Episode 108 - Tesla threatens to leave CA | Saudi Austerity measures | Dean Foreman

Coronavirus cases in long-term care facilities

https://www.nytimes.com/interactive/2020/05/09/us/coronavirus-cases-nursing-homes-us.html

Elon Musk threatens to move Tesla headquarters out of California following extended shelter-in-place rules

https://www.cnn.com/2020/05/09/tech/elon-musk-tesla-threatens-california/index.html

- Calling California tyrant

- Potentially moving Factory and headquarters to Texas/Nevada

- Hidalgo county wants Tesla to move to its county because of existing auto manufacturing facilities

Saudi Arabia to slash June oil output by an extra 1 million bpd - ministry

https://in.mobile.reuters.com/article/amp/idINKBN22N1OA

- troubling signs of impact in Saudi ARabia and Russia for impact of oil price drop

- Saudi Arabia increasing VAT from 5% to 15% and cutting spending

- political instability is a possibility

- what is Q2 going to show when signs are that Q1 is so bad

Wanted: Somewhere, Anywhere, to Store Lots of Cheap Oil

https://www.wsj.com/articles/wanted-somewhere-anywhere-to-store-lots-of-cheap-oil-11589207580?

- check out the “oil-storage bladders” for $65,000

Dr. Dean Foreman from API on the monthly statistical report:

- production is down significantly, the market is responding

- shut ins locally but demand side problem not a supply side problem

- gasoline demand: starting to see an uptick but 50% below what it should be: jet fuel is likely to lag but gasoline and diesel will pick up more quickly

- diesel is down but not that much because uptick in trucking due to shipping

- February and march people were driving more because not flying but with stay at home orders gasoline went down too

- 31 states gradually starting to reopen and in last 2 weeks seeing gasoline demand rise

- will we see gasoline demand increase this summer? Will people drive more to avoid flying or will driving decrease because people aren’t going anywhere?

- Gasoline exports: down but not down nearly as much as would have expected. Crude oil imports dropped.

- Refinery utilization for April at record low.

- Winter vs. Summer gasoline: trying to get waivers for use of winter gasoline into the summer because too much in storage. Usually have a 20-30 supply of gasoline but current supplies are much higher

- Refinery utilization is at 1985 levels - In 1985 there was a labor shock, not a demand shock like here is now.

- Imports dropped 3x as much as US exports - because of crackers and cokers we use in the United States

- Uncertainty over what you will get when you reopen a well that was shut-in early. May not be able to produce as much, productivity loss.

- Natural gas market: gas is in better position now even though it was a relatively warm winter

- Oklahoma proration hearing: mandate production quotas in a proportionate way, usually well-based not operator based. Tens to penalize most efficient wells.

- Economic indicators are factoring in the worst. Weekly data are showing a turn around. Economic expectations, with trillions of dollars of stimulus expecting lots of economic growth in 2021. Market could be short oil in Q4.

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