| | | Summary of Weekly Petroleum Data for the week ending October 2, 2020 ......................................................................................
U.S. crude oil refinery inputs averaged 13.9 million barrels per day during the week ending October 2, 2020 which was 184,000 barrels per day more than the previous week’s average. Refineries operated at 77.1% of their operable capacity last week. Gasoline production increased last week, averaging 9.5 million barrels per day. Distillate fuel production increased last week, averaging 4.5 million barrels per day.
U.S. crude oil imports averaged 5.7 million barrels per day last week, increased by 0.6 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 5.3 million barrels per day, 18.9% less than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 849,000 barrels per day, and distillate fuel imports averaged 230,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 0.5 million barrels from the previous week. At 492.9 million barrels, U.S. crude oil inventories are about 12% above the five year average for this time of year. Total motor gasoline inventories decreased by 1.4 million barrels last week and are about 0% below the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories decreased by 1.0 million barrels last week and are about 23% above the five year average for this time of year. Propane/propylene inventories decreased by 0.1 million barrels last week and are about 14% above the five year average for this time of year. Total commercial petroleum inventories decreased by 2.0 million barrels last week.
Total products supplied over the last four-week period averaged 17.8 million barrels a day, down by 14.8% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.6 million barrels a day, down by 6.7% from the same period last year. Distillate fuel product supplied averaged 3.6 million barrels a day over the past four weeks, down by 9.3% from the same period last year. Jet fuel product supplied was down 47.5% compared with the same four-week period last year.
Black Blade (a.k.a. Dennis Erectus):
This week's EIA Petroleum Inventory Status Report is SLIGHTLY BULLISH as Crude inventories increased nearly 0.5 million bbls while Total Commercial Petroleum Inventories decreased nearly 2.0 million bbls. Refining utilization increased to around 77.1%. Norway's Lederne labor union has staged an oil worker strike over wages and benefits. It appears that negotiations are on hold until October 10th so both sides can evaluate their current proposals. Meanwhile North Sea production continues but at a lower rate while most other operations are on hold or are slowed significantly until progress has been made and workers get back to work. North Sea. An interesting report this last week said that Venezuela's oil industry is finished as in no longer viable. Even with the "help" from Russia, China and Iran it seems that Nicky Maduro insists on screwing them over as well ... ain't Communism grand? They can't even trust each other while the only real mutual interest that keeps them "united" is their hatred for western free market Capitalism, even if it makes them weaker in the process. Moral of the story: "Don't let your emotions dictate your investing strategies".
As for the energy demand front ... there really isn't any. Demand has picked up slightly but fears of a "next wave" or "second wave" of the China Plague has investors and bankers on edge. We have seen share prices of major oil and gas companies tank to their lowest levels in decades. As an investor in BP and a former investor of RDS.B shares I am somewhat dismayed that they are planning to abandon oil and gas and go headlong into "green energy". That's fine as a sideline project but changing corporate structure on a whim over perceived opportunities where many have failed is too risky for my blood. We may shed our remaining BP shares going forward if they do abandon hydrocarbon energy. Interestingly many US Pipelines are reducing their fees for oil producers this week. Bad for income investors and good for oil and gas producers. Not sure if this makes US Shale production a wee bit more likely to pick back up or not. Work I have from a couple "insiders" in the Permian Basin is that they are starting to see an uptick in activity. One told me that they just began to move a couple rigs onto their leases that they had shutdown since August. We will just have to see what the Baker Hughes Rig Count numbers tell us over the next few weeks. Still, the price of oil remains locked in a narrow trading range between $38 to $41 per bbl which isn't even "breakeven" for most players.
As for the "Blade Portfolio" we are still holding our shares in RGR, SWBI, OLN, MACE, POWW and MAGS. The gun and ammo buying frenzy is in full force. We went to a few local gun shops and the shelves were abre and when ammo does come in it is gone within a couple hours as buyers snap it up even with a "two box limit" per day. If any thing demand is running at a fever pitch as people are watching the (questionable) polls going into the election and see that MSM networks have Joe Biden far in the lead and he has stated many times that he intends to "confiscate" firearms from the American people. Not likely but could lead to higher costs, taxes and fees on gun owners should the Dems take over the White House and Congress. Even at the recent "Gun Show" last week there was a larger crowd than seen in recent years even with fewer offerings and much higher prices. The Ammo Vendors (one major vendor in particular) had people surrounding the section 5 and 6 people deep clamoring to buy ammo. The Fire Marshall warned that he would shutdown the show if people didn't step back and spread out (yeah ... no "social distancing here). So we will keep our investments on ammo, firearms, defense products and security systems for now.
Precious Metals prices have been falling back again after having rebounded twice in the last week. With the Stimulus Package now on hold until at least after the elections we will likely see a good opportunity to snatch up more mining shares on the dips. Maybe Silver and Gold bullion too if you can find it without ridiculous premiums. Obviously when Nancy Pelosi and Donald Trump are finished with their "pissing match" after November 3rd we may see the Stimulus Package seriously discussed and passed. Of course the $Trillions of new dollars and extremely low interest rates vs inflation yielding 'real negative rates" will push the precious metals prices higher, maybe much much higher. We continue nibbling away adding to our "penny stock miner" shares SMTS, ASM and GPL in a "dollar-cost-averaing" strategy as the Bull Case for silver and gold remains intact. We have also been slowly adding more to our KL and RIO positions on the dips. We still hold our physical silver and gold as the "ultimate insurance" against monetary problems including potential collapse.
We are are beginning to slowly add to our larger holdings like T, VZ, CNP, HEP and GRME. We also started adding shares of IRM as well for additional income. Same with our eREIT FUNDRISE where we added more to our position as rents have been collected at a well over 90% rate even with new projects added. Our own rentals are occupied with stable renters and continue to provide decent cash flow. Our stripper wells remain idled and on care and maintenance. At this point it's anybody's guess when we may restart operations (if ever). We currently have no drill rigs working. Going back into production has been discussed and shelved for the foreseeable future.
As always, get out of debt and stay out of debt, accumulate physical Silver and Gold bullion as "portfolio insurance", and stockpile supplies of long term nonperishable foods and basic necessities into storage. After all we do "live in interesting times". |
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