Nice Turn In WTI Price; Nine New Permits -- August 18, 2017

Active rigs:

$48.73↑↑	8/18/2017	08/18/2016	08/18/2015	08/18/2014	08/18/2013
Active Rigs	53	33	74	193	183

Nine new permits:

• Operators: Hess (7); Petro-Hunt (2)
• Fields: Blue Buttes (McKenzie); Charlson (McKenzie)
• Comments: Hess has permits for a 7-well Sigrid-Loomer pad in NWNW 8-150-95; Petro-Hunt has permits for two more USA wells in Charlson -- always exciting to see USA wells in the Charlson

Two permits renewed:

• Whiting (2): an Iver & Minnie permit, Stark County; and, a permit for Sikes State, Mountrail County

One permit canceled:

• QEP: canceled a Vegas permit in McKenzie County (#33037)

The Market And Energy Page, Part 6, T+210 -- August 18, 2017

When will tight oil make money? A great analysis from Wood Mackenzie. Three reasons why one would not expect to see positive cash flow in the shale oil industry (think Amazon in the early years):

• early life
• high growth
• capital intensive

Operators have spent a lot of money:

• acquiring positions
• investing in infrastructure
• getting up the learning curve

The shale oil industry is in early stages; much of this is structural, not cyclical.

The analyst gets specific regarding oil prices:

• $50 oil or better: positive cash flow
• $45 - $50 oil: operators will make production/growth targets but at expense of cash flow
• below $45: operators will have to change their behavior, but it would take a full 12 months of $45-oil, and Wood Mackenzie thinks that is unlikely to happen

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

US Petroleum Demand: Highest In 10 Years -- Highest In A Decade -- Highest Since 2007 -- US Crude Oil Production? Highest In 45 Years -- NGL Production? Highest On Record -- Making America Great Again

As you read the note below, think about this: this is not being reported in the mainstream media. CNBC does not report it. I don't think FBN even reports it but I don't listen much to FBN -- even more political than CNBC and that says a lot. 

From Oil & Gas Journal, data points:

• July data
• total US petroleum deliveries: up almost 5% from a year ago
• averaging: 20.7 million b/d
• highest July deliveries in 10 years
• increased 1.6% over previous month (June, 2017)
• year-to-day: total petroleum deliveries up 1.3% compared to same period last year

Meanwhile, gasoline deliveries hit new records also (same link):

• all-time high in July; not just a 10-year high, but an all-time high
• increased 1% from July, 2016
• average nearly 9.7 million b/d
• 2016: 9.2 million b/d - the second highest year-to-date level

Domestic crude oil production? Yup, more records (same link):

• in July, 2017, last month -- production increased from the prior month, the prior year, and the prior year-to-date to reach the highest July output level in 45 years
• averaged 9.4 million b/d in July, 2017, up almost 10% -- astounding -- from July, 2016
• US crude production has been above 9 million b/d for the sixth consecutive month 

NGLs? Glad you asked (same link):

• highest July output level on record

Color me impressed. A huge shout-out to all the roughnecks and truck drivers that made this possible. Good on you.

What A Doofus

The Market And Energy Page, Part 5, T+210 -- August 18, 2017

Foot Locker: getting hammered, down 25% in early trading. One word: Amazon.

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

Re-balancing. For me, re-balancing means getting back to 22 days of gasoline supply; it peaked at 34 days. It appears we have hit a new record "low" for number of days of US gasoline supply since the Saudi Surge began and then the OPEC cut (wink, wink).

It's possible I missed something, but it appears the most recent data shows that US days of supply of crude oil excluding the SPR is now down to 26.7 days. We have to go all the way back to October, 2015, to see 26.7 days or lower.

There doesn't seem to be much difference between 34 days and 22 days but the former is almost 5 weeks, whereas the latter is barely three weeks.

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Cooking School

Middle granddaughter (on the left) and friend. Pastry school all week; two different pastry chefs and two students. Pretty good ratio. I've been enjoying great desserts all week.  Sur La Table, Southlake, TX.

Her dad makes sure that the granddaughters are "booked" for something each week during the summer. Both granddaughters were enrolled in rock climbing last week. The week before that, the National Junior Olympics water polo in southern California (Huntington Beach, CA). Earlier in the summer, the older granddaughter attended two weeks of Spanish Camp in Minnesota while the middle granddaughter was at soccer camp. One week of computer coding camp before that. Last year, the summer included two weeks of sailing lessons, but no time this year for sailing. Oh, yes, scuba diving instruction last summer, also, which I almost forgot. Busy, busy summers.

I'm hoping to get the older granddaughter working in the Bakken oil fields next summer. LOL.

Sophia, the 3-year-old? TutorTime all day long and then swimming every afternoon/evening with me. Well, almost every afternoon/evening.

The Market And Energy Page, Part 4, T+210 -- August 18, 2017

Why I love to blog: I mentioned this just the other day. Now Argus Media reports:

An expected surge in visitors for the 21 August eclipse helped send Portland, Oregon, suboctane gasoline prices to a four-month high yesterday.

Portland suboctane gasoline ... buoyed in part by anticipation of increased traffic to Oregon to glimpse the first US coast-to-coast eclipse in 99 years. The full eclipse is expected to pass over a large part of the state just south of Portland.

Expectations of upcoming maintenance at a refinery in the Pacific Northwest have also bolstered prices, traders said, but many attribute the daily gains in the Portland gasoline market to anticipation of increased fuel demand from eclipse visitors.

As many as 1.5mn additional people could be in Oregon for the eclipse beyond normal summer traffic, an Oregon State Police spokeswoman told Argus.

"This is incomparable to increased visitors during holiday periods," she said. "I cannot think of anything else like this."

Pipelines, refineries, terminals, delivery trucks and fueling stations are not set up for what could be a 20pc increase in demand over a short period of time.

"Maybe at an individual station, but not a region," Lenard said. "Fuel is a huge concern. Markets have adjusted much higher in the Pacific Northwest. I have heard that some gas stations out there have quadrupled their plans for supply. This is a very unique event."

A significant factor is the availability of tanker trucks to refill underground storage tanks, Lenard said.

"Fuel is not like an extra case of soda — you cannot just stick it in the back room," he said.

Gasoline and diesel supplies may be "stretched thin" in Oregon communities near the path of totality, auto club AAA Oregon said.

"Earlier in the week, we had stations temporarily run out of fuel in central Oregon, and that is the area that seems to be the most impacted by the eclipse," a AAA spokesman said. "This is like a 4 July holiday weekend and a snow event all rolled into one, with the kind of traffic gridlock we are expecting."

On 21 August the eclipse will cast a 70-mile shadow across 14 US states, ranging from Oregon to South Carolina.