Masters Of War

Come you masters of war You that build all the guns You that build the death planes You that build all the bombs You that hide behind walls You that hide behind desks I just want you to know I can see through your masks. You that never done nothin' But build to destroy You play with my world Like it's your little toy You put a gun in my hand And you hide from my eyes And you turn and run farther When the fast bullets fly. Like Judas of old You lie and deceive A world war can be won You want me to believe But I see through your eyes And I see through your brain Like I see through the water That runs down my drain. You fasten all the triggers For the others to fire Then you set back and watch When the death count gets higher You hide in your mansion' As young people's blood Flows out of their bodies And is buried in the mud. You've thrown the worst fear That can ever be hurled Fear to bring children Into the world For threatening my baby Unborn and unnamed You ain't worth the blood That runs in your veins. How much do I know To talk out of turn You might say that I'm young You might say I'm unlearned But there's one thing I know Though I'm younger than you That even Jesus would never Forgive what you do. Let me ask you one question Is your money that good Will it buy you forgiveness Do you think that it could I think you will find When your death takes its toll All the money you made Will never buy back your soul. And I hope that you die And your death'll come soon I will follow your casket In the pale afternoon And I'll watch while you're lowered Down to your deathbed And I'll stand over your grave 'Til I'm sure that you're dead.------- Bob Dylan 1963

Sunday, May 1, 2016

oil prices continue rising, oil drilling continues falling, oil glut at yet another record high

oil prices, and prices for everything that is refined from oil, have continued to head up this week, something you dont need me to tell you if you've bought gasoline lately...there has been no fundamental change in the global oversupply situation that would account for higher prices, however, but rather a change in the betting habits of oil traders...just as oil prices were forced down to nearly $26 a barrel in mid-February as oil traders were selling contracts to deliver oil they did not own, oil prices are now being forced up by traders who are buying contracts for oil they have no intention to take delivery of...and as we've explained previously, with daily electronic trading in oil contracts accounting for more than 100 times the amount of actual oil produced and shipped daily, the gamblers in oil contracts have much more to say about the short term direction of prices than do the producers or users of that oil...

after falling to close at $42.62 a barrel on Monday on news that the Saudis were boosting production to meet Chinese demand, contract prices for June WTI oil spiked to over $44.50 a barrel on Tuesday after an American Petroleum Institute report that inventories of crude, gasoline and distillates were all down, settling to close the day at $43.72 a barrel... however, even after the EIA report showed that the crude oil glut had actually continued to build, traders drove prices up to close at a 2016 high of $45.33 a barrel on Wednesday, preferring to focus on a small drop in field production of crude, believing that would suggest supply-and-demand conditions would soon come back into balance...thus convincing themselves that the oil price rout was over, buying by speculators continued on Thursday, as the current contract price rose to a 5 month high and closed at $46.03...oil prices then fell below $45.40 on Friday morning as the rally ran out of steam, but then recovered after the rig count report showed the largest decrease in oil rigs 6 weeks, and closed the week at $45.92 a barrel, up nearly 20% for the month of April...we'll include a graph here so you can all see how this oil price rally has played out...

April 30 2016 oil prices

the above graph now shows the daily closing contract price per barrel for June delivery of the US benchmark oil, West Texas Intermediate (WTI), as traded on the New York Mercantile Exchange over the last 3 months...the last time we showed an oil price graph it was for the May contract, trading for which expired at $41.08 last Tuesday...this June contract closed at $42.47 on that same day, after which it became the widely quoted "price of oil"...also note that although the March contract for oil fell as low as $26.02 a barrel in mid-February, this contract price for June delivery never got much lower than $32...although futures price quotes are commonly available out to 2024, i dont know of anyone who charts any of those futures, and each time the current contract expires, its chart is replaced by all such services with the new current contract month’s prices, which then shows different prices than what had been quoted in the media just days earlier...

prices at this level have the potential to draw some of the more overconfident frackers back out into the field...Continental Resources and Whiting Petroleum, two big operators in the Bakken, have previously said that they may begin fracking their large inventory of drilled but uncompleted wells if oil prices rise above $40 a barrel ...to be sure, they wont be making money at that price, but it should be enough to cover the cost of fracking, given that all the other drilling expenses are already water over the dam...and this week, Pioneer, a large Dallas based fracker, announced they will add more rigs as soon as oil hits $50...in reporting earnings this week, they reported they'd already produced more oil than forecast, citing $45 a barrel as a breakeven price in some plays...so although the rig count was down to a new record low this week, if oil prices continue to rise, we would not be surprised to see an increase in drilling shortly thereafter...

The Latest Oil Stats from the EIA

while our imports of crude oil fell significantly from the elevated levels of last week, our refineries also slowed somewhat, and because the EIA found 400,000 barrels per day of the 434,000 barrels per day that went missing from the Petroleum Balance Sheet during the week ending April 15th, our surplus crude oil in storage rose by 2 million barrels to another new record on April 22nd...Wednesday's reports from the Energy Information Administration showed that our imports of crude oil fell by 637,000 barrels per day to average 7,550,000 barrels per day during the week ending April 22nd, down from the average of 8,187,000 barrels per day we were importing during the prior week...that lowered our 4 week average of oil imports to 7.7 million barrels per day, which was just 1.2% above the same four-week period of last year...

at the same time, production of crude oil from US wells fell for the 13th time in the past 14 weeks, dropping by another 15,000 barrels per day, from an average of 8,953,000 barrels per day during the week ending April 15th to an average of 8,938,000 barrels per day during the week ending April 22nd....that's now 4.6% below the 9,373,000 barrels per day we were producing during the same week last year, and 7.0% below the 9,610,000 barrel per day peak of our oil production that was established during the week ending June 10th of last year...

meanwhile, U.S. refineries’ crude oil inputs averaged 15,847,000 barrels of per day barrels during the week ending April 22nd, which was 257,000 barrels per day less than the 16,104,000 barrels of crude per day they processed during the week ending April 15th, and 1.6% less than the 16,104,000 barrels per day they used in the same week last year…this was as the US refinery utilization rate fell to 88.1%, down from 89.4% the prior week and quite a bit below the utilization rate of 91.3% that was seen during the week ending April 24th last year...an unusual slowing for this time of year, it could have been in part due to an unusual rash of refinery problems, which saw a Shell refinery in Deer Park, Texas, and Houston Refining's plants shuttered last week, and a Motiva refinery at Port Arthur Texas shut down this week...

at any rate, with less oil being refined this week, our refinery production of gasoline fell to the lowest level in 4 weeks, dropping by 231,000 barrels per day to 9,507,000 barrels per day during week ending April 22nd, down from our gasoline output of 9,738,000 barrels per day during week ending April 15th...that was still 1.4% more than the 9,374,000 barrels of gasoline per day we were producing during the same week last year, however, as our year to date gasoline output is still running well ahead of last years pace.....in addition, our refinery output of distillate fuels (diesel fuel and heat oil) fell by 90,000 barrels per day to 4,622,000 barrels per day during week ending April 22nd, which put our distillates production 4.4% below the 4,837,000 barrels per day we produced during the same week of 2015...although our year to date distillate output is below the pace of 2015, the milder than normal winter in the heat oil consuming states of the Northeast means we've used that much less...

however, even with the lower refinery output of gasoline, our gasoline inventories rose for the first time in 3 weeks, increasing from 239,651,000 barrels on April 15th to 241,259,000 barrels on April 22nd...part of the reason for that was an increase of 107,000 barrels per day in our imports of gasoline, which at 898,000 barrels per day were at a 7 month high...we also saw a 129,000 barrel per day drop to 9,315,000 barrels per day in gasoline product supplied, which is a metric considered to be a proxy for gasoline consumption...all that meant our gasoline inventories were 6.1% higher than the 227,451,000 barrels we had stored on April 24th last year, which was at that time the highest gasoline stores for the 4th weekend in April in EIA records going back to 1990...thus the EIA categorizes our gasoline stores as "well above the upper limit of the average range" for this time of year...at the same time, our distillate fuel inventories fell by 1,695,000 barrels to end the week at 158,240,000 barrels, driven by a surge in diesel fuel consumption in the central US, likely associated with spring planting...but because distillate inventories were already bloated after a warmer than normal winter, they remained 22.4% higher than the 129,270,000 barrels of distillates we had stored at the same time last year, which although not a record, is still characterized as "well above the upper limit of the average range" for this time of year...

finally, even with the large drop in oil imports, we still added nearly the same amount of oil to our stores as was recorded as added last week, mostly because last week the EIA's petroleum balance sheet came up 434,000 barrels per day short then (something i missed at the time)...this week, with the "adjustment" recorded on line 17 of the petroleum balance sheet (page 6 of the EIA's weekly Petroleum Status Report (62 pp pdf) a less significant 34,000 barrels per day, our stocks of crude oil in storage, not counting what's in the government's Strategic Petroleum Reserve, rose once again to a new record of 540,610,000  barrels as of April 22nd, up by 1,999,000 barrels from the record 538,611,000 barrels of oil we had stored on April 15th...that was 10.1% higher than the then record of 490,912,000 barrels of oil we had stored as of April 24th, 2015, which turned out to be the highest level of 2015, and 35.4% higher than the 399,357,000 barrels of oil we had stored on April 25th of 2014....below, we have a chart which illustrates this oil inventory growth...

April 22 2016 oil inventories for April 30

the above graph comes from a weekly pdf booklet of petroleum graphs produced by Yardeni Research, a provider of independent investment and economics research...it shows the end of the week stocks of crude oil in millions of barrels for each week beginning with January 2012, up to and including this week's report for April 22nd, with graphs for each year color coded as indicated...here we can much more clearly see how our oil inventories stayed in a narrow range between 2012 and 2014, represented by the mustard, green and blue bands, typically falling to 350 million barrels by the end of summer and rising to around 390 million barrels by early spring..however, at the beginning of 2015, represented by the grape colored graph, our inventories of oil started rising each week till they reached 490 million barrels at the end of April 2015, and then stayed elevated in a range 80 to 100 million barrels above the previous norms...that continued into 2016, represented by the scarlet colored graph, which shows that our oil inventories rose from what were already record levels to new records most every week since February...we've now increased our inventories of crude oil by by nearly 58.3 million barrels since the beginning of this year, while setting new records for the amount oil we had in storage in the US in 10 out of the last 11 weeks...and while we expect that these inventories of oil will begin to decline seasonally soon, possibly even next week, the key to relieving the glut will not really come until our stockpiles of crude drop below the elevated 2015 level and start to approach the norms of the 2012 to 2014 period...

This week's rig counts

as mentioned, the week saw another record low for drilling rig activity in the US, for the 8th week in a row...Baker Hughes reported that the total count of drilling rigs in use in the US was down by 11 more rigs to 420 rigs as of April 29th, down from the 905 rigs that were working on May 1st of 2015, and down from the recent high of 1929 rigs that were drilling on November 21st of 2014... the count of rigs drilling for oil fell by 11 to 332, which was down from 697 rigs targeting oil a year earlier, and down from the recent high of 1609 working oil rigs that we saw on October 10, 2014, while the count of drilling rigs targeting natural gas fell by 1 to a record low of 87, down from the 222 natural gas rigs that were drilling during the same week a year ago, and down from the 1,606 natural gas rigs that were in use on August 29th, 2008...meanwhile, a single rig classified as "miscellaneous" was started up, which was the only rig so classified operating this week, down from the 4 miscellaneous rigs that were in use a year ago

one of the rigs that was shut down this week had been drilling off the shore of Texas in the Gulf of Mexico, thus reducing the Gulf of Mexico rig count to 24 and the total offshore count to 25, as they are still working an offshore platform in the Cook Inlet off Alaska...that's down from the 33 Gulf of Mexico platforms and 34 total offshore that were in use on May 1st of 2015...a net total of 8 horizontal rigs were pulled out this week, leaving the count of rigs drilling horizontally at 324, which was down from the 699 horizontal rigs that were in use a year ago, and down from the recent record of 1372 horizontal rigs that were drilling on November 21st of 2014...at the same time, 2 directional rigs were also shut down, leaving 46 directional rigs still drilling, which was down from the 93 directional rigs that were in use at the end of the same week a year earlier...in addition, a single vertical rig was also removed, cutting the vertical rig count back to 50, which was down from the 113 vertical rigs that were deployed nationally the same week last year... 

for the details on which states and which shale basins saw changes in drilling activity this past week, we're going to include a screenshot of that part of the rig count summary from Baker Hughes, which shows those changes...

April 29 2016 active rig counts

the first table above shows weekly and annual rig count changes by state, and the second table shows weekly and annual rig count changes for the major geological oil and gas basins...in both cases, the first column shows this week's active rig count, the third column shows last weeks rig count, and the column in between shows the change, plus or minus, from that week to this one...then, the year ago active rig count for each state and basin is shown in the column on the far right, with the column just to the left of that showing the change in active rigs from a year ago...hence, you can thus see that the active rig count in the Eagle Ford shale of South Texas was down by 3 rigs to 37, which was down from the 110 rigs that were working that basin a year ago, or in this case, on May 1st of 2015...

however, this table does not show active rigs for every state, as many have no drilling, and some have just one rig irregularly...some weeks there are no changes in the rigs counts other than what's shown above, but this week we have additions of rigs in four states not shown above...the Baker Hughes state count tables indicate that one new rig was deployed in Illinois, one in Hawaii, one in Kentucky and one in Mississippi this week...for Illinois, the new rig was the only one active this week, same as the single rig drilling a year ago; for Hawaii, the new rig was also the only one active, but they had none a year ago; in Kentucky, they now have 3 rigs working, up from 2 rigs a year ago, and in Mississippi, they now have 3 rigs working, same number as they had on May 1st a year ago...



more here...

Israel Accused Of West Bank 'Ethnic Cleansing'

The Israeli military has dramatically increased the number of demolitions of Palestinian homes and other buildings in the occupied West Bank, according to the United Nations.
Figures collated by the UN's Office for the Co-ordination of Humanitarian Affairs (OCHA) show that there have been an average of 165 demolitions a month since January.
In February alone, 235 buildings were taken down, and the UN agency has claimed people are being driven from the land as a result.
The Israeli military, which has occupied the West Bank for nearly 50 years, claims it carries out the demolitions because the structures are illegal and do not have the necessary planning permits.
But left-wing politician and member of parliament, Dov Khenin, claims the government is trying to appropriate the land so Israelis can settle there in the future.
He described the demolitions as "ethnic 8cleansing in a very sophisticated way".

Friday, April 29, 2016

The Calm Before the Coming Global Storm by Pepe Escobar



Major turbulence seems to be the name of the game in 2016. Yet the current turbulence may be interpreted as the calm before the next, devastating geopolitical/financial storm. Let’s review the current state of play via the dilemmas afflicting the House of Saud, the EU and BRICS members Russia, Brazil and China.

Oil and the House of Saud
Not many people are familiar with the Baltic Dry Index. Yet the Index is key to track commodity demand. Two months ago, it was trading to all-time lows. Since then, it has increased over 130%. Precious metals prices have all moved higher in virtually all currencies. Why is this important? Because it tells us that faith in fiat currencies – the US dollar especially — is sharply declining.
The Baltic Index rise portends a rise in oil demand in Asia – especially China. Falling supply and rising demand for oil will likely drive up the price of the barrel of oil in the second half of 2016.
That does not mean that the House of Saud will win back the trust of both the US and Russia. Deep sources keep confirming that as far as Washington and Moscow are concerned, the House of Saud is expendable. Both are really energy independent (should the US want to be). Powerful Washington factions blatantly accuse Riyadh of “terror” – well, it’s way more complicated – while Moscow regards the House of Saud as following US orders to destroy Russia in an oil price war. 
Ailing – on the way to dementia — King Salman and young Warrior Prince Mohammed would be finished if those famous 28 pages about 9/11 were released and the Saudi connection is incontrovertible. What next? Regime change. A CIA coup. A “trusted” Saudi military CIA asset elevated to power. 
What’s left for the House of Saud is to play for time. High up in Riyadh the feeling is that relations with Washington won’t improve while Obama is president; the next president — whether Hillary or The Donald – will be a much better deal. So Plan A for now is to keep posing as essential to Washington in the “war on terra”; that means King Salman falling back on Mohammed bin Nayef, the Crown Prince, way more adept at it than the Warrior Prince, the conductor of the disastrous war on Yemen.  

Sunday, April 24, 2016

what we learned from Doha, a new push for gas exports, new oil glut and rig count records again, etc

the meeting at Doha was a dud...there was no agreement between OPEC and other oil producers meeting at the Qatari capital last Sunday to freeze production or to take any other action whatsoever to control oil output...in fact, contrary to their intended purpose of limiting oil output, both the Saudis and the Russians indicated after the meeting that they'd be increasing their output... furthermore, now that we understand the issues in play, we can see that there is no chance that there’ll be any kind of agreement to freeze oil production at any time in the foreseeable future...

initial news from the conference early Sunday was that the 16 oil producers meeting in Doha, including the Saudis and the Russians, would agree to freeze their oil output until October, at which time they'd have another meeting and renegotiate from there...but before the meeting actually started, the Saudis said they wanted all OPEC members to participate, including Iran, despite previously insisting on excluding Iran because Iran had refused to freeze production....so they delayed the meeting till later in the afternoon in an attempt to address the differences between the Saudis position and the earlier draft agreement which excluded Iran....but that was to no avail, as the Saudis were uncompromising, and by evening the meeting fell apart without a freeze agreement or even an agreement to meet again at some time in the future...the early Asian market reaction, wherein quotes for U.S. crude for May fell 6.7% to $37.70 a barrel and the global benchmark Brent crude was down 6.9% to $40.14, was short-lived, as news that oil workers in Kuwait went on strike, threatening to take nearly 2 million barrels per day off the global market, steadied prices, which then closed Monday at $39.78 a barrel in the US and at $42.91 a barrel in Europe, both down less that one percent from last Friday...

now that the dust has settled, it's pretty clear what had happened....over the 2 months leading up to the meeting, confidence that a deal to freeze output would get done was pretty high, as both Russian energy minister Alexander Novak and Ali al Naimi, the long time Saudi oil minister, had taken part in the original meeting with Qatar and Venezuela, and had voiced support for an agreement in the interim weeks...however, at the same time, and especially during the week prior to the Doha meeting, 30 year old Saudi Crown Prince Mohammed bin Salman insisted there would be no deal without Iran's participation...we can now see that it was bin Salman who was calling the shots at last Sunday's meeting....the tell is from reports from Venezuela oil minister Del Pino, who said that Saudi representatives at Sunday's meeting didn’t have authority to negotiate a freeze, and hence they followed the dictates of bin Salman, and presumably his father the king, that there would be no deal unless their regional arch enemy Iran was also forced to freeze their output (at depressed levels)

thus, young Mohammad bin Salman has emerged as the power behind the Saudi crown...his father King Salman, who rose to the throne when King Abdullah died last January and who has often been described in reports as somewhat senile, is still active domestically, presiding over the largest jump in political beheadings in 20 years...but his favored son Mohammend, who often speaks of Saudi Arabia in the first person singular, has been gradually assuming all the important positions in the Kingdom, including Minister of Defense and Chief of the Royal Court...the outcome of this meeting at Doha confirms that he is in charge of Saudi energy policy as well, and that Ali al Naimi, who for 21 years has not only been the Saudi oil minister but also the voice of OPEC, is now answering to the young Crown Prince...fighting proxy wars with Iran in Syria and Yemen, the Saudis thus appear willing to cut off their nose to spite their face, and will do all in their power to drive the price of oil down, just to deny Iran full remuneration for their oil as they return to the global export markets...

New Energy Bill Fast Tracks Gas Export Facilities

back in the US, the Republican controlled US Senate passed a broad-ranging energy bill promoting everything from renewable energy to exports of fossil fuels by an 85-12 vote...delayed for 2 months over an impasse on providing emergency aid to Flint, this so-called Energy Policy Modernization Act had broad bi-partisan support because it was turned into a Christmas tree with something on it for everyone, including a provision to designate forests as a carbon-neutral energy source that was introduced by senators Susan Collins from Maine and Amy Klobuchar from Minnesota, presumably at the behest of their timber interests...the earlier House passed version of this bill was more aimed at restricting Federal oversight and thus drew a veto threat from the White House, so it appears that this Senate version will be closest to what survives the reconciliation process and ends up as law..

while there's undoubtedly much pro and con in this bill that we haven't seen, what has attracted our attention are the provisions to speed the permitting process for liquefied natural gas exports...when i first read about those provisions, i assumed they were similar to others that had been included in other energy proposals, wherein a permit to build an export facility had to be granted within a year after a completed application, but i serendipitously stumbled onto SEC. 2201 in the text, under "Action on applications to export liquefied natural gas" which reads in part  "the Secretary shall issue a final decision on any application for the authorization to export natural gas under section 3(a) of the Natural Gas Act (15 U.S.C. 717b(a)) not later than 45 days after the later of— (1) the conclusion of the review to site, construct, expand, or operate the liquefied natural gas export facilities required by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.); or(2) the date of enactment of this Act."  thus it’s clear that someone seems to be in quite a hurry to get those LNG export facilities built and start shipping our natural gas to Asia and Europe, where gas prices still remain much higher than in the US...

that provision is particularly important to us here in Ohio because we are on the cusp of becoming the fastest growing natural gas producing state in the nation...last Friday, in the "Today in Energy" blog post from the Energy Information Administration (EIA) titled U.S. natural gas production reaches record high in 2015, they examined the states that are contributing the most growth to the increased output of natural gas in the US in 2015, and Ohio came in second, just a bit behind Pennsylvania...but while growth of natural gas production is slowing in Pennsylvania, it is still growing in Ohio, a fact which is most clearly illustrated by a bar graph from that EIA post which we're including below...

April 16 2016 natural gas by state

the above bar graph was taken from the EIA "today in energy" blog post of last Friday and it shows the 5 states that have contributed the most to the increase in natural gas output over the past six years...the annual increase in the output of gas in billions of cubic feet per day is represented by a bar for each of those 6 years for each of those 5 states (in some cases as a negative)...understand, Texas still produces more gas than Pennsylvania, but Texas gas output is falling, and this graphic only shows the states where the major growth has been....in 2015, Pennsylvania's natural gas output grew by 1.5 billion cubic feet a day, down from the 2.6 billion cubic feet a day growth the state logged in 2014...meanwhile, Ohio's natural gas output grew by 1.4 billion cubic feet a day, up 41% from the less than 1 billion cubic feet a day growth we saw in 2014...assuming these trends continue, Ohio's natural gas output growth will almost certainly surpass the growth of Pennsylvania natural gas in the coming year...thus, while the LNG exports that may be leaving from the Gulf Coast, New Jersey or Washington state will not necessarily have originated in Ohio, it will be Ohio where the rest of the country will be looking for the new gas to pick up the supply deficit created by those exports...

The Latest Oil Stats from the EIA

according to the latest reports from the Energy Information Administration, our imports of oil increased by nearly a quarter of a million barrels per day, which was almost the same amount of oil that we added to our record supplies of oil in storage over that period....however, oil traders took note of an even larger drawdown of our inventories of distillates, and drove the new June contract price of oil up to $43.73 a barrel, a new high for the year, despite the Doha failure earlier in the week...also contributing to the strength in the price for oil was another decrease in the rig count, and a 24,000 barrel per day drop in our field production of crude oil, which fell to an average of 8,953,000 barrels per day during the week ending April 15th, which was 4.4% lower than the 9,366,000 barrels per day we were producing during the same week last year...output of oil from US fields has now fallen 12 out of the last 13 weeks and is now 6.8% off the peak of last June 10th, the lowest it's been since the week ending October 10th of 2014...

at the same time, our imports of crude oil averaged 8,178,000 barrels per day during the week ending the 15th, 247,000 barrels per day higher than the previous week and 5.4% higher than the 7,765,000 barrels per day we were importing during the week ending April 17th last year...but as this week replaced an even higher import week in the 4 week moving average of imports reported by the weekly Petroleum Status Report (62 pp pdf), and thus our oil imports still remain at the 7.8 million barrel per day level, just 2.1% above the same four-week period last year...   

meanwhile, US refineries, which had slowed processing by nearly a half a million barrels per day last week, picked up a bit this week, processing 16,104,000 barrels of oil per day during the week ending April 15th, 163,000 barrels per day more than the 15,941,000 barrels of oil per day they were using during the week ending April 8th....that was also up a bit from the 15,982,000 barrels of oil per day US refineries were using during the same week of 2015, even though the US refinery utilization rate only rose to 89.4%, up from 89.2% last week, which was still lower that the 91.2% refinery utilization rate of the same week last year....

with more oil being refined, our refinery production of gasoline rose by 170,000 barrels per day, averaging 9,738,000 barrels per day during the week ending April 15th, up from the average 9,568,000 barrels of gasoline per day produced during the week ending April 8th...oddly, though, that was still lower than the one week spurt to 9,763,000 barrels per day production we saw during the week ending April 17th of 2015, which set the record for gasoline output for any week in April...on the other hand, our refinery output of distillate fuels (diesel fuel and heat oil) fell by 72,000 barrels per day to 4,712,000 barrels per day during week ending the 15th, which was also 63,000 barrels per day, or 1.3% lower than our distillates production during the same week of 2015...    

even with the increased output of gasoline, our gasoline inventories fell for the second week in a row, slipping from 239,761,000 barrels on April 8th to 239,651,000 barrels on April 15th...however, this week's gasoline supplies were still 6.2% higher than the 225,738,000 barrels of gasoline that we had stored on April 17th last year, which were at the time the highest for the third weekend in April since 1993...thus our gasoline stores are still categorized as "well above the upper limit of the average range" for this time of year...at the same time, our distillate fuel inventories also fell, as you might recall the cold snap that week, dropping by 3,554,000 barrels to end the week at 159,935,000 barrels, which oddly was widely reported as the impetus for a 3.8% jump in the price of crude oil...however, as we've pointed out all winter, distillate inventories also remained "well above the upper limit of the average range" for this time of year as of April 15th, still 23.7% greater than the 129,336,000 barrels of distillates we had stored as of April 17th last year..   

finally, largely on the 247,000 barrel per day increase in our imports, we had an additional 2,080,000 barrels of surplus oil supply this week, and hence our stocks of crude oil in storage, not counting what's in the government's Strategic Petroleum Reserve, rose once again to a new record of 538,611,000 barrels as of April 15th, up from the record 536,531,000 barrels of oil we had stored on April 8th...that was 10.4% higher than the then record of 489,002,000 barrels of oil we had stored as of April 17th, 2015, which at the time was the highest level of 2015, and 35.4% higher than the 397,659,000 barrels of oil we had stored on April 18th of 2014....we've now increased our inventories of crude oil by by nearly 56.3 million barrels since the beginning of this year, while setting new records for the amount oil we had in storage in the US in 9 out of the last 10 weeks... 

This Week's Rig Count

and guess what else? for the 7th week in a row, we have another all-time record low for the number of active drilling rigs working in the US...Baker Hughes reported that their total count of drilling rigs running in the US was down by another 9 rigs to 431 rigs as of April 22nd, which was also down from the 932 rigs that were working on April 24th of 2015, and down from the recent high of 1929 rigs that were deployed on November 21st of 2014... the count of rigs drilling for oil fell by 8 to a 6 year low of 343, which was down from 734 a year earlier, and down from the recent high of 1609 working oil rigs that we saw on October 10, 2014, while the count of drilling rigs targeting natural gas fell by 1 to a record low of 88, down from the 217 natural gas rigs that were drilling a year ago, and down from the recent natural gas rig high of 1,606 that was set on August 29th, 2008... 

two of the rigs that were shut down this week had been drilling in the Gulf of Mexico, reducing the Gulf rig count to 25 and the total offshore count to 26, with the other offshore platform working off the Cook Inlet in Alaska...that's down from the 33 Gulf of Mexico platforms and 34 total offshore that were in use on April 24th of 2015...however, there was a new rig set up on an inland lake in southern Louisiana this week, which brings the inland waters rig count up to 4, up from the 3 rigs deployed drilling on inland waters last year at this time...

a net of 3 horizontal rigs were pulled out this week, leaving the count of rigs drilling horizontally at 332, which was down from the 720 horizontal rigs that were in use on April 24th of 2015, and down from the recent record of 1372 horizontal rigs that were drilling on November 21st of 2014...at the same time, 3 more directional rigs were also stacked, leaving 48 directional rigs still running, which was down from the 91 directional rigs that were in use at the end of the same week a year earlier...in addition, a net of 3 vertical rigs were also shut down, cutting the vertical rig count back to 51, which was down from the 121 vertical rigs that were in use nationally the same week last year... 

5 of the rigs that were shut down this week had been working the Permian basin of west Texas, which still has 136 rigs working there, down from the 246 rigs that were deployed in the Permian last year at this time, and down from the high of 568 rigs that were working the Permian on November 14, 2014....two rigs were also idled in the Eagle Ford of south Texas, which still has 40 rigs running, down from 115 a year ago and down from that basin's peak of 259 rigs hit on May 25 of 2012...a rig also came out of the Cana Woodford of Oklahoma, which still has 29 rigs working it, down from 41 a year ago...and a single rig was also pulled from the Utica shale of Ohio, which has 11 working rigs remaining, down from the 26 rigs working the Utica a year ago at this time, and down from the Utica peak of 50 rigs last seen on December 26th of 2014....

with the reductions in the Permian and Eagle Ford, the state count tables thus indicated that Texas had the largest drilling rig decrease, as they saw a net of 7 rigs pulled out this week, leaving 187 rigs still working the state on April 22nd, which was down from the 393 rigs that were working in Texas on April 24rd last year…Louisiana, with the loss of 2 offshore rigs and the addition of a rig on an inland lake, was down by a net of 1 rig to 47 for the week, which was down from 74 rigs working there a year earlier...and lastly, Ohio also saw a single rig pulled out, leaving 11 still running in the state, which was down from the 25 rigs working Ohio last year at this time...



as usual, there is more here...

ANDREW BACEVICH AND AMERICA’S LONG MISGUIDED WAR TO CONTROL THE GREATER MIDDLE EAST

.................Since 1979, when the Iranians overthrew the Shah and the Soviets invaded Afghanistan, the U.S. has concentrated its firepower in what former U.S. Army colonel Andrew Bacevich calls the “Greater Middle East.” The region comprises most of what America’s imperial predecessors, the British, called the Near and Middle East, a vast zone from Pakistan west to Morocco. In his new bookAmerica’s War for the Greater Middle East, Bacevich writes, “From the end of World War II until 1980, virtually no American soldiers were killed in action while serving in that region. Within a decade, a great shift occurred. Since 1990, virtually no American soldiers have been killed anywhere except the Greater Middle East.” That observation alone might prompt a less propagandized electorate to rebel against leaders who perpetuate policies that, while killing and maiming American soldiers, devastate the societies they touch...........

READ MORE

Seoul's financial hub dream gone wrong By Kim Jae-kyoung

READ MORE

Chinese President Xi Jinping addresses a conference on religions in Beijing


BEIJING, April 23 (Xinhua) -- Chinese President Xi Jinping has called on authorities to stick to the Communist Party of China (CPC)'s religious policies and improve religious work.
Addressing a conference on religions that concluded on Saturday, Xi said religious affairs carry "special importance" in the work of the CPC and the central government, and that the CPC's religious policies and theories had been proven right through past practices.
He promised to fully implement the Party's policy of religious freedom, manage religious affairs in line with laws, retain the principle of religious independence and self-administration, and help religions adapt to the socialist society.
Authorities should work to unite religious and non-religious people, and guide those religious to love their country, protect the unification of their motherland and serve the overall interests of the Chinese nation.
Religious groups, meanwhile, must adhere to the leadership of the CPC, and support the socialist system and socialism with Chinese characteristics, Xi said.