Home » Posts tagged 'SRSrocco report'

Tag Archives: SRSrocco report

Olduvai
Click on image to purchase

Olduvai III: Catacylsm
Click on image to purchase

Post categories

Greed Driving Broader Markets Today, Fear To Spark Precious Metals Fireworks In The Future

Greed Driving Broader Markets Today, Fear To Spark Precious Metals Fireworks In The Future

With the Fed propping up the entire market and extreme greed driving the stock indexes to new highs, investors have lost interest in the precious metals, for the moment.  However, I am not surprised.  What is taking place in the overall markets is precisely what I forecasted back in September.

After gold and silver broke out of key resistance levels in the summer and then moved to new highs for 2019, a consolidation period would likely follow before the precious metals began the next leg up.  I mentioned this in my last Youtube precious metals update, Silver Price Update & End Of Mining Era, published on September 21st.

In that video update, I posted this daily chart on silver:

I stated that silver would probably correct back down to these price levels before setting up for the next phase higher. Today, silver fell to a low of $16.71 in the U.S. markets ($16.58 in overnight markets), so it seems to be heading down to the $16.20 level.  Here was the silver price on stockcharts as of Thursday, November 7th.

I believe silver will fall back to that $16.20 level, according to how traders are now anticipating the market.  Again, I am not saying that silver should go down to $16.20, especially with all the Fed money printing and Repo-madness, but this is how traders are viewing the silver market.  Why?  Because the Fed is now buying $60 billion a month in Treasuries, the same as the U.S. Military monthly spending budget, it has given the market another FALSE BUYING SIGNAL.  Thus, GREED in the market has gone back up to a record “Extreme Level.”

 …click on the above link to read the rest of the article…

TROUBLE AT MIGHTY EXXONMOBIL: Record Number Of Shale Wells While Permian Oil Production Remains Flat

TROUBLE AT MIGHTY EXXONMOBIL: Record Number Of Shale Wells While Permian Oil Production Remains Flat

There’s trouble brewing in the U.S. largest oil company while most investors remain in the dark.  ExxonMobil added a record number of wells in the Permian during the first three quarters of 2019, only to see the company’s oil production plateau.  What a difference in a year when Exxon bragged that its Q4 2018 Permian oil production had surged 93% from the same period in 2017.

However, an investor reading ExxonMobil’s latest presentation would believe the company’s Permian oil production continues to increase significantly by the announcement that output is up 72% since Q3 2018.

Let me explain how these oil companies “BUFFALO” investors with the numbers.

First, the nice chart above is stated in Koebd, or 1,000 barrels of oil equivalent per day.  Exxon’s Permian production shown in that chart includes natural gas.  So, unless you do a bit of digging and research, the typical investor will believe that Exxon’s Permian oil output continues to surge higher in 2019.

Second, while Exxon’s Permian production continues to increase in 2019, the majority of the gain is from natural gas. According to Shaleprofile.com, Exxon’s Permian oil production rose slightly since January, but natural gas was the clear winner.

(charts from Shaleprofile.com)

Third, ExxonMobil added 133 wells from Jan-Aug 2018 to increase overall Permian oil production by 84%. However, when ExxonMobil added 149 wells from Jan-Aug 2019, oil production only increased by a mere pittance of 3% during the same period. The reason for the plateauing of Exxon’s Permian shale oil production has to do with the massive decline rate taking place in its 2018 production.

We can see this occur in glorious 3D Technicolor in the chart below:

 …click on the above link to read the rest of the article…

More Than 50% Of The Mighty Permian’s 2018 Oil Production Has Vaporized

More Than 50% Of The Mighty Permian’s 2018 Oil Production Has Vaporized

As dark clouds gather on the financial horizon, big trouble is brewing in the U.S. Shale Oil Industry.  While most Americans are focused on the Mainstream media’s coverage of the ongoing Washington D.C. circus, the real threat to the domestic economy lies in the country’s oil heartland.  And, if we look at what is taking place in the United States’ largest shale oil region, the signs are troubling.

The Permian Oil Basin in Texas and New Mexico accounts for nearly half (46%) of the total U.S. shale oil production.   According to the data from Shaleprofile.com, Permian’s oil production peaked in May at 3.43 million barrels per day.  Due to the massive decline rate, production in the Permian has stalled this year.

The chart below shows the Permian oil production declining even though more wells continue to be brought online.  Unfortunately, there aren’t enough wells being added to offset the tremendous decline rate.  You will notice how quickly the oil production that was added in 2018 (Light Blue color) has declined in just half a year:

To give you a better idea of the huge decline rate in Permian oil production, let’s only focus on 2018 and 2019 in the following charts.  But, before doing so, I wanted to let everyone know that this information would not be possible without the data from Shaleprofile.com.  I highly recommend that you check out Shaleprofile.com and consider subscribing to the service if you want to be able to access more details in the shale industry.  It’s worth its weight in gold.

Let’s look at the Permian oil production just for 2018.  Permian oil production brought on in 2018 peaked in December at 2,136,000 barrels oil per day (bopd) or 2,136K bopd, and declined to 1,056K bopd by July 2019. That is a STUNNING 50.5% decline in just seven months:

 …click on the above link to read the rest of the article…

More Black Swans Arrive As U.S. Debt Balloons $800 Billion In Two Months

More Black Swans Arrive As U.S. Debt Balloons $800 Billion In Two Months

The rate at which black swans are showing up in the world should scare the hell out of people.  But, unfortunately, everyone seems to be lost in the highly complex technology of I-phones, computers, social media, and the telly to notice that something is definitely wrong.  The current situation reminds me of a famous scene in the Monty Python movie, The Holy Grail, where a guy is banging a bell and saying, “Bring out your dead.”  Let me explain.

The scene in the movie takes place in England or Europe during the Black Plague, and due to the staggering amount of deaths, carts were used to pick up the bodies throughout the city.  Yes, this is indeed a macabre subject matter, but Monty Python takes a serious situation and turns it into a comedy.  However, the point I am trying to make is this… death is a very tragic and emotional part of life that impacts family members, friends, and coworkers.  But, in this Monty Python scene, there is so much death, that it almost becomes numb to everyone.

And, that is precisely what I see now in the public. There are so many warning signs, or black swans, that no one seems to notice.  Everyone has become… QUITE NUMB to it all.  So, when the U.S. Government adds $814 billion of new debt in a little more than two months, the public yawns as this is no big deal:

Since the beginning of August, the total U.S. federal debt has increased from $22,023 billion to $22,837 billion.  Thus, the U.S. public debt has increased by nearly 4% in just two months!  Here is the debt table from TreasuryDirect.gov website since August 1st:

…click on the above link to read the rest of the article…

More Than 50% Of The Mighty Permian’s 2018 Oil Production Has Vaporized

More Than 50% Of The Mighty Permian’s 2018 Oil Production Has Vaporized

As dark clouds gather on the financial horizon, big trouble is brewing in the U.S. Shale Oil Industry.  While most Americans are focused on the Mainstream media’s coverage of the ongoing Washington D.C. circus, the real threat to the domestic economy lies in the country’s oil heartland.  And, if we look at what is taking place in the United States’ largest shale oil region, the signs are troubling.

The Permian Oil Basin in Texas and New Mexico accounts for nearly half (46%) of the total U.S. shale oil production.   According to the data from Shaleprofile.com, Permian’s oil production peaked in May at 3.43 million barrels per day.  Due to the massive decline rate, production in the Permian has stalled this year.

The chart below shows the Permian oil production declining even though more wells continue to be brought online.  Unfortunately, there aren’t enough wells being added to offset the tremendous decline rate.  You will notice how quickly the oil production that was added in 2018 (Light Blue color) has declined in just half a year:

To give you a better idea of the huge decline rate in Permian oil production, let’s only focus on 2018 and 2019 in the following charts.  But, before doing so, I wanted to let everyone know that this information would not be possible without the data from Shaleprofile.com.  I highly recommend that you check out Shaleprofile.com and consider subscribing to the service if you want to be able to access more details in the shale industry.  It’s worth its weight in gold.

Let’s look at the Permian oil production just for 2018.  Permian oil production for 2018 peaked in December at 2,136,000 bopd or 2,136K bopd, and declined to 1,056K by July 2019. That is a STUNNING 50.5% decline in just seven months:

 …click on the above link to read the rest of the article…

SILVER PRICE UPDATE: Including End Of A Silver Mining Era

SILVER PRICE UPDATE: Including End Of A Silver Mining Era

Since my last video update, the silver price has consolidated to a lower level.  While I wasn’t surprised to see silver continue to correct, I do believe its only temporary before it begins a new leg higher.  And, if we look at the COT Report for silver, there are some positive signs going forward.

But, before I provide a preview on my newest video update, Silver Price Update & End Of A Silver Mining Era, I wanted to clarify my position on “technical analysis.”  There seems to be a large group of precious metals investors that have a negative KNEE-JERK reaction when I post some charts on technical analysis, stated several reasons why it’s a waste of time to do it when the market is rigged or controlled by the bullion banks (JP Morgan), the Fed and central banks.

While new and long-term followers are free to post any comments they desire about the pros or cons of technical analysis, my reason for doing so is to show what TRADERS ARE LOOKING AT and what they expect going forward. Traders, hedge funds and large institutions all study and follow technical analysis.  Right now, they are the leading drivers of the silver price.

However, technical analysis patterns will not provide the ultimate FUNDAMENTAL VALUE for silver when the Fed and Central Banks lose control of the Fiat Monetary system and economy.  Yes… at that point, technical analysis won’t matter.  BUT, we aren’t there yet.

So, instead of precious metals investors becoming frustrated because they believe the silver price should only go IN ONE DIRECTION… UP, I am just showing how silver trades in the current system.  Thus, if it falls back down to a certain key technical level before moving higher, you CAN TAKE IT OR LEAVE IT. 

 …click on the above link to read the rest of the article…

Why Silver Is Better Than Gold

Why Silver Is Better Than Gold

While the surging gold price has received most of the spotlight in the market, silver will outperform the king monetary metal over the longer term.  Key fundamental factors make silver the more attractive asset and investment to own versus gold when we look closely at the data.  However, that doesn’t mean precious metals investors shouldn’t own gold.  Investors need to own both precious metals, but I believe silver will provide better returns than gold in the future.

Now, there is this notion put forth by many precious metals analysts that central banks will be forced, at some point, to back their currencies by gold.  Thus, the idea is that gold will reset at a much higher price.  While that is a possibility, backing debt-based currencies with gold will not solve our coming energy crisis.  And, let me tell you, it’s an energy predicament that we have no real solution.

You see, it doesn’t really matter if we back fiat money with gold.  The REAL ISSUE has always been ENERGY. The massive increase in debt and derivatives are a symptom of the Falling EROI (Energy Returned On Investment) of oil.  Basically, while gold may solve certain issues in regards to “Confidence” in money, it doesn’t fix our energy problems.

I touched on this briefly in my newest video, Why Silver Is Better Than Gold.  However, most of the video explains new charts that show fundamental factors on why silver is a better investment than gold as well as some key price levels for the short term.

One of the more important charts in the video shows the amount of “Identifiable” physical gold and silver investment stocks.  Interestingly, according to the data from the World Gold Council and the World Silver Surveys, there is just about the same amount of physical gold investment as there is silver.

 …click on the above link to read the rest of the article…

TROUBLE AT THE BAKKEN: Oil Production Finally Peaking?

TROUBLE AT THE BAKKEN: Oil Production Finally Peaking?

Is the mighty Bakken Shale Oil Field finally peaking?  Well, according to the data from the folks at the North Dakota Department of Mineral Resources, oil production in the Bakken has been flat for the past six months.  And, to make matters worse, production has been flat even though oil prices increased from a low of $42 in January to the mid $60’s in April.

So, something seriously wrong is going on in North Dakota.  What a difference in the Bakken’s recent oil supply compared to the field’s heyday when production surged from 300,000 barrels per day in 2011 to over 1.1 million barrels per day in 2014.  Furthermore, the oil price the shale companies in the Bakken are receiving is now $48 a barrel versus the West Texas Intermediate price of $57.

If we look at the past seven months, the North Dakota Bakken has only added 36,000 barrels per day (bd) of new oil production compared to 114,000 bd during the same period last year:

As we can see in the chart above, the output from Sep 2017 to Apr 2018 enjoyed an upward trend, while the Sep 2018-Apr 2019 has been flat.  You can see this better in Enno Peters chart from ShaleProfile.com.  I highly recommend followers check out his site as he provides updates on the top shale oil and gas fields in the United States using state data from over 100,000 wells.

These charts from ShaleProfile.com show the annual change production by different colors.  Here we can see that Bakken oil production increased steadily from 2011 to 2014, plateaued in late 2014 and 2015, declined in 2016, raised in 2017-2018, and has plateaued once again in 2019. The likely culprit for the plateau in Bakken oil production has to do with the lower oil price and the reduction of investment funds available to the shale companies that continue to spend more money than they make.

 …click on the above link to read the rest of the article…

THE MASSIVE 46 STORY TALL STRUCTURE: The Penasquito Mine Tailings Dam

THE MASSIVE 46 STORY TALL STRUCTURE: The Penasquito Mine Tailings Dam

The colossal Penasquito Mine’s tailings dam will reach a stunning height of a 46 story skyscraper over the next decade.  That is, if the mine reopens and is allowed to continue business as usual.  Newmont-Goldcorp suspended operations at Mexico’s second largest silver mine on April 29th, due to a blockade stemming from issues with the local community in regards to water supply concerns and problems with a trucking contractor.

Last year, the Penasquito Mine produced 272,000 oz of gold and over 18 million oz of silver.  However, it plans on producing over 5 million oz of gold and 400+ million oz of silver over the next decade.

After I published my article, MORE TROUBLE IN MEXICO: Second Largest Silver Mine Suspended Operations, I did some research on Penasquito’s tailings dam, and when I saw a photo of the dam, I was literally shocked by its massive size.  I never really gave it much thought about where all the waste ended up after the processing of ore was finished.  It’s a typical problem we all deal with today, OUT OF SIGHT, OUT OF MIND.

Let me start by saying that the tailings dam is so large; it surpasses the size of the Penasquito open-pit mine itself. For clarification, the tailings dam (or ponds) are used to store the processed waste slurry after the metals have been extracted.  Here is a layout of the Penasquito Mining Operation:

(image courtesy of Goldcorp 2018 Tailings & Mine Waste Conference PDF report)

As you can see, the tailings dam is 4 kilometers long compared to the Penasquito open-pit mine, which is about half its size.  However, this layout doesn’t give the epic scale of the tailings dam justice.  According to the images in Goldcorp’s 2018 Tailings & Mine Waste Conference PDF, and data from the company’s Feb 2019 Penasquito Mine Tour Presentation, the tailings dam is currently 85 meters tall, or nearly 280 feet in height:

 …click on the above link to read the rest of the article…

THE END OF THE OIL GIANTS: And What It Means

THE END OF THE OIL GIANTS: And What It Means

Recently, Saudi Aramco, the world largest oil exporter, has acknowledged that Ghawar, the world largest oil field, is in decline. The news went mostly unnoticed except in the specialised media.  OK, so the Saudi have a bit of bother, so what?  In fact, this piece of news is extremely important. Previously the oil world had been led to believe that Ghawar was producing over 5 Million barrels/day (Mb/d).[1] As part of its fund-raising, Aramco has disclosed that it is in fact down to 3.8Mb/d.

THE END OF THE OIL GIANTS:  And What It Means

GUEST POST: By Dr. Louis Arnoux

The meaning of this news snippet takes a bit of explaining.  What the specialised media did not emphasise is what follows:

When giant oil fields go into decline, they usually decline abruptly. Ghawar’s decline is ominous. It was discovered in 1948 and until recently represented about 50% of the oil crude production of the Kingdom of Saudi Arabia (KSA). Ghawar is representative of some 100 to 200 giant oil fields. Most of them are old.  The most recently discovered giants are of a diminutive size compared with those old giants.[2]

Giants represent about 1% of the total number of oil fields and yet produce over 60% of conventional oil crude.[3]Very few real giants have been discovered in recent years. The geology of the planet is now known well enough and prospects for new significant giant oil discoveries are known to be low.  In recent decades, discoveries of smaller oil fields have not been able to compensate for the eventual loss of the giants. Figure 1 illustrates the matter. It shows the net flux of addition to reserves per year (additional volumes less volumes used). 

 …click on the above link to read the rest of the article…

Precious Metals Are Setting Up For A Major Rally While The Broader Markets Are Primed For A Crash

Precious Metals Are Setting Up For A Major Rally While The Broader Markets Are Primed For A Crash

While many precious metals investors are concerned about the current low prices, I believe gold and silver are setting up for a major rally while the market is primed for a crash.  Why?  Because the broader market technical indicators versus the precious metal have been pushed to opposite extremes.  Thus, when one goes down, the other will rise.  And, we also must remember, gold and silver act as a FEAR TRADE when the conditions get ugly in the market.

And if you don’t think the markets are getting ugly, you should see the intra-day volatile price action of some of the more well-known stocks.  I continue to be amazed at the INSANE price movements taking place in the various stocks in the market.  While the fundamentals haven’t played much of a role in determining the “PRICE” of stocks for a while, it seems to me that there is no rhyme or reason for the way the stocks are trading today.

So, before I compare the analysis of the overall markets versus the precious metals, I wanted to provide two examples of company stock price movements over the past two days and why investors today are TOTALLY INSANE and IRRATIONAL.

ROKU Stock Jumps 28% In One Day On Lousy Financials

Those who aren’t familiar with the company called ROKU, they are one of the new streaming content providers to compete with Cable and Satellite.  It seems as if many cable and satellite customers are growing tired of the high costs of $150-$200 a month for their TV entertainment, so they are replacing them with ROKU via YouTube TV, Hulu, Netflix, etc.

 …click on the above link to read the rest of the article…

Global Economic Growth In Serious Trouble When U.S. Shale Oil Peaks & Declines

Global Economic Growth In Serious Trouble When U.S. Shale Oil Peaks & Declines

The global economy would be in serious trouble if it weren’t for the rapid growth of U.S. shale oil production.  Since the 2008 financial crisis, U.S. shale oil production has increased by more than 6 million barrels per day.  Without these additional barrels of oil, the massive money printing and asset purchases by the central banks would not have been as successful in propping up the economy and markets.

We must remember this simple fact; energy drives the markets, not finance. Finance steers the market.  So, for the economy to expand, there must be oil production growth.  However, it would be unwise for the market-economy to rely upon the U.S. shale industry as the leading driver of global oil production growth for the foreseeable future.

Why?  Well, there are several reasons, but let’s first look at how much the increase in U.S. shale oil production has accounted for the rise in global oil supply since 2008. Of the 9.6 million barrels per day (mbd) of global oil production growth 2008-2017, the United States supplied two-thirds or 6.3 mbd of the total:

Interestingly, global oil production minus the United States and Canada didn’t increase in 2009, 2010 or 2011.  There was a small bump up in 2012 and finally by 2105-2017 did global oil production minus the U.S. and Canada increase by 1.7 mbd.  Now, let me repeat that.  If we add up ALL THE OTHER COUNTRIES in the world producing oil, the net increase from 2008 to 2017 was only 1.7 mbd. Thus, of the total 9.6 mbd of global oil production growth 2008-2017, the U.S. (6.3 mbd) and Canada (1.6 mbd) accounted for 82% of the total.

 …click on the above link to read the rest of the article…

MORE TROUBLE IN MEXICO: Second Largest Silver Mine Suspended Operations

MORE TROUBLE IN MEXICO: Second Largest Silver Mine Suspended Operations

In just a little more than a week after the mighty Newmont-Goldcorp merger was finalized, the company suspended operations of its largest gold-silver mine in Mexico.  The Penasquito Mine, which produced more than a 500,000 ounces of gold and 25 million ounces of silver in a single year, has been dealing with a blockade of its operations since March 27th.

The blockade was started due to issues with the local community in regards to water supply concerns and problems with a trucking contractor.  However, the protests by the local community over water rights have been going on ever since the Penasquito Mine started operations in 2010.

According to the article, Goldcorp using excessive water at Peñasquito mine – critics, research by McGill Research Group, reported that the Penasquito Mine was using three times the amount of water than it originally agreed upon.  Furthermore, the large open-pit gold-silver mine, located in the state of Zacatecas, was also consuming three times the amount of water supplied to the entire City of Zacatecas (population 129,000).

To get an idea the amount of water being consumed by the Penasquito Mine, I looked at the data from Goldcorp’s most recent Sustainability Report. In 2017, the Penasquito Mine withdrew a staggering 7.9 billion gallons of water to supply its operations for the year.  Of that total amount, 93% came from groundwater. That is one hell of a lot of water.

It will be interesting to see how long it takes for the suspension to end.  However, with the election of the new President AMLO of Mexico, Andrés Manuel López Obrador, large foreign mining companies in Mexico may find it increasingly challenging to GET THEIR WAY as they have in the past with the help of pro-mining leaders.

Regardless, the Penasquito Mine produced the second highest amount of silver in Mexico last year:

 …click on the above link to read the rest of the article…

LOUSY SHALE ECONOMICS: Financial Troubles Continue At ExxonMobil

LOUSY SHALE ECONOMICS: Financial Troubles Continue At ExxonMobil

After reporting lower than expected earnings, ExxonMobil’s stock price sold off on Friday.  The company blamed poor performance on reduced production volumes and a weaker oil price.  However, the real culprit will turn out to be Exxon’s big move into the Great U.S. Shale Oil Ponzi Scheme.

As I mentioned in my recent article, EXXONMOBIL U.S. OIL & GAS FINANCIAL TRAIN-WRECK: Producing Shale Is Destroying Its Bottom Line, the company will continue to spend a great deal of capital with little financial reward.  So, it wasn’t a surprise to see Exxon’s Q1 2019 earnings decline by $3.6 billion compared to the previous quarter… even though U.S. oil production had increased.

While weaker earnings were experienced across all of the company’s sectors, upstream (oil & gas wells), downstream (refining and marketing products) and chemical, the big RED FLAG was in the U.S. oil and gas sector.  According to Exxon’s Q1 2019 Earnings Release, the company invested $2.5 billion in CAPEX (capital expenditures) on its U.S. oil and gas wells, to earn a paltry $96 million in earnings:

Now, compare the miserable U.S. upstream earnings to Exxon’s International upstream earnings of $2.78 billion on $2.8 billion of capital expenditures.   ExxonMobil will likely invest close to $10 billion in CAPEX on just its U.S. upstream sector (spent over $5 billion of CAPEX past two quarters) this year, and if oil prices fall, it will impact their earnings quite negatively.

This next chart shows how much money Exxon is investing in its U.S. oil and gas sector each quarter:

We can see that Exxon ramped up capital expenditures in its U.S. oil and gas properties (mostly shale) significantly since the beginning of 2018.  Over the past year, the company has spent $8.8 billion to increase production by 77,000 barrels per day. 

 …click on the above link to read the rest of the article…

SHALE STOCK LOSES 99% OF ITS VALUE: Investor Warning For The Future Of The Industry?

SHALE STOCK LOSES 99% OF ITS VALUE: Investor Warning For The Future Of The Industry?

If you think the carnage taking place in the shale oil companies is nearly over, you couldn’t be more wrong.  I believe the bloodbath in the shale oil stocks has only just begun.  Once we see the majority of shale stocks trading on the pink sheets as penny stocks will we finally close the book on the Greatest Energy Ponzi Scheme in history.

I first wrote about the “Disconnect” between the major oil companies share prices versus the shale stocks in my article, THE BLOODBATH IN U.S. SHALE STOCKS CONTINUES: Worst Is Yet To Come.  In that article, I showed how several of the major oil companies’ stock prices had corrected back close to their highs set in October 2018.  However, the shale stocks never really recovered and are still considerably lower than their peaks set last year.

Here is the chart from that article linked above:

Even though many of the shale stocks shown in this chart have seen their prices move higher since I posted it in the middle of March, they are still well off their highs. For example, Whiting Petroleum peaked at $55 in October and is currently trading at $27.  Thus, it is still 50% off its peak last year.  Furthermore, Oasis trading at $6.60 is still 53% off its high of $14.

However, there are some outliers like Pioneer.  Pioneer hit $190 back in October 2018 and was only trading at $140 in mid-March.  So, it was still well off its October peak.  Although over the past month, Pioneer is now trading at $175, so it’s not too far from its previous high.   While Pioneer’s share price is behaving much better than Whiting, Continental, Oasis, and Callon, I believe there is a huge “PERMIAN PREMIUM” being paid by investors who have more money than sense.

 …click on the above link to read the rest of the article…

Olduvai IV: Courage
In progress...

Olduvai II: Exodus
Click on image to purchase