Hurricane Watch -- September 12, 2020

There is so much fake news out there, I can no longer make sense of even some of the most basic "stuff," like hurricanes. From my perspective this has been a most uneventful hurricane season to date, even including "lo-impact, no-impact Laura." But then we get, see second paragraph in note below:

 Link here.

The Atlantic’s 18th storm is coming together off Florida’s eastern coast and will drift west into the oil-rich Gulf of Mexico over the weekend where it could reach nearly hurricane strength before coming ashore.

When the storm’s winds reach 39 miles (63 kilometers) per hour it will likely be named Sally. That would mark the earliest that 18 storms have formed in the Atlantic during a hurricane season, breaking the previous record set by Stan in October 2005, said Phil Klotzbach, lead author of the Colorado State University seasonal hurricane forecast. It is possible a second system in the far eastern Atlantic will be named first.

“The system is forecast to strengthen to near hurricane intensity by early next week as it moves across the northeastern Gulf of Mexico,” Eric Blake, a hurricane forecaster, wrote in his outlook.

In addition to the depression, which has sparked a tropical storm watch in southern Florida, the hurricane center is watching three other potential storms -- one in the Gulf of Mexico and two off the coast of Africa. On top of that, Tropical Storms Paulette and Rene are churning through the central Atlantic. Paulette will likely become a hurricane and could strike Bermuda Monday.

World Series Watch -- September 12, 2020

Assuming we get that far, all 2020 World Series games will be held in Arlington, TX, midway between Dallas and Ft Worth:

Week 37: September 6, 2020 -- September 12, 2020

Best social media quip all week:

• graze it, log it, or, watch it burn

Top story of the week:

• President Trump receives two separate nominations for the Nobel Peace Prize (white privilege); first announcement here (white privilege);

Top international non-energy story:

• AstraZeneca's Covid-19 vaccine trial put on hold;
  
• Sweden defeats coronavirus;

Top international energy story:

• OPEC basket in free fall;
• Existential crisis for the House of Saud; squeezing a cash cow to stay afloat; Vision 2030 (almost) dead; reserves and import requirements; foreign exchange reserves, lower for longer;
• Pemex slashes production forecasts;

Top national non-energy story:

• Denver records earliest ever freeze;
• The fires in California, Oregon, and Washington state

Top national energy story:

• US crude oil imports from Saudi Arabia at all-tie low;
• Low gasoline prices going into Labor Day weekend;

Top North Dakota non-energy story:

Top North Dakota energy story:

Geoff Simon's top North Dakota stories:

• Corps of Engineers starts DAPL review;
• Project Tundra sets up second test well: just south of hte main plant at the Milton R. Young Station;
• Wow, that was fast -- remember that story? the railroad bridge near Beulah destroyed by fire just a week or so ago; the bridge has been replaced and traffic resumed
• thirty-acre greenhouse project to grow tomatoes planned for Spiritwood
• Baker Hughes to sell surface pressure control flow unit to Pelican Energy Partners

Operators:

• NOG announces first acquisition in the Delaware Basin, paying upwards of $30,000/acre;

Operations:

• Whiting reporting nice wells in Pembroke oil field;
• An Oasis Rolfso N well goes over 500K bbls crude oil;

Fracking:

Pipeline:

• "Hot gas" and the Northern Border pipeline; and, here;

Advantaged oil:

Commentary:

• East coast newspapers reporting North Dakota is a hot spot for the coronavirus;

The 2020 Oil Crash’s Unlikely Winner: Saudi Arabia -- Foreign Policy -- May 5, 2020

Link here. Archived here.

This article was published May 5, 2020. This article does not mention the $75 billion in dividend Saudi Aramco must pay Saudi Arabia each year for the next five years.

From the linked article:

It’s a year of carnage for oil nations. But at least one will emerge from the pandemic both economically and geopolitically stronger. 

With 4 billion people around the world under lockdown as the coronavirus pandemic grows, demand for gasoline, jet fuel, and other petroleum products is in freefall, as are oil prices. The price of a barrel of crude has been so low in the United States that sellers recently had to pay people to take it off their hands. As a result, oil-dependent economies are reeling. 

In the United States, the largest oil producer in the world, the number of rigs drilling for oil has plummeted 50 percent in just two months, almost 40 percent of oil and gas producers could be insolvent within the year, and 220,000 oil workers are projected to lose their jobs. 

Around the world, petrostates from Nigeria to Iraq to Kazakhstan are struggling and their currencies tanking. Some, like Venezuela, face an economic and social abyss. 

While 2020 will be remembered as a year of carnage for oil nations, however, at least one will most likely emerge from the pandemic stronger, both economically and geopolitically: Saudi Arabia. 

First, Saudi Arabia is proving that its finances can weather a storm such as this. Low oil prices are, of course, painful for a country that needs around $80 per barrel to balance its public budget, which is why Moody’s cut Saudi Arabia’s financial outlook last Friday. 

Saudi Arabia ran a $9 billion deficit in the first quarter of 2020. Like other nations, the kingdom has also seen tax revenues fall as it imposes economic restrictions to halt the pandemic’s spread. Last week, the Saudi finance minister said that government spending would need to be “cut deeply” and some parts of the kingdom’s Vision 2030 economic diversification plan would be delayed.

Much more at the link, but behind a paywall. 

The article does not mention the amount of money Saudi Arabia must spend each year for imports.  

Since the above article was published in May, 2020, these articles:

• OPEC basket in free fall;
• Existential crisis for the House of Saud; squeezing a cash cow to stay afloat; Vision 2030 (almost) dead; reserves and import requirements; foreign exchange reserves, lower for longer;

How Will Saudi Arabia's Dire Straits Affect Relationship With Pakistan? -- September 11, 2020

The dire financial straits Saudi Arabia finds itself in will have repercussions across the entire Mideast, Pakistan, India, and China. There's a reason "peace" is breaking out among strange bedfellows across the middle East. Are we seeing the beginning of a more overt episode in the clash of civilizations? The clash, of course, is nothing new. Samuel P. Huntington wrote of it years ago. Another book to re-read, What Went Wrong: The Clash Between Islam and Modernity in the Middle East by Bernard Lewis.

From the Hindustan Times:

Foreign minister Shah Mehmood Qureshi crossed the red line last week when he asked OIC to “stop dilly-dallying” and set a deadline for the Saudi-led grouping of 57 Islamic countries [a most interesting phrase

“If you cannot convene it, then I’ll be compelled to ask Prime Minister Imran Khan to call a meeting of the Islamic countries that are ready to stand with us on the issue of Kashmir and support the oppressed Kashmiris,” Shah Mahmood Qureshi told a Pakistani news channel last week. 

The remark did not go down well with the Saudi leadership which had made Pakistan pay back $1 billion two weeks ago, forcing Islamabad to borrow from China instead. 

The Saudis are yet to respond to Pakistan’s request for a $3.2bn oil credit facility, part of a $6.2bn package announced in 2018. 

From Reuters

Remittances from Pakistani workers employed abroad hit the highest level for a single month in July, officials said on Monday, increasing 36.5% year on year, mostly thanks to less spending on Haj pilgrimages because of the coronavirus pandemic.

The global economic slowdown had raised fears that remittances, key to Pakistan’s dwindling foreign exchange reserves, would decline given falling employment in countries from where most of the money is sent - particularly Saudi Arabia and United Arab Emirates.

But July remittances rose to $2.768 billion, the State Bank of Pakistan said, adding the increase was up 12.2% from June, when remittance numbers were also high.

Bottom line: Pakistan has reason to worry.