Gasoline Demand -- Nice Reversal -- June 12, 2019

Link here.

****************************** 

Breakfast of Champions 

While Listening To Fleetwood Mac on Echo (Alexa)

Odds And Ends -- June 12, 2019

US spending: hits record. US spends $3 trillion in first eight months of the fiscal year, October, 2018, - May, 2019. The good news: the deficit for the current fiscal year is still less than a trillion dollars.

Boeing: further delays. Now, September at the earliest. From an earliest post:

May 25, 2019: that didn't take long. Two days ago I suggested it was going to be a lot longer than Boeing suggested before the 737 Max 8 was back flying. Now this, from The Wall Street Journal, "MAX's return to flight delayed by FAA's re-evaluation of safety procedures for older 737 models. The agency is considering changes in how pilots are trained to respond when the flight-control computer or other systems erroneously pus the plane's nose down."

Apple: to lease a large office complex in Seattle's booming South Lake Union neighborhood. Will be located near Amazon.  The good news that was not reported: Occasional-Cortex does not represent Seattle/Washington state in the US Congress. 

Amazon out of the food delivery business. Gig economy is not all that it's cracked up to be.

Bragging rights: Amazon surpasses Apple and Google to become world's most valuable brand. The list: Amazon, Apple, Google, Microsoft, Visa, Facebook, Alibaba, Tencent, McDonald's, ATT.

Cramer: apparently Jim sold his company, TheStreet, for $16.5 million.

Retailers: this is the last month (June), maybe we can extend it to July, before their (US retailers)  Chinese orders go in for the US Christmas holiday retail season --

Jobs: two critical things nobody is talking about. Link here.  Whether "the jobs story" is a good story or a bad in the US, analysts over-think it while mom-and-pop retailers and Joe Six Pack/Wendy Wine Cooler can figure it out in a New York minute. From the linked story:

• there are way more job openings than people looking for jobs
• employers are looking for folks with skills
• analysts unable to explain why there is minimal (no?) wage inflation
• but the lack of wage inflation is easy to explain: it's the law of large numbers

Can't link it but Newt Gingrich has a great op-ed over at FN. I always check in on FN to see the "worse thing" trending. When the lead story is about the US debt, one knows it's a slow news day.

**********************************

Notes to the Granddaughters

Pre-History -- Timelines

It's just a matter of time:

It's Just A Matter of Time, Randy Travis
A reminder: Helen’s story -- "Helen of Troy" -- begins in the Late Bronze Age. The Late Bronze Age died with Helen, and was replaced by the Iron Age. 

From: Helen of Troy: The Story Behind the Most Beautiful Woman in the World, Bettany Hughes, c. 2005.

[Timeline: volcano eruption: 1550 BC; Trojan War: 1200 BCE; Homer: 800 BCE; defeat of the Persians: 480 BCE; Classical Age: 50 years following the defeat of the Persians in 480.]

The Recuyell (collection) of the Historyes of Troye: first book ever to be printed in the English language when Caxton brought the printing press to Westminster in 1476. (It sounds like he began printing this in English while he was still in Germany.) 

 From: The Torah, Henry Holt and Company, c. 1996. First American edition, 1996, p. 9:

To speak of the origins of the Torah is, for Orthodox Jews, to speak of the moment on Sinai when Moses received not only the two tablets of stone, but the written Torah dictated to him by the God of the Exodus, and all the oral interpretations that were to be the substance of Rabbinic teaching in subsequent generations.

The Bible itself, however, speaks of books that appear to pre-date the Torah, such as The Book of Yashar and the books of The Wars of the Lord, neither of which has survived. [Think: Lord of the Rings.]

Certainly from around the thirteenth century BCE, which is the general period in which Moses is placed [Trojan War above, 1200 BCE], to the first hints of written texts in the tenth century BCE, it is clear that books such as these, as well as the oral poetic traditions of the people of Israel, were the means by which the core of the Torah was preserved.

Some of the evidence of the earlier oral tradition is to be found in the fragments of songs that can still be detected within the body of the Torah. For modern biblical scholarship, the Torah did not achieve its present literary form until the fifth century BCE with the return of the exiles from Babylon.

Having developed through the period of the first Monarchy, the separation of Judah and Israel, the destruction of the First Temple and the Babylonian exile, it is clear that the Torah is not simply the Five Book of Moses, but a literary mosaic of the experience of the people of Israel through its first commonwealth and return from exile, as well as being the repository of its received pre-history.

US Crude Oil Inventory Build: 2.2 Million Bbls -- June 12, 2019

EIA's weekly petroleum report:

• US crude oil weekly build: 2.2 million bbls
• US crude oil inventories: 485.5 million bbls
• US crude oil inventories now at a whopping 8% above the five-year average (and the five-year average has been increasing over the past year or so) [Later: see first comment: in case you were wondering, our crude oil inventories were 38.5% higher than the prior 5 year (2009 - 2013) average of crude oil stocks for the first week of June..]
• refiners: operating at 93.2% capacity; trending upward; as good as I've seen in quite a few months
• imports: 7.6 million bopd, down by 316,000 bopd from the previous week
• imports: over the past four weeks, imports have averaged about 9% less than same four-week period last year (interesting)
• jet fuel supplied: still shows an increase year-over-year

US days of crude oil supply: 28 days. Trending higher.  Max has been 31 days; 28 days is a very high number. All the US needs is 21 days; very, very bullish for oil traders if the supply were less than 20 days. In other words, a 28-day supply of crude oil in the US ... at the high end.

WTI: after the report was released, the "board" shows WTI trading down 2.78%; down $1.48, trading at $51.79. In fact WTI was at $51.78 before the report came out. So, either the movers and shakes already knew the likely numbers that would be reported, or the report didn't change things. 

The market: the Dow is flat, up 2 points right now (9:49 a.m. CT, June 12, 2019).

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
Week 27	May 30, 2019	-0.3	476.5
Week 28	June 5, 2019	6.8	483.3
Week 29	June 12, 2019	2.2	485.5

Random Look At Three Wells Coming Off Confidential List Today -- June 12, 2019

Wells coming off the confidential list today that reported production:

• 34225, 907, Oasis, Nelson 5298 11-14 3B, Banks, t1/19; cum 138K 4/19;
• 35005, 449, Whiting, Larson 44-12-4H, Corinth, t12/18; cum 42K 4/19;
• 34980, 1,107, Whiting, Schilke 24-21-1H, Big Stone, t12/18; cum 82K 4/19;

Oasis Nelson well in the Banks, a huge well:

• 34225, 907, Oasis, Nelson 5298 11-14 3B, 50 stages; 6 million lbs, Banks, t1/19; cum 138K 4/19;
• TD: 21,100 feet
• proppant: 100 mesh; 40/70 white; 30/50 white; and, 30/50 CRC
• 13 miles north of Watford City
• second of three wells to be drilled south on this pad
• from surface casing to TD: 12 days (the lateral took less than 3 days)
• re-entered on May 27, 2018
• curve landed at 11,981 TVD, approx 13' below the upper Bakken shale
• the lateral was completed using one assembly
• upper Bakken, entered at 10,950'; characterized by elevated background, often exceeding 2,000 units
• middle Bakken, entered at 10,968; so again, the upper Bakken shale about 20 feet thick
• middle Bakken: background gases ranged fro 600 to 3,500 units, while several exceeded 4,000 units
• overall formation dip was about -0.2 degrees
• the lateral was drilled in less than 3 days from casing exit to total depth
• the wellbore was completed 90% within target, opening 9,744 feet
• considered a success:
• maximum exposure to target
• minimal days from re-entry to total depth
• no shale strikes
• no sidetracks

Production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2019	30	31116	31117	16664	68578	65998	2160
BAKKEN	3-2019	31	31394	31894	21802	79205	76215	2990
BAKKEN	2-2019	28	26466	26759	23315	73447	71214	1841
BAKKEN	1-2019	31	30266	30124	29315	71672	65517	5721
BAKKEN	12-2018	20	18435	17751	30717	36907	30671	5956

************************************

The Whiting Schilke well in the Big Stone oil field:

• 34980, 1,107, Whiting, Schilke 24-21-1H, 36 stages; 6.2 million lbs, Big Stone, t12/18; cum 82K 4/19;
• TD: 19,576 feet
• 36-stage plug and perf
• spud: July 21, 2018
• cease drilling: August 2, 2018
• KOP: in the Lodgepole at 9,318' measured depth
• Lodgepole: 9,179' TVD
• False Bakken: 9,682' 
• Scallion: 9,686'
• upper Bakken: 9,693'; background gas averaged 917 units; max of 1,914 units
• middle Bakken: 9,707 (the upper Bakken was about 14 feet thick); gas readings average 787 units with a maximum of 3,134 units; 
• target window: 15' thick; set at 16' below the base of hte upper Bakken
• majority of the wellbore was drilled within the target window; 100% within the middle Bakken

Production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2019	30	11612	11489	20470	29246	0	29161
BAKKEN	3-2019	24	10686	11416	17465	24906	0	24841
BAKKEN	2-2019	26	15798	15691	23792	26458	0	26393
BAKKEN	1-2019	31	28605	29427	44550	36257	0	36179
BAKKEN	12-2018	22	14854	13266	55603	19426	0	19366

 

 ******************************************

The Whiting Larson well in the Corinth oil field:

• 35005, 449, Whiting, Larson 44-12-4H, 35 stages; 6 million lbs, Corinth, t12/18; cum 42K 4/19;
• 35-stage plug and perf
• TD: 19,421 feet
• spud date: July 7, 2018
• cease drilling: July 16, 2018
• Lodgepole: 9,149' TVD
• False Bakken: 9,665'
• Scallion: 9,668'
• upper Bakken: 9,676'; gas readings averaged 1,480 units; max of 2,198 units
• middle Bakken: 9,687' (upper Bakken was about 11 feet; gas averaged 98 units; a max of 1,101 units
• lateral: gas averaged 293 units; max of 2,198 units
• target window was 10 feet thick; the target window was set 18 feet below the base of the upper Bakken
• the majority of the wellbore was drilled just underneath the target window but 100% within the middle Bakken

Production:

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	4-2019	29	5016	4784	14448	15430	7332	8024
BAKKEN	3-2019	31	8066	8665	24962	27018	2688	24242
BAKKEN	2-2019	26	11050	11207	30207	27634	6031	21530
BAKKEN	1-2019	18	10504	11605	24652	19281	0	19241
BAKKEN	12-2018	19	7446	5434	31665	12473	0	12422

Six Wells Coming Off Confidential List; WTI Trading Under $52; EIA Reports US Inventories Today -- When The Numbers Are Released, Act Surprised -- June 12, 209

Natural gas: EIA raises natural gas production estimates for 2Q19 and 3Q19.

More natural gas: US natural gas set to post another triple-digit build. Survey: stocks to rise 108 Bcf.

Pipeline: TC Energia and IEnova's 2.6 Bcf/d Sur de Texas-Tuxpan pipeline has been completed after significant delays in 2018.

Shell Martinez refinery to be acquired by PBF Energy. Also here from the Rigzone staff, data points:
this is Shell's only refinery in California

• 104 years old
• located near San Francisco
• deal: $1 billion plus various adjustments
• PBF will now own two West Coast refineries
• the Martinez refinery, 157,000 bpd
• the Torrance refinery, 155,000 bpd
• near Los Angeles
• adding the Martinez facility brings PBF's total capacity past the 1 million-bpd mark
• PBF Energy, from wiki:
• headquartered in New Jersey
• has refineries in New Jersey, Louisiana, Ohio, Delaware, and now two in California
• formed in 2008: joint venture by Petroplus Holdings and two private equity companies: Blackstone Group and First Reserve

***************************************

Back to the Bakken

Wells coming off confidential list today -- Wednesday, June 12, 2019: 38 for the month; 227 for the quarter;

• 34655, SI/NC, Petro-Hunt, USA 153-95-3B-10-1H, Charlson, no production data,
• 34225, 907, Oasis, Nelson 5298 11-14 3B, Banks, t1/19; cum 138K 4/19;
• 35149, SI/NC, Hess, BB-Eide-151-95-3328H-8, Blue Buttes, no production data,
• 35005, 449, Whiting, Larson 44-12-4H, Corinth, t12/18; cum 42K 4/19;
• 34980, 1,107, Whiting, Schilke 24-21-1H, Big Stone, t12/18; cum 82K 4/19;
• 34934, SI/NC, XTO, Darlean 41X-2D, Alkali Creek, no production data,

Active rigs:

$51.78	6/12/2019	06/12/2018	06/12/2017	06/12/2016	06/12/2015
Active Rigs	63	62	53	28	76

RBN Energy: flurry of changes coming to Texas gulf coast gas markets.

When it comes to Texas natural gas markets, the Permian has been getting much of the attention lately, with its rapid supply growth, limited pipeline takeaway capacity and sometimes negative prices. However, a wave of gas infrastructure development just starting to come online along the Texas Gulf Coast is set to steal some of the Permian’s spotlight over the next few months. Two large liquefaction/LNG export facilities are ramping up on the coast, as are the pipeline reversal projects designed to supply them. Also, three announced Permian-to-Gulf-Coast gas pipelines slated for completion over the next 24 months will move supply cross-state to destinations spanning the area from the Houston Ship Channel to the Agua Dulce Hub near Corpus Christi. That’s a lot of change ahead for these key Texas gas markets. Today, we turn our attention downstream of the Permian to the Houston Ship Channel market, including upcoming gas infrastructure expansions and their potential impact on the greater Texas Gulf Coast gas supply and demand balance.

Corpus Christi: to become bigger than Houston with regard to oil exports.