Random Update Of Bakken Well EURs -- CLR's May, 2018, Corporate Presentation

For newbies: this has nothing to do with investing. This has everything to do with the potential of the Bakken. Jane Nielson probably knows more. 

EUR type curves, for CLR:

• 2011: 430 mboe
• 2014: 603 mboe
• 2015: 800 mboe
• 2017: 980 mboe
• 2018: 1,100 mboe ($7.9 million) 
• "all optimized completions" now exceed the 1,100 mboe EUR type curve

Production:

• 1Q18, 161K boepd; up 48% from 1Q1 

Tea Leaves Suggest Price Of Oil To Rise -- June 13, 2018 -- Venezuela Imports Oil To Meet Refinery Demands

Updates

June 25, 2018: still very bullish for oil even after OPEC+ announcement. Saudi production from another source (link lost) -- note: this is total production, not exports. Women given the right to drive should increase local demand at least to some extent.

Original Post

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

Disclaimer: it's a fool's errand to predict oil prices, including the trend.

Note: this could all be greatly affected if Russia and Saudi Arabia agree to increase production. We will know more by the end of June / July. "Those" tea leaves suggest Russia and OPEC will raise production using the excuse that loss of production in Iraq, Iran, Venezuela and global demand forecasts for 2019 necessitates such action.

Sixteen reasons:



Re-posting:

WTI: the tea leaves suggest the price of WTI will continue to rise -- let's stir the tea -- (note to newbies: "tea leaves" have a mix of fact and opinion and it's not necessarily easy to tell them apart; tea leaves look alike) --

• a graphic earlier today suggested Saudi Arabia "spare capacity" forecast to shrink significantly in 2019
• there's a story over at oilprice.com suggesting US shale oil won't be able to fill the gap
• the Permian pipeline shortage won't be resolved before 2019
• the Trans Mountain Pipeline expansion project won't be completed this year (if ever)
• not even the height of summer driving season, and US gasoline demand hits a new record
• refiners are operating at 95.7% capacity and having trouble keeping up with distillate fuel demands
• distillate fuel reserves in the US hit an all-time (if not an all-time low, very close; certainly appeared that way on the graph; needs to be fact-checked)
• China recently shut down new solar installations, suggesting they need more fossil fuel sooner
• Venezuela may import heavy oil to meet refining needs (see below)
• Iraq's instability may affect production
• Iran's sanctions will cause greater shortfall than some pundits suggest 
• the chairman of the "US Fed" said their will be four rate hikes this year, partly because "they" expect the price of oil to increase by the end of the year, causing inflationary pressure on the economy

Now, some background stories.

First a graphic: US gasoline demand sets a record --

Venezuela: may import oil for the first time in its history to meet refining needs. [Later: it's now announced -- Venezuela is importing oil to meet refinery demands.]

• the state-run oil company has drawn up plans to import 57,000 bopd to meet demands of its largest refinery
• would need to be heavy oil
• Russian and Chinese customers probably putting the "screws" to PDVSA
• the refinery's capacity: 1.3 million bopd; breaking down; not being maintained
• no comment by Reuters suggesting how this all came about

Shale oil can't fill the gap anticipated in 2019 -- IEA: from oilprice -- actually IEA didn't say that explicitly -- there were a lot of qualifiers -- Nick Cunningham seems to be putting words into the IEA statement -- I didn't see anything in the article that alarmed me.

Spare capacity: posted earlier; I'm not concerned with this data, either.

Active Rigs Up To 63 In North Dakota; Tea Leaves Suggest WTI Will Continue To Rise -- June 13, 2018

WTI: the tea leaves suggest the price of WTI will continue to rise -- let's stir the tea -- (note to newbies: "tea leaves" have a mix of fact and opinion and it's not necessarily easy to tell them apart; tea leaves look alike) --

• a graphic earlier today suggested Saudi Arabia "spare capacity" forecast to shrink significantly in 2019
• there's a story over at oilprice.com suggesting US shale oil won't be able to fill the gap
• the Permian pipeline shortage won't be resolved before 2019
• the Trans Mountain Pipeline expansion project won't be completed this year (if ever)
• not even the height of summer driving season, and US gasoline demand hits a new record
• refiners are operating at 95.7% capacity and having trouble keeping up with distillate fuel demands
• distillate fuel reserves in the US hit an all-time (if not an all-time low, very close; certainly appeared that way on the graph; needs to be fact-checked)
• China recently shut down new solar installations, suggesting they need more fossil fuel sooner
• Venezuela may import heavy oil to meet refining needs
• Iraq's instability may affect production
• Iran's sanctions will cause greater shortfall than some pundits suggest 
• the chairman of the "US Fed" said their will be four rate hikes this year, partly because "they" expect the price of oil to increase by the end of the year, causing inflationary pressure on the economy

Politics: I love how every politico -- from the far left to the far right -- has advice for President Trump on North Korea. Six months ago they all said "it" couldn't be done. Now that "it's" been done -- North Korea agreeing to complete denuclearize -- the politicos have advice for President Trump. I was most negatively impressed by House Speaker Ryan by his remarks today; glad to see him stepping down as House Speaker.

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Back to the Bakken 

Active rigs:

$66.64↑	6/13/2018	06/13/2017	06/13/2016	06/13/2015	06/13/2014
Active Rigs	63	56	28	75	185

Five new permits:

• Operator: Hess
• Field: Capa (Williams)
• Comments: Hess has permits for a 5-well CA-Ferguson Smith pad in SESE 19-155-95

And that was all.

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For The Archives

Gasoline Demand In The US Hits An All-Time Record -- June 13, 2018

From the EIA, thousand bbls gasoline/day:

Back of envelope calculations:

One year ago:

• 2nd week, June, 2017, one year ago:  9,269
• peak, summer, 2017, one year ago: 9,846
• (9846-9269)/9269 = 6.2%

Extrapolating forward:

• 2nd week, June, 2018, most recent data: 9,879
• 9,879 * 1.062 = 10,491 thousands bbls gasoline/day

Keeping North Dakota Great -- June 13, 2018 -- Air Quality Permit Approved For Davis Refinery, Southwest North Dakota

Link at Bismarck Tribune.

The department issued the permit to Meridian Energy to construct the Davis Refinery near Belfield after reviewing more than 10,000 public comments.

It would be interesting to get an analysis of the number of:

• "robo" comments
• form letters via e-mail; number with relevant comments
• out-of-state comments
• non-ND-resident comments

Remember this from an earlier post?

• New refinery: Meridian's Belfield refinery, 45-day comment period
• more than 11,000 comments
• of those, 10,068 were form letters via e-mail; none with relevant comments
• of all comments, 22% received from the west coast, specifically Oregon, Washington, and California
• 1.8% of the comments were from North Dakota respondents

It's interesting that both the the "refinery permit" and the "air quality permit" had an almost equal number of submissions.

For an update of refinery projects in North Dakota, see this February, 2018, post.

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GDP Now

Latest forecast: 4.6 percent — June 8, 2018.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the second quarter of 2018 is 4.6 percent on June 8, up from 4.5 percent on June 6.

After this morning's wholesale trade release from the U.S. Census Bureau, the nowcast of the contribution of inventory investment to second-quarter real GDP growth increased from 0.99 percentage points to 1.06 percentage points.

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"Fed Rate"

The "Fed" raises "rate" to 2.5%. Two more rate increases this year would bring the "Fed rate" to 3.0%.

History of US recessions.

History of "Fed rates."

Past decade:

 Multi-decade: