Thursday, July 7, 2016

Record Cushing Storage; Update On PADD 2 Storage -- RBN Energy; How Badly Is Russia Being Pinched By Oil Prices? -- July 7, 2016

Active rigs:

Active Rigs3075189188213

RBN Energy: "I still haven't found all the crude storage I'm looking for -- PADD 2."
The famous Field of Dreams misquote “If you build it, they will come” certainly has proved true for the midstream companies that added a record 18.7 million bbls of crude oil storage capacity in PADD 2 in late 2015 and early 2016.
During that six-month period, crude inventories in PADD 2 blasted 24.4 million bbls higher to a record 155.6 million bbls
And while PADD 2 oil stockpiles have been shrinking somewhat in recent weeks, they remain above 150 MMbbl—a mark the PADD had never seen before this year. Storage levels have been particularly high at the Cushing, OK, storage and distribution hub within PADD 2.
Why is so much crude being socked away?  Today, we continue our look at the new storage capacity being added in the U.S., and at why demand for storage has been so high.
Jobs, the weekly spin: tumble 16,000 to 254,000; four-week average dipped slightly to 264,750. It looks like we may have finally turned the corner.

Norway oil service firms, unions fail to agree to wage deal. Link here. [UPDATE, 58 minutes ago: agreement reached; strike averted.]

How badly is Russia getting pinched by low crude oil prices? Link here. See notes below.

Us oil boom is not dead. It's plotting a 2017 comeback. Link here.

Pennsylvania to get power from shale gas. Link here.
How Badly Is Russia Being Pinched?
From the linked article above:
  • Russia is the world's top energy exporter
  • Russia is enduring the longest economic downturn of Putin's 16-year rule
  • crude oil export duties and extraction taxes cover 23% of Russia's budget
  • Russia is running the widest deficit since 2010
Cabot Oil & Gas Signs 10-Year Sales Agreement 
To Be Sole Supplier Of Natural Gas For New 1,500 MW Plant
Lackawanna County, Pennsylvania

From the linked article above:
  • energy landscape in Pennsylvania shifting away from coal
  • the state still relies on coal for about 40% of its electricity
  • the Lackawanna Energy Center will be one of the most efficient power plants in the country
  • full-scale operations by end of 2018
  • Cabot's NG production from the Marcellus shale basin increased 10% in 1Q16 over 4Q15
The Coming Boom In 2017

From the linked article above, which was not a particularly useful article; mostly filler:
  • "OPEC has hardly dealt the US oil boom a death blow"
  • Goldman Sachs recently predicted US production would continue to fall in 2016, but then would climb again in 2017
  • US production still twice what it was just before President Obama took office
  • reiterates that US, with 264 billion bbls of oil reserves, has more reserves than either Russia or Saudi Arabia
  • record US crude oil production set in April, 2015, best month since 1971
The article again emphasizes "rig count" which I think is low on the list of important data points to follow.

There was a report out yesterday that 4,000 DUCs across the US have 2 billion bbls of oil ready to be pumped.

In the Bakken:
  • many wells choked back
  • 1,500 inactive wells
  • 900 DUCs
  • pad drilling
  • drilling sweet spots
  • halo effect
  • better completion techniques

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