OPEC Basket Price Takes A Huge Jump Overnight -- June 2, 2020

Continuing education: if you have time to read only one article on energy today, see the RBN Energy link below.

Most interesting data point all week?

Urals: one source has Urals up 5.05%; up $1.75, at $36.40 but recently that source has appeared to have some variances from other sources. Whatever. With regard to the Urals we started to see this movement last week. Now this from twitter, yesterday -- link here:

OPEC basket: $33.68, link here. This is the first time OPEC basket has not been above $30 since mid-March, 2020, and it's a huge jump. See this post.

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Back to the Bakken

Active rigs:

$36.43	6/2/2020	06/02/2019	06/02/2018	06/02/2017	06/02/2016
Active Rigs	12	64	60	50	25

Six wells coming off the confidential list today -- Tuesday, June 2, 2020: 10 for the month; 155 for the quarter, 382 for the year:

• 36757, 794, Kraken Arrow A 15-22 4TFH, Sanish, t12/19; cum 108K 3/20;  see this post;
• 36756, 732, Kraken Ethan 15-22 3TFH, Sanish, t12/19; cum 82K 3/20; see this post;
• 36755, 1,531, Kraken, Penny 15-22 2TFH, Sanish, t12/19; cum 97K 3/20; see this post;
• 36469, drl/NC, Slawson, Periscope Federal 5-10-7TFH, Big Bend, no production data,
• 36130, A, Whiting, Harvey TTT 41-4HU, Sanish, t--; cum 137K in five months;
• neighboring well on same pad with small halo effect;
• 35191, drl/drl, XTO, Zane Federal 21X-6E, Siverston, t--; cum --;

RBN Energy: The Brent crude oil matrix, the linkages that make it work and implications for global markets.  This one is a keeper. Archived here.

Do not try and refine the Brent; that's impossible. Instead, only try to realize the truth...there is no Brent. Then you will see it is not the Brent that gets refined; it is only yourself.

For those who are not fans of The Matrix, that sentence may seem a little cryptic, but it makes a point that is little understood outside the rarified world of crude oil trading. The production of North Sea Brent crude oil is down to less than a couple of hundred barrels per day.

Soon it will be gone altogether. But 70% of all crude oil in the world is tied either directly or indirectly to the price of Brent. How is that possible? Well, it’s because Brent is no longer simply a grade of crude oil. Over the past two decades, it has evolved into an intricate, multi-layered matrix of trading instruments, pricing benchmarks and standard contracts that is a world unto itself. A world with a huge impact across almost everything in today’s energy markets. Unfortunately, no one can be told what Brent is. You have to see it for yourself. So that’s where we’ll go in this blog series. Warning: To read on is like taking the red pill.

When the prompt futures price of West Texas Intermediate (WTI) crude oil plunged to $37.63/bbl below zero on April 20, the corresponding price for North Sea crudes, known collectively as Brent, remained positive, and never fell lower than a positive $19/bbl during the late-April meltdown. This relative stability has been touted by some as a justification for crude markets to rely even more on the Brent benchmark, or alternatively for CME WTI at Cushing to morph to a more Brent-like settlement system (more on that distinction later). But simple comparisons between the two benchmarks can be misleading. Brent and WTI are structurally quite different and serve very different markets. Furthermore, Brent has many challenges of its own, not the least of which has been the steady decline of North Sea crude oil production over the past 30 years.