Friday, March 16, 2018 -- WTI Manages To Stay Above $61; Consumer Sentiment Index -- Nice Jump

Economic data:

• consumer sentiment index: huge -- 102 vs 99 estimate
• previous high: October, 2017: 100.7
• previous high: January, 2008:  103.8
• Jolts: anything with a "million handle" is outstanding -- 6.3 million job openings at end of January, 2018 -- think about that -- that's incredible -- first time unemployment claims measured in "100,000" increments and usually at the low end -- and here we have 6.3 million job openings

To frack or re-frack? Two articles:

• to frack or re-frack? insights from the Bakken? from 2016; Note: I don't know if it's worth the trouble to get to the document: I do believe the link works but it takes you to a "blank" box where one then clicks on a link to download a PDF document; "pays your money; takes your chance" -- I'm not sure the article has much more than what we have already been posting on the blog
• frack 2.0: refracking could enable a second wave of production growth in the Bakken and Eagle Ford; link at Baker Energy Blog, May 21, 2015

Friday sports:

• Tiger Woods makes a respectable showing at Arnold Palmer Invitational, tied for seventh after first day
• second day of first round of March Madness; most of the games yesterday were incredibly boring

Vermont, the "green" state? Hardly. A geeky article but worth a read. Sort of. Bottom line:

In 2016, the Vermont state Legislature was given an independent report that revealed Vermont’s electric customers actually buy zero percent of the wind energy and just 0.4 percent of photovoltaic solar energy produced in the state. Moreover, the report found, “the state’s electric sector greenhouse gas emissions had doubled over a historic 10-year period.” And they pay more for their electricity.

Texas, the "wind" state? It was my understanding based on news stories that wind energy was increasing exponentially. In fact, in the past year or so, consumption of natural gas has increased significantly, taking the place of coal, and the percentage of wind energy consumed against all types of energy has actually dropped a bit:

Global warming headlines over at iceagenow:

• Worcester, Massachusetts, smashes snowfall record for second time in two weeks
• Billerica, Massachusetts: almost 26 inches
• another five feet of snow for the Sierra by the end of the week
• twelfth frost of the summer in São Joaquim (South Brazil)
• Moscow weather in March will be "January cold"
• up to 21 inches of snow for California
• travel-halting blizzard for New England
• someone is reading the blog: "18 inches of GlobBULL Warming hits West Virginia in four (4) hours; link here

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Back to the Bakken

Active rigs:

$61.39→	3/16/2018	03/16/2017	03/16/2016	03/16/2015	03/16/2014
Active Rigs	57	47	31	111	190

RBN Energy: record crude and gas production leads to record NGL production at just the right time, part 2.

With U.S. NGL production hitting a record high of just over 4.0 MMb/d in the fourth quarter of 2017 and ethane production also reaching record volumes at 1.6 MMb/d, the price for ethane has remained stuck at about 25 c/gal — where it’s been for the past two years, even though prices for other NGLs are up over the same period.

The combination of roaring high-ethane-content Permian and SCOOP/STACK NGL volumes, coupled with steam cracker outages and construction delays due to Hurricane Harvey, have landed us here. So where do we expect the ethane market to go now as incremental cracker and export demand ramp up in 2018 and 2019? Today, we continue a series on our updated NGL market forecast, highlighting the NGL product whose market is going through the most changes: ethane. 

LNG buyers not taking advantage of buyer's market, Reuters:

Royal Dutch Shell, the world's biggest liquefied natural gas (LNG) trader, said on Thursday buyers of the fuel have not taken advantage of a market that favours them and have failed to extract better supply deals.

Steve Hill, executive vice president at Shell Energy, said this failure was damaging to all market participants as it prevented new supply from being developed.

"It's quite interesting in that you could argue that buyers haven't necessarily taken advantage of the buyer's market because buyers haven't done very many long-term deals," he told an industry seminar in Tokyo.

"I think what is our concern is that if deals aren't done and projects aren't sanctioned, eventually it won't be a buyers' market anymore because demand will grow and supply won't.

Hill said that a traditional model of switching back and forth between the buyer's market and the seller's market would not be helpful either way because that would lead to demand destruction in addition to projects not being developed on a regular schedule.