For Investors Only; China Could Become Largest Global Economy This Year; US Economy Slows Drastically

Dow closes at all time high: 16,580. Main Street might not be doing so well, but Wall Street is doing very, very well.

Sweet: Exxon Mobil announces quarterly dividend increase, to $0.69/share from $0.63.

I mentioned this a couple years ago on the blog and go push-back from some folks telling me that China would never surpass the American economy, at least not any time soon. Now, Financial Times is reporting:

The US is on the brink of losing its status as the world’s largest economy, and is likely to slip behind China this year, sooner than widely anticipated, according to the world’s leading statistical agencies.

The US has been the global leader since overtaking the UK in 1872. Most economists previously thought China would pull ahead in 2019.

Stagflation? MyWay is reporting (it will be interesting to see how Reuters spins this story; I assume the White House is helping Reuters re-write the story):

The U.S. economy slowed drastically in the first three months of the year as a harsh winter exacted a toll on business activity.

The slowdown, while worse than expected, is likely to be temporary as growth rebounds with warmer weather.

Growth slowed to a barely discernible 0.1 percent annual rate in the January-March quarter, the Commerce Department said Wednesday. That was the weakest pace since the end of 2012 and was down from a 2.6 percent rate in the previous quarter.

What is the definition of a recession, again?

Disclaimer: this is not an investment site. Do not make any investment decisions based on anything you read here or think you may have read here.

Eight companies announce increased dividends or distributions.

Hess beats by $0.31, beats on revs: Reports Q1 (Mar) earnings of $1.38 per share, $0.31 better than the Capital IQ Consensus Estimate of $1.07; revenues fell 35.0% year/year to $2.68 bln vs the $2.15 bln consensus. Trading at 52-week high.

PSX: expectations, $1.34; actual: $1.47/share but without excluding a one-time gain, the actual earnings were $2.23/share.

Phillips 66, the second-largest independent U.S. oil refiner, reported a higher-than-expected quarterly profit on Wednesday, helped by a big gain from a share exchange and its chemicals and midstream businesses.

Crude oil and natural gas pumped from shale formations in the United States have lowered feedstock costs for companies such as Phillips, which is expanding its network of pipelines and processing facilities for increasing onshore output.

Phillips, based in Houston, had a first-quarter profit of $1.6 billion, or $2.67 per share, compared with $1.41 billion, or $2.23 a share, in the same quarter of 2013.

Excluding a one-time gain of $706 million primarily related to Berkshire Hathaway Inc's deal to swap its Phillips 66 shares for ownership of the company's specialty products unit, Phillips 66 earned $1.47 per share.

Analysts, on average, had expected a profit of $1.34 per share, according to Thomson Reuters I/B/E/S.

Trading at 52-week highs: AAPL, BRK.B, HES, OKE.

Crude Oil Train Derailment In Lynchburg, Virginia; Libyan Oil Production Decline Will Affect Saudi Production

Updates

May 1, 2014: The CSX Corp train that derailed and erupted in flames in Lynchburg, Virginia, was carrying crude oil from the Bakken shale in North Dakota, the kind of oil involved in several other fiery derailments over the last few months, the railroad said on Thursday.

Comment: it should be noted that there were no injuries, fatalities. About the same time this happened, a low-flying plane in fog hit a wind turbine killing three passengers and the pilot in the small private plane. That story was not widely reported. 
 

Original Post

Specifics not yet reported.

I first saw it in LA Times; will be reported everywhere, eventually.

From Reuters:

There was no immediate information about where the train was coming from or where it was heading. Most East Coast refineries are far to the north. One of the only crude oil facilities to the east of Lynchburg is a converted refinery in Yorktown, which is now a storage depot run by Plains All American. Officials said there were no reports of injuries.

Other News

Bloomberg is reporting with the chart of the day:

Saudi Arabia will probably have to sustain production above 10 million barrels a day for the longest period in more than 30 years as it meets the summer surge in domestic demand and compensates for production losses in Libya. 

This should come as no surprise to regular readers. The surprise will come whether Saudi Arabia is able to keep up on a prolonged basis. Both Brent and WTI are trading lower today; obviously no one thinks this is a very big deal.

********************

Remember how President Obama said there was no war on coal (sort of like his promise: "You can keep your doctor if you want"). The Boston Globe is reporting:

Competition from natural gas combined with increasing environmental regulations has made casualties of many of the nation’s aging coal-fired power plants, including Salem Harbor Power Station and Brayton Point in Somerset.

By 2020, about 60 gigawatts of coal-fired electric-generating capacity — enough to power an estimated 48.5 million homes — is expected to disappear, at least partly due to the expense of meeting federal rules to cut pollution from power plants, according to the Energy Department.

Don't let anyone fool you. Natural gas played a role but this is all about the war on coal, nothing else, regardless of how one wants to spin it. Don't believe me? Read the next two paragraphs:

“For an existing coal plant to basically stay in operation, it would have to install some sort of pollution control apparatus, such as a scrubber,” said Elias Johnson, an energy analyst with the Energy Information Administration. “The problem is that these technologies are not cheap.”

The consequences are likely an even greater reliance on natural gas, which despite booming production, is experiencing upward pressures on prices. That in turn could mean higher heating and electrical costs for New England consumers.

For Investors Only -- Earnings Wednesday -- Some Interesting Ones; Recent High In Active Rigs In North Dakota; Someday, I Will Be President -- V. Stiviano

Fiery freight train derailment in Lynchberg, VA; forces evacuations ... tanker cars derailed in downtown Lynchburg in central Virginia on Wednesday afternoon.

Active rigs:

	4/30/2014	04/30/2013	04/30/2012	04/30/2011	04/30/2010
Active Rigs	189	185	210	173	112

RBN Energy: Permian pipeline build-out; the Permian is at 1.5 million bopd

Permian Basin crude producers are currently churning out over 1.5 MMb/d of crude from a basin that has produced oil since the 1920’s but is the center of a recent renaissance. With new production comes new demand for takeaway capacity and between January 2013 and the end of 2015, about 1 million barrels of new pipeline has been constructed or will come online directed towards Houston, Nederland and Corpus Christi, TX. 

About a dozen new gathering systems are being constructed to help get new production from the wellhead to the larger takeaway pipelines. Today we continue our series on new Permian gathering infrastructure.

Earnings to be reported today:

• Enbridge Energy Partners (EEP): expectations, 20 cents; time not supplied;
• Hess: expectations, $1.02; actual -- profit drops from a year ago; results boosted by gain from sale of some properties; net income comes in at $1.20/share (compared to $3.72/share one year ago)
• MDU: expectations, 33 cents; after market close;
• Murphy Oil: expectations, 96 cents; after market close;
• PSX: expectations, $1.34; actual: $1.47/share but without excluding a one-time gain, the actual earnings were $2.23/share.
• Whiting: expectations, 96 cents; after market close
• Williams Companies: expectations, 26 cents; after market close

Investment stories:

• EOG and CHK over at SeekingAlpha

The Dickinson Press  is reporting:

• Gravel pit near national park ranch resurfaces: US Forest Service says mine would have ‘no significant impact’ on area. Roger Lothspeich of Miles City, Mont., and his partner, Peggy Braunberger, own mineral rights to the land, located near the ranch, about 25 miles north of Medora. The 26th U.S. president spent several years on the ranch during the 1880s. [Update, January 7, 2015: link here.]

 The Wall Street Journal

Top story, front page: EPA ruling on coal. Big political win for the Obama administration.

Americans want to pull back from world stage, WSJ poll -- not surprising. I still don't know why"we" are in the Crimean. This will end badly for the US.

Alstom accepts GE's bid for power business -- should be biggest story of the week in the WSJ.

Another old white man interested in buying another NBA basketball team.

Boehner makes amends for GOP immigration gibes. I have no idea why he maintains leadership.

Minimum wage fight, not gaining traction at national level, is being pushed quietly at the local level.

US homeownership rate: lowest since mid-1990s.A reminder that despite two years of recovery thre is still a way to go before the housing market is back to normal.

In drug mergers, there's one sure bet: the layoffs.

Apple returns to the bond market; the company completed its second blockbusgter bond sale in a year, tapping robust investor demand that has propelled corporate debt in 2014 to a larger gain than US stocks.

Dow rose yesterday, but falls shy of record. [Closes at all-time record today.]

The Los Angeles Times

Memo to self: file under "they're all crazy." The Los Angeles Times is reporting:

With paparazzi tracking her every move, V. Stiviano -- friend of sanctioned Clippers owner Donald Sterling -- roller-skated in her driveway Tuesday and said she wanted to be president.

“One day, I will become president of the United States of America and I will change the legislation and laws,” Stiviano said in one of several odd encounters with media camped outside her home. “Modern day history. Civil rights movement.”

And then this:

Calabasas lawyer Mac Nehoray told The Times that, contrary to some media reports, Stiviano was not in a romantic relationship with Sterling.

"It's nothing like it's been portrayed," Nehoray said. "She's not the type of person everyone says."

Crazy, Kat Dahlia

So many versions, but this one is pretty straight forward ...

Crazy, Gnarls Barkley, Danger Mouse and Cee-Lo

EOR In Nebraska

A reader sent me this interesting story:

Elk Petroleum Limited is pleased to announce that it has acquired the Singleton Unit in Nebraska. The effective date of the transaction is 1 May 2014, when the company will take over operatorship of the Unit.  

The company plans to develop the remaining oil potential in the Singleton Oil Field using CO2 enhanced oil recovery (EOR) techniques. The source for the CO2 for the project is the Bridgeport Ethanol plant, located 25 miles to the northeast of the Singleton Unit.  

The Singleton Oil Field has produced 10.9 million barrels of oil and is historically the largest oil field in the Panhandle of Nebraska.

I do believe the proposed route for the Keystone, killed by activist environmentalists, was through the Panhandle of Nebraska.

Someone has a sense of humor.

And this will make everyone feel better:

Having completed the acquisition of the Singleton Unit and secured the CO2 supply, Elk Petroleum is now in a position to attract external funding for development of the project. The corn‐ethanol source of the CO2 for the project makes the CO2‐EOR process a carbon sequestration project, with the implication that the oil produced from the Singleton Field will be carbon negative. This aspect of the project makes it attractive to green energy funds, which have a mandate to develop energy sources that result in reduced CO2 emissions. Elk has started conversations with several green energy funds in the United States regarding the development of the project.

Some feel that the Bakken will also be a candidate for EOR somewhere down the line.

Amateur Videos Of The New $70-Million Williston Area Recreation Center

Williston is now home to the largest indoor recreation facility owned and operated by any metropolitan park district in the entire United States.


Williston Area Recreation Center, from the outside:



Williston Area Recreation Center, general:




Williston Area Recreation Center, indoor track, basketball courts, volleyball, tennis:




Williston Area Recreation Center, indoor baseball and walking:


Note the badminton nets that swing down, so folks can play badminton on turf.

Williston Area Recreation Center, treadmills, general fitness:



Williston Area Recreation Center, children's swim and water play area; with wave generator: