Active Rigs Up To 63 In North Dakota; Tea Leaves Suggest WTI Will Continue To Rise -- June 13, 2018

WTI: the tea leaves suggest the price of WTI will continue to rise -- let's stir the tea -- (note to newbies: "tea leaves" have a mix of fact and opinion and it's not necessarily easy to tell them apart; tea leaves look alike) --

• a graphic earlier today suggested Saudi Arabia "spare capacity" forecast to shrink significantly in 2019
• there's a story over at oilprice.com suggesting US shale oil won't be able to fill the gap
• the Permian pipeline shortage won't be resolved before 2019
• the Trans Mountain Pipeline expansion project won't be completed this year (if ever)
• not even the height of summer driving season, and US gasoline demand hits a new record
• refiners are operating at 95.7% capacity and having trouble keeping up with distillate fuel demands
• distillate fuel reserves in the US hit an all-time (if not an all-time low, very close; certainly appeared that way on the graph; needs to be fact-checked)
• China recently shut down new solar installations, suggesting they need more fossil fuel sooner
• Venezuela may import heavy oil to meet refining needs
• Iraq's instability may affect production
• Iran's sanctions will cause greater shortfall than some pundits suggest 
• the chairman of the "US Fed" said their will be four rate hikes this year, partly because "they" expect the price of oil to increase by the end of the year, causing inflationary pressure on the economy

Politics: I love how every politico -- from the far left to the far right -- has advice for President Trump on North Korea. Six months ago they all said "it" couldn't be done. Now that "it's" been done -- North Korea agreeing to complete denuclearize -- the politicos have advice for President Trump. I was most negatively impressed by House Speaker Ryan by his remarks today; glad to see him stepping down as House Speaker.

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Back to the Bakken 

Active rigs:

$66.64↑	6/13/2018	06/13/2017	06/13/2016	06/13/2015	06/13/2014
Active Rigs	63	56	28	75	185

Five new permits:

• Operator: Hess
• Field: Capa (Williams)
• Comments: Hess has permits for a 5-well CA-Ferguson Smith pad in SESE 19-155-95

And that was all.

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For The Archives

Gasoline Demand In The US Hits An All-Time Record -- June 13, 2018

From the EIA, thousand bbls gasoline/day:

Back of envelope calculations:

One year ago:

• 2nd week, June, 2017, one year ago:  9,269
• peak, summer, 2017, one year ago: 9,846
• (9846-9269)/9269 = 6.2%

Extrapolating forward:

• 2nd week, June, 2018, most recent data: 9,879
• 9,879 * 1.062 = 10,491 thousands bbls gasoline/day

Keeping North Dakota Great -- June 13, 2018 -- Air Quality Permit Approved For Davis Refinery, Southwest North Dakota

Link at Bismarck Tribune.

The department issued the permit to Meridian Energy to construct the Davis Refinery near Belfield after reviewing more than 10,000 public comments.

It would be interesting to get an analysis of the number of:

• "robo" comments
• form letters via e-mail; number with relevant comments
• out-of-state comments
• non-ND-resident comments

Remember this from an earlier post?

• New refinery: Meridian's Belfield refinery, 45-day comment period
• more than 11,000 comments
• of those, 10,068 were form letters via e-mail; none with relevant comments
• of all comments, 22% received from the west coast, specifically Oregon, Washington, and California
• 1.8% of the comments were from North Dakota respondents

It's interesting that both the the "refinery permit" and the "air quality permit" had an almost equal number of submissions.

For an update of refinery projects in North Dakota, see this February, 2018, post.

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GDP Now

Latest forecast: 4.6 percent — June 8, 2018.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2018 is 4.6 percent on June 8, up from 4.5 percent on June 6.

After this morning's wholesale trade release from the U.S. Census Bureau, the nowcast of the contribution of inventory investment to second-quarter real GDP growth increased from 0.99 percentage points to 1.06 percentage points.

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"Fed Rate"

The "Fed" raises "rate" to 2.5%. Two more rate increases this year would bring the "Fed rate" to 3.0%.

History of US recessions.

History of "Fed rates."

Past decade:

 Multi-decade:

An Interesting Graphic But Hardly Relevant -- June 13, 2018

From John Kemp today:

The graph above will help put any production increase by Russia and Saudi Arabia in perspective.

If push comes to shove, my hunch is that US shale could respond quickly.

The problem: the mix of the different kinds of oil.

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US Open

A Note to the Granddaughters

With the US Open in Shinnecock Hills, I'm reminded of my wonderful days in a bedroom community, suburb of NYC, many decades ago, Westfield, NJ.

During that summer I was able to get into Manhattan only a couple of times. I never got out to Long Island.

Shinnecock is at the far east end of Long Island; it must be a beautiful setting. I can only imagine.

When I was in my "Great Gatsby" phase I spent a lot of time studying the map of Long Island. East Egg and West Egg are much, much closer to NYC, near the west end of Long Island. 

And of all things, I never realized Belmont Park was in the same general area.

Least Livable Cities In The US -- USA Today -- June 13, 2018

Link here. A most interesting list put together by USA -- the least livable cities in the US.

Not on the list:

• Portland, OR
• any city in Texas
• any city in North Dakota, South Dakota, Idaho, Montana, Minnesota, Iowa
• any city in Oregon (surprising); Nebraska, Kansas, Wyoming
• any city in Maine, New Hampshire, Vermont, Rhode Island
• any city in North Carolina, Virginia, Kentucky

But:

• two cities in Tennessee made the list 
• Chicago is not on the list
• Ohio seems over-represented

Least livable cities:

1. Detroit (no surprise)
2. Flint, MI
3. St Louis, MO
4. Memphis, TN (I have heard this before; surprising; sad)
5. Cleveland, OH (no wonder LeBron wants to leave)
6. Wilmington, DE
7. Albany, GA
8. Springfield, MO
9. Baltimore, MD (surprised it's only #9)
10. Milwaukee, WI
11. Hartford, CT
12. Homestead, FL
13. Florence-Graham, CA (never even heard of it)(just north of Compton, south of Los Angeles)
14. San Bernardino, CA
15. Youngstown, OH
16. Rockford, IL
17. Pueblo, CO (really?) (only city in Colorado on the list; high poverty problem)
18. Gary, IN
19. Little Rock, AR
20. Compton, CA
21. Shreveport, LA
22. Charleston, WV
23. Daytona Beach, FL
24. Stockton, CA
25. Miami Beach, FL
26. Merced, CA
27. Oakland, CA
28. Springfield, MA
29. Dayton, OH
30. Trenton, NJ
31. Tucson, AZ (after recent visits, not surprised)
32. Fresno, CA
33. Canton, OH
34. Buffalo, NY
35. Toledo, OH
36.Knoxville, TN
37. Kalamazoo, MI
38. Tallahassee, FL
39. New Haven, CT
40. South Bend, IN
41. North Charleston, SC (we've lived there, or actually very close to this city)
42. Miami, FL
43. Syracuse, NY
44. Jackson, MS
45. Albuquerque, NM
46. Tacoma, WA
47. Atlanta, GA
48. Gainesville, FL
49. Salt Lake City, UT
50. Fort Smith, AR (never heard of it)