Five New Permits -- May 22, 2019

Active rigs:

$61.33	5/22/2019	05/22/2018	05/22/2017	05/22/2016	05/22/2015
Active Rigs	64	64	51	25	82

Six new permits:

• Operators: MRO (4); Whiting (2)
• Fields: Reunion Bay (Mountrail County); Foreman Butte (McKenzie County)
• Comments:
• MRO has permits for 4 wells in Reunion Bay (either two locations very close together or on one pad)
• one in lot 3/section 2-150-93
• three in section 34-151-93
• Whiting has permits for a 2-well Irwin pad in section 25-150-103, Foreman Butte

That was all.

EIA Weekly Petroleum Report -- May 22, 2019

Updates

Later, 9:25 p.m. CT: look at the note below -- that is accurate -- total gasoline imports last week rose to 1,350,000 bbls/day -- that's an increase of almost 600,000 bbls/day and an eight-year high. Gasoline demand is down (year-over-year). Last week, for example, gasoline imports were only 752,000 bbls/day-- significantly less than the 1.3 million bbls/day this past week. One has to ask the question: what's driving the increase in gasoline imports? I really don't know. My hunch: is has to do with the West Coast. Let's check. From Reuters, last month, record amounts of gasoline were imported from Europe into the west coast.

Later, 5:56 p.m. CT: regarding today's EIA weekly petroleum report, a reader noted --

Noteworthy: 2nd gasoline storage build in 14 weeks despite a 281,000 bpd increase in product supplied because our imports of gasoline rose by 598,000 barrels per day to an eight-year high of 1,350,000 barrels per day, while our exports of gasoline fell by 369,000 barrels per day to 416,000 barrels per day.

Later, 12:50 p.m. CT: WTI off over 3%; down almost $2.00; now trading at $61.16. The best model to explain all this at this post. On top of the huge build that was announced yesterday, we now have forecasts that US shale oil production is set to grow by 16% in this calendar year (2019); and, finally, unless something significant happens, it looks like the Mideast risk premium has been taken out of current pricing.

Original Post

WTI: down 1.5%; down almost a buck; now trading at $62.22/bbl. Gee, I wonder why?

• API data posted yesterday: a "surprise build."
• EIA weekly petroleum inventory data: link here.

Big_Orrin over at twitter says that based on API "actual inventories" this is his EIA forecast:

• crude: +8.2 million bbls
• Cushing: +1.2 million bbls
• distillate: +1.0 million bbls
• gasoline: +2.3 million bbls 

The EIA numbers for week ending May 17, 2019:

• US crude oil inventory: increased by 4.7 million bbls
• US crude oil inventory: stands at 476.8 million bbls, about 4% above the 5-year average (last week, total inventories were said to be about 2% above the 5-year average)
• refinery operating capacity: operating at 89.9% -- very low -- and it's down slightly from last week
• both gasoline and distillate fuel production decreased last week
• US crude oil imports have dropped considerably, now down close to 10% compared to same four-year period last year
• gasoline imports average 1.4 million bpd; it would be interesting to see how much of this was "California"
• gasoline inventories increased by 3.7 million bbls (significantly exceeded forecast; see above)
• distillate fuel inventories increased by about 1 million bbls (in line)
• but look at this: propane/propylene inventories are about 22% above the 5-year average; increased by 3 million bbls last week
• jet fuel supplied was up again; up 2.5% compared to same four-week period last year 

Twitter response: pending

From twitter: pay attention to Brazil and Mexico (actually, in the graphic below, note all of South America vs rest of world). Also, note Iraq -- where XOM, others pulled out their personnel due to mideast tensions; from zero back to some imports from Venezuela:

Re-balancing:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 10	January 31, 2019	0.9	445.9
Week 11	February 6, 2019	1.3	447.2
Week 12	February 13, 2019	3.6	450.8
Week 13	February 21, 2019	3.7	454.5
Week 14	February 27, 2019	-8.6	445.9
Week 15	March 6, 2019	7.1	452.9
Week 16	March 13, 2019	-3.9	449.1
Week 17	March 20, 2019	-9.6	439.5
Week 18	March 27, 2019	2.8	442.3
Week 19	April 3, 2019	7.2	449.5
Week 20	April 10, 2019	7.0	456.5
Week 21	April 17, 2019	-1.4	455.2
Week 22	April 24, 2019	5.5	460.1
Week 23	May 1, 2019	9.9	470.6
Week 24	May 8, 2019	-4.0	466.6
Week 25	May 15, 2019	5.4	472.0
Week 26	May 22, 2019	4.7	476.8

Update On Mexico -- May 22, 2019

Over at "big stories": Mexico could go the way of Venezuela.

With that in mind, here's a screenshot from twitter.

This is from a long, long update on Mexico. Archived.

• leftist elected president: Mexico's energy market reform is now five years old; the new president was elected partly on a promise to dismantle that reform
• centralizing control: "a more naked grab at power"
• administrative changes: the state has first right-of-refusal for projects; not subject to market concerns
• pipeline construction: construction on at least five natural gas pipelines has been suspended due to environmental regulations and/or land-use constraints  
• processing infrastructure: so bad that Pemex declared a force majeure at one of its gas processing plants, and indications are that the wound was self-inflicted, and unlikely to be fixed
• underserviced demand: Pemex unable to meet demand, especially in the south
• LNG imports: Mexico has no existing gas storage infrastructure

When (not if) Mexico implodes, the US will look back at the current "southern surge" as a walk in the park, and a warning ignored.

HES: Top-Performing US Oil Producer So Far This Year -- May 22, 2019

When I think of Hess, I think of Tioga, ND. Tioga is about the smallest oil capital in the world.

But there it is: the "year's top-performing US producer" has no exposure to the Permian. None. Nada. Zilch. Wow.

From Bloomberg:

This year’s top-performing U.S. oil producer doesn’t have any operations in the world’s fastest-growing shale play.

New York-based Hess Corp. has climbed about 64% this year to trade above $66 on Tuesday in New York. The S&P 500 Energy Index, meanwhile, is up just 12% over the same period.

Hess is leading the pack with the exception of Anadarko Petroleum Corp., which is being bought by Occidental Petroleum Corp. following a bidding war with Chevron Corp.

Unlike a long list of other oil drillers, Hess isn’t staking its name on the prolific Permian Basin, which has seen shale output nearly double in two years. Instead, the company is tapping a massive discovery more than 3,000 miles away in Guyana and tinkering with techniques to improve results in North Dakota.

“There’s value in portfolio diversity,” said Devin McDermott, an analyst at Morgan Stanley who has a buy rating on the stock. “Hess has an attractive balance of short-cycle shale, which can be flexed up and down with the oil price, and this very attractive longer-cycle development in offshore Guyana.”

Last year's top performing oil stock was ConocoPhillips, which has operations all over the globe, including some assets in the Permian and several other U.S. basins.

Much more at the link.

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.

Let's go back and look at the "revenue per employee" study.  Of the S&P 500, Hess was #11 on the revenue per employee list, at about $3.75 million / employee. Revenue per employee grew at a 46% rate year-over-year (2018-over-2017).

Development Comes To A Halt In NYC And Environs? -- Con Edison Limits New Service -- May 22, 2019

This story is followed at links below:

New York denies natural gas pipeline; and, here; and, here.

Now, this, today -- it was "predicted" that Con Edison would follow suit ... and they did ....