The Million Dollar Way (The Bakken Oil Blog)

Monday, January 16, 2023

Investing Going Into A Short Week -- January 16, 2023

Hey, how about them Cowboys?

Covid, China, and net zero: so why did China abruptly pivot with regard to their net-zero Covid-19 policy. This got their attention:

From the linked article:

China’s economy grew at one of its slowest rates in decades last year as repeated lockdowns hammered households and businesses, emphasizing the high cost of zero-tolerance Covid-19 policies that Beijing abruptly abandoned at the end of 2022.

China’s economy expanded 3% in 2022, a sharp slowdown from the 8.1% pace recorded in 2021.

Aside from 2020, when the economy grew only 2.2%, last year marked the worst year for gross domestic product growth in China since 1976, the year that Mao Zedong’s death ended the decade of strife known as the Cultural Revolution.

The ditching of almost all public-health restrictions in China after nearly three years of smothering even tiny virus outbreaks sets the stage for an economic rebound in 2023.

Economists expect a consumer-led recovery in China this year to buttress global growth as the U.S. and Europe flirt with recession.

For full-year 2022 for the US, real GDP could come in at 2.0%.

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.

All my posts are done quickly: there will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

If 2023 turns out to be a good year for investors, for some ideas on the NASDAQ, click here. Let's see if I can name them from memory: MSFT, NVDA, ZS, AMZN, and AAPL. Let's see what they were and in the order shown:

1. MSFT: one of the safest and one of the best
2. AAPL: with AAPL down 25% from its all-time high, this is a rare opportunity ...
3. Zscaler: having had a really rough couple of years, the company posted the fastest rate of growth in FY 2022 since the company went public in 2018, even in the face of a weak economy. Unaware of announced worker layoffs.
4. NVDA: three core competencies -- gaming; AI, and its Drive platform. The latter: has been adopted by at least 35 of the world's largest car manufacturers. Drive is an end-to-end hardware and software solution for fully autonomous self-driving capabilities.
5. AMZN: the word "trillion" appears a couple of times at the linked article with regard to AMZN.

I have a rolling 30-year horizon with regard to investing. Over the long weekend, this popped up in my social media feed:

Big Stories Going Into The New Week -- January 16, 2023

Davos: except for this one time, I have no plans to mention Davos again this week.

Natural gas: my brother-in-law called me earlier today to tell me that their natural gas prices are surging in California. Their most recent monthly statement was three times what they usually pay. This was predicted back in December, 2022.

ISO NE: well, this is strange. After a long period of "reasonable prices,” all of a sudden ISO NE spikes despite relatively low demand. Link here. Prices are slightly higher on Long Island (ISO NY) but nothing close to what's going on in NE tonight.

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First Big Story of the New Week

China's population.

Peter Zeihan discussed this in his The End Of The World Is Just The Beginning, published June 14, 2022.

Link here.

From CNBC:

This has been a frequent topic on the blog. For example, see this post.

Back To Offshore Drilling In The Mideast? Picking Up Where We Left Off? January 16, 2023

See this post from April 7, 2013, for background to this update.

Within that post, this from April 7, 2013:

April 7, 2013: This Bloomberg article may explain a bit more for the reason behind Saudi's increase in number of active rigs. Note the date of the article (January 23, 2013):

Saudi Arabian Oil Co. is set to boost its use of drilling rigs to a record this year as it pushes exploration for oil and shale gas into the Red Sea, a local energy analyst said.

Saudi Aramco, as the world’s largest crude exporter is known, will probably use about 163 rigs this year, up from 133 at the end of 2012, said Sadad al-Husseini, who founded Husseini Energy, an independent energy consultant in Dhahran, Saudi Arabia, after retiring from the state producer in 2004.

Aramco was using 98 rigs to produce oil and gas from onshore fields and perform maintenance on existing wells at the end of last year, with a further 35 employed in exploration activity and offshore operations, al-Husseini said. This year, the company may use as many as 170 rigs in total should the country step up production of oil or gas, thus activating more rigs, he said.

Schlumberger Ltd., the world’s largest oilfield-services provider, also expects a gain in Saudi drilling activity. Saudi Aramco ended 2012 with 134 rigs and that number will grow to 160 rigs by the end of this year, Schlumberger Chief Executive Officer Paal Kibsgaard told analysts and investors on Jan. 18 in a conference call.

Now, an update. What's happening in 2023?

Social media link here.

Direct to source.

It's very interesting.

Oil demand, in 2013, was projected to rise, and it did, but then something happened. Covid and the great global lock down. So an interruption.

Now, gradually getting back to normal, and that projected crude oil demand will continue where it left off. Of course, the numbers will be different, and the baseline will start from a different point, but might "2023" be the new "2013"?

The graphic above (and the linked story) suggest that's what Saudi Arabia is thinking.

What little I know suggests Schlumberger (SLB) should benefit.

Disclaimer: All my posts are done quickly. There will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them.

Long notes like these are particularly prone to having errors. If this is important to you, go to the source. I'm less interested in individual well production as I am in understanding the Bakken.