Huge Insurer To Exit Califoria Over Huge ObamaCare Losses -- June 1, 2016

ObamaCare, headline, section B, today's Wall Street Journal: UnitedHealth to exit California, a key market. Business losses mount.

• Trump: "Let's Make America Great Again"
• Hillary: "Let's Re-Visit ObamaCare"
• Gary Johnson: "Let's Make Hillary President"

May's auto sales data will be out this week. Last month's data, April's top selling cars:

#10: Chevrolet Malibu
#9: Chrysler 200
#8: BMW 3-Series
#7: Chevrolet Camaro
#6: Toyota Camry
#5: Honda Accord
#4: Mazda MX-5 Miata
#3: Ford Mustang
#2: Ford F-Series
#1: Honda Civic

Tesla: free-charging won't be available for Model 3 owners, unlike earlier models/owners.

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Back to the Bakken

Active rigs:

	6/1/2016	06/01/2015	06/01/2014	06/01/2013	06/01/2012
Active Rigs	27	80	189	187	215

RBN Energy: condensate update.

“Condensates are long and you can’t give them away … No, things have changed – condensate supply is tight and prices are running up relative to WTI … But wait wait, the oversupply is back and prices are down again.” No wonder the market’s love for condensates has faded.  It’s a liquid hydrocarbon that is being buffeted by every force the market can bring to bear: declining production, lots of new committed infrastructure (stabilizers, pipelines, and splitters), wide-open export markets, volatile crack spread splitter economics -- the list goes on. Adding to this whirlwind is the fact that historically there has been limited analytical data to work with, with most condensate information buried deep inside crude production numbers from producer investor presentations and less-than-revealing Energy Information Administration (EIA) crude oil reports.  But we have some new tools to help understand what’s going on, including the EIA’s new 914 crude quality data and condensate export numbers from ClipperData.  Today, we continue our exploration of rapidly evolving condensate markets.

In Part 1 of Faded Love we revisited RBN condensate classics, including Fifty Shades of Condensates and Like A Box of Chocolates. 

We showed that while condensates are produced from all of the major basins across the U.S., the Eagle Ford in South Texas has been responsible for most of the production growth over the past five years, and how the Eagle Ford has been hit harder by low crude prices than any of the other major shale plays, resulting in declines in condensate production.  We then touched on the splitters built to process condensates in the U.S. and on other infrastructure to handle segregated processed condensate for export – now no longer required since the lifting of the crude/condensate export ban.  With the ban gone, there’s no longer anything special about a condensate barrel; it is just like any other crude oil, except lighter.  These developments have converged to create a topsy-turvy market for condensates, where both opportunities and dangers lurk for those brave enough to buy, sell and trade condensate barrels.

From today's RBN Energy blog: an update on the new EIA form 914:

The new 914, in use since January 2015 reporting, is an expanded survey for the collection of oil and gas production data from a sample of operators of oi/condensate and natural gas wells in 15 states and the federal Gulf of Mexico. For our purposes here, the big deal is that the new EIA-914 collects this crude oil production data in 10 API gravity buckets. So, after years of, well, Dancing in the Dark (our mid-2015 blog on condensate splitters), we get our first shot at official condensate statistics using the two API gravity buckets above 50 degrees API shown in Figure 1. Sampled producer companies (those large enough to be included in the survey) are required to fill out the form each month for their oil production and oil sales by API gravity category. There are 10 API gravity categories on the form reported in total for the U.S., but due to EIA’s confidentiality rules, these are collapsed to only four categories for the reporting of state‐level API gravity estimates.

There are all sorts of statistical quirks and machinations that EIA must go through to use this data due to the facts that 1) it is only a sample (85% volumetric coverage based on data from 450 operators out of roughly 13,000 oil and gas operators in the U.S.), and 2) EIA trues up and reconciles the 914 form data with production data from the individual states provided and consolidated by our friends at DrillingInfo.