Bakken Pricing Rises, Firms -- Refinery Maintenance Completed; $11 Discount To WTI; LSS Sells At $3.45 Premium; Alaskan At $13 Premium

Update

November 30, 2013: a reader says that his royalty checks reflect nothing less than $96/bbl for the past three months. I find that very, very interesting, and why it is very, very difficult for analysts to sort out future earnings for operators. The discrepancy reflects:

• the "TV crawler" and Bloomberg data below are daily spot prices and futures
• operators contracted six months ago on current deliveries
• operators contract with hedges, collars, floors, ceilings which have been previously discussed
• price of Bakken oil is priced at Clearbrook (I believe); it varies at other locations

You have no idea how much I appreciate getting data from readers on prices they are getting for their Bakken oil. It is very, very helpful.
 

Original Post

An $11 discount to WTI may make some folks unhappy, but Canadian oil sands is priced at $30 to $40 discount to WTI, and Canadian oil sands runs $20 to $40 more to produce. Maybe more. [Those are all "my" numbers; others will disagree.]

Bloomberg is reporting:

Bakken light crude strengthened on the spot market as refineries ramped up operation after seasonal maintenance.

The grade reached a four-week high against the benchmark West Texas Intermediate. Refinery utilization rates in PADD 2, or the U.S. Midwest, rose by 2.6 percentage points to 96.1 percent of capacity last week, according to data released today by the Energy Information Administration. The rates typically decline seasonally as plants perform maintenance before the start of winter.

Bakken crude delivered in Clearbrook, Minnesota, strengthened by $1 a barrel to an $11.50 discount to WTI, according to data compiled by Bloomberg at 3:03 p.m. New York time. Bakken crude production in North Dakota reached 867,240 barrels a day at the end of September.

Other pricing at the link:

WTI crude oil on the New York Mercantile Exchange fell $1.38, or 1.5 percent, to settle at $92.30 a barrel on the New York Mercantile Exchange.

Other spot market grades also strengthened. Light Louisiana Sweet oil gained 30 cents to a $3.45 premium to WTI, while Alaska North Slope crude strengthened for a fifth straight day, by 25 cents to a $13 premium. Southern Green Canyon gained 90 cents, narrowing its discount to WTI to $3.70 a barrel.

For newbies: Bakken has two disadvantages -- a) landlocked/transportation/takeaway/location; and, b) sweet oil.