And Nowhere To Go -- April 22, 2020

Nowhere to go: They must be reading the blog. The other day I refenced a tweet suggesting that scores of Saudi ships were streaming to the US.

I replied, asking where were they going to download all that oil?

Bloomberg reports today that something like 20+ ULCC/sVLCCs loaded with Saudi oil are sitting off the US west coast with no place to go. The oil tankers off the coast of California can supply 20% of the world's total oil demand.

Link here.

Bragging rights still belong to Wisconsin, at 85 cents / gallon:

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Back to the Bakken

Not yet wasteful:

Active rigs, tied with record low in "modern history":

$14.72	4/22/2020	04/22/2019	04/22/2018	04/22/2017	04/22/2016
Active Rigs	29	62	59	49	29

Wells coming off confidential list today:

Wednesday, April 22, 2020: 35 for the month; 35 for the quarter, 290 for the year:

• 36559, 1,374, Whiting, Fladeland 14-26HU, Sanish, t11/19; cum 131K 2/20; a 38K month;
• 35633, 5,946, MRO, Perkins USA 12-16TFH, Four Bears, t11/19; cum 189K 2/20; a 73K month; this completes the most recent data on this four-well pad; tracked here.
• 35531, 1,283, Oasis, Merritt 5693 13-24 9T, Alger, t10/19; cum 72K 2/20; a 20K month;
• 32624, 891, Whiting, Niemitalo 11-35-2H, Sanish, t11/19; cum 8K 2/20; a 23K month;

RBN Energy: negative prices for crude and natural gas slam Permian markets.

Underlying Monday’s financially driven oil price rout are physical markets that are in extreme turmoil as they contend with severely reduced demand resulting from the COVID lockdowns and rapidly filling storage tanks. In the Permian Basin, the epicenter of U.S. shale oil, the crude benchmark price — WTI at Midland — on Monday crashed to a historical low of negative $13.13/bbl before rebounding to a positive $13.01/bbl Tuesday. The same day, prices at the Permian natural gas benchmark Waha revisited negative territory for the third time this month, with a settle of minus $4.74/MMBtu for Tuesday’s gas day. Negative supply prices aren’t new to Permian producers, at least for gas — Waha settled as low as minus-$5.75/MMBtu in early April 2019. But up until a couple months ago, oil prices were supportive enough to keep producers drilling regardless. Now, that’s all over, at least for a while. What can we expect now that negative oil prices have arrived in the Permian? Today, we’ll dissect the latest bizarre pricing event to rattle the Permian natural gas and oil markets.

It bears repeating: the crude oil market entered the twilight zone Monday when WTI at Cushing not only collapsed below zero but went as negative as minus-$40.32/bbl and settled the day at minus-$37.63/bbl. The extent of Monday’s trouncing was shocking and, as we explained yesterday, worsened by a few financial players who got caught having to unwind long positions for May delivery just a day before the May contract was expiring, because they had no way to take physical delivery. To get out of their predicament, they ended up having to pay “buyers” to take them out of their positions. That was Monday. On Tuesday, with the financial trading crisis resolved, the May contract recovered to positive territory to expire at $10.01/bbl, up almost $48/bbl from the previous day. The June contract, which had remained relatively supported Monday near $20/bbl — fell to converge with the expiring May contract, down nearly $9/bbl to $11.57/bbl Tuesday.