ND Rig Count Up One -- December 3, 2018

From twitter:

And from a reader: no beef was sold to China during the Obama administration. From CNBC;

American beef producers are expected get access to China for the first time in 13 years, raising the possibility that the U.S. could recapture lost market share in one of the fastest-growing global markets. -- updated on May 12, 2027, just months after President Trump sworn in.

And now from Reuters:

Trump agreed not to boost tariffs on $200 billion of Chinese goods to 25 percent on Jan. 1 as previously announced, while Beijing agreed to buy an unspecified but "very substantial" amount of agricultural, energy, industrial and other products.

As part of the deal, China also agreed to start purchasing agricultural products from U.S. farmers immediately. 

And now from Nancy Pelosi regarding the farm deal with China: "chickenfeed."

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Qatar pulls out of OPEC; relationship sours.

Heavy sweet oil, rising star: from Bloomberg --

Dense, low-sulfur oil, known in industry parlance as heavy sweet crude, is fetching increasingly stronger prices relative to benchmark lighter grades. For example, Angola’s Dalia traded at just 10 cents below Brent oil last month, up from a discount of $4.50 in January 2016. Australian Pyrenees traded at $4 more than Brent, its widest premium in more than three years.

The shifting values are indicative of the powerful forces that are pulling apart long-held relationships between oil prices around the world, in particular the U.S. shale boom and an overhaul of marine fuel regulations.

Heavy sweet crude has come into favor because it yields a lot of diesel and low-sulfur fuel oil when it’s refined. Those fuels are seen coming into heavy demand as new rules due to take effect in 2020 mean ships will use them more as an alternative to high-sulfur fuel oil, which is produced readily from sour crude.

What’s more, lighter prices are under pressure because of a glut of U.S. shale oil and the gasoline it yields in abundance.

“What’s really in the sweet spot are heavy sweet crudes, which is offshore Angola and Brazil,” Martijn Rats, an analyst with Morgan Stanley, said in an interview. “Those should trade very strongly, but it’s a relatively small part of the oil market.”

Only about 500,000 barrels a day of heavy sweet oil are exported globally, accounting for just 1 percent of total seaborne trade. Angola, Brazil and Chad are among the biggest sources.

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Back to the Bakken

Wells coming off the confidential list --

Monday, December 3, 2018:

• None.

Sunday, December 2, 2018:

• 33695, 759, Oasis, Lite 5393 31-11 9B, Sanish, 50 stages;9.7 million lbs, t6/18; cum 102K 10/18;

Saturday, December 1, 2018:

• 33968, 932,  Enerplus, Nickel 147-93-16B-21H-TF, Moccasin Creek, Three Forks, 33 stages; 5.9 million lbs, t818; cum 66K 10/18;
• 33696, 657, Oasis Lite 5393 31-11 8T, Sanish, Three Forks B1, 50 stages; 10 million lbs, t6/18; cum 88K 10/18;
• 33242, 1,129, Oasis, Muri 5198 12-4 5B, Banks, 50 stages; 10 million lbs, t6/18; cum 157K 10/18;
• 33110, 1,720, CLR, Wiley 10-25H, Pershing, 51 stages; 8.2 million lbs; a huge well: t7/18; cum 132K 10/18;
• 31264, SI/NC, Oasis, Kjorstad 5300 34-22 9B, Willow Creek, a huge well; t--; cum 98K 10/18;
• 30543, 2,837, Bruin, Fort Berthold 151-94-26A-35-6H, Antelope-Sanish, a 50K+ well; t6/18; cum 172K 10/18;

Active rigs:

$52.84	12/3/2018	12/03/2017	12/03/2016	12/03/2015	12/03/2014
Active Rigs	67	53	39	63	189

RBN Energy: winter demand offsets NGL fractionation capacity constraints.

Two months ago, NGL prices and market differentials were soaring, in large part due to fractionation capacity constraints on the Gulf Coast at Mont Belvieu. The constraints have not eased, yet the same prices and differentials have come crashing down from those lofty levels. Why has this happened, you ask, and how long will it last?

There are a lot of factors contributing, but two of the most significant are seasonal NGL demand shifts and what’s going on with crude oil.

Today, we examine the recent swings in NGL prices and market differentials and what may be around the next corner for these markets.

NGL prices and market differentials have experienced wild volatility in recent months, from multi-year highs in early October (2018) to back down near 2018 lows over the past week. One of the most important factors driving the highs was fractionation capacity constraints at Mont Belvieu in Texas — a topic we’ve discussed often here in the RBN blogosphere.

Here’s the bottom line: if you can’t fractionate the product, it can’t be used to meet demand. In September and early October, demand was moving higher, due to new petchem plants coming online and preparations for the winter propane season and butane blending season.  Higher demand and constrained supply are always a recipe for higher prices. Not to mention that crude prices were moving north of $70/bbl during that period. But the main catalyst was the problem with fractionation.

Recall that fractionation, the process of splitting a mixed natural gas liquids stream (raw-mix NGL; also known as y-grade) into “purity” products — ethane, propane, butanes and natural gasoline — is as important to the NGL market as refining is to the crude and products markets.

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Getting Ready For The Nutcracker