Disclaimer: in a long note like this, there will be typographical and factual errors. In addition, this is not an investment page. Do not make any investment, financial, job, travel, or relationship decisions based on what you read here or think you may have read here.
Lots going on.
First, let's check what WTI is doing at 9:53 and then look at the EIA weekly petroleum report:
- WTI: down 0.2%; down 12 cents; trading at $59.82, that suggests to me a small build; let's see --
- weekly US crude oil inventories: increased by 2.8 million bbls last week
- weekly US crude oil inventories: at 442.3 million bbls, about 2% below the five-year average (but, who are they trying to fool? the five-year average has been moving up significantly the past year or so)
- refineries? operating at a very, very low capacity -- just as we move into driving season; shortage of heavy oil? whatever -- refineries operating at 86.6% -- at the very low end of what we generally see;
- and, look at this, gasoline production actually decreased last week (again, as we move into the US driving season; midwest flooding?), averaging 9.7 million bbls of gasoline per day
- total gasoline inventories are about 2% above the five-year average for this time of the year; so maybe it's simply the refineries not wanting to get ahead of their headlights
- everything else? Pretty much background noise
Week
|
Week Ending
|
Change
|
Million Bbls Storage
|
Week 0
|
November 21, 2018
|
4.9
|
446.9
|
Week 1
|
November 28, 2018
|
3.6
|
460.5
|
Week 2
|
December 6, 2018
|
-7.3
|
449.2
|
Week 3
|
December 12, 2018
|
-1.2
|
442.0
|
Week 4
|
December 19, 2018
|
-0.5
|
441.5
|
Week 5
|
December 28, 2018
|
0.0
|
441.4
|
Week 6
|
January 4, 2019
|
0.0
|
441.4
|
Week 7
|
January 9, 2019
|
-1.7
|
439.7
|
Week 8
|
January 16, 2019
|
-2.7
|
437.1
|
Week 9
|
January 24, 2019
|
8.0
|
445.0
|
Week 10
|
January 31, 2019
|
0.9
|
445.9
|
Week 11
|
February 6, 2019
|
1.3
|
447.2
|
Week 12
|
February 13, 2019
|
3.6
|
450.8
|
Week 13
|
February 21, 2019
|
3.7
|
454.8
|
Week 14
|
February 27, 2019
|
-8.6
|
445.9
|
Week 15
|
March 6, 2019
|
7.1
|
452.9
|
Week 16
|
March 13, 2019
|
-3.9
|
449.1
|
Week 17
|
March 20, 2019
|
-9.6
|
439.5
|
Week 18
|
March 27, 2019
|
2.8
|
442.3
|
Third, some headlines to come back to, or better said, some headlines to which I will come back:
- next US shale wave will need fewer heads, different skills
- from Texas to the world: surge of US oil exports on the way (Art Berman: take note)
- fracking keeps the gas pedal on the US economy
- 35029, 693, Lime Rock, Scott 3-7-6H-143-95, Murphy Creek, t11/18; cum 29K 1/19;
- 34928, 3,603, WPX, Plenty Sweet Grass 18-19HD. 50 stages; 8.5 million bbls, Squaw Creek, t2/19; cum --;
- 31799, 1,949, CLR, Mittlestadt 6-17H, Chimney Butte, t1/19; cum 30K at 15 days;
- 30362, 2,575, CLR, State Weydahl 5-36H1, Corral Creek, t1/19; cum 17K at 8 days:
| $59.97 | 3/27/2019 | 03/27/2018 | 03/27/2017 | 03/27/2016 | 03/27/2015 |
|---|---|---|---|---|---|
| Active Rigs | 68 | 60 | 49 | 32 | 97 |
RBN Energy: what it takes for an LNG Export project to reach FID. Left unsaid, the most important thing for any fossil fuel project to reach FID is the country's political will and a president who listens to that country's political will to allow the process to proceed.
The second wave of North American LNG export projects is officially underway. LNG Canada took final investment decision (FID) last October and would be the first large-scale LNG export facility in Canada. Golden Pass and Calcasieu Pass followed in February, marking the beginning of the next round of LNG export build on the U.S. Gulf Coast. Sabine Pass Train 6 is expected to get the green light any day, and at least eight more projects are targeting FID this year. But how likely are these projects to go ahead? And what exactly does it take for a project to reach that financial milestone? Today, we begin a two-part blog series on the factors affecting U.S. and Canadian LNG export projects’ prospects for taking FID and our view on the projects making progress towards joining the second wave of LNG exports.
One of the ripple effects of the Shale Revolution has been the rush to export LNG. Seven U.S. liquefaction trains across three terminals — two at brownfield sites and one at a greenfield site — are now operational (green diamonds in Figure 1), and more than a dozen others are “FID-ed” and on their way toward completion (blue and orange diamonds). But those are just the ones that have garnered the capital backing and commitment to get built. In addition, there are nearly two dozen more liquefaction projects lined up to. But as surfers know, multiple factors have to align in order to find that perfect swell; the same goes for LNG export projects, and not all of the announced projects will make it. So, what makes a liquefaction project truly viable in a highly competitive environment?
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