Thursday, May 28, 2020

SUV Sales Exceed 40% Of Global Car Sales -- First Time -- May 28, 2020

In the early 1990s I attended Air War College, the senior service school of the USAF. I remember one lecture in particular. A retired multi-star general officer opined that within 20 years there would no longer be any internal combustion engines. Twenty years from that lecture was 2014 -- and, you know -- in the big scheme of things he was more right than wrong. Well, that's not quite right. He became part of the mainstream thinking that ICE were on the endangered species list. But it looks like they were all wrong.

See the KPMG paper linked yesterday, and then, now this:


Sure, SUVs could be EVs but they aren't (for the most part).

Wow, I had to look at that again -- 40%. That is not trivial, by any stretch of the imagination. At the link, the IEA report is very, very long; use "SUV" search to find the note.

Other links:
From wiki:
The CAFE achieved by a given fleet of vehicles in a given model year is the production-weighted harmonic mean fuel economy, expressed in miles per US gallon, of a manufacturer's fleet of current model year passenger cars or light trucks with a gross vehicle weight rating (GVWR) of 8,500 pounds (3,856 kg) or less (but also including medium-duty passenger vehicles, such as large sport-utility vehicles and passenger vans, with GVWR up to 10,000 pounds), produced for sale in the United States.
The CAFE standards in a given model year define the CAFE levels that manufacturers' fleets are required to meet in that model year, specific levels depending on the characteristics and mix of vehicles produced by each manufacturer. If the average fuel economy of a manufacturer's annual fleet of vehicle production falls below the applicable requirement, the manufacturer must either apply sufficient CAFE credits to cover the shortfall or pay a penalty, currently $5.50 per 0.1 mpg under the standard, multiplied by the manufacturer's total production for the U.S. domestic market.
Congress established both of these provisions explicitly in EPCA, as amended in 2007 by EISA. In addition, a Gas Guzzler Tax is levied on individual passenger car models (but not trucks, vans, minivans, or SUVs) that get less than 22.5 miles per US gallon (10.5 l/100 km).

I'm Thinking Of Taking The Day Off -- If So, I Will Update The Bakken Later This Afternoon -- Early Evening -- May 28, 2020

EIA, weekly petroleum report, link here:
  • US crude oil inventories increased by a whopping 7.9 million bbls; consistent with yesterday's API data;
  • US crude oil inventories now stand at 534.4 million bbls, about 13% above the already-fat five-year average for this time of the year
  • and, look at this: imported surged -- up 2.0 million bbls per day from the previous week -- that's the equivalent of one VLCC unloading every day on the west coast
  • even so, imports averaged about 16.5% less than the same four-week period last year, but that's going to change if the current trend continues; currently, imports are averaging about 6 million bpd;
  • US refiners are operating at 71.3% capacity -- a bit higher than last week
  • jet fuel supplied remains down about 70% compared with same four-week period last year
Thank goodness for the transparency of the internet. Despite all the political posturing, hand-wringing, and bragging about America's energy independence, with a glut of US oil, not only did US oil imports increase, they surged, and went from "negative" to extremely positive.

Despite all this, WTI and Brent slumped slightly, about 2/3rds of a percent; OPEC basket slumped 2.4%, suggesting that traders know that Saudi still has a boatload (pun intended) of VLCCs and ULCCs offshore China and the US.

Most troubling -- crude oil imports -- daily, huge swing in delta, and four week percentage change:
Crude Oil Imports




Week (week-over-week)
Week Ending
Raw Data, millions of bbls
Change (millions of bbls)
Four-week period comparison
Week 0
March 11, 2029
6.4
0.174

Week 1
March 18, 2020
6.5
0.127

Week 2
March 25, 2020
6.1
-0.422

Week 3
April 1, 2020
6.0
-0.070

Week 4
April 8, 2020
5.9
-0.173

Week 5
April 15, 2020
5.7
-0.194

Week 6
April 22, 2020
5.6
-0.700

Week 7
April 29, 2020
5.3
0.365
-19.700%
Week 8
May 6, 2020
5.7
0.410

Week 9
May 13, 2020
5.4
-0.321
-26.100%
Week 10
May 20, 2020
5.2
-0.194

Week 11
May 28, 2020
7.2
2.000
-16.400%


And then look where the imports are coming from, and with one exception increased across the board (Brazil was the exception). If I did the math correctly:
  • Saudi Arabian oil imports: increased by almost 250%
  • Iraqi oil imports: increased by almost 220%
  • Mexican oil imports: increased by 23%
  • Canada oil imports: increased by 11%


If the numbers aren't enough to get your attention, maybe the graph will. Saudi crude oil imports (into the US):



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 71
April 8, 2020
15.2
484.4
Week 72
April 15, 2020
19.2
503.6
Week 72
April 22, 2020
15.0
518.6
Week 73
April 29, 2020
9.0
527.6
Week 74
May 6, 2020
4.6
532.2
Week 75
May 13, 2020
-0.7
531.5
Week 76
May 20, 2020
-5.0
526.5
Week 77
May 28, 2020
7.9
534.4

Jet fuel delivered:
Jet Fuel Delivered, Change, Four-Week/Four-Week


Week
Week Ending
Change
Week 0
3/7/2020
-12.80%
Week 1
3/14/2020
-12.60%
Week 2
3/21/2020
-8.90%
Week 3
3/28/2020
-16.40%
Week 4
4/4/2020
-0.22%
Week 5
4/11/2020
-39.70%
Week 6
4/18/2020
-53.60%
Week 7
4/24/2020
-61.60%
Week 8
5/1/2020
-66.60%
Week 9
5/8/2020
-68.50%
Week 10
5/15/2020
-67.90%
Week 11
May 22, 2020
-66.60%

*********************** 
US Weekly Crude Oil Supply In Days

Link here: dropped slightly, from 42.0 days to 41.3 days. I love the false precision. It's fairly easy to measure the amount of crude oil in storage -- at least, the source of the data should be relatively consistent. However, demand is, at best, an educated guess.

A Vern Whitten Photography Coffee-Table Book -- May 28, 2020

I may post this a couple of times so it doesn't get lost in all other news. In addition, I will add a link at the sidebar at the right.

This is really, really cool.

Vern Whitten Photography is publishing a "coffee-table book" book. Virtually.

The first two pages have already been posted here and elsewhere.

The best news: the photos and text will be maintained at the Vern Whitten Photography website and you can order prints.

It is interesting: as much as I enjoy storing my photos on-line and posting them on the blog, I love hard-copy enlargements. I place enlargements in documents protectors and then into a binder as a journal of sorts. They end up being "coffee-table" binders and visitors (including Sophia) love poring through them. Somehow, the tactile experience and getting away from the mobile device is very, very inviting.

In addition, the best of the best, and those that stir memories and emotions, are framed and hung. My experience visiting the great art museums in Paris (many, many times when stationed overseas) resulted in my love to hang art and photos in the house. I don't care for empty walls. 

As I get new photos from Mr Whitten, they will be posted on the blog and a reminder of the link at the side bar at the right.

Again, here was the first photo which most reminds me of my brother who we lost several years ago.  In fact, if one puts the first two photos Vern sent me, they tell a complete story about my brother. I may post that later.

First, the Vern Whittin Photography site and the coffee-table book.



Contact:

Economic Numbers -- May 28, 2020

GDP, link here:
  • 1Q20
  • prior: -4.8%
  • forecast: -4.8%
  • actual: -5.0%
  • real consumer spending: -6.8%
  • price index, q/q: 1.4%
Jobless claims, link here:
  • prior: 2.438 million
  • revised: 2.446 million
  • consensus: 2.1 million
  • actual: 2.123 million
Off the net for awhile -- Uber-granddaughter driving.

Market:
  • Dow futures: up 163 points
  • S&P futures: up 3.25 points
  • NASDAQ futures: down 95 points
Business headlines:
  • the Hertz story keeps getting worse 
  • AAPL: down a bit in pre-market trading
Disclaimer: this is not an investment site.  Do not make any investment, financial, career, travel, job, or relationship decisions based on what you read here or think you may have read here.

Love him or hate him, he does cut through the fog:

**********************************
Another Sophia Story
I don't know if you know that you can subscribe to "channels" on YouTube. I never subscribe, of course.

Tonight, when we were driving from our apartment to her house, Sophia nonchalantly asked me what "Subscribe" means on YouTube.

Either she sounded out that word herself or someone read it to her somewhere. I certainly did not read "Subscribe" to her on videos on YouTube. I never even thought to mention them to her.

It was difficult for me to describe but I asked her what she does when she sees the "Subscribe" button.

She says she just clicks on it and moves on. LOL.

I wonder how many YouTube "channels" I'm subscribed to. LOL.

NDARC: Trending Toward Less Than Ten -- May 28, 2020

Americans  traveling again? Rigzone reports remarkable surge in traveling over Memorial Day weekend. Air travel data supports: a reader sent this screenshot from yesterday's Dallas Morning News: 

Wuhan flu: Minneapolis mayor asking protestors to maintain social distancing. It will be interesting to see if there is a surge of new cases in Minnesota two weeks from now. My hunch: no. Looters are wearing masks as recommended by the mayor, CDC.

Cuts: Russia, OPEC discussing extension of crude oil production cuts after July 1, 2020. Link over at Reuters. Many story lines in this one. Apparently:
  • OPEC (i.e., Saudi Arabia) wants to extend production cuts, perhaps through end of 2020;
  • Russia: not yet on board with further extension; in fact, may ease production cuts after July 1, 2020
  • Comments:
    • is it simply possible Russia and Saudi Arabia see differently on supply / demand after July 1, 2020?
    • is this an opportunity for Russia to gain further leverage in the region? 
    • it was my understanding that Russia and Iraq were moving closer together on energy issues; if Russia wants to increase production, this won't help their "alliance" with Iraq;
    • does Russia see a twofer: strangling US shale as well as strangling Saudi Arabia?

OPEC basket: $29.75.
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Back to the Bakken

Active rigs:


$32.825/28/202005/28/201905/28/201805/28/201705/28/2016
Active Rigs1164655029

One well coming off confidential list today  -- Thursday, May 28 2020: 90 for the month; 140 for the quarter, 367 for the year:
  • 36209, drl/drl, XTO, FBIR Baker 34X-25H, 
RBN Energy: Corpus Christi's newest crude export terminals. Article archived here.
Through the second half of the 2010s, the Permian Basin’s crude oil supply trajectory was clear: up, up and up. From the start of 2015 to the end of last year, crude production in the world’s leading shale play increased by an amazing 3 MMb/d, from 1.7 MMb/d to 4.7 MMb/d. Three new pipelines with a combined capacity of more than 2 MMb/d were built to move a lot of those incremental barrels to Corpus Christi, which — thanks in part to newly developed storage and docks — has become the U.S.’s #1 port for crude exports in recent months. But Permian producers have trimmed their crude output by at least several hundred thousand barrels a day this spring in response to falling demand and low prices. Has the Permian been thrown off course, and if it has, what would that mean for marine terminals in Corpus? Today, we continue our series of Gulf Coast crude export facilities with a look at the three newest terminals along the Corpus Christi Ship Channel.