid-term: a return to prices oil bulls like
If that's accurate:
- US oil companies will do just fine at $75 / $70;
- sure, their profits will take a hit, but they've been through much worse;
- in the big scheme of things, $75 / $70 is pretty good.
But long term, as soon as a year from now, it could be really, really good for US oil companies.
Think of it this way. A year ago, there were three actors on the global stage (in the theater of oil):
- the US
- OPEC
- Russia
Today, there are two:
- the US
- Saudi Arabia
A year from now, there will still be only two:
- the US
- Saudi Arabia
And if the global economy "explodes" in a good way -- a year from now --
- coming out of a pandemic;
- coming out of a global recession;
- the demand for oil might be more than just noteworthy.
Atmospheric CO2 -- November, 2022, Data
With all the volcanoes around the world right now that are active, and some erupting, including two actually near the Mauna Loa Observatory, at least one reader is wondering why the most recent atmospheric CO2 number is not a whole lot higher.
The increase y/y is about what we've seen for the past several years. It's almost as if the volcanoes are having no effect on atmospheric CO2.
Jeffrey Epstein didn't kill himself.
Natural Gas -- US -- EIA Update -- December 7, 2022
With regard to three states whose biggest source was wind, I would need to know if this is installed capacity or actual consumption.
New Mexico's Oil Production Could Exceed That Of Mexico Before The End Of Next Year -- December 7, 2022
Re-posting: this is an incredible story picked up by Alex Kimani over at Oilprice. I don't know the geographic footprint of New Mexico's oil production or that of Mexico but I would consider New Mexico's footprint very, very small compared to that of Mexico, and New Mexico has no off-shore production. In addition, production from federal lands in New Mexico must be problematic -- all in all, it's just remarkable that New Mexico's oil production is comparable to that of Mexico, or actually exceeds Mexico's production.
New Mexico's crude oil production likely to exceed that of Mexico sometime in the next couple of months:
- not official yet, but projected;
- Mexico crude oil production (link here): 1.700 million bopd for the past two months (July, August)
- New Mexico crude oil production (link here to EIA): 1.681 million bopd (August)
- going forward the gap will narrow and New Mexico is likely to produce more oil than Mexico
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