EIA's Weekly Petroleum Report -- WTI Crosses (Going Up) $78 -- January 5, 2022

Link here. 

• US crude oil in storage decreased by a moderate 2.1 million bbls from the previous week;
• US crude oil in storage now stands at 417.9 million bbls, 8% below the five-year average;
• US crude oil imports averaged 5.9 million bbls per day last week, yawn; decreasing by 0.9 million bbls per day from the previous week;
• over the past four weeks, imports averaged 6.3 million bopd, almost 17% more than the same four-week period last year
• US refiners are operating at 89.8% of their operable capacity, no change
• distillate fuel inventories reported by EIA corroborate API estimates from yesterday reporting an increase of 4.4 million bbls last week -- which is a big deal -- based on other data, it suggests "demand destruction" more than anything else -- high prices;
• distillate inventories are 16% below the five-year average
• total products supplied over the last four-week period averaged 21.4 million bbls/day up by 14% from same period last year;
• jet fuel product supplied was up almost 40% compared to same four-week period last year

At time of release of this report:

• WTI: up 1.35%; up $1.04; trading at $78.03.

EVs -- Commentary -- January 5, 2022

Note: WTI just crossed (going up) $78. Whoo-hoo. 

Updates

Later, 12:36 p.m. CT: what are the three top reasons why folks don't buy pick-up trucks? Answer:

• they are pick-up trucks;
• they are expensive to buy;
• they are expensive to fuel;

New paradigm: why folks are going to love all-electric pick-up trucks:

• they are pick-up trucks;
• they are no more expensive than the current Teslas being sold;
• they are incredibly inexpensive to fuel.

Original Post

I was slow to "coming around" to EVs but slowly I'm starting to get "a feeling" for what's going on or how it plays out.

A disclaimer: for EVs to become mainstream there is still a huge infrastructure build out that will be required, and a recognition that forty percent of Americans live in apartments or rental homes, where individuals have less control over availability of in-home EV charging stations.

EVs can be divided into at least seven categories:

• POVs, non pick-ups: family sedans, SUVs, cross-overs; across all income sectors, including luxury
• POVs, pick-up trucks: farm, ranch, urban cowboys;
• commercial, personal rentals: Hertz, Enterprise, U-Haul;
  
• commercial, last mile: minivans, vans, neighborhood delivery vehicles, US Postal Service
• commercial, pick-ups: construction; landscaping / lawn; pool maintenance;
• commercial trucks, long haul:
• commercial trucks, specialty:

In the POV sector, the big story will be pick-up trucks. 

And that makes sense. I'm used to paying $20 to fill up my little Honda Civic but I see sales of $70 or more when someone fills up their F-350. A lot of those folks pay in cash. These folks are going to love not going to the service station and paying that kind of money. In addition, if the pickup truck is being used for work, less down time for oil changes and routine maintenance. I think EV pick-ups sales are going to be huge, and right now, it appears Ford has the advantage. 

In the commercial truck, specialty sector, I am very, very biased toward Daimler. 

Rental, fleets, neighborhood small business: I don't know how the other sectors play out, but my hunch is that the US government (USPS), Amazon, Hertz, Enterprise, U-Haul will pick winners and losers when it comes to two of the sectors. It's very possible, U-Haul could be the next big commercial company to announce transition to EVs. 

POV cars/SUVs: up for grabs. 

Commercial trucks, long haul ("18-wheelers," "semis"): up for grabs. Daimler might be big in this arena overseas but not so much in the US.

Financial And Economic Notes -- January 5, 2022

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. 

Commentary on EVs: I was slow to "coming around" to EVs but slowly I'm starting to get the feeling there is some clarity here. I guess I will continue this discussion elsewhere.

PFE: shares up 2% in pre-market trading as Biden announces that it has asked Pfizer to double the production of "Covid-19 pills." Jim Cramer advocates US distributing the "Covid-19 pill" free of charge to every American. Okay. Later: just announced. US raises "order" to 20 million from 10 million for the new "Covid pill." BofA analyst suggests the "pill" could raise PFE's current cash horde from $40 billion to $100 billion, or something along that line.

GM: another look at all the excitement yesterday with regard to GM. Link here.

• For the record, GM sales totals show it sold one Hummer EV in the fourth quarter and 25 Bolts for a total EV sales of 26 vehicles. A 2022 theme.
  

Daimler Truck: it looks like we're almost there -- for the new Daimler Truck Group to start trading ADRs on NYSE. From Merrill Lynch this morning:

EPD: Wall Street will be looking for positivity from Enterprise Products Partners as it approaches its next earnings report date. The company is expected to report EPS of $0.55, up 7.84% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $11.31 billion, up 60.54% from the prior-year quarter. Zacks. 

JNJ: quarterly dividend of $1.06 remains unchanged; dates: 2/18/22; 2/22/22; 3/8/22.

Have we jumped the shark? From social media:

Never sure what this means? Link here.

First group "financial / economic" indicators:

• 10-Year Treasury: link here. 1.653%. After small jump this past week, it has stopped rising for at least one day.
  
• DXY: link here. 96.05, down slightly.
  
• Silver: link  here. Continues to rise, now at $23.215.
  
• CBOE volatility index: link here. Up slightly at 17.11.
  

WTI Trending Toward $78; Mexico To Phase Out Crude Oil Exports -- January 5, 2022

ND governor: has eased some driving restrictions for truckers hauling propane. 

US shale: equities jump as demand swells revenue. Rigzone. Link here. 

US shale: Spain's Repsol buys US shale oil and gas assets from Rockdale Marcellus for $222 million. Link here.

Mexico: to phase out crude oil exports over the next two years (2022 - 2023). I knew this was going to be a big story, and that hunch corroborated with blog on the subject from RBN Energy. See below. 

• US oil imports;
• US imports from Mexico;
• about twenty million bbls oil and petroleum products each month; 700,000 bopd
• the total volume is inconsequential; the problem: it's "the kind of oil" the US refiners needs
• US imports from Canada:
• about 130 million bbls oil and petroleum products each month; 4 million bopd
• again, Canadian oil is the "right" kind of oil

US gasoline prices continue to rise.

Huge ADP payrolls report. Good growth; smashed expectations. Dow goes from red to green as news is being reported, but then back to red.

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Back to the Bakken

Active rigs:

$77.49	1/5/2022	01/05/2021	01/05/2020	01/05/2019	01/05/2018
Active Rigs	32	13	55	63	54

Wednesday, January 5, 2022: 4 for the month, 4 for the quarter, 4 for the year

• 26824, conf, Bruin, WM Polar 157-101-25B-36-6B, Otter, nice production

Tuesday, January 4, 2022: 3 for the month, 3 for the quarter, 3 for the year;

• 37900, conf, CLR, JDT Federal 24-10RH, Cedar Hills, small production;
• 37000, conf, CLR, LCU Reckitt Federal 7-22H1, Long Creek, no production data,

RBN Energy: how Mexico's plan to phase out crude oil exports may impact US refineries. Archived.

Mexico’s state-owned Petróleos Mexicanos, the second-largest exporter of crude oil to the U.S. after Canada, said in late December that it will slash its export volumes in 2022 and eliminate them completely in 2023. The plan is premised on Pemex’s expectation that, with increased utilization of the company’s six existing refineries and the impending start-up of a new one, it will need every barrel of the Maya, Isthmus, Olmeca, and other varieties of oil it produces. While at first glance it may seem that Mexico phasing out exports of crude would pose a major challenge to some U.S. refineries, there’s good reason to believe that in reality it won’t. In fact, as we discuss in today’s RBN blog, there may be less to Pemex’s planned export phase-out than meets the eye.

The Answer To That Question -- January 4, 2022

The question: what's a mineral acre in McKenzie County going for these days?

See this post. 

The other day, it was announced that Lime Rock was buying Abraxas' assets in North Dakota. The initial article did not include the number of net mineral acres. 

Now we have all of that, in the update at the link above. 

I also mentioned that in the original post it was not stated how many mineral acres in North Dakota were acquired but I opined that it was unlikely to be more than 10,000. Pretty good for a wild ass guess. It turns out it was only 3,500 acres.

************************
Answer To That Other Question

Is Dean Winters back? If so, what happened? Why was he gone? And, now, why is he back? 

Inquiring minds want to know.

Answer: yes, he's back and there's a story there but I'll let readers have a chance before I give it away.