Slow Days In The Oil Patch -- September 19, 2018

Methane rules relaxed: finalized by Trump. 

API weekly crude oil inventories. We'll start with two movies.

• the movie I saw

• price of oil did not move yesterday after the data was released
• the gasoline "story" is driving the price of oil; not Libya, not Venezuela, not Iran; not China trade war
• US crude oil inventories unexpectedly increased by 1.25 million bbls
• the build was a yawner: up 1 million bbls following a week when there was an unprecedented (?) draw of over 8 million bbls
• gasoline inventories decreased by 1.5 million bbls vs an expected draw of 104,000 bbls

• the movie oilprice.com saw:

• headline: "oil prices up despite massive crude oil build"
• US crude oil inventories: "mammoth build of 1.25 million bbls"
• analyst (singular) expectations: a draw of 2.741 million bbls (2,741,000 bbls -- that false precision is stunning - estimated to the nearest thousand bbls -- wow; now I know we're counting the number of angels dancing on the head of a pin)
• gasoline inventories: a draw of 1.485 million bbls (again, the false precision); vs analysts (plural) prediction of a small draw of 104,000 bbls
• 1.485 is greater than 1.25 so if "1.25 million is mammoth", then "1.485 must be humongous"
• "oil prices were up in afternoon trade by around 1/2% compared to last week's prices"
• the writer did not note that comparing the price of oil immediately before and after the API data was released: no change

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Back to the Bakken 

Where Exuberant Optimism Replaces False Precision 

Wells coming off the confidential list today -- Wednesday, September 19, 2018

• 34561, SI/NC, Abraxas, Ravin 11H, North Fork, no production data, 
• 34459, drl, Eagle Operating, Miller 2-29, Wildcat, no production data,
• 31772, SI/NC, BR, Ivan 7-1-29MBH, Elidah,  no production data, 
• 29711, 1,625, CLR, Cuskelly 4-7H1, Rattlesnake Point, 62 stages; 12.2 million lbs, a nice well; the Cuskelly wells are tracked here; t6/18; cum 43K after 43 days;

Active rigs:

$69.53→	9/19/2018	09/19/2017	09/19/2016	09/19/2015	09/19/2014
Active Rigs	66	55	32	67	196

RBN Energy: Hurricane Harvey and the importance of Gulf Coast refined product infrastructure.

It’s been more than a year since Hurricane Harvey dumped 50 inches of rain on Houston and its environs, but memories from those fateful days remain remarkably fresh. Harvey is not only unforgettable, it put a spotlight on just how important Texas refineries — and the refined-products pipeline infrastructure connected to them — are to the rest of the U.S.

For several days, more than half of the Gulf Coast’s refining capacity was offline. Major pipelines transporting gasoline, diesel and jet fuel to the East Coast and the Midwest shut down too. But how do Harvey’s impacts on refining and refined products markets compare with the effects of other major hurricanes this century? Today, we conclude our series on Gulf Coast refining and pipeline infrastructure, and how a natural disaster along the coast can impact the rest of the country.

When one refinery along the U.S. Gulf Coast goes offline, as each does occasionally during a maintenance “turnaround,” the outage typically follows months of planning and supply-chain or storage adjustments designed to ensure supply agreements can be met and disruptions to fuel availability is averted. If the turnaround takes longer than expected, other refineries with processing availability can pick up the slack until the outage is over or imports increase. However, when large swaths of the refining infrastructure shut down in a short time as a result of a hurricane, the impacts can be far-reaching since stock levels may not be sufficient to offset the extended outage. Hurricane Harvey, which hit the epicenter of the Gulf Coast refining sector, serves as a prime example.

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Notes to the Granddaughters

Your mom is a doctor!

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The Book Page

From Sea of Dangers: Captain Cook and His Rivals in the South Pacific, Geoffrey Blainey, c. 2009. From page 291:

Another of our biases has to be recognized. In tracing the major discoveries in the southwest Pacific, we give too much weight to the finding of lands and not enough to the finding of narrow seas. The discovery of such vital shortcuts as Torres Strait (1606), Cook Strait (1770), and Bass Strait (1798) enhanced the value of the land discoveries.

Likewise, to detect a prevailing wind could be as important as discovering a land. The Dutch discovery of the power of the westerly winds in the middle latitudes of the Indian Ocean actually led them to the west coast of Australia as well as opening of the fastest sea route from Cape Town to Java.

The discovery by de Surville of the value of the westerly winds and the west-east route in the South Pacific was also crucial. 

Discovery:

Subsequent political events help determine who should be given the title of discoverer. The continent of Australia in 1901 became the territory of just one nation; but if a different course of events in Europe had divided Australia permanently into three separate nations, each nation might now be giving credit to a different discoverer -- names the navigator who found that particular part of the distinct nation. So the nation of Northern Australia might recognize a Dutch discoverer, and the nation of New South Wales might recognize Cook as its discoverer.

30-second elevator speech, regarding the European "discovery" of Australia: the Dutch have bragging rights but were unable to capitalize on what they found because they were already over-extended. The Dutch can be given credit for "discovering" the northwest coast of Australia. It follows that there had to be an eastern coast, and that was the coast Lieutenant Cook mapped and studied extensively. As important were his mapping of New Zealand, Tasmania, and the Great Barrier Reef.