Weekly EIA Petroleum Report -- Gasoline Imports At A 53-Week High -- August 12, 2020

Updates, see comments:

About the only thing I found surprising was that gasoline imports were at a 53-week high, like we don't already have enough gasoline sloshing around.

Oh, and that reported 300,000 bpd decrease in production; i think it should have been an increase...hope they aren't overreacting to the mistake they made in May...

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Original Post

Link here.

• US crude oil in storage: 514.1 million bbls, about 15% above the already fat five-year average;
• US crude oil in storage decreased by a moderate 4.5 million bbls;
• refiners are operating at 81.0% capacity, pretty much unchanged, but up slightly from last report:
• US imported 5.6 million bopd, down by 389,000 bopd from previous week;
• over the past four weeks, crude oil imports averaged about 5.7 million bpd, 20.4% less than the same four-week period last year;
• total products supplied averaged 18.5 million bpd, down by 14.3% from same period last year
• distillate fuel product supplied averaged 3.6 million bpd over the past four weeks; down by 9.3% from the same period last year
• distillate fuel inventories decreased by 2.3 million bbls, but still an astounding 24% above the already fat five-year average for this time of the year;
• jet fuel supplied was down 45.8% compared with same four-week period last year; about the same as previous report;

Crude oil re-balancing:

Week	Date of Report=	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 76	May 20, 2020	-5.0	526.5
Week 77	May 28, 2020	7.9	534.4
Week 78	June 3, 2020	-2.1	532.3
Week 79	June 10, 2020	5.7	538.1
Week 80	June 17, 2020	1.2	539.3
Week 81	June 24, 2020	1.4	540.7
Week 82	July 1, 2020	-7.2	533.5
Week 83	July 8, 2020	5.7	539.2
Week 84	July 15, 2020	-7.5	531.7
Week 85	July 22, 2020	4.9	536.6
Week 86	July 29, 2020	-10.6	526.0
Week 87	August 5, 2020	-7.4	518.6
Week 88	August 12, 2020	-4.5	514.1

Imports:

Crude Oil Imports
Week (week-over-week)	Date of Report	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%
Week 12	June 3, 2020	6.2	-1.000	-18.300%
Week 13	June 10, 2020	6.4	0.000	-13.300%
Week 14	June 17, 2020	6.6	-0.222	-10.000%
Week 15	June 24, 2020	6.5	-0.102	-11.600%
Week 16	July 1, 2020	6.5	-0.600	-11.300%
Week 17	July 8, 2020	7.4	1.400	-8.500%
Week 18	July 15, 2020	7.5	-1.800	-10.200%
Week 19	July 22, 2020	5.9	0.373	-13.500%
Week 20	July 29, 2020	5.1	-0.800	-13.600%
Week 21	August 5, 2020	6.0	0.900	-18.100%
Week 22	August 12, 2020	5.6	-0.389	-20.400%

Jet fuel:

Jet Fuel Delivered, Change, Four-Week/Four-Week
Week	Date of Report	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%
Week 12	June 3, 2020	-68.70%
Week 13	June 10, 2020	-63.70%
Week 14	June 17, 2020	-62.30%
Week 15	June 24, 2020	-62.50%
Week 16	July 1, 2020	-60.00%
Week 17	July 8, 2020	-57.20%
Week 18	July 15, 2020	-51.90%
Week 19	July 22, 2020	-47.70%
Week 20	July 29, 2020	-42.10%
Week 21	August 5, 2020	-40.90%
Week 22	August 12, 2020	-45.80%

Cross-Country Gasoline Prices -- Nothing About The Bakken -- For The Archives -- August 12, 2020

For the archives, gasoline prices on cross-country trip from Grapevine, TX, to Portland, OR, and then to Flathead Lake, MT, and then return to Grapevine, TX:

Google maps mileage vs actual mileage:

• Grapevine, TX, to Portland, OR: 1,983 miles
• my mileage: 1934 miles
• Portland, OR, to Lakeside, TX: 575 miles
• my mileage: 566 miles
• Lakeside, MT, to Grapevine, TX: 1921 miles via SLC, Albuquerque, Amarillo
• Lakeside, MT, to Grapevine, TX: 1770 miles via Billings, Casper, Denver, Amarillo (bypassing Albuquerque)
• my mileage: 1867 miles (via SLC, Albuquerque)
  

• data points
• location; mileage
• gallons at price/gallon = total paid (numbers often rounded)
• data:
• Grapevine, TX, starting: 0.00
• Roanoake, TX: 43
• 5.0 gallons @$1.88 = $9.37
• Childress, TX: 224.5
• 4.59 @ $1.73 = $7.93
• somewhere in eastern New Mexico, Tucumari: 449
• 6.1@$1.95 = $11.90
• Farmington, NM: 800
• 8.6 @ $2.08 = $17.81
• Green River, UT: 1086
• 6.9 @ $2.40 = $16.45
• Snowville, UT: 1371
• 6.2 @ $2.20 = $13.64
• Baker City, OR: 1726
• 8.4 @ $2.56 = $21.56
• Portland, OR: 1934
• arrival; no gasoline until departure; did not drive car at all while in Portland

 

• data, Portland, OR, to Flathead Lake, MT:
• Portland, OR, starting: 0.00 
• 8.2 @ $2.86 = $23.45
• Ritzville, OR: 278
• 6.6 @ $2.66 = $17.49
• St Regis, MT: 464
• 4.6 @ $2.40 = $11.00
• Lakeside, MT: 566
• arrival: no gasoline until departure; minimal driving while at Lakeside

 

• data, Flathead Lake, MT, return to Grapevine, TX:
• Lakeside, MT: 0.00
• Polson, MT: 44.5
• 4.4 @ $2.26 = $9.98
• Dubois, ID (north of Idaho Falls): 375
• 8.2 @ $2.86 = $23.45
• Tremonton, UT: 562
• 5.2 @ $2.50 = $13.04
• Moab, UT: 871
• 6.7 @ $2.40 = $16.12
• Aztec, NM: 1071
• 4.74 @ $2.08 = $9.86
• Tucamari, NM: 1417
• 8.2 @ $2.05 = $16.72
• somewhere in north Texas, north of DFW: 1611
• 5.2 @ $1.99 = $10.44
• Grapevine, TX: 1867
• 6.6 @ $1.67 = $11.04

Notes From All Over -- Pre-Market Edition -- August 12, 2020

JULY CPI:

• up 0.6%; double expectations:
• excluding energy, food: up 0.6%
• energy: up 2%, month-over-month:
• y/y, a whopping 1.6% (I might be wrong on this);
• will be interesting to see how market reacts:
• something called "output gap" suggests inflation will NOT be a problem: the Fed is watching that metric
• before the announcement:
• Dow: up 254 points
• NASDAQ: up 88 points
• S&P 500: up 24 points (maintains that 10 - 1 ratio between Dow and S&P 500)
• fifteen minutes after the CPI numbers released, 8:00 a.m. CDT:
• Dow: up 312 points
  
• NASDAQ: up 69 points
• S&P 500: up 26 points (maintains that 10 - 1 ratio between Dow and S&P 500)

Covid-19:

• for investors, an interesting take from Jim Cramer:
• Russia took different direction than US:
• vaccine vs anti-virals; prevention vs treatment;
• Russia focused on vaccine: US focused on both (treatment and prevention);
• think about this:
• target population for vaccine: healthy volunteers;
• target population for anti-viral drugs: sick individuals; some of  them fighting for their lives;
• this is not rocket science

Politics:

• Ill-hand Omar wins Democratic primary in Minnesota; Teflon-candidate; okay to marry one's brother to get US citizenship;
• Trump surprised -- but thrilled -- Biden's VP choice;
• I agree that Harris was a great pick; will knock-out Pence in the debate; but at end-of-the day: this race is Trump vs Biden
• as much as the rest of us don't like her, if Biden wins, it's going to be tough to determine the biggest reason: anti-Trumpers/never-Trumpers or Kamala Harris -- I'm starting to think that the latter is more important than people think -- folks know she will be president if Biden wins; people forget she was huge proponent of law enforcement at one time; hits her peak just as Americans warming to minority female for president
• biggest mistake Elizabeth Warren made: said she was 1/1024th native American; she should have found some African DNA in her blood test;  
• who will decide the outcome (assuming a "legal" election): suburban moms with school-age children; Trump wants to open schools; Biden-Harris, unclear on this issue at this point;
• video to watch: Kamala Harris on Stephen Colbert (link pending) -- not sure which one folks are talking about; 
• recommendation to RNC: put Harris on defensive immediately; start airing videos of DNC presidential debates and her post-debate interviews
• the fact that Biden delayed announcement one week (maybe 10 days) suggest he really had to be convinced to pick Harris as his running mate;
  

Sumner Redstone dead at 97 years of age;

• started with a family-owned drive-in theater
• in dog-years: 14 years of age

Market, futures:

• Dow: up 254 points
• NASDAQ: up 88 points
• S&P 500: up 24 points (maintains that 10 - 1 ratio between Dow and S&P 500)
• AAPL: up $5, up 1.22%
• TSLA: surges; up almost $100; up almost 7%
• UNP: on a tear; now up almost a percent; up $1.65; trading at $192
• T: up a bit; has been flat for decades but pays 7%; dividend safe for now
• XLNX: up almost 1%; well off its 52-week high, but what the heck;
• PSX: up almost 2%; up $1.14; trading at $65.25
• PFE: in a trading zone; watch this one; it will move fast; currently up 0.7%;
• BK: no futures trading yet
• MCD: after bad press this week, recovering nicely; ticker symbol should be "MAC"; whatever happened to Ronald McDonald as spokesperson?
• pipelines:
• ENB: not trading yet
• KMI: up almost a percent
• OKE: surging; up 3%; up almost a dollar;
• EPD: up almost a percent; pays 9.79%; ya gotta love it;
• links of importance for those who follow dividends:
• dividend history;
• market chameleon;
• QCOM: after a move up yesterday, up another 1.5% today; up $1.62;
  
• As much as folks criticize Warren Buffett for his investing style, at least recently, it looks like he is the turtle in the hare/turtle race; all the buzz yesterday on CNBC was the banks; millennials like Wells Fargo;

Best tour I've ever done: the George W. Bush presidential library in north Texas.

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Millennial / iGen Working Together

Son-in-law Tim and one of two grandson twins putting up new swing set.

Nine Wells Coming Off Confidential List -- August 12, 2020

Huge day for stories: see this early morning note. 

OPEC basket, link here: $45.21. Saudi desperately needs $100-oil if it's going to maintain that $75-billion dividend for the next five years; and no one is projecting oil to go over  $50 in the next five years; this will be fascinating to watch.

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Back to the Bakken

Active rigs:

$42.19	8/12/2020	08/12/2019	08/12/2018	08/12/2017	08/12/2016
Active Rigs	12	61	60	57	3

Nine wells coming off confidential list -- Wednesday, August 12, 2020: 40 for the month; 111 for the quarter, 557 for the year:

• 36981, drl/TAI, CLR, LCU Truman 7-23H, Long Creek, no production data,
  
• 36744, drl/NC, XTO, FBIR Lawrence 24X-26A, Heart Butte, no production data,
  
• 36421, SI/A, Zavanna, Panther 16-21 2TFH, Stony Creek, t--; cum 107K 6/20; did not shut down during 5/20;
  
• 36350, drl/A, Hess, EN-Thompson Trust-154-94-1930H-5, Alkali Creek, t--; cum 117K 6/20; did not shut down during 5/20; a 31K month;
  
• 36159, drl/A, Hess, GO-Hauge-156-97-2116H-3, Dollar Joe, t--; cum 84K 6/20; shut in, 6/20; did not shut in during 5/20;
  
• 35721, SI/A, Oasis, A. Johnson 5298 11-1 4B, Banks, t--; cum 121K 6/20; was not shut in; a 30K month;
  
• 35600, SI/NC, Enerplus, Alto 149-94-33C-28H-TF, Eagle Nest, t--; cum 124K 6/20; did not shut down; however, only 24 days in 6/20; a 28K month;
  
• 35599, SI/NC, Enerplus, Haze 149-94-33C-28H-TF, Eagle Nest, t--; cum 141K 6/20; did not shut down; 29 days in 6/20; a 34K month;
  
• 35598, SI/NC, Enerplus, Vapor 149-94-33C-28H-TF, Eagle Nest, t--; cum 93K 6/20; did not shut down, but only 10 days in 6/20; a 33K month;
  

RBN Energy: Canada's overseas propane exports come at the expense of the US, part 3.

Canada’s propane market has quickly morphed from one characterized by abundant supply to one facing a tightening supply/demand balance, with direct exports to Asia playing an increasingly important role. This tension became evident in May 2019, when the start-up of the Ridley Island Propane Export Terminal (RIPET) in British Columbia, Canada’s first direct export connection for propane to Asian markets, effectively eliminated the usual seasonal surplus for propane in Western Canada. With rail exports of propane to the U.S. often reliant on that excess for restocking in the summer months and as a reliable fallback supply in the cold winter months, the prospect of fewer or no periods of excess supply may be signalling trouble for some U.S. regions that have come to rely on those volumes. What’s more, within a few months, another propane export terminal in BC will be starting up, further reducing what’s left for the U.S. market. In today’s blog, we conclude our series examining the Western Canadian propane market by considering the impacts of Canada-to-Asia propane sales on U.S. propane consumers and propane prices.

The Canadian propane market is transitioning into an all-new era. We don’t just mean changes wrought this year by wild oil price swings, producer spending cutbacks, and the unpredictable demand landscape generated by COVID-19 disruptions – although these have been important. The new era started to emerge in mid-2019 with demand and exports having caught up to and more frequently surpassing available supplies. The result has been a rapid tightening of a market once thought to be grossly oversupplied outside of higher demand winter heating needs.

We started exploring Western Canada’s propane market in Part 1 of this series, where we delved into the changes brought about by the start-up of AltaGas and Vopak’s jointly owned, 50-Mb/d RIPET facility 15 months ago. RIPET is Canada’s first propane export terminal providing direct access to Asian markets from its own shores and it reached its export capacity within a month of opening. It joined the only other propane export terminal operating on the West Coast, the Petrogas-owned terminal in Ferndale, WA, which sends out propane that is railed in from Western Canada and other sources.

Notes From All Over -- Early Morning Edition -- August 12, 2020

Another incredibly busy day; several must-read stories popped up overnight.

Markets: could hit new all-time highs today.

Flaring:

• best story all day; 
• may be behind paywall, but somehow it showed up on my iPad (by the way, that happens a lot: stores that should be behind a paywall are behind a paywall on my laptop, but show up on my iPad); again, if one googles the headline, it seems one can get past the paywall; discussed this years ago;
• fall in US gas flaring gives cause for optimism: look who is posting that story, of all things, a Euro-based publication: Financial Times;
• global gas flaring hit its highest level in a decade last year; large part due to shale;
• but more recent data: in the past twelve months, gas flaring in the US actually declined by 70 percent (a nice round number, interestingly); numbers provided by the Earth Observation Group at the Payne Institute for Public Policy (EOG-PIPP);
• decline not driven by policy, Covid-19, or suddenly improved operations
• driven by investors demanding greater capital discipline from a sector known for exuberant spending
• better operators will survive the current demand-destruction environment; better operators better at managing their resources, including flaring
• well completions:
• August, 2019: peaked at 1,425 wells
• May, 2020: just 461 wells were completed
• finally, the FT recognizes the important of "completion" of wells, not simply number of rigs, or number of wells drilled: "completing, as its name suggests, is one of the last steps in monetising a well -- thus a strong driver for companies to maintain, even as they reduce spending" -- wow -- such an insight -- we've been discussing that for years:
• completions: also the most expensive step (now; it wasn't always that way) -- completions comprise up to 70 percent of well costs for onshore basins;
• summary: drop in flaring due to drop in completions
• basins cited: the Permian in Texas and the Bakken in North Dakota;
• much more at the site if you can get to it;

Housing market:

• mortgage applications jumped 7%
• every type: 30-year; 15-year; jumbo
• rates rising
• supply issue: huge demand; limited supply; prices rising;
  

Cable ratings:

• Fox News leads the pack in prime time -- NY Times; I expected this one to be behind a paywall, but it is not not, at least for now
• Fox News ratings surge, leading 'Primetime Pack" despite boycotts, as CNN, MSNBC lag -- ZeroHedge;

Economy:

• Waffle House is back; re-opened; almost back to full capacity -- Fox News: less than 20 Waffle House restaurants remain closed;
• NYC: in deep doo-doo; wealthy residents fleeing; in droves; in addition to everything else, folks now working from home -- in Connecticut, in New Jersey, upstate, Long Island
  

Oil:

• API yesterday:
• forecast: a "modest" draw of 2.875 million bbls; again, the false precision
• actual: a "considerable" draw of 8.587 million bbls;
• distiallate: down by 2.949 million bbls compared to last week's 3.824-million-barrel build
• so, we wait for today's EIA data
• WTI right now: 42.32, up 1.7%;

DAPL:

• I've lost interest in this story; what will be, will be; however, I can't pass up a link to S&P Global Platts: jumping the shark -- DAPL proponents cite risk of famine, floods, fires, and fatalities;

Wuhan flu:

• why it may affect children less -- ZeroHedge: 

This new study detailed in the Journal of the American Medical Association (JAMA) on May 20, discovered that the angiotensin-converting enzyme 2 (ACE2), which grows in abundance as the individual grows, might be the reason that less than two percent of all individuals infected with SARS-CoV-2 - the virus that causes the COVID-19 disease - are children.

• like the US space program in the 1960s, the medical response to Covid-19 will have huge positive spin-offs for entire US health industry: research; diagnosis; treatment; public policy; etc; 
• this is a big, big deal;
  
• millennial "attitude" vs the attitude of baby boomers
  

Disclaimer: this is not an investment site.  Do not make any investment, financial, job, career, travel, or relationship decisions based on what you read here or think you may have read here. 

Market:

• on "record-watch" -- missed new records yesterday but could see them today;
• Moderna surges: Trump announces US government will buy 100 million doses at $15.25/dose;
• comment: keep your eye on Pfizer
• more and more talk about this "strange recession"; the buzz is changing and it's changing quickly;
• keep your eye on OXY-WT;
• huge splits coming -- both on August 31, 2020: AAPL (4-1) and TSLA (5-1); 
• TSLA can turn on a dime; made announcement much later than Apple; and will execute the split on the same day as AAP, and do one better (5 -1 vs 4 - 1) 
• every so often I get very, very excited about the market; this is one of those times; it appears that regardless of the election outcome, the market is going to do very, very well;
  

Biggest fumble:

• Big 10, Pac-12 both kill 2020-2021 season; was a risk management decision;
• not sure what the other three Power 5 conferences will do;
• looks like ACC will stay open in a "hybrid" model
• understands risks of no supervision vs 100% supervision 
• no "supervision" for six months will result in huge amount of risky behavior
• one must remember the structure that college sports provides, and one can argue that the majority of college athletes come from backgrounds where they have not had structure, no mentors, no role models, etc.
• Kash-&-Kari will support this decision by the Pac-12 and Big 10; University of Minnesota is part of the Big 10
  
• when this is all over and folks look back on this five years from now, this will be viewed as huge mistake (to shut down college sports); huge, huge mistake;
  
• biggest argument: with a full football season, the tens of thousands of football players would have been monitored daily and very, very, closely; now, 10's of thousands of young (mostly black) men will be going out to bars in droves -- at least that's the risks
• what are tens of thousands of young, hyper-sexed men going to do for six months? this is going to be a huge story before it's all over
• if I can find the source, I will link it: the number of young, black men that are going to be affected;
  
• keep eyes on Sturgis Rally to see if 250,000 rallies (well above college football game attendance) affect change in growth rate of Covid-19-related hospitalizations (not cases)
• I don't have a dog in this fight; I don't even care to watch NCAA football any more, not even the bowl games -- all 640 of them;
  

Politics:

• the market can accept Democratic administration, but not a full sweep -- talking head; I agree;

Bad public policy:

• eating less meat;
• meat: huge source of zinc
• zinc: critical for immune system
• zinc: not stored in body; daily requirements needed
• where does Kamala Harris stand on meat? eat less meat -- although in her defense, it sounds like she is simply being politically correct and couldn't care less one way or the other; she will simply do what the lobbyists and those who surround her tell her to do
  

Lego:

• surging in my household; LOL