Tuesday, January 13, 2015

Articles And Links I Will Come Back To Later -- January 13, 2015

Initial production data has been posted for wells coming off confidential list today

Bakken economyRapid City reports more than $200 million in building permits in 2014. Compare this with Dickinson and Williston for 2014:
Dickinson, as of November: permit values stood at just over $205 million, behind the roughly $309 million at the same time in 2013.
Williston, year-end: slightly more than $500 million.
By the way, in that linked Dickinson Press article, the writer noted that permits had slowed year-over-year in both Dickinson and Williston. Here is Williston, 2013 and 2014:

 Total Year-to-Date
 $352,763,110.00 1047 $500,342,125.60
A reader alerted me to a new presentation over at the North Dakota Industrial Commission website.

Enerplus has a new presentation

This is another great article about the real winner in the oil price collapse, from Bloomberg.

Active rigs:

Active Rigs156193182199163

RBN Energy: Expansion plans in the Eagle Ford and the Permian.

This is a most interesting story; a reader sent me the link. This caught me by surprise based on everything I've been reading over at RBN Energy. Either I've misread RBN Energy or their reports were focused elsewhere. Regardless, another great link sent by a reader. Thank you.  Reuters is reporting that U.S. oil tanks are barely one-third full, beckoning a crude contango play:
The U.S. oil storage trade is back - and may be bigger than ever.
Six years ago, the financial crisis led to a sudden surplus of oil and a collapse in prices, spurring a classic low-risk trade that's set to make a comeback: buying crude to store in onshore tanks or floating tankers, since oil costs $8 a barrel less now than what futures buyers will pay in a year.
OPEC's decision not to cut output in the face of slower demand and growing U.S. shale has traders scrambling to cash in on the return of a market structure known as 'contango,' by securing storage that could yield an almost guaranteed return of 8 percent or more. This year, they'll have more scope than ever before to take advantage of the contango play: the capacity of U.S. commercial oil storage tanks has expanded by a third since 2010, while months of strong demand for domestic crude from North American refiners has prevented inventories from swelling too far.
As a result, those onshore tanks are barely a third full, with less than 150 million barrels of the nation's total 439 million barrels of shell storage capacity occupied as recently as October, according to a Reuters analysis of U.S. data. That's by far the highest vacancy rate since the Energy Information Administration began a bi-annual survey of tank farm capacity -- which exclude refinery stocks and oil in pipelines - in 2010. 
Much, much more at the link.

Death Watch

The AP is reporting:
A high-profile Venezuelan opposition leader is calling for protests while President Nicolas Maduro travels abroad seeking help for the financially struggling country.
Tensions have escalated in recent days as the socialist administration has deployed troops and implemented a rationing system to control lines for groceries.
Henrique Capriles, who nearly defeated Maduro in the 2013 presidential election, said Monday that it was time for public demonstrations.
"We are in a state of emergency," he said. "This is the time to mobilize in the streets"
The official state press in Venezuela says there is more than enough bread and diapers; it's simply a distribution problem. 

Sayonara To OPEC

A reader suggests to me that it is very likely that WTI could become the global benchmark once again after losing that status in 2007.

Oil's "race to the bottom" shows OPEC's irrelevance --  Yahoo!Finance. This is a most interesting article. One forgets that Saudi is propping up at least three other countries: Egypt, Lebanon, and Jordan.
The crude crash was arguably the biggest story of 2014 (and now the start of 2015) in part because it caught almost everybody by surprise.
Almost. In early January 2014, Ian Bremmer, president of Eurasia group, told Yahoo Finance that oil could "crater" in 2014 and OPEC could "fall apart."
He was right -- even if he now admits the depth of the decline caught him by surprise.
Bremmer’s call last year had a lot to do with the fact that the geopolitics were “overpriced."
“People said that the Middle East was falling apart and that was going to lead to a lot of oil coming off the market,” says Bremmer. “We agreed the Middle East was coming apart but it wasn’t going to affect oil production.”
Bremmer says the misunderstanding of energy and the politicial landscape has now come out of the market and prices dropped dramatically as a result.
Then there's the question of if or when the Saudis are going to pull back production.
“I have a hard time seeing the Saudis going through 2015 without [any cuts] on the production side, “ Bremmer says, pointing to the Saudi's budget concerns and the country’s growing population.
Also, he notes they have a lot of commitments to places like Egypt and Jordan and Lebanon that "really need Saudi money."

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