Tuesday, February 12, 2019
API Weekly Crude Oil Inventory -- February 12, 2019
An inventory draw of just less than one million bbls. Inconsequential but at least going in the correct direction. We'll see the EIA data tomorrow.
Counting Chickens Before One's Eggs Hatch -- February 12, 2019
Updates
February 13, 2019: from Goldman Sachs today --
Original Post
From twitter today:
So, look at the graph. The x-axis starts in 2014 (although it really doesn't matter when the time period would have started). What is different this time around compared to back in 2014?
This is what Ali Al-Naimi did not have to deal with, from earlier today:
And as the price of oil improves, the US will produce more shale oil.
Texas Oil Production Sets Record -- February 12, 2019
Link here. Data points:
Link over at oilprice:
- production not seen since 1973, the same year of the Arab oil embargo
- 2018: 1.54 billion bbls last year
- 2017: 1.26 billion bbls
- 1973: 1.28 billion bbls
- Ranking:
- Russia
- Saudi Arabia
- Texas
- daily average in 2018: 4,219,178 bopd (4.2 million bopd)
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New Mexico Doing Well Also
New Mexico Doing Well Also
New Mexico received US$2.2 billion in revenues from oil production last year. This was a 26-percent increase on the year, or US$465 million. The total amount represented 32.3 percent of the New Mexico State General Fund recurring revenue.
According to a report of the news in the Albuquerque Journal, a substantial increase in investments and production in the state contributed to the revenue increase, as did higher oil prices, despite the fluctuations throughout the year.
New Mexico, together with Texas, is home to the Permian, the shale oil and gas play that has seen the strongest increase in interest, investment, and production over the last few years thanks to many low-cost production spots. That’s despite warnings from industry experts that the low-cost sweet spots are already taken and production costs will only rise.
Still, oil and gas companies, and private equity firms are flocking to the Permian and drillers are pumping, which most recently caused pipeline bottlenecks that pressured the prices of Permian crude. The bottlenecks are being addressed, however, and soon the play will have more oil-moving capacity.
The Permian is an outperformer: between 2017 and 2018, crude oil production shot up by as much as 860,000 bpd to 2.76 million bpd, energy investment expert Nawar Alsaadi noted in a recent analysis for Oilprice, but this may lead many to assume that this performance is the norm across shale plays.Nawar Alssadi suggests that the Permian was an outlier, that the Eagle Ford and the Bakken did not contribute to the shale revolution and/or production from the Eagle Ford and the Bakken were inconsequential. Nawar must have missed this graphic:
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Such A Great Story
Link over at oilprice:
The rise of U.S. tight oil production over the last several years has upended the oil market and challenged OPEC’s hold on oil prices. This seemingly relentless growth in U.S. tight oil production has created the impression that oil prices will remain forever capped as each price spike is met by a massive wave of US tight oil supply.
California To Pull Plug On Bullet Train? -- February 12, 2019
Updates
Later, 3:52 p.m. Central Time: it looks like the headline-writers were far out in front of their headlights. It turns out that the governor of California has not killed the project "outright." He will still spend money studying the issue and spend enough money to qualify for federal stimulus funds, but ... something tells me this will be very confusing to most folks. Is the project dead or isn't it? Sounds like the governor himself can't decide.
Branco's cartoon today. Incredibly coincidental:
Original Post
The story is being reported by one news outlet. Need to confirm. The "California Bullet Train" is tracked here.
Not even Drudge has the story yet. We'll watch to see which of the big six cover it first: CBS, NBC, ABC, LA Times, New York Times, Washington Post. According to google, the AP and The [London] Guardian were the first to major outlets to report the story. Then Fox News and almost simultaneously, something called Curbed LA.
The first major news outlet to cover this story has a great video that was actually produced just before the news that the project was canceled. Some data points from the video which is now overcome by events:
- the cost for the bullet train has jumped another $2.8 billion
- a single section, 119 miles in the Central Valley near Sacramento is now estimated to come in at $10 billion; original section was to cost $6 billion
- reasons for sudden jump in cost estimate:
- higher land acquisition
- relocation of utilities
- need for safety barriers
- growing stakeholder demands
- already a decade behind when the plug was pulled
- but look at this: the tipping point came when California rushed to spend $2.8 billion to show enough progress to get $2.5 billion in federal stimulus funds before December 31, 2018, deadline
- thus, California just spent another $2.8 billion to save $2.5 billion; and,
- that was probably the tipping point for the new governor
No major news outlet is reporting it yet, although the AP has.
Screenshot at 3:27 p.m. Central Time, February 12, 2019:
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