IMO 2020 About One Year Away -- RBN Energy -- Monday, November 26, 2018; $50-Floor Held

ISO New England:

Break-evens:

CBR: Trudeau apparently not in favor of CBR plan. Perhaps the federal government does not have enough money to buy more locomotives? Are you kidding? The greenies would go loco if the federal government were to buy more diesel locos. At least Trudeau notes it's a crisis when WCS is selling for $8/bbl. The Chinese are loving it. Too bad their storage sites are now overflowing. One new data point in the article: Trudeau suggests that the differential is as much as $50.

Justin Trudeau’s government is unlikely to heed Alberta’s plea for new trains to alleviate the country’s oil crisis, federal officials say.

Buying new locomotives and rail cars isn’t a short-term fix to the glut that has sent prices plunging because it would take at least a year to get the new trains in place, the officials said, asking not to be named because the stance is not public. While two cautioned that no final decision has been made -- with Trudeau visiting the heart of Canada’s oil industry on Thursday -- the officials downplayed the chances of a train purchase.

Alberta asked a month ago for the federal government to buy more locomotives to boost shipping capacity as it struggles with near-record low prices and a supply glut. Premier Rachel Notley made the request after an Oct. 22 meeting in which some oil executives pushed for a forced cut to production.

Trudeau’s energy minister is reviewing the proposal but Notley said Thursday Alberta hasn’t received a reply. Asked if the province would make the purchase on its own, the premier said she’d do “whatever it takes” to increase rail capacity.

Trudeau, who’s speech in downtown Calgary was marked by a pro-pipeline protest that gathered hundreds of people, wouldn’t say what he thinks of the Alberta rail proposal, but agreed the oil situation is serious.

“This is very much a crisis,” Trudeau said. “When you have a price differential that’s up around $42, $50 even, that’s a massive challenge to local industry, to the livelihood of a lot Albertans, and I hear that very clearly.”

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Back to the Bakken

Wells coming off the confidential list -- (for the Yellowfin wells, see this post -- will be updated later)

Monday, November 26, 2018:

• 34801, 811, Newfield, Yellowfin 150-98-6-7-8H, SIverston, a nice well; 24K first full month; t8/18; cum 28K 9/18;
• 34587, 3,024, WPX, Grizzly 25-36HX, Spotted Horn, t9/18; cum 30K in 14 days extrapolates to 64,131 bbls/30 days;

Sunday, November 25, 2018:

• 34800, 815, Newfield, Yellowfin 150-98-6-7-7H, Siverston, a nice well; 25K first full month; t8/18; cum 31K 9/18;
• 34610, 1,299, Petro-Hunt, Klevmoen 153-95-17C-7-1H, Charlson, t10/18; cum --
• 34586, 3,384, WPX, Grizzly 25-36HF, Spotted Horn; t9/18; cum 14K over 9 days extrapolates to 46,313 bbls / 30 days;
• 34254, 480, Bruin, Sadowsky 14-11-2H, St Anthony, t5/18; cum 26K 9/18;
• 34051, SI/NC, WPX, Howling Wolf 28-33D, Wolf Bay, no production data,
• 33112, 2,526, CLR, Wiley 8-25H, Pershing, t7/18; cum 146K 9/18; see this post;

Saturday, November 24, 2018:

• 34585, 2,188, WPX, Grizzly 25-36HY, Spotted Horn, t9/18; cum 10K over 8 days extrapolates to 38K over 30 days;
• 33226, 962, CLR, Kennedy 6-31H2, Dimmick Lake, t8/18; cum 39K 9/18

Active rigs:

$51.10	11/26/2018	11/26/2017	11/26/2016	11/26/2015	11/26/2014
Active Rigs	62	53	37	65	183

RBN Energy: how IMO 2020 may impact markets and challenge refiners and shippers.

The planned implementation date for IMO 2020 is still more than a year away, but this much already seems clear: even assuming some degree of non-compliance, a combination of fuel-oil blending, crude-slate shifts, refinery upgrades and ship-mounted “scrubbers” won’t be enough to achieve full, Day 1 compliance with the international mandate to slash the shipping sector’s sulfur emissions. Increased global refinery runs would help, but there are limits to what that could do. So, what’s ahead for global crude oil and bunker-fuel markets — and for refiners in the U.S. and elsewhere — in the coming months? Today, we discuss Baker & O’Brien’s analysis of how sharply rising demand for low-sulfur marine fuel might affect crude flows, crude slates and a whole lot more.

As regular readers of RBN’s blogs know, the International Maritime Organization (IMO), a specialized agency of the United Nations, in recent years has been implementing ever-tightening rules to reduce allowable sulfur-oxide emissions from the engines that power the 50,000-plus tankers, dry bulkers, container ships and other commercial vessels plying international waters. Earlier we explained that in January 2012, the global cap on sulfur content in bunker (marine fuel) was reduced to 3.5% (from the old 4.5%) and that on January 1, 2020 — only 13 months away — it is set to be reduced to a much stiffer 0.5%. There are even tougher standards already in place in the IMO’s Emission Control Areas (ECAs) for sulfur, which include Europe’s Baltic and North seas and areas within 200 nautical miles of the U.S. and Canadian coasts. In July 2010, the ECA sulfur limit in marine fuel was reduced to 1% (from the old 1.5%), and in January 2015, the limit was ratcheted down again to a very stringent 0.1% — a standard that will remain in force within the ECAs when the 0.5% sulfur cap for the rest of the world becomes effective on New Year’s Day in 2020.