August 16, 2017: NOKO (Kim) blinked. He says he has "called off" the four-missile launch on Guam. Comes after tough talk from Trump. In the past, concessions to NOKO would have been made to get Kim to "blink." Now Iran fills the void with threats to renege on "the deal" and may re-start (wink, wink) its nuclear program.
Later, 10:06 p.m. Central Time: if allies go to war with NOKO, "everyone" seems to agree it would be catastrophic. If so, one wonders why the rest of the world isn't taking stronger action on sanctions -- this doesn't add up. Total embargo on NOKO seems appropriate, but yet that's not even being talked about -- at least in the mainstream press. China fears a humanitarian catastrophe --if war breaks out, there will be a humanitarian catastrophe.
Later, 4:17 p.m. Central Time: NOKO - US rhetoric heats up. When should one start to take any of this seriously? When the US orders all non-essential civilian and all non-essential military and all family members of US military personnel out of SOKO; and, bans US travel to SOKO.
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Did the mainstream media misread Trump's "fire and fury" speech? Prior to that speech, Trump's approval rating had dropped to an all-time low, and lower than anything recorded by Barack Obama during his presidency. Trump's approval rated had dropped to 38%.
His approval rating "popped" to 44% following the "fire and fury" speech. The "44%" comes from a Drudge Report headline; the link takes you to the Rasmussen daily presidential tracking poll to which Drudge linked.
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The Physics Page
The Jazz of Physics:
The Secret Link Between Music and the Structure of the Universe
Stephon Alexander
c. 2016
DDS: 523.1 ALE
The title intrigued me. The first three pages made me look at the jacket to see a photo of the author and get the typical short bio. Blew me away. But the first chapter really, really blew me away. An accomplished jazz musician who became physicist. I've only read the first chapter and the first two pages of the second chapter, but for now, I'm hooked.
[Later, August 26, 2017: I've completed the book. Overall, a good book, but anti-climactic. After finishing it, my first thought: the author has had quite a "ride," but from what I can tell hasn't accomplished anything remarkable in the world of physics. That's the case with the entire field of physics right now. It's hard to believe the thousands of physicists worldwide, the technology, and the billions of dollars being spent (large hadron colliders; space travel) and nothing to really show for it. At least compared to the late 19th and early 20th centuries. I'm sure I'm wrong, but that's my impression.]
2018: After two lost decades for the US, one wonders what happens next. The tea leaves suggest a most interesting 2018 for the United States. First, a link to a story; and, second, a graphic. First, OPEC now forecasts that the demand for its crude oil will increase in 2018due to rising global consumption. Rising global consumption of crude oil seems to be the consensus for most analysts. In its most recently monthly report, OPEC suggests that the world will need 32.42 million bopd next year, an increase of 220,000 bopd from the previous forecast.
Meanwhile, the EIA says that strong domestic and export demand is outpacing US gasoline production, resulting in stock draws. This graphic summarizes many of the data points noted (some of them posted) in the past 24 hours:
The GDPNow model forecast for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2017 is 3.5 percent on August 9, down from 3.7 percent on August 4.
The forecast of the contribution of inventory investment to third-quarter real GDP growth declined from 1.11 percentage points to 0.99 percentage points after this morning's wholesale trade report from the U.S. Census Bureau.
So close: four-week average for gasoline demand, almost matching last year's number. Most recent four-week number:
2017: 9.763 million b/d
2016: 9.776 million b/d
delta: 13,000 b/d -- wow
But, we did hit an all-time record of gasoline demand on a weekly basis for the first week in August (not an all-time record for any week, but an all-time record for the first week in August):
Gasoline demand flirts with new records despite all those EVs being sold in the US and all those new CAFE standards.
Refineries respond:
Disclaimer: I often misread tables and graphs. If this information is important for (to) you, ignore my comments, go to the source.
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Lego replaces its 61-year-old Brit Bali Padda after just eight months on the job. Wow. Lego replaces him with a digitally-savvy Dane. Story at The WSJ. This comes in light of Lego's growth slowing, slipping behind Mattel as the world's largest toy company.
Later, 11:17 a.m. Central Time: Don helped me out with new airfields in the Bakken (see note below regarding the "talking head" that misspoke), with this link to the FAA. Don noted:
Minot got a runway, Dickinson got runway expansion, and a terminal expansion ... at peak had Delta, United and a regional carrier. Bowman has a new 5700 ft CEMENT runway with lights ... and an all-new facility 4 miles east of town. And, of course, Williston is currently building a new international airport.
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WTI: $50.13.
Jobs: 244,000 today, up 3,000 from last week's 241,000 (revised upward by 1,000). Narrative: jobless claims are now meaningless. Numerator/denominator (jobless claims/total employed) is at an all-time record low: employers no longer watching jobless claims -- their problem is this: employees unable to find qualified candidates for the jobs they need filled.
Fed watch: likelihood of Fed raising rates in September, almost zilch. Maybe 0.25% in December, but that comes from a talking head at CNBC whose biggest concern seems to be NYC potholes (see below).
Comment to start the day: the number of comments a WSJ story generates speaks volumes. There were 80 comments to the WSJ article on the Permian (see below) which suggests readers interested in the Permian were very surprised (concerned?) by this development. On the other hand, the WSJ story reporting that OPEC's production rose in July must have surprised no one: not one comment.
Talking head misspeaks: talking about infrastructure, talking head on CNBC says there has been no new airport built in the US in 23 years -- he needs to get out to the Bakken -- see the new Williston airport being built. Didn't Bowman, ND, get a new airport? At least a new runway. Minot with a new terminal a couple of years ago, I believe. I'm surprised he didn't say there has been no new refiney built in 50 years; in fact, at least one, again, in the US. Same talking head complains about lack of activity on roads: he needs to come to north Texas. He needs to get out of NYC. He didn't talk about the LNG export facilities -- his main concern: potholes in downtown NYC. Wow.
The Permian: for quite some time I've questioned the exuberant enthusiasm of operators who were willing to pay $40,000 / mineral acre to jump into the Permian. Lately there have been some "concerning" stories in the mainstream business media that suggest my thoughts may not be far off the mark. Today, in The Wall Street Journal: investors question oil output in Permian Basin. Worries mount after Pioneer reported its Permian wells are producing more gas than expected:
Investors helped turn West Texas’ Permian Basin into America’s fastest-growing oil field, but their confidence is cracking over whether drillers can keep production rising.
Questions mounted last week after Pioneer Natural Resources Co. PXD 1.60% reported that its Permian wells are producing more gas and natural gas liquids such as propane than expected. That worried investors, who care a lot more about oil.
Shares of Pioneer and other Permian producers tumbled as a result. Pioneer ended the week down 16%, while Parsley Energy Inc. PE -0.78% and Concho Resources Inc. CXO 0.76% both declined more than 9% over that stretch.
Most wells produce natural gas as a byproduct alongside oil, and that
gas output tends to rise over time. That is because as a reservoir is
depleted, its pressure drops and gas vapors separate from
liquid—reaching the “bubble point” at which natural-gas production
accelerates.
Pioneer last week indicated that some of its Permian wells are reaching this point sooner than it anticipated.
The Permian gas problem: RBN Energy seems to be all over this issue. Today, RBN Energy has a third installment on Permian natural gas (see below).
OPEC cuts (wink, wink): OPEC says crude output rose in July. I'm shocked, shocked! In The Wall Street Journal today, "a blow to cartel's efforts to reduce output and drain a global supply glut."
OPEC crude-oil production rose further in July, in the latest sign
the cartel’s efforts to reduce output and drain a global supply glut are
falling short.
The Organization of the Petroleum Exporting
Countries’ output rose by roughly 0.5%, to 32.87 million barrels a day
last month, up by 172,600 barrels from June. The uptick, which was
smaller than the prior month’s increase, was driven by higher production
in Libya, Nigeria and Saudi Arabia, according to OPEC’s closely-watched
monthly market report.
The report comes as Saudi Arabia—OPEC’s
largest member and the world’s biggest crude exporter—has been
pressuring other members of the cartel for better compliance with an
agreement to curb production output.
The year-ago completion of Energy Transfer Partners’ Lone Star
Express NGL pipeline from West Texas to the Mont Belvieu storage and
fractionation hub near Houston was a big deal. The new, 533-mile pipe
increased effective NGL takeaway capacity out of the Permian by more
than 25% and gave Energy Transfer a larger conduit for moving NGL
produced at its Permian natural gas processing plants directly to the
company’s still-growing complex of fractionators in Mont Belvieu. Energy
Transfer also owns another big NGL pipeline out of the Permian: the
Lone Star West Texas Gateway. Today we continue our blog series on the
NGL side of the Permian with a look at what is currently the biggest
fish in the play’s NGL pond.
All of the drilling going on in the Permian — 379 active rigs as of
August 4, according to Baker Hughes — is focused on crude oil, but the
70,000-square-mile play in West Texas and southeastern New Mexico also
produces large volumes of associated natural gas (about 6.5 Bcf/d as of
this week and NGLs (nearly 800 Mb/d) that help to fatten producers’ wallets. The
focus of this blog series is Permian NGLs: the natural gas processing
plants that separate raw gas into dry gas and mixed NGLs and the
pipelines that transport mixed NGLs (also known as y-grade or raw mix)
to storage and fractionators, primarily in Mont Belvieu.
