US crude oil inventories: increased by 5.8 million bbls -- wow!
US crude oil inventories now sit at 411.1 million bbls but the EIA blow it off -- saying that it's still 2% below the five year average -- the five year average includes the two years in which Saudi Arabia flooded the market with oil and the Permian was hitting its stride
but look at this: after operating at nearly 98% capacity, refineries are now down to just 94.3% capacity; most likely due to fact that winter/summer transition and height of driving season are in our rear-view mirrors
gasoline production decreased last week but still above my "threshold": 10.3 million bbls/day produced (my threshold: 10 million bbls)
same with distillate fuel: decreased to 5.2 million bbls (my threshold is 5 million bbls
imports increased by a staggering 1.6 million bbls (my threshold: less than a million bbls)
over the past four weeks, crude oil imports averaged about 8.5 million bbls per day, 8.1% more than the same four-week period last year -- so we are importing more (but also exporting more -- now exporting 3 million bbls/day)
gasoline imports: 657,000 bbl/day
distillate fuel imports: 140,000 bbl/day
WTI drops another 29 cents to trade at $66.89 after this report was released
Comments: for oil bulls, short term, this is a scary, scary report. But worse, for the US economy, it is very, very bearish. We will see if that's confirmed with gasoline demand data to be released later, graphically. I'm obviously missing something, though: the US markets are minimally negative to flat, suggesting investors are not linking bearishness that I see with bullishness that the Fed sees.
Gasoline demandthe numbers are out, but the graph has not been updated. When the graph comes out, it will show that the "demand for gasoline" reported today is slightly -- very slightly -- below that reported for same period last year (one may not see separation on the graph.
Disclaimer: this is not an investment site. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.
Market: in a slightly negative to flat market, stock picking seems more important than ever. Let's look at some bellwether stocks and I use the term bellwether tongue-in-cheek -- I wanted to see if I still knew how to spell bellwether -- the bell that rings whether or not the weather changes (wether, by the way for those who have forgotten, is a castrated ram, and yes, that's the etymology of "bellwether":
AAPL: at $190, down $1.19
BRK: wow - wow - wow -- at $198, up $7.89 (up over 4%) -- what's not to like?
UNP: nice -- at $140.93, up $2.67 (up almost 2%)
SRE: at $114, down $1.24 -- almost exactly what I suggested a few weeks ago; purely serendipity;
S: at $5.58, down a penny
NOG: at $3.26, well off it's high for the past 52 weeks, but up 2 cents
Okay, that's enough. But that's pretty amazing for a company like Berkshire to move that much in one day. Berkshire investors have to be relieved that Warren et al didn't announce a special dividend -- all those taxes to pay -- if one wants cash from Berkshire, sell a few shares and pay the "cheaper" capital gains tax.
Let's see. There was something else I was going to say, but I forget. Maybe some music will help.
Fishing Junks at Sunset, Jean Michel Jarre
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Notes To The Granddaughters
Hard to believe The Concerts in China, Jean Michel Jarre, were released in 1981. I think I first recall listening to them back in 1987 or thereabouts. I was commanding an air transportable hospital -- we were training in England at the time. To my everlasting disappointment, I never put in place some great communication ideas I had at the time. Those ideas came to fruition some two decades later but we had the technology in 1987. I completely missed the opportunity. And I know the reason. The lesson learned. A lesson I can pass on to the granddaughters.
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The Book Page
I continue to "work" the "one consequential book per week" rule. I just returned last week's book, Our Man In Havana, Graham Greene, to the library and am now reading The Sisters: The Saga of the Mitford Family, Mary S. Lovell, c. 2001.
If there is something akin to a "chick flick" among written biographies, this book would fit the bill.
I've suggested to our oldest granddaughter who wants to read Little Women (she is currently reading Franz Kafka) that The Peabody Sisters and The Mitford Sisters might be similarly interesting.
At 529 pages, I will have to be disciplined to complete the Mitford Sisters in one week.
I always thought "Clementine" was an American name (she'll be comin' around the mountain). But lo and behold (and I knew this, but had forgotten): Clementine Ogilvy Spencer-Churchill, Baroness Spencer-Churchill, GBE (nee Hozier) was the wife of Winston Churchill and a life peer in her own right.
David Mitford -- the father of the "Mitford sisters" -- was the second son born to Lady Clementine Ogilvy and her husband Bertie Mitford. His aunt, Lady Clementine's sister, Lady Blanche, married Henry Hozier and was mother to another Clementine -- are you following this? -- the Clementine who married Winston Churchill. So, David would have been a first cousin (?) of Clementine Churchill, and the Mitford girls would have been nieces (?).
This was the same Winston Churchill who was voted out of office in a landslide upset in 1946 after "winning" the war and saving Britain from the Nazis. And the Brits are upset that the current US president actually sat in Winston's chair. Seventy-two years ago the Brits hated Winston Churchill enough to vote him out of office. Short memories.
On another note, first printings of many of Winston Churchill's book and original paintings by Churchill can be seen in a special, permanent exhibit at the Dallas Museum of Art.
I wonder if Winston called his wife by her full name? Perhaps when he was really angry at her for something.
Touch To Remember, Jean Michel Jarre
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The Amazon Page
Amazon is simply incredible. I love targeted ads.
Amazon just sent me a long list of kitchen gadgets -- all 50% to 60% off -- and that's not a "come-on." When one goes to any one of these items, the full price is listed at $11.99 or thereabouts and with the "code" the price is 50 to 60 percent less.
Shipping is free.
And, then on top of that one can use "prime points" that have accumulated from previous purchases (of which I have many). But then, incredibly, points on points. Because I have "Prime," Amazon will ship my purchase to arrive in two days. But if I agree to take "regular shipping" - add a few days -- I get another $5.00 credit. So, with a couple of clicks, I order something I actually need -- through a targeted ad -- and get it absolutely free (yes, I know the annual Prime fee is now $120) and get another $5.00 credit. For something I'm getting free with no shipping and handling costs. Yes, I will be charged an inconsequential sales tax.
I assume Jeff Bezos is making me feel so good that when he raises the annual Prime fee another $20, I will gladly pay. Sort of like the proverbial frog sitting in warm water that is gradually heating up.
In Chicago? Are you kidding?
When I saw the headline, I thought it was a "slush fund" story. I guess I'm wrong. Sounds like something else.
The coal mine permit expired in 1989. Illinois didn't go after the bond until 2005 (16 years later). The case was dismissed by the court in 2014 (what? and the reporter provides no explanation why?). Now a new bank has acquired the bank that originally held the bond.
But we're missing a big part of the story: why did the court dismiss the case in the first place? And not only that, $325,000 seems like a pretty paltry sum. Strange, strange story.
Second story.
Another bank story. This one in Africa. Something called the African Development Bank.
Apparently Multilateral Development Banks "use manmade climate change alarmism to justify lending policies that reject funding for fossil fuel electricity generation, promote expensive and unreliable renewable sources, and thereby help keep impoverished nations poor."
Apparently the African Development Bank was one of these Multilateral Development Banks. I hate all those capital letters, but we will move on.
The ADB has seen where this renewable energy policy has gotten them: an hour of electricity every day in much of Africa -- and that hour, relying on solar and wind energy -- is unreliable and sporadic.
So, breaking with the rest of the MDBs, the ADB will now allow fossil fuel, other than just natural gas (yes, that would mean coal), to provide electricity for Africans.
The writer "explains why Africa, China, India, Indonesia and others
refuse to reject coal and gas – and rely on “green” energy technologies
that don’t exist … except in classrooms, computer models, IPCC reports,
Al Gore lectures, and renewable energy company promotional literature."
The article is a wonky article explaining the transition from the Obama energy policy in Africa and the Trump-Perry energy policy in Africa. It's a painful article to read but great for the archives.
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A Note For The Granddaughters
Years ago -- decades ago -- I was sitting in a bar in west Africa, in Banjul, The Gambia, just south of Senegal.
About 9:00 p.m. the lights in the hotel go out. Two chaps -- and they were chaps, from England -- excused themselves. About thirty minutes later the lights came back on and a few minutes later, the chaps returned to the bar. They said the country's electricity was provided by a couple of diesel engines -- probably GE engines -- and that someone had forgotten to refill the diesel fuel tanks. I am not making this up. I can't recall now if it was the entire country, the entire city, or just the hotel -- doesn't matter -- probably one and the same for all practical purposes -- that lost power that night ... until more diesel fuel was put in the tanks.
Talking to those two chaps felt as if I were talking to Harris and Wilson from Heart of the Matter, Graham Greene, 1946.
That was 1946. Sounds like most of Africa hasn't progressed much farther, except now they've been suckered into using solar energy instead of diesel fuel. Some call it "carbon colonialism."
CSX: CSX reports jump in profit. Cost cuts and higher freight rates boost railroad operator's second-quarter earnings. CSX reported a sharp increase in profit, and wow! Was it ever! Net income was almost a billion dollars. Actual net income was $877 million in the second corder, a 72% increase from the $510 million it earned one year earlier. Revenue increased about 6% to $3.1 billioin, boosted by higher volumes. This WSJ article has received no comments so far. La-de-da.
BRK-B: up over 2.5% in pre-market trading. Probably has nothing to do with the CSX story, but remember, Warren owns BNSF lock, stock, and barrel. Pundits suggest BRK-A/B is rising because the company has "lifted previous restrictions on buying back its own stock." Pundits suggest that Berkshire is unable to find anything worth buying. And with hordes of cash, it might as well buy back some of its own common stock. Okay.
Disclaimer: this is not an investment site. Do not make any financial, investment, travel, job, or relationship decisions based on anything you read at the blog or think you may have read at the blog.
It's not Nordstrom's, it's Nord Stream 2. Posted earlier,
Nord Stream 2 is a gas pipeline that would allow Germany to effectively
double the amount of gas it imports from Russia. In 2017, Germany used
up a record 53 billion cubic meters of Russian gas, comprising about 40
percent of Germany's total gas consumption. Nord Stream 2's delivery
system is designed to carry up to 55 billion cubic meters (1.942
trillion cubic feet) of gas per year.
So, to repeat: currently, Russian natural gas accounted fro 40% of
Germany's total gas consumption; the Nord Stream 2 would effectively
double the amount of gas Germany would import from Russia. Seems fairly
significant to me. And yet, CNBC says "Trump is exaggerating Germany's reliance on Russia for energy." CNBC was disingenuous with its argument (Trump was exactly correct, it turns out) but worse, CNBC defends Russia even as NBC calls out Trump on Russian sanctions. Seems one can't have it both ways. Unless you are CNBC/NBC/MSNBC.
Even cartoonists get it; this is not rocket science:
NOG: announces acquisition of producing wells, about 4,100 boepd; $68.4 million in cash plus 25.75 million shares (x $3.40 = $88 million) for a total of about $150 million. Net acreage not mentioned. Recently, NOG paid upwards of $40,000 / acre. NOG also announced it has reduced annual interest payments by over $5 million and will reduce overall debt by over $63 million through a new deal and other agreements. The most recent deal: exchange 8% senior unsecured notes due 2020 by issuing over 3 million shares of common stock; this will reduce debt by almost $10 million. In pre-market trading, NOG was up almost 5%, trading near $3.40. It's 52-week high is $3.72.
Disclaimer: this is not an investment site. The NOG update is to help me better understand the Bakken and follow the oil and gas industry.
Only one well comes off the confidential list today:
33993, SI/NC, Hess, BB-Burk-LE-151-95-1807H-9, Blue Buttes, no production data,
Mexican demand for U.S.-sourced refined products continues to
increase, but Mexico lacks the infrastructure required to efficiently
import, store and distribute large volumes of gasoline and diesel. That
has spurred the rapid build-out of new port and rail terminals, new
pipelines and new storage capacity on both sides of the U.S.-Mexico
border. At the same time, Mexico’s state-owned energy companies are
gradually opening access to their existing refined-products pipeline and
storage networks — which helps a little, but not enough. Today, we
discuss the latest round of midstream projects tied to U.S. exports of
motor and jet fuels to its southern neighbor.
This blog is an update of our “Into the Void” series on the
infrastructure that helps deliver Pemex and imported motor fuels to
Mexican markets. Earlier we explained that until April 2016, state-owned
Petróleos Mexicános (Pemex) was the only entity that could import
gasoline and diesel to Mexico, and that until early 2017,
independent/third-party importers could not use Pemex’s refined-product
distribution and storage network. We also noted that competition is
being introduced to Mexico’s energy markets during a trouble-filled
period for Pemex’s six refineries, whose output of refined products has
been declining — opening the door even wider to imports from the U.S.
We provided an overview of three key elements of Mexico’s existing
refined-product logistic infrastructure. First, there’s Pemex’s network,
which includes refined-product pipelines with capacities totaling more
than 1 MMb/d and more than 70 storage and distribution terminals with a
combined storage capacity of 11 MMbbl. Then, there are the liquids
storage assets owned by Mexico’s Comisión Federal de Electricidad (CFE),
the state-owned electric utility, which over the next few years plans
to make available to motor-fuel logistics providers at least one-quarter
(and perhaps as much as half) of its 10 MMbbl of fuel storage capacity.
And then there are the marine terminals, pipes, storage and other
assets owned by third parties such as midstreamers, railroads and
terminaling companies. We emphasized that Mexico’s refined-products
pipeline system is far from robust, and a lot of motor fuel is
transported by rail and by truck.
