Posts Tagged ‘drilling’

Oil, Oil Everywhere

Oil, Oil Everywhere

Courtesy of Karl Denninger at The Market Ticker 

Boat passes through heavily oiled marsh near Pass a Loutre, Louisiana

We’re now about a month into the BP Oil "blowout" incident in the Gulf.

We still don’t know exactly what caused the blowout, but that’s not the important factor from my point of view. 

We know that a gas "bolus" got into the drill pipe and expanded as it rose, and that was the proximate cause of the blast and sinking of the Deepwater Horizon.

What we don’t know is why the blowout preventer failed to close.

There have been several theories and claims, among them:

  • The Blowout Preventer’s hydraulic system has one or more leaks in it, and as such it couldn’t close.  If this is true then the question becomes who knew of the leak, if anyone, as it would have caused the preventer to fail routine tests.
     
  • There are also claims that the well failed a negative pressure test a few hours before the incident.  That would imply that there was a problem with the casing integrity (or the cement job done to lock it in place) and work continued without addressing this first.

Let me provide some context here: I live in the Florida Panhandle and in a "worst case scenario" the value of my home is likely to be destroyed.  On April 30th I wrote a piece called "Drill Baby Drill", and I stand behind it today, even with the increased knowledge we now have.

Gulf Coast Struggles With Oil Spill And Its Economic Costs

I want answers to the above two questions, and I want the firms and persons responsible for those two breaches of protocol and common sense (along with safety measures) tarred, feathered and bankrupted, in that order, with every penny they personally and corporately possess confiscated to perform whatever remediation we can.

What I do know is this: A deepwater rig like the Horizon costs about $500,000 per day to have on site and operate.  There was obviously a decision taken by someone that halting operations to pull and repair or replace the blowout preventer stack would cost millions (such an operation would result in significant downtime, of course, during which the rig would be sitting idle) and thus it was not done.

But this does not change my base view, which is that we have no valid alternative to drilling in the Gulf and elsewhere – indeed, everywhere we can find oil and gas.

What…
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Drill Drill Drill – From A Democrat?

Drill Drill Drill – From A Democrat?

Broken globe and oil rig

Courtesy of Karl Denninger at The Market Ticker

Well well well…..

Obama will propose allowing exploration off the coast of Virginia and, if a Congressional moratorium is lifted, in the Gulf of Mexico 125 miles (201 kilometers) off the coast of Florida, according to an administration official speaking on the condition of anonymity.

125 miles offshore is too far.  Off most of Florida this is insanely-deep water.  Yes, there is oil and gas there, but it’s very expensive fuel to acquire, simply because of the technology required to reach the deposits.

Anyone care to bet on whether this is a game linked to "cap-and-fraud"?

Yes, we should "drill drill drill."  But we should also look toward realistic vehicles for personal transportation.  Here’s a fact: The best "bang for the buck" out there with today’s technology is hybrid diesel/electric, with a diesel engine just big enough to cruise on the highway and charge the batteries.  Add plug charging capability and you’ve got something worthwhile, and in combined-cycle driving it would reach 100mpg.

Now work on engine technology that is truly "flex fuel" but runs on the diesel cycle.  That is, you can put any mixture of gasoline, diesel or kerosene-like fuel (e.g. Jet-A or JP5) in the tank and it will run just fine.  Why the diesel cycle?  Because it is more efficient due to the lack of throttling losses.  Set up the vehicle so you can "tell" the vehicle that you’re parked outdoors and thus it is permitted to top off the battery pack while you’re in the shopping center (by running the engine), then automatically shut down when charged.

Pure electric vehicles are, with today’s technology, a fantasy for most users.  The issue is energy density – there is no better density option than liquid hydrocarbons, whether people like it or not.  Batteries can provide short-term small-size…
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If We Can’t Get Oil from Mexico…

If We Can’t Get Oil from Mexico…

mexico - tbiCourtesy of Lawrence Delevingne at Clusterstock

This was originally posted at The Oil Drum, and has been reprinted under the Creative Commons Attribution-Share Alike 3.0 United States License.

*** 

The news from Mexico just continues to get worse with bad news from all three of their biggest oil fields, even as our perennial cornucopian talks of “a Mexican surprise.” As Gregor noted recently (h/t ft energysource) at the beginning of the year Cantarell was producing 862,000 bd and at the end of July this was down to 588,000 bd. The graph plotting decline continues to show a linear decent at the rate of 35,000 bd per month or roughly 100,000 bd every three months – giving it just 17-months at that rate (ending right at the end of next year) until there is nothing left. Somewhere in there the drop is likely to stabilize, but suddenly and soon the questions as to where the replacement hundreds of thousands of barrels are going to come from is going to stop being an almost academic exercise.

Mexico: Daily production from one-time super giant cantarell oilfield - tbi

The peak and decline of Cantarell – where Mexico once got most of its oil.

But they aren’t the only ones in trouble. Consider U.S. net imports from Mexico over the same period. That decline also looks pretty linear, with a projected intersection with zero in 2014, depending on where you draw the line.

 the oil drum, monthly us net imports from mexico
Net Imports From Mexico (EIA)

Mexico itself is not likely to be able to come up with much of an answer.

The President just changed the head of Petroleos Mexicanos (Pemex) as the revenues that the state gets from sale of its oil (making up nearly 40% of the federal budget) dropped 30% in the first half of the year. Current Mexican Government predictions that overall Mexican production will stabilize at 2.5 mbd over next year don’t reflect the collapse of Cantarell, and also fail to recognize that the promised increases in production from other fields are not reaching the goals set. It is only a few days since the production at Chicontepec was “evaluated” after falling some 12,000 bd short of target. This field is still in development, with ultimate production targeted at 550,000 to 700,000 bd by 2017, but as it is already 16%…
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Zero Hedge

Trump Slams "Foolish" Fed, Ready To Intervene In Huawei Case

Courtesy of ZeroHedge. View original post here.

Update: President Trump went on tell Reuters that he needs flexibility amid the trade battle with China:

“You have to understand, we’re fighting some trade battles and we’re winning. But I need accommodation too,” he said.

And stated that it would be a mistake if the Fed boosts rates next week: "I think that would be foolish, but what can I say?"...



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Phil's Favorites

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shared her thoughts on the political landscape with us in our August interview, and now, post-2018 election, we’re following up.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow ...



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Members' Corner

Blue Wave with Cheri Jacobus (Q&A II, Updated)

By Ilene at Phil's Stock World

Cheri Jacobus is a widely known political consultant, pundit, writer and outspoken former Republican and frequent guest on CNN, MSNBC, FOX News, CBS.com, CNBC and C-Span. Cheri shared her thoughts on the political landscape with us in our August interview, and now, post-2018 election, we’re following up.

Updated 12-10-18

Ilene: What do you think about Michael Cohen's claim that the Trump Organization's discussions with high-level Russian officials about a deal for Trump Tower Moscow ...



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Kimble Charting Solutions

Bear Market Omen? The 'Average Stock' Is Breaking Down

Courtesy of Chris Kimble.

The stock market has been in a corrective sideways move for the better part of 2018. Is it ready to decline even lower?

Well if the “average stock” is any indication, then investors should be concerned.

The “monthly” chart below is of the Value Line Geometric Index (INDEXNYSEGIS: VALUG), which plots the price of an average stock in today’s market. We can see that a bearish wedge pattern has developed in a similar fashion to 2007 and 1999.

It’s notable that in each of the past two breakdowns (1) and (2), the price broke below wedge support and its 10-month moving average.

It appears to be doing the same thing today. Careful here!

Value Line Geometric Chart – Bearish Wedges

...



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Insider Scoop

A Peek Into The Markets: US Stock Futures Surge Ahead Of Producer Price Index

Courtesy of Benzinga.

Related SPY A Peek Into The Markets: US Stock Futures Signal Lower Start On Wall Street Assessing This Week's Technical Damage To...

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Digital Currencies

How low will Bitcoin now go? The history of price bubbles provides some clues

 

How low will Bitcoin now go? The history of price bubbles provides some clues

The Bitcoin bubble is perhaps the most extreme speculative bubble since the late 19th century. Shutterstock

Courtesy of Lee Smales, University of Western Australia

Nearly 170 years before the invention of Bitcoin, the journalist Charles Mackay noted the way whole communities could “fix their minds upon one object and go mad in its pursuit”. Millions of people, he wrote, “become simultaneously impressed with one delusion, and run after it, till their attention is caught by some new folly more captivating than the first”.

His book ...



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Chart School

Weekly Market Recap Dec 09, 2018

Courtesy of Blain.

Bears are certainly showing the type of strength we haven’t seen in a long time.   A week ago at this time futures were surging on news of a “truce” for 90 days between China and the U.S. in their trade spat.  But the charts were still not saying lovely things despite a major rally the week prior.   And by Tuesday, darkness had descended back on the indexes, with another gut punch Friday.    A lot of emphasis was put on a long term Treasury yield dropping below a shorter term Treasury.

On Monday, the yield on five year government debt slid below the yield on three year debt, a phenomenon which has p...



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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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Biotech

World's first gene-edited babies? Premature, dangerous and irresponsible

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

World's first gene-edited babies? Premature, dangerous and irresponsible

Vchal/Shutterstock

By Joyce Harper, UCL

A scientist in China claims to have produced the world’s first genome-edited babies by altering their DNA to increase their resistance to HIV. Aside from the lack of verifiable evidence for this non peer-revie...



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ValueWalk

Vilas Fund Up 55% In Q3; 3Q18 Letter: A Bull Market In Bearish Forecasts

By Jacob Wolinsky. Originally published at ValueWalk.

The Vilas Fund, LP letter for the third quarter ended September 30, 2018; titled, “A Bull Market in Bearish Forecasts.”

Ever since the financial crisis, there has been a huge fascination with predictions of the next “big crash” right around the next corner. Whether it is Greece, Italy, Chinese debt, the “overvalued” stock market, the Shiller Ratio, Puerto Rico, underfunded pensions in Illinois and New Jersey, the Fed (both for QE a few years ago and now for removing QE), rising interest rates, Federal budget deficits, peaking profit margins, etc...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

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Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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