Expecting 350,000. Actual: 339,000.
Huge drop in claims: down 16,000.
Four-week moving average: down 4,500 to 357,500 .
Continuing claims: 3.0 million vs 3.093 million last week.
Thursday, April 25, 2013
Wednesday Morning Links
Active rigs: 187 (steady)
RBN Energy: update on the three refinery projects under consideration in North Dakota. One is under construction. I doubt the second will get very far. And the third has gotten most (all?) the permits required, but not the funding. To some extent, it's a sad commentary on the United States that these three refineries even make national news, as inconsequential as they are in the big (national) scheme of things. These are the first refineries, as small as they are, to be built in the contiguous US since 1977.
The takeaway from this article:
[RBN Energy: it should be noted that it is not the price of crude oil that will determine the success/failure of these ND refineries, but rather the margins. From RBN:
Section D (Personal Journal):
Section C ( Money & Investing):
Apple and iBonds. A lot of story lines.
Section B (Marketing):
Section A:
When bad ideas go worse: senators seek way to ease FAA cuts. The question was raised by Southwest Airlines. For all those fees passengers pay, why was the FAA even caught up in this? Why isn't the FAA financed completely by the airline industry, commercial and private. Something doesn't ring true here. On another note, they got a 25% increase n budget and yet a 2% cut causes nationwide problems? Again, something doesn't ring true.
RBN Energy: update on the three refinery projects under consideration in North Dakota. One is under construction. I doubt the second will get very far. And the third has gotten most (all?) the permits required, but not the funding. To some extent, it's a sad commentary on the United States that these three refineries even make national news, as inconsequential as they are in the big (national) scheme of things. These are the first refineries, as small as they are, to be built in the contiguous US since 1977.
The takeaway from this article:
Nevertheless the challenge for refiners is that good times don’t always last for 20-30 years and that is typically how long it takes to get to payback on a new refinery investment.Why is this the takeaway? MDU is betting that the Bakken will be around for a long time.
[RBN Energy: it should be noted that it is not the price of crude oil that will determine the success/failure of these ND refineries, but rather the margins. From RBN:
For a refinery to pay out it needs more than a reliable, reasonably priced crude supply. It needs petroleum product prices to be high enough above crude prices to support the refinery margins.]
WSJ Links
Section D (Personal Journal):
Section C ( Money & Investing):
Apple and iBonds. A lot of story lines.
Section B (Marketing):
Section A:
When bad ideas go worse: senators seek way to ease FAA cuts. The question was raised by Southwest Airlines. For all those fees passengers pay, why was the FAA even caught up in this? Why isn't the FAA financed completely by the airline industry, commercial and private. Something doesn't ring true here. On another note, they got a 25% increase n budget and yet a 2% cut causes nationwide problems? Again, something doesn't ring true.
The public's going to be furious when they find out that this could have been prevented," said Sen. Dan Coats (R., Ind.), who supports the bipartisan proposal to give the Department of Transportation more flexibility in dealing with the FAA cuts. The aviation agency has said it can't avoid furloughs in the course of complying with the mandated budget cuts.Global warming: too much rain --> flooding in the Midwest, south of Chicago.
Rains totaling more than 8 inches in the past week are causing rivers from Grand Rapids, Mich., to St. Louis to reach flood levels and putting communities along much of the Mississippi River on alert. The Des Plaines River, with a typical flood stage of 5 feet, swelled to 10.9 feet in Des Plaines, Ill., breaking a record from 1986. The wet spell is helping to reverse drought conditions across much of the corn belt, but keeping farmers from planting their next crops.
"The flood situations seem to drag on for so long. The rivers take a long time to come down, and that's the frustrating thing," said meteorologist Jim Keeney of the National Weather Service.Oh, this is nice. Ancient Aleppo minaret destroyed. Idiots. I guess Allah willed it. After the Boston Marathon bombings, I really don't care what these folks do to themselves.
The minaret of a landmark 12th-century mosque in the northern Syrian city of Aleppo was destroyed Wednesday, leaving the once-soaring stone tower a pile of rubble and twisted metal scattered in the tiled courtyard.
President Bashar al-Assad's regime and antigovernment activists traded blame for the destruction to the Umayyad Mosque, which occurred in the heart Aleppo's walled Old City, a Unesco World Heritage site.
It was the second time in just over a week that a historic Sunni mosque in Syria has been seriously damaged. Mosques served as a launching pad for antigovernment protests in the early days of the country's two-year-old uprising, and many have been targeted.Speaking of which, Iraq continues to slide into chaos. I wonder if Iraq can wait for the next US president to help, of if Mr Obama will have to get involved?
Wednesday, April 24, 2013
Gasoline Stocks Plummet -- Platts, Rigzone
Updates
April 25, 2013, 7:26: CNBC will have a segment on rising oil prices. CEO of Gulf Oil: price for gasoline will continue to go down; winter grade to summer grade switch. Not a demand-led drop; clearing out winter-grade stock to make room for summer-grade stock. Demand is down 2%. Production is strong. Gasoline prices could go below $3/gallon by Labor Day. Industry looking for relief from Jones Act (adds 10 to 15 cents/gallon). Industry looking for relaxation on states' red tape hindering CNG and LNG stations. Administration's attitude toward the industry: fundamental dislike of oil and gas industry; fundamental lack of understanding of commodity trading. Keystone XL would eventually drop price of gasoline by about 30 cents/gallon.
Original Post
Rigzone is reporting: Oil futures shot to their highest price in almost two weeks Wednesday, after a closely watched report said gasoline demand rose to its highest level in more than five months.
The weekly report from the Energy Information Administration also showed oil stockpiles last week rose less than expected, while gasoline inventories fell sharply.
"We're in positive territory" year over year, said Gareth Lewis-Davies, analyst at BNP Paribas. "This is not typical of what we've seen."
Analysts expect gasoline demand to continue rising in the coming months as the summer driving season kicks in. That should trigger an increased need of crude oil from refiners. European refiners are also expected to exit a period of prolonged maintenance in the coming weeks that could contribute to demand.No explanation how oil supplies rise, but gasoline supplies plummet.
Platts is reporting:
U.S. gasoline inventories plunged 3.93 million barrels during the week ended April 19 to 217.8 million barrels, the lowest level since the week ended December 7, according to data just released by the U.S. Energy Information Administration (EIA) Wednesday. Analysts polled by Platts on Monday had expected a 700,000-barrel decline in U.S. gasoline inventories.I've commented often on deltas between analysts' expectations/estimates and actual results, but this really defies ... I don't know what it defies, but it must defy something. A 700K decline is quite different than a 4 million-barrel decline. Wow.
The drop in inventories came amid a sharp jump in implied demand for the fuel, which rose 366,000 barrels per day (b/d) to 8.750 million b/d, even as production ticked upward by 93,000 b/d to 8.995 million b/d.
Oil stocks increased; see linked article.
How does one explain increased oil stocks, but plummeting gasoline stocks? Wrong kind of oil (heavy vs light) in the pipeline for refineries.
Bakken Well Costs
From the Hess 1Q13 earnings transcript:
I recall many discussions over the past two years that a long lateral at $10 million was about the same as a short lateral for $5 million. So, when I see the Hess 1Q13 quote of $8.6 million per well in 2013, I find it quite interesting. Mike Filloon recently said that well costs were coming down faster than folks generally realized.
Well cost for the first quarter averaged $8.6 million per well, down 36% from $13.4 million per well in the first quarter of 2012 and down from $9 million per well in the fourth quarter of 2013.Not trivial.
***************************
Back on January 24, 2010:This may or may not be important in the future as a trend (cost and time to drill a horizontal Bakken well), but I don't want to lose the link. If you scroll to the top of that link, Slawson reports that it has put in a horizontal well in 16 days and for less than $3 million. The rule of thumb for a horizontal well in North Dakota: 30 days (it used to be 45 days) and $4 - 6 million.I believe wells in 2010 were generally short laterals.
I recall many discussions over the past two years that a long lateral at $10 million was about the same as a short lateral for $5 million. So, when I see the Hess 1Q13 quote of $8.6 million per well in 2013, I find it quite interesting. Mike Filloon recently said that well costs were coming down faster than folks generally realized.
For Investors Only: Tomorrow Morning, Before Market Open: Carbo Ceramics (90 cents) Reports
... and COP ($1.39) ....
... and XOM ($2.04) ....
.... and NBL ($1.19) ....
UPS ($1.01) will be the big story on CNBC.
All the above will be reporting before market open.
KEG (Key Energy Services, 4 cents) will report after market close.
This list is provided by Yahoo Earnings Calendar which has been known to have errors.
Noble Energy beats by $0.23, beats on revs: Reports Q1 (Mar) earnings of $1.48 per share, $0.23 better than the Capital IQ Consensus Estimate of $1.25; revenues rose 5.1% year/year to $1.14 bln vs the $1.09 bln consensus.
CARBO Ceramics misses by $0.14, misses on revs (CRR): Reports Q1 (Mar) earnings of $0.76 per share, $0.14 worse than the Capital IQ Consensus Estimate of $0.90; revenues fell 9.5% year/year to $147.7 mln vs the $153.36 mln consensus.
UPS beats by $0.02, reports revs in-line; reaffirms FY13 EPS guidance: Reports Q1 (Mar) adj. earnings of $1.04 per share, $0.02 better than the Capital IQ Consensus Estimate of $1.02; revenues rose 2.3% year/year to $13.43 bln vs the $13.43 bln consensus. The quarter benefited from a stronger than expected post-holiday season in January as UPS e-commerce solutions resonated with customers. In the U.S. Domestic segment, daily package volume grew 4.4% and operating profit improved 9%.
Occidental Petro beats by $0.14, misses on revs: Reports Q1 (Mar) earnings of $1.69 per share, $0.14 better than the Capital IQ Consensus Estimate of $1.55; revenues fell 6.3% year/year to $5.87 bln vs the $6.47 bln consensus. Our Q1 domestic production of 478,000 barrels of oil equivalent per day, of which 342,000 barrels per day were liquids, set a record for the tenth consecutive quarter. Our total company production of 763,000 barrels of oil equivalent in Q1 of 2013 was 8,000 barrels higher than production in first quarter of 2012.
XOM: raises dividend from 57 cents to 63 cents. From Reuters: First-quarter profit for the world's largest publicly traded oil company totaled $9.5 billion, or $2.12 per share, compared with $9.45 billion, or $2 per share, a year earlier. Analysts, on average, expected the Irving, Texas, company to report a profit of $2.05 per share. From Yahoo!Finance, In-Play: Exxon Mobil beats by $0.07 (XOM) 89.43 : Reports Q1 (Mar) earnings of $2.12 per share, $0.07 better than the Capital IQ Consensus Estimate of $2.05; revenues fell 12.3% year/year to $108.81 bln vs the $125.86 bln consensus.
ConocoPhillips reports EPS in-line: Reports Q1 (Mar) earnings of $1.42 per share, excluding items, in-line with the Capital IQ Consensus Estimate consensus of $1.42.
... and XOM ($2.04) ....
.... and NBL ($1.19) ....
UPS ($1.01) will be the big story on CNBC.
All the above will be reporting before market open.
KEG (Key Energy Services, 4 cents) will report after market close.
This list is provided by Yahoo Earnings Calendar which has been known to have errors.
Results
Noble Energy beats by $0.23, beats on revs: Reports Q1 (Mar) earnings of $1.48 per share, $0.23 better than the Capital IQ Consensus Estimate of $1.25; revenues rose 5.1% year/year to $1.14 bln vs the $1.09 bln consensus.
CARBO Ceramics misses by $0.14, misses on revs (CRR): Reports Q1 (Mar) earnings of $0.76 per share, $0.14 worse than the Capital IQ Consensus Estimate of $0.90; revenues fell 9.5% year/year to $147.7 mln vs the $153.36 mln consensus.
UPS beats by $0.02, reports revs in-line; reaffirms FY13 EPS guidance: Reports Q1 (Mar) adj. earnings of $1.04 per share, $0.02 better than the Capital IQ Consensus Estimate of $1.02; revenues rose 2.3% year/year to $13.43 bln vs the $13.43 bln consensus. The quarter benefited from a stronger than expected post-holiday season in January as UPS e-commerce solutions resonated with customers. In the U.S. Domestic segment, daily package volume grew 4.4% and operating profit improved 9%.
Occidental Petro beats by $0.14, misses on revs: Reports Q1 (Mar) earnings of $1.69 per share, $0.14 better than the Capital IQ Consensus Estimate of $1.55; revenues fell 6.3% year/year to $5.87 bln vs the $6.47 bln consensus. Our Q1 domestic production of 478,000 barrels of oil equivalent per day, of which 342,000 barrels per day were liquids, set a record for the tenth consecutive quarter. Our total company production of 763,000 barrels of oil equivalent in Q1 of 2013 was 8,000 barrels higher than production in first quarter of 2012.
XOM: raises dividend from 57 cents to 63 cents. From Reuters: First-quarter profit for the world's largest publicly traded oil company totaled $9.5 billion, or $2.12 per share, compared with $9.45 billion, or $2 per share, a year earlier. Analysts, on average, expected the Irving, Texas, company to report a profit of $2.05 per share. From Yahoo!Finance, In-Play: Exxon Mobil beats by $0.07 (XOM) 89.43 : Reports Q1 (Mar) earnings of $2.12 per share, $0.07 better than the Capital IQ Consensus Estimate of $2.05; revenues fell 12.3% year/year to $108.81 bln vs the $125.86 bln consensus.
ConocoPhillips reports EPS in-line: Reports Q1 (Mar) earnings of $1.42 per share, excluding items, in-line with the Capital IQ Consensus Estimate consensus of $1.42.
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