Futures Surge -- Is This The Week The Tax Bill Passes? December 18, 2017, T+331

Note: the NDIC map server appears to be slightly "degraded" this morning. The permit numbers for pad wells appear not to be posting.  I assume this is a temporary problem.

A no-show: it's being reported that Senator John McCain will not be able to vote on the tax bill. He is recovering at home from a recent hospitalization secondary to his brain cancer. It looks like the bill will be signed, but it's still not a slam dunk. 

$100 billion should make this chart look better. It is now being reported (in The New York Times) that Prince Salman hopes to "recover" at least $100 billion from the rich tycoons he rounded up earlier this autumn. In the graph below, the kingdom was losing about $5 billion month-over-month in foreign reserves. It will be interesting to see how this graph changes.

Link here, Saudi Arabia foreign exchange reserves:

Break-even (again): From What's Up With That:

Number of the Week: $56.60: According to Platts (subscription required), the energy consulting firm Wood Mackenzie estimates the “weighted average break-even” for a barrel of crude produced from North Dakota shale is $56.60. Generally, the estimates include a modest profit.

Areas with higher estimated costs include: Niobrara (Rockies), $75.5; Canada Oil Sands, $70; Deepwater US, $63; Deepwater Angola, $73; Offshore Nigeria, $64; and Shallow Water Europe, $60. The estimates reviewed did not include Texas. No doubt, the petro-states of OPEC are concerned with hydraulic fracturing in the US. 

The math doesn't work: break-even cost for oil for Canadian oil sands: $70. Canadian oil sands is now selling for $30. Previously posted.

Blockchain: link here.

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Back to the Bakken

Active rigs:

$57.61↑	12/18/2017	12/18/2016	12/18/2015	12/18/2014	12/18/2013
Active Rigs	53	40	64	183	188

RBN Energy: why condensate flipped from cheap to expensive and why it may flip back.

The combination of rising condensate demand as new splitter capacity came online and falling conde supply resulted in just what you’d expect — higher conde prices. Worse yet for the companies that made throughput commitments for those new splitters, the once-favorable price differentials between conde and light-crude benchmarks West Texas Intermediate (WTI) and Louisiana Light Sweet (LLS) have been turned on their heads, and a number of splitters are operating at far less than capacity.

Today, we continue our look at the roller-coaster world of conde, this time focusing on conde prices and differentials, and on the forces that may change the conde market once again.

Crude oil and condensate are categorized by their API gravity (API standing for American Petroleum Institute), which is a measurement scale (in degrees) of a petroleum liquid’s specific gravity — the lighter or less dense the crude, the higher its API gravity number.

Superlight crude oil and condensate (or, as it’s commonly called, conde) is at the far end of the crude-oil spectrum, with an API gravity of 50 to 55 degrees for superlight and more that 55 degrees for conde (according to the gravity breakdown used by the Energy Information Administration, or EIA, in its Crude Oil and Lease Condensate Production by API Gravity data series). As we said earlier in this blog series, superlight crude and conde can either be refined, exported or blended with heavier crudes — or (for conde) run through a splitter. A splitter uses atmospheric distillation to separate conde into its component fractions to produce intermediate, semi-finished blend stocks like naphthas and distillates that are processed further at refineries.

A major resurgence of superlight/conde production like this would only require crude prices staying pretty much where they are now — and the development of new conde-related infrastructure. If it happens, there would be more than enough condensate to meet the demand for existing splitters (and a 35-Mb/d splitter that Targa Resources is building at its Channelview, TX terminal), refinery appetite for super-light material, and significant volumes of neat conde exports or crude blends that include conde and/or superlight crude.