Permian Crude Pricing Into A Tailspin -- RBN Energy -- April 5, 2018

Norway: this is incredibly cool. Just the other day, in a post about global re-balancing, I wrote that I was skeptical that there would be any global re-balancing anytime soon:

Let's add in Kashagan. Mexico's Gulf of Mexico. The US Gulf of Mexico. Let's add in Exxon's Guyana. Add in "Statoil's" new push off shore Norway. Subtract out Libya (inconsequential). Subtract out Venezuela (inconsequential). Both Libya and Venezuela will be offset by Canadian production if push comes to shove. 

Today, this from Rigzone: "Significant discoveries made offshore Norway." This is in addition to the "huge" discovery announced this past week by Bahrain. From the linked story regarding Norway:

OMV Norge AS announced Wednesday that it has encountered ‘exploration success’ at well 6506/11-10, located offshore Norway in license PL 644B.

The well targeted two formations; the Cretaceous Hades prospect and the Jurassic Iris prospect located directly underneath. OMV said the well discovered gas and condensate in both exploration targets with ‘very good’ reservoir properties.

Preliminary results indicate a discovery size of between 20 and 115 million recoverable barrels of oil equivalent (boe) for Hades, and between 20 and 130 million recoverable boe for Iris, according to OMV.

And so it goes. [Not that "significant" in my book, by the way.]

********************************

Fake news/headline: Reuters reports that yesterday's US crude oil inventories dropped because of increased output from the refineries. Perhaps. But when you look at the numbers, highly doubtful.

• in the past two weeks, the refineries were operating at 93% operable capacity
• Reuters reports that week-over-week, refinery utilization rates rose by 0.7% (inconsequential)
• refinery crude oil runs rose by 141,000 bopd
• US crude oil production hit a new weekly record of 10.46 million bopd compared to 10.433 million bopd last week 
• 10.46 - 10.433 = 27,000 bopd 
• 27,000 x 7 days = 189,000 bbls for the week increase in production
• 7 * 141,000 bbls = 987,000 bbls increase in refinery runs for the week
• the drawdown reported: 4.6 million bbls
• sounds like Reuters is using the same analysts as Tesla
• but it begs the question: what DOES account for the drawdown?

***********************************

Back to the Bakken 

Active rigs:

	4/5/2018	04/05/2017	04/05/2016	04/05/2015	04/05/2014
Active Rigs	57	49	29	94	192

RBN Energy: a most interesting story. Link here. Just a few days a reader and I had a discussion about the rush into the Permian despite the productivity per rig being so much higher in the Bakken. Although that is not the theme of today's RBN Energy blog, it helps explain what I was trying to say.

This is probably the best item of the day, so far. Send a note of thanks to RBN Energy for all their good work.

Wipeout, The Ventures