The Political Page, T+2 -- January 23, 2018

Updates

January 24, 2018: Trump tweets back, "No wall, no DACA."

Original Post 

Wow, even the Drudge Report has it in bold red.

Snowflakes blame President Trump for talking out of both sides of his mouth. Okay, whatever.

The deal for funding the government/ending the shutdown was open discussion on border security and discussion on immigration reform (euphemism for "dreamers").

Mitch McConnell agreed to have open debate in the US Senate on immigration reform in exchange for funding the government.

Now, today, one day later after the agreement, the link at Drudge is in bold red (which Matt uses sparingly), and this is the screenshot over at Politico:

That changes everything.

If Chuck Schumer doesn't keep his end of the bargain, then Mitch McConnell doesn't need to keep his end of the bargain. My hunch is that Mitch McConnell will keep his end of the bargain -- open debate -- but the more conservative US House of Representatives will having nothing to do with the discussion, especially if funding for the wall is off the table even before the debate begins. How the US Senate plays out is anybody's guess, but this is the last thing Heidi wanted to hear from Senator Schumer.

It appears that Schumer has been so chastised by his alt-left base, that he had no choice but to renege on the deal. But when the government shuts down again in three weeks, the shutdown will:

• last longer;
• be dirtier; and,
• will still come down to paying active duty military vs fast-tracking illegal residents

In short, it will be the shutdown the mainstream media hoped for. Remember, the $1 trillion infrastructure plan will have been announced only eight days earlier.

The US Senate better confirm as many federal judges and other political appointees as fast as it can because after February 8, 2018, not much is going to get done.

For snowflakes, cupcakes, and fruitcakes, who choose to forget this is from wiki: the Secure Fence Act of 2006 was passed by Congress and signed by President George W. Bush on October 26, 2006.

Peak Oil? What Peak Oil? All Those Deferred Projects? Getting Off The Ground -- Bloomberg -- January 23, 2018

I can't count the number of times I've read stories and heard from folks that all the big global energy projects that have been deferred over the years will result in a huge crude oil shortfall. Maybe. Maybe not.

But now Bloomberg is reporting that all those deferred projects are finally getting off the ground.

The global oil industry’s backlog of big drilling projects is starting to shrink as prices improve.

From production vessels tapping Brazil’s deep-water reserves to pipes connecting rigs to underwater wells in China, the number of ventures delayed since the oil crash that finally got approval to get off the ground totaled 18 last year, according to a report by consultant Rystad Energy. That compares with only five in 2016 and two in 2015.

That’s a start, but there are still 104 delayed oil and gas projects waiting for investment approval, according to Rystad.

Much, much more at the link.

To re-cap, big global projects the past few years:

• 2015: two
• 2016: five
• 2017: 18
• pending: 104 

By the way:

• keep this data point in mind
• the most recent Bloomberg stance is a lot different than it was just on December 28, 2017, less than one month ago 

FWIW: Update On Chesapeake Well Completions -- Filloon -- January 23, 2018

Link over at SeekingAlpha. I believe these are all in the Eagle Ford.

Note This High-Intensity CLR Frack -- 86 Stages -- January 23, 2018

The well:

• 32349, 1,168, CLR, Hereford Federal 9-20H, Elm Tree, 86 stages; 14.3 million lbs, in excess of 100K in first four months of full production; t8/17; cum 116K 11/17; no production first three months of production; 

The CLR Hereford wells are tracked here. 

Canadian Oil To Replace Venezuelan Crude; And Selling At A Discount -- What's Not To Like; WTI Up Solidly Over $64; Davos Continues -- January 23, 2018

Earthquake, Alaska: 7.9 magnitude, and they haven't even started fracking yet.

Talk radio: tariffs on solar cells is going to kill the domestic solar panel installation industry. President Trump walked away from the Paris global warming accord. Is there a pattern here?

Talk radio: Whirling Pool washers to increase 30% in price, from $500 to $650. Over 12 months that $150 comes to less than $15/month; it's a one-time expense; never needs repair (according to their advertising); and, last forever. Small price to pay to keep American jobs, making America great again; keeping a campaign promise. If overseas manufacturing companies are "dumping" or being subsidized by state governments, all's fair in love and war.

Putting things in perspective: will need replacing in less than a year or so

Putting things in perspective: ObamaCare increased monthly premiums by hundreds/thousands of dollars; one had to find a new insurance policy; and, one had to find a new physician. Somehow I think we'll survive the tariffs on large residential washing machines.

Talk radio: South Korea will build washing machine plants here in the US.

Davos:

What has Davos got to say? Link here.

Bridgewater Associates founder Ray Dalio shared his market views on CNBC Tuesday from the World Economic Forum in Davos, Switzerland.

"A market blow-off" will be produced by stimulus fueled by cash from banks, corporations and investors, Dalio said. "If you're holding cash, you're going to feel pretty stupid," he added.

Bridgewater is the world's largest hedge fund, managing about $160 billion, according to its website. Dalio started the firm in 1975 out of his two-bedroom apartment in New York City. He is now worth an estimated $17 billion.

Dow: futures slightly up.

Disclaimer: this is not an investment page. Do not make any investment, financial, job, travel, or relationship-related decisions based on anything you read here or think you may have read here. If this is important to you, go to the source.

ONEOK, closed up about 3% yesterday: 

ONEOK, Inc. announced financial and volume guidance for 2018.

The company expects full-year 2018 net income to be in the range of $955-$1,155million. It anticipates adjusted EBITDA $2,215-$2,415 million, an increase of 20% from the previous guidance of 2017.

ONEOK reiterated the average annual dividend growth in the range of 9-11% through 2021.

Notably, it does not expect to issue additional equity in 2018 and into 2019. 

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Back to the Bakken

Active rigs:

$64.13↑↑	1/23/2018	01/23/2017	01/23/2016	01/23/2015	01/23/2014
Active Rigs	58	38	47	157	189

RBN Energy: rising Canadian production, takeaway constraints and WCS price discounts.

The recent collapse in the price of Western Canadian Select (WCS) versus West Texas Intermediate and the 12-day shutdown of the Keystone Pipeline in November 2017 put the spotlight on a major issue: Alberta production is rising, pipeline takeaway capacity out of the province has not kept pace, and pipes are running so full that some owners have been forced to apportion access to them.

Storage and crude-by-rail shipments have served as a cushion of sorts, absorbing shocks like the Keystone outage and the apportionments, but with more production gains expected in 2018-19, that cushion seems uncomfortably thin and unforgiving. With all this going on, we decided that it’s time for a deep-dive look at Western Canadian production, takeaway options and WCS prices — the whole kit and caboodle. Today, we begin a new series on Canadian crude and bitumen production, the infrastructure in place (and being planned) to deal with it, and the effects of takeaway constraints on pricing.

Western Canadian crude oil production has grown from about 2.5 MMb/d in 2011 to almost 4.0 MMb/d by the end of 2017. 

Despite these gains — most of which came from Alberta’s oil sands region — times are tough in the Canadian oil patch. While other North American producers have been enjoying the gradual rise in WTI pricing over the past year, Canadian producers have suffered through declining prices for WCS, the Canadian heavy blend crude benchmark — especially over the past few months. Figure 1 shows that WCS maintained a pricing discount to WTI of around $10/bbl through most of 2017 (all in U.S. dollars). Beginning in late summer, however, the WCS discount to WTI began to grow, initially to around $11-12/bbl during September and October, and then crashing during November and December to around $25/bbl.