There's Always An Excuse -- Remember Analysts Have Been Studying These Metrics For Decades; More People Are Laid Off In One Week Than Sign Up For ObamaCare In Same Time Period

I was sincerely hoping for good employment news today, to confirm all the good economic data points we've seen in the past two weeks. I've never believed the weekly first time unemployment claims data, although the one-week later revisions might be a bit better. But the numbers never seemed "quite right" to me and recently my doubts were confirmed when the AP and others reported that yes, indeed, the numbers are massaged and manipulated, on occasion.

Even if the numbers are bogus, they are data points that can be followed and trends spotted (sort of like IPs in the Bakken).

Last week, the unemployment claims number was almost too good to believe, but with the other good academic data, the numbers were plausible.

I was eagerly awaiting today's figures.

I guess the analysts forgot that every year about this time there is a national holiday. What amazes me is that one holiday -- one day off from work -- can affect unemployment claims to this extent. Are folks that quick, that as soon as they lose a day's work due to a holiday -- they are in the unemployment office submitting a claim for benefits? I guess so.

Look at these numbers. I have never seen a surge to this extent in unemployment claims in the two or three years that I have been tracking these numbers. Scroll through those three pages and see if one can find a surge of 68,000 claims in one week due to a single-day holiday.

Generally the number moves 2,000 to 5,000 up or down. Very rarely, do we see moves of 20,000 up or down. I do not ever recall a number this high "blamed on" a scheduled event.

That was the headline: "surges 68,000."

Let's see how Bloomberg, a mouthpiece for the administration, handled this shocking news:

Applications for U.S. unemployment benefits jumped last week from an almost three-month low, highlighting the difficulty in adjusting the data around the year-end holidays. Jobless claims surged by 68,000 to a two-month high of 368,000 in the period ended Dec. 7, exceeding the highest forecast in a Bloomberg survey of economists, Labor Department data showed today in Washington.

The 300,000 applications filed in the prior week, which included Thanksgiving, were the fewest since Sept. 7. The data reflect seasonal adjustment volatility around the Thanksgiving and Christmas holidays, a Labor Department spokesman said as the figures were released. A report last week showed the unemployment rate fell to a five-year low and companies added more workers than forecast, pointing to further labor-market progress. 

Ah, yes. This is the Bloomberg spin: Forget the actual numbers. Don't spend any time analyzing what this means for the economy. Rather, analyze why the analysts got it wrong. It was due to difficulty of forecasting job numbers around scheduled holidays.

Really? They've been doing this for decades. The number (68,000) was higher than the highest forecast. Missing by this much is akin to Asiana pilots landing short of the San Francisco runway.

If folks recall: stores opened earlier than usual for Black Friday, opening up on Thanksgiving. One would assume that more workers were hired, not fewer.

Nah, something is going on, but it's not a single day holiday.

Also, note this in the Bloomberg, an administration mouthpiece: at the very top of the story they reminded readers how good the numbers were just a week ago, suggesting this was a one-off OR that things were really not this bad. A suggestion, subliminal suggestion, to ignore this data.

This is sort of the clincher:

“I wouldn’t put too much stock in the ups and downs of initial jobless claims over the next several weeks because seasonal volatility is pretty high this time of year,” said Ryan Sweet, senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, and the top-ranked forecaster of jobless claims in the past two years, according to data compiled by Bloomberg. “Layoffs are low. Other jobs data suggest layoffs are not the problem, it’s the lack of hiring.” 

Really? Just yesterday (or the day before or the day before that) the mainstream media was telling us how good hiring was getting.

I can't make this stuff up. 

Why I Love Blogging: Reason #24,587

As surmised yesterday, those permits for four new wells east of Bakken activity will be targeting shallow natural gas.

For newbies: natural gas has been discovered/reported/found in every county in North Dakota except one. 

A Couple Of Data Points To Be Aware Of In The Bakken -- December 12, 2013

OXY USA has obtained 56 permits in North Dakota in calendar year 2013.

OXY USA's last permit was reported October 30, 2013. The company obtained 15 permits in October, 2013, all (except for three, Billings County) in Dunn County.

I track OXY here. OXY is not known for particularly good IPs in the North Dakota Bakken, but they are getting better, and even wells with "poor" IPs, are having good production over time.

MRO is ramping up in North Dakota, both in CAPEX and added hardware. Reported twice in the last 24 hours on the blog: MRO has budgeted $1 billion for the North Dakota Bakken. It is hard to spend $1 billion on just drilling in one year in North Dakota.

Reader e-mail: OXY modifying pumps; compatible with MRO ops

MRO has 400,000 acres in the North Dakota Bakken (compare with Oasis, 500,000)

OXY has 275,000 acres in the North Dakota Bakken ($1.4 billion/180,000 acres)

From the OXY USA May 31, 2013, presentation.

• there were 52 slides
• slide 21: first slide discussing 2013 plans
• slide 21: overall CAPEX is expected to decline by 6% in 2013; almost all of the reductions will be made in domestic oil and gas operations; midstream capital spending will increase mainly for the BridgeTex pipeline
• slide 22 -- three bullets: a) Permian capital will remain flat ("we expect to reduce CA CAPEX about $500 million ... a modest shift toward more conventional drilling opportunities and the constraints of the current environment"; b) in the midcontinent, "we expect to reduce CAPEX about $400 million from 2012 (we have reduced our activity in higher cost unconventional oil plays, specifically in the Williston ... c) however, as a result of planned efficiencies we expect to drill a similar number of wells as we did in 2012 [82 permits in 2012; 56 permits in 2013, to date, December 14, 2013; last permit October 30, 2013]
• slide 23: N/A
• slide 24: three main objects of 2013 domestic program -- a) delineate our core drilling area in the Permian Basin (1.7 million net acres); drive capital efficiency blah, blah, blah, and, c) enhance our cash margins blah blah blah
• slide 25: N/A
• slide 26: blank
• slide 27: Permian Basin overview
• slide 28: Permian Basin primary plays
• slide 29: Permian non-CO2 business
• slide 30: Permian non-CO2 business
• slide 31: Permian Basin -- solid returns, free cash flow; no info
• slide 32: Permian Basin -- solid returns, free cash flow; production, CAPEX, earnings
• slide 33: California overview
• slide 34: California overview
• slide 35: unconventional opportunities (map with ND, Colordo, California)
• slide 36: unconventional opportunities (production, CAPEX, earnings) (CAPEX of $2 billion in Permian and in unconventional)
• slide 37: future growth projects (Al Hosn Gas Project, BridgeTex Pipeline, a new chlor-alkali plant); total CAPEX almost $10 billion
• slide 38: forecast earnings from these new projects
• slide 39: Al Hosn Gas Project west of Abu Dhabi
• slide 40: Al Hosn  Gas Project
• slide 41: Middle East/North Africa -- growth, highly profitable
• slide 42: Middle East/North Africa -- production, CAPEX ($3 billion), earnings
• slide 43: future growth -- the BridgeTex Pipeline Project -- Permian to the Gulf Coast; JV with Magellan Midstream; Oxy to spend $400 million; 300,000 bopd;
• rest of slides: PR, summary

Thursday; RBN Starts An Excellent Series On Natural Gas To NYC, Boston -- The Tale Of Two Cities; MRO To Invest $1 Billion In North Dakota In 2014

Active rigs: 191

RBN Energy: This is going to be a very interesting series -- a three-part series on natural gas to NYC and to New England. Two different markets. NYC is well supplied; New England is not (think Boston). We might see how this plays out in February, 2014. This is the first part in a 3-part series:

The hopes of Marcellus gas suppliers to move more of their product east are playing out in very different ways in metropolitan New York City and in New England. New pipelines to deliver gas from Pennsylvania, West Virginia and Ohio to the Big Apple and its environs already are installed and operating, easing the metro area’s supply crunch and shrinking regional price “basis”. But plans to expand gas-transmission capacity to New England are stalled, and some gas users there are facing another potentially supply-constrained expensive winter. Today we begin a new series looking at why—for the foreseeable future at least--it’s better to be a gas user in New York City than Boston.

The Wall Street Journal

Picking the wrong horse again? Top western-backed rebel in Syria is forced to flee.

White House works to attract younger health-plan users - and that's the metric that's important to follow. The insurers say they need 7 million folks to enroll AND pay premiums, but if the 7 million are predominantly senior citizens, folks with AIDs, folks with cancer, and folks need heart transplants and liver transplants, this house of cards will topple fast. From the linked article:

Insurers and others fear that the initial group of enrollees will skew toward older people with medical ailments, who are motivated to overcome website problems because they need health insurance, while younger, healthy people may decide to stay on the sidelines.

On another note, yesterday when I checked, the federal government website was "down" -- at least one was not able to access it when I checked. So let's see what it is doing today.... it's up.

It won't happen, but it's worth the link. Exxon presses for oil exports. LOL. 

Predicted: businesses stung by $15 /  hour minimum wage. Who wudda thought?

With 40 employees and less than $5 million in annual revenue, the franchise hotel in SeaTac, Wash., could be the typical American small business. But the Holiday Inn Express will soon have to give most of its staff pay raises that are anything but routine. Officials in SeaTac, which is 10 square miles nestled between Seattle and Tacoma and consists of an airport and its surroundings, confirmed this month that it will raise the minimum wage for many workers to $15 an hour starting in January. That's a 63% increase and the highest municipal minimum wage in the nation. The original vote in November was so close that a recount had to be ordered.

Posted earlier at the blog: a long article in The WSJ -- MRO to increase spending, focus on North America; including another $1 billion in the North Dakota Bakken (and that's just one company operating in North Dakota).  

Marathon plans to invest $2.3 billion next year in the Eagle Ford Shale of South Texas, where up to 400 new wells will be drilled. The company will put $1 billion into Bakken prospects in North Dakota, and another $236 million toward work in Oklahoma's Woodford basin. 

This is so cool. I suggested this several years ago, but focused on Wal-Mart. It appears other retailers have figured it out. Several big-box / mall anchor stores will offer same-day delivery: 

Four of the nation's largest mall operators are turning their properties into mini-distribution centers for rapid delivery, meaning shoppers can ditch their bags and keep spending. The service promises set delivery times for purchases consumers make at the mall or online from mall tenants, facilitated by a Silicon Valley startup, Deliv Inc.

Pensions make most of stock-market surge.

A roaring stock market and rising interest rates are fueling the strongest recovery in the $2.4 trillion U.S. corporate-pension sector in more than a quarter century, giving companies new flexibility in dealing with some employee-benefit costs.

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This is a most interesting story -- holiday shopping figures, retail sales are going to be hard to sort out this season. November's numbers are very, very blurry. Why? Internet shopping. 

Changes in retailers' opening hours, the surge in online commerce and calendar quirks are combining to make it unusually tricky to gauge the holiday-shopping season's vitality from one of its most important months.

Economists polled by The Wall Street Journal see data for retail sales excluding autos, due Thursday, having increased 0.2% in November over the previous month. That would bring year-over-year growth to 2.7%.

That is fairly tepid and is supported by some private-sector surveys. One, from Thomson Reuters, says same-store sales at retailers it polls rose just 1.8% from last November. This survey covers a narrower band of spending than the government report. But it doesn't bode well since its forecast was for 2.7% growth.

Another wrinkle almost certainly depressed November sales. The surging online equivalent to Black Friday, Cyber Monday, fell in December, the first time since 2008.

Weak retail data in November need not signal a lousy holiday season. Possibly a better snapshot of the period—or at least retailers' expectations for it—comes from international freight data. Since most apparel, toys and electronics are imported, the National Retail Federation's "Global Port Tracker" looks at the number of containers as a proxy for dollars likely to be spent. There was a 4.3% rise in volume from August through October from a year earlier; a preliminary reading for November was 3.6% higher.

Yesterday, I did 90% of my Christmas shopping. It took about 15 minutes. All on Amazon. Over the past year, I kept a Christmas list on the "Apple desktop yellow legal pad." Then yesterday, I simply ordered each item on the list from Amazon and had them mailed to the appropriate addresses. Without question, it would have taken two to three days of driving around town, putting the items together, and then wrapping and shipping it. Wow, what a chore. And I won't see a huge bill on my Mastercard. I paid for it directly from my checking account.

By the way, for Apple users, the "Apple desktop yellow legal pad" is indispensable for me. I post all sorts of memos there.

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And here's another example of how Bakken fracking changed things: how shale helped frack Mexico's energy impasse.

After decades of inertia, the energy-reform proposal given general approval by the Mexican Senate late Tuesday goes even further than many had expected. The country's rapidly changing energy relationship with its northern neighbor helps explain why.

Mexico's dismal decline in oil production, to 2.94 million barrels per day last year from 3.85 million in 2004, is the obvious impetus for trying to coax in more foreign money and expertise.

The reason is all that competing oil and gas in the U.S. drawing the global oil industry's investment dollars toward it. Barclays estimates U.S. exploration and production spending will rise by 8.5% next year, accounting for nearly a third of the increase in global E&P budgets. Meanwhile, oil majors face calls from investors to rein in spending anyway and distribute more cash—even Exxon Mobil borrows to fund its share buybacks these days.

The Los Angeles Times

Mysterious space plane spent one year orbiting the Earth on "secret mission." 
ery.

The X-37B Orbital Test Vehicle, which looks like a miniature unmanned version of the space shuttle, was launched from Cape Canaveral, Fla., on Dec. 11, 2012.

At the time of launch, Air Force officials offered few details about the mission, saying that the space plane simply provided a way to test new technologies in space, such as satellite sensors and other components.

It was set to land on a 15,000-foot airstrip at Vandenberg Air Force Base, northwest of Santa Barbara. But the Air Force has never announced an exact landing date.

Although the X-37B program is classified, some of the particulars are known.

More than 10 years ago, it began as a NASA program to test new technologies for the space shuttle. But when the government decided to retire the aging fleet of shuttles, the Pentagon took over the program and cloaked it in secrecy.

Fascinating story; read the rest at the link.

What We Will Be Talking About In February, 2014

This is why I love to blog.

A couple of weeks ago a reader sent me a short note explaining that my lumping together of the entire northeast was a mistake. With regard to natural gas, NYC is in very, very good shape. That cannot be said for Boston, or New England in general.

Coincidentally, then, today, RBN Energy begins a 3-part series on natural gas to NYC and New England.

Today, part 1, looks at NYC. It begins:

The hopes of Marcellus gas suppliers to move more of their product east are playing out in very different ways in metropolitan New York City and in New England. New pipelines to deliver gas from Pennsylvania, West Virginia and Ohio to the Big Apple and its environs already are installed and operating, easing the metro area’s supply crunch and shrinking regional price “basis”. But plans to expand gas-transmission capacity to New England are stalled, and some gas users there are facing another potentially supply-constrained expensive winter. Today we begin a new series looking at why—for the foreseeable future at least--it’s better to be a gas user in New York City than Boston. 

Since November (2013) several major pipeline projects serving northern New Jersey and New York City have become operational, together providing a roughly one-third increase in the volume of Marcellus and other gas that can be delivered to the metro area. And it’s the supply from Marcellus that opened up the most.

The new pipelines:

• Williams Partners LP on November 1, 2013,  placed into service the remaining 125,000 dth/d of capacity added by its $390 million Northeast Supply Link;
• Kinder Morgan’s completed the Tennessee Northeast Upgrade project. Kinder Morgan on November 1, 2013, added 636 M dth/d of capacity to the Tennessee Gas Pipeline’s (TGP) 24-inch-diameter 300 Line; 
• Spectra Energy’s $1.2 billion New Jersey-New York expansion also came online November 1, 2013. The expansion of the Texas Eastern Transmission Co. (TETCO) and Algonquin Gas Transmission pipelines--which involved a 16-mile extension of TETCO’s existing Staten Island line to lower Manhattan, and the replacement of five miles of existing pipeline in New Jersey and New York with larger-diameter pipe — boosted the capacity of gas deliveries to New York City by up to 800 MMcf/d. 

The third project, the Spectra Energy project, roughly doubled the amount of gas that can make its way to the heart of the nation’s largest city.

In Part 2 of this series, RBN Energy will look into the still-stalled effort to move more Marcellus gas into New England [it will be interesting to see why].

And in a third entry, RBN Energy will examine longer-term projects on the drawing board to further expand New Jersey, New York and New England’s access to shale gas from Pennsylvania, West Virginia and Ohio.