Saturday, November 5, 2016

The US Demand For Gasoline, Jobs, Unemployment, And The US Labor Force Participation Rate -- November 5, 2016

Gasoline demand:

*********************************
Jobs Report

Jobs report: I posted this yesterday, but never got around to finishing it --
Jobs: first stories coming out on the jobs report today are rosy, but by the end of the day we will know how bad the report really is. Again, the numbers underwhelm. The only reason the unemployment rate ticked down was because a larger number of folks dropped out of the labor force. The numbers are bad, not really, really bad, but bad. We'll post them later. I'm getting ready to go biking -- before the rain hits.
First, the numbers:
Then the spin: The New York Times was literally giddy overt this jobs report.

The magic numbers: New jobs: 200,000 (< 200,000 new jobs: economic stagnation). This is the number that was used throughout the George W. Bush presidency and in the very early days of the Obama administration. 

*********************************
Gasoline Demand and Jobs

My thesis is this:

Gasoline demand in the US is driven by two numbers:
  • commuting miles to work
  • leisure miles
Generally speaking:
  • leisure miles is affected most by an individual's income, and the price of gasoline (comparing same months year-over-year).
  • commuting miles to work -- pretty much depends on whether one has a job or not; public transportation year-over-year changes very, very little
Right now, oil prices are as low as they have ever been, taking into consideration the value of the dollar, inflation, cost of living, whatever -- gasoline is very inexpensive, and incredibly available. In this month's report, it was also stated that wages have increased. So, wages are increasing, the price of gasoline is down, and yet, the demand for gasoline has plunged over the past few weeks. That would suggest there has not been a decrease in leisure driving. In fact, with more and more folks out of the labor force, more and more of these folks, when driving, are driving either for leisure, or to the bank to deposit unemployment checks. Or disability checks.

So, when I see the demand for gasoline plunge in the US -- as it did over the past few weeks -- I assume it is related directly to job growth, and the jobs reports seem to bear it out.

There are a lot fewer folks driving to work these days because the percent of Americans not in the labor force continues to rise. The absolute number not working would also be rising because the population of the United States is rising.

Number of Americans UP x percent of Americans not in labor force  UP = number of Americans not driving to work UP. This is not rocket science.

With no spin whatsoever, directly from Google when asked "percent of Americans not in the labor force":
Labor Force Participation Rate in the United States averaged 63 percent from 1950 until 2016, reaching an all time high of 67.30 percent in January of 2000 and a record low of 58.10 percent in December of 1954. Labor Force Participation Rate in the United States is reported by the U.S. Bureau of Labor Statistics.
That google reply came from tradingeconomics. The US Labor Force Participation rate. The recent slight increase is due to an increase in service jobs (aka "flipping hamburgers"):



Week 44: October 30, 2016 -- November November 5, 2016

This past week it was reported that the US posted its largest weekly surge in crude oil stocks in 34 years. Meanwhile, US exports of crude oil and petroleum products are also surging.  Both RBN Energy and Platts suggest US refineries will do very, very well, going forward.

It was also reported that OPEC is considering cutting its production from 33.24 million bopd to 33 million bopd. Car sales were down in the US, and gasoline demand plummeted. For Saudi Arabia to average $80-oil for the calendar year, 2016, oil will have to jump to $260/bbl the last two months of 2016. Saudi Arabia's cash reserves continue to fall.

Open-book exam for US LNG investors.

Operations:
Newfield reports a nice, high-IP well in Lost Bridge oil field
Active rigs in North Dakota up to 37
Enduro has a permit for water injection, Newburg oil field
Six EOG Hawkeye permits renewed 
CLR reports a huge well near Williston
Sedalia Energy is drilling two laterals from an existing Madison well northeast of Minot

DUCs
WPX reports three high-IP DUCs completed 
National update 

Bakken 101
The Grand Forks Herald provided a nice update of the Bakken
Mitigation proposal for pressure pulses while fracking neighboring wells
Evidence of a halo effect?

Miscellaneous
North Dakota quarterly lease sales hardly worth noting
Earnings season continues, including this CLR presenation

Nothing About The Bakken -- November 5, 2016

The biggest story to watch during the election coverage -- which begins at 4:00 a.m. Monday morning on Fox: the "delta" between the exit polls and the actual vote, or what will be known as the "Soros count." If in fact, the exit polls reflect the graphic below, and the official results hand the election to Hillary, .... well, just remember, electronic voting machines in 16 states were supplied by Soros, including every battleground state (except North Carolina): Florida, Nevada, Pennsylvania, Michigan,

From the USC-Los Angeles Times poll:

At 48%, this is the highest Donald Trump has ever polled in this poll. The delta is wide, but it is not a record.  The delta is 5.4 today but it was 6.7 back on September 19, 2016. The separation minimally exceeds the range of uncertainty.


Let the lawsuits begin: if Hillary Clinton takes Washington State as expected, at least one elector, a Bernie Sanders supporter, will not vote for Hillary. "Constitutional crisis" talk will gain momentum.

Obama leaves a terrible legacy. From Investor's Business Daily. I track Obama's Legacy at the sidebar at the right. The good news: the link will be removed on January 21, 2017.

And finally, before moving on to "Top Stories of the Week" (next post), it is being reported that a "crashed Tesla exploded into a massive fireball." Authorities say it is not unusual for massive fireballs to occur after cars -- even non-EVs -- crash into trees at high speeds.

The Cost Of An Outright Ban On Fracking; North Sea To Flood Global Market With Oil; Canada Blocks Exxon-InterOil -- November 5, 2016

Fracking ban being discussed again as we head into last few days before election. Remember, Hillary has said very clearly she wants to ban fracking; do to the oil and gas industry what has been done to the coal industry. From Rigzone: 
  • an outright ban would hit Colorado, Ohio, Pennsylvania, and Texas the hardest
  • Ohio: would lose almost 400,000 jobs
  • Pennsylvania would lose more than 460,000 jobs
  • Texas wold lose almost 1.5 million jobs
  • gasoline prices would almost double; natural gas prices would skyrocket
  • a $1.6 trillion GDP decline by 2022
North Sea producers to flood global market with oil if OPEC cuts. From Bloomberg:
  • North Sea producers poised to ship the most crude in more than four years
  • shipments will increased 10% yoy to about 2.2 million bopd in December
  • this wold mark the most crude oil shipments from the region since May, 2012
  • current OPEC talk: trip output to a range of 32.5 million to 33 million bbls/day
  • in its September monthly report, OPEC reported that it produced 33.24 million bopd
  • Brent crude: $46.28 at the time of the Bloomberg report
Looks like the Canadian government will block Exxon's attempt to buy InterOil Corp. Story here. It's a story but it certainly is not news.

*****************************************
 
Starbucks earnings (4Q16) -- November 3, 2016:
Starbucks: 55 cents forecast; actual: 54 - 56 cents; U.S. comparable store sales increase of 4%; traffic up 1%; apparently very concerned about pace of store traffic; reading between the lines, SBUX concerned that "coffee infatuation" may have peaked; CEO suggests the "Amazon effect;" if so, he's referring to Starbucks stores inside Barnes & Noble; or too many competitors for coffee "just as good" a whole lot cheaper;
*************************************
The Literature Page 
Friday Evening

There are days I come this close [ ] to simply packing my bags -- actually one bag -- jumping on a plane and disappearing, much like Connie Converse did many years ago. Only one thing keeps me from doing that. Family. Three granddaughters. Two daughters. One wife. Not necessarily in that order.

Maybe next autumn, 2018. I have a contact. He could arrange it. Far from the madding crowd.

It hit me today. Once a week I treat myself to a 3/4 ounce of Scottish whisky. In today's mail, I had a Medicare bill and the monthly London Review of Books. The Medicare bill will be taken care of later this weekend.

Meanwhile, a 3/4 ounce of Scottish whisky -- Tomatin, to be precise -- with two cubes of ice which are tossed about five minutes into sipping. And then the Review. Some issues are great; some issues are spectacular. This is a so-so issue, somewhere between great and spectacular.

But this is what it would make it spectacular. To be in a small hovel at the far southwestern tip of Scotland sipping Scottish whisky and reading the Review. I say the southwestern tip of Scotland because I really do have a contact who has given me an open-ended invitation to "live" at his summer house whenever I want. He would be thrilled if I watched it over the winter. It's enticing.

In this month's Review, the first of several articles that I can hardly wait to read slowly and fully, John Pemble's "Besieged by Female Writers," an essay/review of Frederik Van Dam's Anthony Trollope's Late Style: Victorian Liberalism and Literary Form.

It's overcast, like I remember northern Yorkshire, along the Scottish border. It's already getting dark, like northern Yorkshire, along the Scottish border.

And the first bit of whisky is having its intended effect. And the Review is open to John Pemble's article. And I am on the MacBook Air, thinking of northern Yorkshire, along the Scottish border.

Back in 2004, I believe it was, I forget, I began a very, very aggressive reading program. I started with Ovid and moved chronologically forward, culminating with Virginia Woolf, and pretty much ending my journey there, with some exceptions. There were some exceptions: Hunter S Thompson (had read him earlier but then came back to him); Hemingway, Fitzgerald, Tim O'Brien.

I thought about all of that while paging through this month's issue of the Review. I completed the essay on Anthony Trollope. I have never read a novel by Trollope but have always been curious about this author. He was a Victorian author but not considered particularly interesting. Then in 1927, 45 years after Trollope's death, Michael Sadleir published a reassessment. According to the essay, soon after "Trollope made to into the canon and finally into Westminster Abbey where a plaque was unveiled in 1993.

I was curious. Did Harold Bloom include Anthony Trollope in his western canon? I took down my copy of Harold Bloom's The Western Canon: The Books and School of the Ages, c. 1994. There, on page 512, Appendix C, "The Democratic Age", along with Brontes, William Makepeace Thackeray, Oscar Wilde, and dozens of others, Trollope is listed, along with two of his novels and two of  his novel series, The Pulliser Novels and the Barsetshire Novels.

It's "funny" how things work out. I am currently reading Dante's Inferno -- a reader suggested that I should read it, and I'm reading one canto of the Inferno every day. I find it fascinating. Now I note that Harold Bloom, in The Western Canon has devoted a full chapter to the Inferno: "The Strangeness of Dante: Ulysses and Beatrice." I see I have already that chapter -- some time ago -- many inky notations in the margins. I will read it again.

Five New Permits; Eight Permits Renewed -- November 5, 2016

Active rigs:


11/5/201611/05/201511/05/201411/05/201311/05/2012
Active Rigs3767190183189

Five new permits:
  • Operator: Newfield
  • Fields: Haystack Butte (Dunn) 
  • Comments: permits for five wells on same pad in section 18-148-97
Eight permits renewed:
  • Hess (5): five AN-Gudbranson permits in McKenzie County
  • Resource Energy CAN-AM (2): a Curly permit and a Kenyon permit in Divide County
  • EOG: another Hawkeye permit, in McKenzie County
Three permits canceled:
CLR: three Omlid permits in McKenzie County

Note:
  • Whiting has announced three more Flatland wells are on the "plugged or producing" list. These three "Flatland" wells are in the Banks oil field and should not be confused with the spectacular "Flatland Federal" wells (also Whiting wells) in Twin Valley oil field. I track the Flatland Federal wells in the Twin Valley oil field here.