The Things We Worry About.

Oil & Gas Journal is reporting that the proposed Obama budget is targeting the oil and gas industry. You can to go the link to read the details.

I get a chuckle out of all of this. Right now there is renewed anxiety by some folks elsewhere that the oil companies in North Dakota are going to quit drilling in the Bakken once they get everything tied up in production, holding leases by production. First of all: that isn't going to happen. Most of the Bakken-centric operators have nowhere else to go to drill. Once they stop drilling in the Bakken, the game is pretty much over for them. Unless someone knows where KOG plans to drill outside of the Bakken. Or Oasis.

Folks elsewhere would be better off working with their state and federal legislators to minimize new taxes on the oil and gas industry. Nothing will slow down drilling faster than increased taxes, loss of industry-wide incentives, and more regulations. And, of course, even if drilling continues, increased expenses --> decreased royalties.

But do what you want.

"Fracking Sand 101" La Crosse, Wisconsin

A reader sent a note earlier regarding a "Fracking Sand 101" conference in La Crosse, Wisconsin, yesterday.

He sent the presentation which can be accessed here.

Stock Market Exploding -- Sequester, What Sequester? Market Loves The FOMC Minutes

The Dow is having a huge day. The S & P is having a big day.

It looks like a slightly delayed reaction but maybe folks are finally noting the Japanese stimulus.

But "the Fed minutes."

First, released early, 9:00 a.m. vs 2:00 p.m. Amazing what gets folks excited.  For traders, the timing is important. For investors....well, not so much.

This, from "the Fed minutes" caught my eye:

The next group appears to include the most members: “Many participants” argued that the improved outlook for the job market could justify slowing the pace of bond purchases “at some point over the next several meetings.” (This seems, from recent speeches, to be a relatively broad group of the committee, including centrists such as Atlanta Fed president Dennis Lockhart and doves such as John Williams of the San Francisco Fed and Fed vice chairman Janet Yellen.)

Folks have been talking about "improved outlook for the job market) for two years now. I haven't seen it. There are three issues: a) current economy; and, b) long-term tectonic changes. Even if the economy improves, the workforce is forever changed. Oh, the third difference? ObamaCare. That will have a huge effect on job creation. 

Random Update on Refineries in North Dakota -- A Feel-Good Story -- Nothing New

Reuters is reporting:

On a windswept North Dakota prairie in late March, Governor Jack Dalrymple drove a bulldozer into the fertile black earth and broke ground on the first new U.S. refinery since 1976.

The state's two U.S. senators, as well as dozens of other politicians and investors, stood nearby wearing hard hats, eagerly sharing hopes that this new refinery will help resolve North Dakota's diesel demand problem.

 

Thanks to the Bakken shale formation, an extensive layer of oil-rich rock two miles deep, North Dakota produces more crude oil than any state except Texas. But because the state only has one refinery, it imports more than half of the roughly 53,000 barrels of diesel consumed each day by rigs that suck oil out of the ground, and trucks and trains that transport it.

The Futility, The Futility

April 10, 2013, OPEC: The Fly on the Wall is reporting:

OPEC has left unchanged its world oil demand forecasts for 2012 and 2013, with China expected to contribute the most to growth while industrialized countries appear headed to a decline, reports the Economic Times.The organization expects world demand to reach 88.87M barrels per day this year, which is slightly higher than its previous forecast in March of 88.83 barrels per day. 

Call me a cynic, but isn't 2012 about three months ago, and it is being reported that OPEC has left unchanged its world oil demand for 2012.....

April 10, 2013, OPEC: Market Watch is reporting:

Crude-oil futures fell Wednesday, weighed as data from a trade group showing a jump in weekly crude supplies added to concerns about already high inventory levels, and the Organization of the Petroleum Exporting Countries downgraded its forecast for world oil demand. 

Earlier, OPEC said it had slightly cut global oil demand estimates for the year, the second time in two months, pointing to Cyprus as the latest cause for concern.

OPEC is concerned about the fragility of euro-zone economies, and the crisis has impacted oil prices, especially Brent crude. 

If OPEC is worried about Cyprus, I'm worried about OPEC. Just for starters, problems in OPEC's neighborhood are a tad worse than the Russian banking problem in Cyprus, which by now is so yesterday.

OPEC's neighborhod: the USN is closing in on Iran with .... OMG .... lasers.  Iran closing in on Syria.  Syria is closing in on Lebaon; John Kerry is closing in on Palestine Israel Egypt who knows, I give up. 

Speaking of flies on walls, Cyprus is about as important as yesterdays' fish. But I digress. The point of the article is OPEC's changing forecasts. I guess it depends on which oil prince you talk to and what agenda the kingdom has for the day.