Wednesday, February 2, 2022

Gasoline Demand -- February 2, 2022

Link here.

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First Of Two BR (COP) Rigs Sited -- February 2, 2022

A reader wrote to tell met that BR (COP) will have two rigs in the Bakken. This rig, Nabors B2, appears to be the first, a rig on #37925.

BR has a rig on this five-well pad in Pershing oil field:

  • 37925, conf/rig on site, BR, Lone Beaver 1-1-17MTFH, North Fork,
  • 37693, conf, BR, Lone Beaver 1-1-17TFH, North Fork,
  • 37694, conf, BR, Lone Beaver 2-1-17TFH, North Fork,
  • 37695, conf, BR, Lone Beaver 4-1-17MBH, North Fork,
  • 37696, conf, BR, Lone Beaver 5-1-17TFH, North Fork,


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Lime Rock Resources With Two New Permits; Fifteen Permits Renewed; BR With One Of Two Rigs Now Active -- February 2, 2022

MPLX eyes expansion of Whistler Pipeline:

  • link here;
  • Permian natural gas pipeline;
    • eyeing expansion from existing 2 Bcf/d p to 2.5 Bcf/d
    • 2.5 Bcf/d is the maximum Whistler can be expanded without building a new pipeline;
    • 450-mile pipeline from Agua Dulce, TX, near Corpus Christi
    • came online in August, 2021
    • late January, 2022: announced plans to build a 35-mile lateral to extend the pipeline deeper into the Permian's Midland Basin near more gas processing plants; this lateral will be completed by late 2022
  • natural gas takeaway capacity is quickly becoming the biggest bottleneck for the basin's future oil and gas production growth
  • would also consider new long-haul Permian natural gas pipeline
  • Tornado 2 gas processing plant comes online late 2022
  • much more at the link

$100 oil is now becoming the consensus:

  • link here;
  • UBS is added to those below calling for $100-Brent oil:
  • Goldman, JP Morgan, Morgan Stanley
  • $90 by end of March, 2022
  • $100 by September, 2022
  • Brent has already crossed above $90 multiple times already this year

*******************************
Back to the Bakken

Active rigs (I'll update this later, if necessary):

$88.26
2/2/202202/02/202102/02/202002/02/201902/02/2018
Active Rigs3414546457

The NDIC shows 36 rigs:

  • one is a CCS well:
  • one is a SWD well, so that means 34 active oil and gas wells
  • and, this is huge in a sense: a reader wrote me a couple days ago that BR (COP) was preparing two rigs for the Bakken; here's one of them:
    • 37925, drl/conf, BR, Lone Beaver 1-1-17MTFH, North Fork,

Two new permits, #38767- #38768, inclusive:

  • Operator: Lime Rock Resources
  • Field: Murphy Creek (Dunn County)
  • Comments: 
    • Lime Rock Resources has permits for two Eleanor Twist wells, to be sited in Lot 3 section 3-143-95; and, 
    • sited between 540 FNL and 590 FNL and between 1826 FWL and 1888 FWL

Fifteen permits renewed:

  • Whiting (7): seven permits for the following wells, all in Williams County: Larson, P Bibler, P Earl Rennerfeldt, Roggenbuck Federal, Satterthwaite, Rooggenbuck, and Iverson
  • Petro-Hunt (6) three Estby permits; three Jorgenson permits, all in Burke County;
  • Rimrock Oil & Gas: a Skunk Creek permit in Dunn County
  • Hess: an RS-State permit in Mountrail County
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What's Going On? February 2, 2022

FB: misses; down almost 23% after hours. Company blames inflation, supply chain disruptions and users shifting to "cheaper products" that do the same thing. 

  • Apple could have said the same thing but smashed records and expectations. 
  • analysts looking for revenues of $30 billion; came in between $27 and $29 billion.
  • EPS: $3.67 vs $3.84 expected.
  • revenue: another source said $33.67 billion vs $33.4 billion expected
  • also: guidance -- weaker-than-expected forecast

Spotify: down another 187% after hours. Subscriber guidance disappointed investors. Something for Apple to think about.

QCOM: easily beats 1Q22 (October - December) sales, earnings goals. profit taking after hours, but still a great day. Link here.

  • EPS: $3.23 vs $3.01 expected
  • sales of $10.7 billion vs $10.44 billion forecast
  • one year earlier, QCOM earned $2.17/share on sales of $8.23 billion

Pricing:

  • oil down marginally: yesterday's API report was more bullish than today's EIA report
  • natural gas is surging: up 15%; up 70 cents; trading at $5.453.

Market reflections:

  • SRE: up $1.61; up 1.18; this $124 stock is trading for $137.73;
  • KMI: flat; up slightly;
  • ENB: up 1%; up 43 cents; this $38 stock is trading for $43;
  • EPD: flat; up slightly; trading at $23.84;
  • LNG: up 1.22%; up $1.40; trading at $116.45

The PayPal debacle:

  • PayPal is plunging; no one has anything good to say about the company on "talk" television;
  • other similar companies, like Block, are also falling;
  • no one is mentioning the gorilla in the room: Apple.
  • Apple opened its "Wallet" to all credit cards; essentially eliminates the need for third party hardware that attaches to the iPhone and/or third-party software for payment

WTI hit $89 earlier today; fell back to $88.

  • fell back not because of OPEC maintaining production increase; rather,
  • the crude oil draw reported by EIA was disappointingly low compared to API data yesterday;
  • the bad news: gasoline prices are lagging crude oil prices; gasoline prices will catch up as we move close to driving season;
  • it is interesting that tensions between Russia / Ukraine seem not to be influencing price of oil

MPC: I said once upon a time I would never invest in refineries (again), but then:

  • some months ago, starting building a position in MPC;
  • wasn't following; wasn't paying attention; it's a long-term holding that I will continue to build
  • today, a talking head on CNBC mentioned outstanding MPC results; I never knew; MPC up over 5% today;

ISO NE: burning oil. That same CNBC correspondent mentioned Boston burning oil to keep the lights on; was dumbfounded; finally folks are reading the blog; reporting the ISO NE story. I honestly don't think a lot of folks were aware of this.

COP earnings: to be released tomorrow morning, February 3, 2022, before market open;
what's in store?"

  • consensus: $2.18 EPS forecast vs a loss of 19 cents last year
  • revenue forecast: $13.34 billion; up 120% year-over-year

AAPL: nip and tuck whether it will finish in the green today.

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Weekly EIA Report -- February 2, 2022

Link here.

  • US crude oil inventories decreased by an incredibly small one million bbls from the previous week.
  • US crude oil inventories are now 9% below the five-year average, at 415.1 million bbls.
  • US crude oil imports average 7.1 million b/d; increased by almost a million bbls per day from the previous week.
  • US refineries operated at 86.7%, trending down.
  • Distillate fuel inventories decreased by 2.4 million bbls and are 19% below the five-year average.
  • Jet fuel supplieed was up 29% compared with the same four-week period last year.

That minimal draw on crude oil is why oil stocks (shares) are down across the board today. 

GM: I track EVs elsewhere. Guidance:

  • will spend $35 billion on EVs and autonomous vehicles
  • will build third EV truck factory;
  • will build fourth battery factory.

OPEC: no surprises. Won't meet quotas. Bullish.

Europe's midstreamers are being hit with fairly massive IT attacks.

Texas freeze:

  • forecast for less than two days
  • starts today, Wednesday
  • will barely drop below 28° at worse, and that just for a few hours
  • at noon, I was outside, still comfortable with sweater; no jacket or parka needed
  • forecast for snow, but less than an inch
  • ends Friday
  • schools canceled for both Thursday and Friday

UNP partners with self-driving trucks.

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