Locator: 51744B.
Japan, US: in talks for Japan to invest $550 billion in US for chip factory construction. You can howl at the wind, but AI is here to stay.
Holy mackerel: S&P 500 up 70 points at 6:44 a.m. CT, September 17, 2026; Dow could open up close to more than 500 points. NAS could open close to 400 points higher.
Treasuries are down: that's the soundbite but "10-years" are at 5% for all practical purposes.
At the moment, 4:13 a.m. CT, September 17, 2026 --
Thursday Night Football tonight.
Is AI dead? Apollo Global Management is currently in talks with SoftBank to increase
an existing loan to $9 billion (up from $5.4 billion) to help the
Japanese tech giant expand its investments in OpenAI. The $9 billion
figure represents a loan extension rather than a fresh $9 billion slice
of cash directly from SoftBank's pockets. It is part of SoftBank's
massive, aggressive push to back the ChatGPT creator.
US politics: US House Democrats break ranks; joining GOP in passing "a sweeping Russia sanctions" bill. Link here. India not happy.
Canada part of the EU: wow! Canada won't become the 51st state but looks forward to becoming a member of the EU which means it would cede its sovereignty to an unelected bureaucracy in Brussels. Wow. Obviously that's hyperbole but that's what it boils down to in a 30-second soundbite.
Apple: India's iPhone factories are up all night according to reports. This is the first time "made-in"India" Pro iPhones will hit global shelves from day one, as Apple expands it India manufacturing and export push.
Higher interest rates: yes, that will encourage home-buyers; help the blue-collar worker; bring more oil through the Strait of Hormuz. Exactly what is the Fed thinking? Link here. Bankers, of course, will make out like bandits with higher interest rates, but what was the Fed thinking!!?? Link here. From a Stanford University economist:
The
Federal Reserve has spent more than five years promising the American
public that policymakers will bring inflation sustainably back to the
central bank’s 2% annual target. On Sept. 16 the Fed raised interest
rates in pursuit of that goal.
John
Cochrane, a prominent economist and senior fellow at the Hoover
Institution at Stanford University, thinks that higher rates are a
short-term solution, at best. His research suggests that inflation will
resume climbing unless fiscal policy also changes and the U.S. brings
its borrowing and spending under control. Without more restrictive
fiscal policy, he says, the Fed can only rearrange inflation in the face
of a mountain of federal debt that recently surpassed $40 trillion.
That’s because higher rates push up the government’s interest costs,
leading to higher inflation in the long run.
Delayed reaction: the market did not react immediately yesterday when the Fed announced the first rate hike since 2023. Most likely the market sell-off came after / during the subsequent press conference when it became clear as mud that the Fed would likely raise rates again in December. At least won't have a recession before the mid-terms; that will come next year. See disclaimer.
To the extended family: some time ago, maybe six months ago, I suggested a pivot from tech (AI) to health care and banks might make sense. See disclaimer.
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Back tot he Bakken
WTI: $101.87. WTI continues to fall, based on "I think the war is soon to end." -- President Trump.
Oh, oh, now the Saudi pipeline has been hit and Saudi warned that some oil has stopped flowing.
QatarEnergy has officially declared force majeure on long-term liquefied
natural gas (LNG) supply contracts following attacks on its production
facilities at Ras Laffan. What would happen if Saudi did that on oil? Iraq has and Kuwait Petroleum Corporation and Saudi Aramco have similarly (to Iraq) suspended or cancelled crude oil loadings and deliveries, but the country has technically not declared a force majuere as far as I can tell. Link here. What happens if the US SPR or supplies at Cushing continue to decline?
New wells reporting:
- Friday, September 18, 2026: 40 for the month, 120 for the quarter, 477 for the year,
- 41721, conf, BR, HBU Hazel 3N MBH,
- 41638, conf, BR, HBU Badlands 5N TFH-ULW,
- Thursday, September 17, 2026: 38 for the month, 118 for the quarter, 475 for the year,
- 41728, conf, BR, HBU Hazel 7S MBH,
- 41637, conf, BR, HBU Badlands 9S MBH,
Lots of work left in the Bakken, McKenzie County, about 15 miles south of Watford City; about 45 miles east of US-85. Out in the middle of nowhere? God's country.
RBN Energy: US LNG returns to China, but this time the game is different. Link here. Archived.
The nice thing about LNG trading is that cargoes do not get offended, pack their bags and disappear if they are not immediately needed in one port; they can be simply redirected to another. The trade tensions between the U.S. and China have created exactly this kind of rerouting story in the LNG market. As tariffs, trade restrictions and geopolitical tensions reshaped flows between the two countries, sellers were pushed to find new buyers, buyers had to find new suppliers, and traders had to find new routes. In today’s RBN blog, we look at how this shift has reshaped U.S.-China LNG trade and whether the new trading pattern is likely to stick around.
Direct LNG trade between the U.S. and China had been dormant since February 2025, but just when it looked like things would remain quiet, a cargo from the U.S. reached China again. The QatarEnergy-operated LNG carrier Al Fat’h arrived at PipeChina’s Yangpu LNG terminal on Hainan Island in mid-July with a cargo loaded at Venture Global’s Plaquemines LNG facility in early June. It may sound like a routine LNG delivery, but it was anything but ordinary. The most interesting part was not simply that U.S.-origin LNG had returned to Chinese shores; instead, it showed how U.S. LNG could physically reach China even though the commercial barriers remain in place, enabled by market flexibility and arbitrage.
The cargo was moved through QatarEnergy Trading, while the Yangpu terminal has bonded status for two of its 160,000-cubic-meter LNG tanks. That’s key, because in a bonded facility an LNG cargo can be unloaded and stored without it being designated as an import unless it is regasified and sent into the pipeline network. This allows for cargoes to be re-exported, or loaded onto bunkering vessels, without attracting the Chinese import tariffs that have largely dried up the flow of U.S.-sourced LNG to China. (The Yangpu terminal is one of eight operated by state-owned PipeChina, which could be the first to develop a true Asian LNG hub, a subject we’ll explore in a future blog.)
To understand why the Al Fat’h cargo matters, we need to look at the players behind the U.S.-China LNG trade and their long-term contracts. On the U.S. side is Venture Global, which developed and operates the Plaquemines LNG and Calcasieu Pass facilities in Louisiana. On the Chinese side, Sinopec and CNOOC Gas & Power stand out. Both signed long-term LNG supply agreements with Venture Global years before trade tensions between the U.S. and China intensified. In 2021, Sinopec signed two separate sale and purchase agreements (SPAs) to buy a combined 4 million tons per annum (MMtpa, 0.52 Bcf/d) of LNG from Plaquemines for 20 years. Sinopec’s trading arm, Unipec, also signed a separate agreement to purchase 3.5 MMtpa (0.46 Bc/d) of LNG from Calcasieu Pass. CNOOC agreed to purchase 2 MMtpa (0.26 Bcf/d) from Plaquemines for 20 years, while it also has a separate 1.5 MMtpa (0.2 Bcf/d) agreement for Calcasieu Pass.
Because the contracts are structured on an FOB (free-on-board) basis, the buyers have the flexibility to take delivery at the U.S. terminal and place the LNG in different markets. (Destination flexibility has been the key feature of the U.S. LNG industry from the start; for more, see our Steady as She Goes series and Should I Stay or Should I Go?) That means U.S.-sourced cargoes that reached — or did not reach — China cannot be viewed solely through physical trade between the two countries. While the contracts remain in place, a cargo’s final destination can change; LNG can be sold into another market instead of China, and Chinese demand can be met — or “backfilled” in trading parlance — from other, closer sources. This is where the distinction between physical flows and commercial relationships becomes important. To see why, we need to look at when and how much U.S. LNG actually reached China.
As shown in Figure 1 below, U.S. flows to China have been highly variable since the U.S. began exporting LNG in 2016. Flows strengthened rapidly in 2017 and were more consistent in 2018, with a monthly high of 17,509 MMcf recorded in April. The relationship between U.S. LNG and China had gone from a standing start to a rapid courtship in just a few years, although there is some nuance to that. Companies that signed up for U.S. cargoes immediately looked to place their large U.S. exposure with Asian buyers on Henry Hub indexation, which they did. However, hardly any cargoes under those contracts were actually sourced from the U.S.; instead, they were supplied from closer sources to China, saving costs. In that regard, the U.S. was a virtual supplier to China.
