The WTI/Bakken Premium Differential Plummets At Clearbrook, MN

Link here to Bloomberg.

That $2.00 premium for Bakken at Clearbrook, MN, did not last long.

Overnight it dropped 180%, down $2.25/bbl, now trading at a discount to WTI by a buck ($1.00).

Meanwhile the WTI/Brent spread is: $11. Is that correct? Did I do the arithmetic correctly? That's the lowest spread in some time.

• Brent: $104
• WTI: $93

For newbies, the premium/discount at Clearbrook, MN, is a relatively new metric for the MDW, but the delta seems to fluctuate above and below the zero line by about $2.00.

The Brent/WTI spread, historically, I understand has often been near parity, but in the past year or so, the delta between Brent and WTI has been quite significant due to the glut at Cushing (where WTI is priced). With efforts to reduce that glut, the delta has been decreasing. Today it is $11, half what it was just a few months ago.

February 15, 2013:  At Bloomberg energy, Brent - $117; WTI - $95. Spread: $22.

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A Note To The Granddaughters

I'll be leaving San Antonio tomorrow to return to the Boston area to see my granddaughters for a short period of time. 

I am really looking forward to the visit. Their dad bought them a great electronic circuit education set (Snap Circuits by Elenco are incredible; one can keep adding sets and more experiments; highly recommended as a gift from grandparents to grandchildren for as young as pre-schoolers). They love watching the fan spin and fly; the lights flicker; the alarms and music. We never seem to have enough time. By the way, those Snap Circuits: think Lego sets with electricity running between the bricks -- in fact, an interesting entrepreneurial idea might be to "electrify" Lego town. But I digress.

Oh, one more comment. The Snap Circuits taught me how to wire LEDs and why one needs a resistor between the power source and the LED. I never knew that. 

The reason I am excited is I am re-reading David Bodanis' E= MC2: A Briography of the World's Most Famous Equation (Kindle version available). I don't recall much of the book the first time I read it some years ago (c. 2000), when it received "A Library Journal Best Book of the Year" award.

I'm reading it much more slowly this time, and getting much more out of it.

I never thought about this years ago when I had the opportunity to fly with the USAF at Mach 1. The space shuttle, after full thrust, can surpass Mach 20. The asteroid that hit Mexico and killed off all the dinosaurs (poetic license) impacted at Mach 70 (the dinosaurs may have died out because after losing their hearing, they could not hear predators' footsteps).

The speed of light? Mach 900,000.

It will be fun to share some of the concepts with the almost-ten-year-old. The interesting thing is this: when I talk to the older granddaughter, the younger granddaughter (who will turn seven this summer) listens intently and asks relevant questions. She is an artist at heart -- her grandmother led her down that path -- and she, the young granddaughter -- loves drawing electric circuits, copying the circuits we make from the Elenco sets.

Electricity was never my strong suit in high school physics, and I avoided it in college, but with the help of her engineer dad who has a great ability to explain things even I can understand, we are learning, and for me, re-learning electricity. (Memo to self: work on run-on sentences.)

One of the most basic concept was why electric circuits are drawn with the arrow pointed in one direction and the electrons actually flowing in the opposite direction. At least I think I have that right. Yes, by convention, again wiki makes it simple:

A flow of positive charges gives the same electric current, and has the same effect in a circuit, as an equal flow of negative charges in the opposite direction. Since current can be the flow of either positive or negative charges, or both, a convention for the direction of current which is independent of the type of charge carriers is needed. The direction of conventional current is defined arbitrarily to be the direction of the flow of positive charges.

In metals, which make up the wires and other conductors in most electrical circuits, the positive charges are immobile, and the charge carriers are electrons. Because the electron carries negative charge, the electron motion in a metal conductor is in the direction opposite to that of conventional (or electric) current.

Anyway, enough of this.

The purpose of this note to the granddaughters is I am excited to see them tomorrow.

I will be taking public transportation from Logan to the suburb. The bus / subway / but will be significantly slower than Mach 1.