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Monday, December 3, 2018
I've Already Filled In The Search Engine Block For You -- December 3, 2018
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Canada Curtails Crude Oil Production -- December 3, 2018
Canada Curtails Crude Oil Production
I find this most incredible: free market capitalism and a government steps in and curtails production.
For most of us in our 60's we grew up in a world in which we were told that we would someday run out of oil -- or at "affordable oil."
Now, this. Who would have ever suspected?
And it all began with the "Bakken revolution."
Cay you imagine if the governor of North Dakota said oil at $50 was too low and for that reason was, by executive order, going to curtail crude oil production in the state?
Link here for this graphic from twitter:
Reader Has Question About New Overlapping 2560-Acre Unit In Big Butte -- December 3, 2018
A reader asked this question. It came in as a comment but because it had his e-mail address, etc, I did not post the comment.
Here was the reader's question: The following was on the ND Dockets for Nov 2018:
This is the area we are talking about:
Here was the reader's question: The following was on the ND Dockets for Nov 2018:
Case No. 27030: Application of Hess Bakken Investments II, LLC for an order amending the applicable orders for the Big Butte-Bakken Pool to establish an overlapping 2560-acre spacing unit described as Sections 13 and 24, T.157N., R.94W. and Sections 18 and 19, T.157N., R.93W., Mountrail County, ND, and authorize one horizontal well to be drilled on such unit, and for such other relief as may be appropriate.
Do you know if the drilling of the one horizontal well is on any timeframe ?My reply: unfortunately I don't have any information. The only way I will know is when I see a permit issued for that drilling unit.
This is the area we are talking about:
Corpus Christi Loading First LNG Cargo? -- Argus Media -- December 3, 2018
Updates
December 30, 2018: the Maria Energy has reached its destination.
Original Post
Keeping America great!
From ArgusMedia:
The first export from Cheniere Energy's Corpus Christi LNG terminal in Texas is likely being loaded, and the second cargo could be exported soon after that.
The Maria Energy LNG vessel docked at the facility yesterday and the Golar Kelvin LNG vessel has been moored in the northern Gulf of Mexico, just south of Corpus Christi, since 29 November.
The Maria Energy, which has capacity of 174,000m³, equivalent to 3.6 Bcf (102mn m³) of gas, is chartered by Cheniere, while the 162,000m³ Golar Kelvin is chartered by Spain's Naturgy, formerly known as Gas Natural Fenosa.
Cheniere previously planned to load the first Corpus Christi cargo on the 170,000m³ Golar Tundra that it charters. But on 21 November that vessel left Corpus Christi empty to load a cargo at Cheniere's Sabine Pass LNG terminal in Louisiana.
Gas intake at Corpus Christi increased significantly on 23 November and has averaged 369mn cf/d since then, for a total of about 4.1 Bcf.
Intake averaged 56mn cf/d from 19 October to 22 October, when the storage tank and loading terms were being cooled down before higher production could safely begin. About 10pc of the feed gas is used in the liquefaction process, so enough LNG has likely been produced to load the Maria Energy.
Cheniere has said it expects to export the first cargo from Corpus Christi train 1 and Sabine Pass train 5 in the fourth quarter. It has not commented on when Sabine Pass train 5 would load its first cargo, or if that has already happened.Much more at the link.
I'll let someone else do all the conversions: mn m³; Bcf; m³; mn cf/d; boe; eieio.
Marine traffic can be tracked here.
ND Active Rig Count Drops Back To 64; Only Three New Permits Issued Today -- December 3, 2018
Gas price wars: earlier today I mentioned that there were signs of a gasoline price war here in north Texas. One of the "teasers" leading into tonight's local evening news: gasoline for $1.00/gallon at local station. Turns out to be $1.19/gallon with purchase of car wash. Nationwide, according to GasBuddy, the top five stations with lowest price for gasoline is in Denton, Texas, just a few miles north of where we live.
Active rigs:
Three new permits:
Whiting: one Earl permit in Williams County
Resonance Exploration: one Ballantyne permit in Bottineau County
Five producing wells (DUCs) reported as completed: pending. IPs:
Active rigs:
| $53.11 | 12/3/2018 | 12/03/2017 | 12/03/2016 | 12/03/2015 | 12/03/2014 |
|---|---|---|---|---|---|
| Active Rigs | 64 | 53 | 39 | 63 | 189 |
Three new permits:
- Operator: Petro-Hunt
- Field: Little Knife (Dunn)
- Comments: Petro-Hunt has permits for a 3-well Hagen/Sabrosky pad in 13-144-98;
- Crescent Point Energy: four CPEUSC Ruby permits and four CPEUSC Holmes permits, all in Williams County;
Whiting: one Earl permit in Williams County
Resonance Exploration: one Ballantyne permit in Bottineau County
Five producing wells (DUCs) reported as completed: pending. IPs:
- 30062, 595, Equinor, Banks State 16-21 8TFH, Banks, t10/18; cum 2K over 4 days;
- 30625, 2,096, Equinor, Banks State 16-21 7H, Banks, t11/18; cum -- ;
- 30624, 1,621, Equinor, Banks State 16-21 6TFH, Banks, t10/18; cum 6K over 4 days;
- 30061, 391, Equinor, Banks State 16-21 5H, Banks, t11/18; cum -- ;
- 24244, 1,166, Equinor, Banks State 16-21 2TFH, Banks, t11/18; cum --;
Off The Net For Awhile
Snow pack well above normal in California: link here --
More global warming nonsense: More pushback on the more recent global warming assessment. There might be too much arithmetic for the average American to follow but, nonetheless, a great read. Link here. Will archive.
From twitter:
The twitter feed that provided that link -- which linked back to Mark Perry -- also included this graphic:
Mark Perry is one of the few permanent non-Bakken links at the sidebar at the right.
From the linked article at reason.com: Whatever the intentions of the NCA4 authors, highlighting a preposterously implausible worst-case scenario does not further the debate over reasonable policy responses to climate change.
By the way, some great stuff coming out over at ZeroHedge today.
I don't always agree with Mark Perry or contributors over at ZeroHedge but it's hard for me to find two more compelling websites.
I just love that word "compelling." It's one of those words that everyone uses when they can't think of the word they really want to use.
... indefinitely.
It's sad. They could have used the opportunity to riff positively on President Bush I. It would have been a win-win for everyone. I'm sure they could have had a number of pro-Bush guests on stage with them who would have provided great Bush I anecdotes.
More global warming nonsense: More pushback on the more recent global warming assessment. There might be too much arithmetic for the average American to follow but, nonetheless, a great read. Link here. Will archive.
From twitter:
The twitter feed that provided that link -- which linked back to Mark Perry -- also included this graphic:
From the linked article at reason.com: Whatever the intentions of the NCA4 authors, highlighting a preposterously implausible worst-case scenario does not further the debate over reasonable policy responses to climate change.
*******************************
Nothing Burger
By the way, some great stuff coming out over at ZeroHedge today.
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For Newbies
I don't always agree with Mark Perry or contributors over at ZeroHedge but it's hard for me to find two more compelling websites.
I just love that word "compelling." It's one of those words that everyone uses when they can't think of the word they really want to use.
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An Evening With Bill And Hillary ... Postponed ....
... indefinitely.
It's sad. They could have used the opportunity to riff positively on President Bush I. It would have been a win-win for everyone. I'm sure they could have had a number of pro-Bush guests on stage with them who would have provided great Bush I anecdotes.
The Market, Energy, And Political Page, Part 2, T+27 -- December 3, 2018
It would be interesting to compare this with similar data points from the EU. Meanwhile, the Brits are mired in Brexit.
ISO New England: unremarkable. Link here.
Car sales: we should start seeing data today, tomorrow. EVs here. The Volt is dead; long live the Volt. Oh, give me a break.
**********************************
I was aware of the relationship between the two to some extent but I had forgotten the details. From Karen Armstrong's The Bible: A Biography.
Historical coincidences fascinate me. The fact that both Luther and Gutenberg were "stationed" in "the Saxon backwater town of Wittenberg." Who would thought. By the way, the Gutenberg wiki entry does not mention the word Wittenberg. I assume Karen Armstrong has impeccable references to back up her claim.
See book review at The Washington Post.
One of the historical coincidences that fascinate me the most: the coming together at one time: Benjamin Franklin (diplomat), Thomas Jefferson (thinker), George Washington (war-time general), and Alexander Hamilton (money).
ISO New England: unremarkable. Link here.
Car sales: we should start seeing data today, tomorrow. EVs here. The Volt is dead; long live the Volt. Oh, give me a break.
- GM: no longer releases monthly figures
- Ford, Japan 3 (Toyota, Honda, Nissan) drop on weak car volume. Automotive News.
- Ford: 7.1% drop overall -- its third straight monthly decline
- Ford truck demand slipped 2.3%
- SUV and crossover sales dropped 4.9%
- car deliveries skidded 20%; now down 18% for the year
- Ford could cut 25,000 jobs worldwide (mostly Ford Europe); would far exceed the 14,000 that GM announced -- Morgan Stanley
- Toyota: fell less than one percent
- Honda: its biggest setback of the year
- sharp decline in demand for the Civic "and other cars"
- 30% plunge in Civic sales
- Nissan: off 19%; dragged down by a staggering 33% drop in demand for cars
- FCA: 17% increase; it's third consecutive double-digit gain and ninth straight overall
- US car sales: on track to decline for fifth straight year
- Americans abandoning cars; buyers mostly looking at trucks and SUVs
- lacking? what pickups are selling? have to go back to August, 2018, sales to get an idea
- best increases yoy: Toyota Tacoma; Nissan Titan; Nissan Titan XD; Ram
- Ford not among the top four, but was up 6% yoy
- Honda Ridgeline up 7%
- Ford announced that it would bring back the Ford Ranger
- lacking? what SUVs, pick-ups are selling? have to go back to August, 2018, sales to get an idea
- four of Jeep's five nameplates saw a sales surge; Wrangler set an August record
- Audi's premium Q-brand models surged 21% overall
- Hyundai's SUV sales soared 30% yoy
- Toyota RAV4 mentioned
- Nissan Rogue: up almost 7% yoy
Comment: mainstream media focused on car sales; missing the point; should be focused on SUV sales.
Gasoline price wars: yes, here in north Texas -- easy to find $1.89/gallon; now, seeing $1.83/gallon;
Gasoline price wars: yes, here in north Texas -- easy to find $1.89/gallon; now, seeing $1.83/gallon;
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The Book Page
I was aware of the relationship between the two to some extent but I had forgotten the details. From Karen Armstrong's The Bible: A Biography.
Martin Luther (1483 - 1546) had been educated in the scholastic philosophy of William of Ockham (c. 1287 - 1347), who had urged Christians to try to merit God's grace by their good works. But Luther fell prey to agonizing depression and none of the traditional pieties could assuage his extreme terror of death. To escape his fears, he plunged into a frenzy of reforming activity and was especially incenced by the papal policy of seling indulgences to swell the coffers of the Church.Some years ago I read about Luther's outrage with the Pope selling indulgences. It's an incredibly fascinating story, how money was transferred from monarchies to the Vatican.
Luther was rescued from his existential distress by exegesis (pronounced ex-uh-Jesus -- stress on first and third syllables). The first time he saw a copy of the whole Bible he had been astonished that it contained so many more writings than he had realized. He felt that he was seeing it for the first time.
Luther became Professor Scripture and Philosophy at the University of Wittenberg and during the lectures that he gave on the Psalms and Paul's epistles to the Romans and the Galations (1513 - 1518) he experienced a spiritual breakthrough that enabled him to break free form is Ockhamite prison.
The lectures on the Psalms began conventionally enough .... but he made two significant changes. First, Luther asked the university printer Johannes Gutenberg to produce a custom-made Psalter for him with an ample margin and wide spaces for his own annotations.... Second, he introduced an entirely novel definition of the literal sense. By "literal" he did not mean the original intention of the author; he meant "christological."
"In the whole scripture," he claimed, "there is nothing else but Christ, either in plain words or involved words. Take Christ from the scriptures," he asked on another occasion, "and what else will you find there?"Thomas Jefferson did something very similar, which is now known as the Jefferson Bible. He literally cut up and pasted his own personal bible.
Historical coincidences fascinate me. The fact that both Luther and Gutenberg were "stationed" in "the Saxon backwater town of Wittenberg." Who would thought. By the way, the Gutenberg wiki entry does not mention the word Wittenberg. I assume Karen Armstrong has impeccable references to back up her claim.
See book review at The Washington Post.
One of the historical coincidences that fascinate me the most: the coming together at one time: Benjamin Franklin (diplomat), Thomas Jefferson (thinker), George Washington (war-time general), and Alexander Hamilton (money).
The Market, Energy, And Political Page, T+27 -- December 3, 2018
Social security: this will stir up some controversy. I now feel strongly that "social security" benefits should be revamped considerably. It will never happen, of course, but there is no question in my mind that there is a subset of the population that absolutely does not "need" to claim/take their social security benefits. That doesn't mean they should not collect it. As an example, consider:
This is the problem with the "Tom Steyers" of the world: while tilting at windmills -- impeaching Donald Trump -- their money and efforts could be better spent helping the truly destitute in America.
So much interesting science out there. From Watts Up With That? -- the difference in ice types causes confusion in global warming story. Absolutely fascinating and the graphics and cartoons are excellent.
Should be a great Christmas holiday for skiing this year.
From IceAgeNow: contrary to what the politicians are trying to foist on you, a new mini ice age – a new Maunder Minimum – has already started.
Note: this is weather, not climate.
Note: it is not yet winter -- and won't be for about three more weeks.
- for top 10% income earners
- no longer taxing social security benefits
- 50% of social security benefits must be donated to charity of one's choice
- the remaining 50% in US Treasury bonds for at least ten years
- for top 10% income earners
- no longer taxing social security benefits
- 50% of social security benefits put back into "pot" to increase benefits for most destitute
- the remaining 50% in US Treasury bonds for at least ten years
This is the problem with the "Tom Steyers" of the world: while tilting at windmills -- impeaching Donald Trump -- their money and efforts could be better spent helping the truly destitute in America.
************************************
So much interesting science out there. From Watts Up With That? -- the difference in ice types causes confusion in global warming story. Absolutely fascinating and the graphics and cartoons are excellent.
Should be a great Christmas holiday for skiing this year.
From IceAgeNow: contrary to what the politicians are trying to foist on you, a new mini ice age – a new Maunder Minimum – has already started.
For the next 20 years it’s going to get colder and colder on average.
The jet stream will be wilder. There will be more wild temperature changes, more hail events, more earthquakes, more extreme volcano events, more snow in winters, lousy summers, late springs, short autumns, and more and more crop failures.
“Carbon dioxide levels do not have any impact – I repeat, any impact – on climate,” says Piers. “The CO2 theory is wrong from the start.”
“The fact is the sun rules the sea temperature, and the sea temperature rules the climate.”
“The basic message is that the sun is controlling the climate, primarily via the sea.”
".... the start of the mini ice age…it began around 2013. It’s a slow start, and now the rate of moving into the mini ice age is accelerating.”A good example of the jet stream. Note minus 10 degrees in Colorado:
Note: it is not yet winter -- and won't be for about three more weeks.
Random Look At Production From Bakken Wells Coming Off Confidential List Today -- December 3, 2018
This page will not be updated.
Random examples of incredible wells coming off confidential list today. For newbies, in the early days of the Bakken it was not uncommon to see monthly production immediately after fracks to peak at less than 7,000 bbls/month. Now, anything less than 25,000 bbls/month in the "core Bakken" following a frack is disappointing. In addition, it appears operators are "moderating" completion strategies, back to about 50 stages and 8 million lbs of proppant (10 million in the middle Bakken; maybe 6 million in the Three Forks; but amount of proppant continues to vary between 6 million lbs and 10 million lbs -- anecdotal, not statistically sound; others will disagree with me). Note one well with production that exceeded 50,000 bbls in one month; not common, but not exactly rare any more. I believe all of these wells produced more oil in less than four months than what we used to see in one or two years in the early days of the Bakken.
Disclaimer: I am inappropriately exuberant about the Bakken and there may be a bit of hyperbole in the previous paragraph.
Random examples of incredible wells coming off confidential list today. For newbies, in the early days of the Bakken it was not uncommon to see monthly production immediately after fracks to peak at less than 7,000 bbls/month. Now, anything less than 25,000 bbls/month in the "core Bakken" following a frack is disappointing. In addition, it appears operators are "moderating" completion strategies, back to about 50 stages and 8 million lbs of proppant (10 million in the middle Bakken; maybe 6 million in the Three Forks; but amount of proppant continues to vary between 6 million lbs and 10 million lbs -- anecdotal, not statistically sound; others will disagree with me). Note one well with production that exceeded 50,000 bbls in one month; not common, but not exactly rare any more. I believe all of these wells produced more oil in less than four months than what we used to see in one or two years in the early days of the Bakken.
Disclaimer: I am inappropriately exuberant about the Bakken and there may be a bit of hyperbole in the previous paragraph.
- 30543, 2,837, Bruin, Fort Berthold 151-94-26A-35-6H, Antelope-Sanish, a 50K+ well; t6/18; cum 172K 10/18;
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| SANISH | 10-2018 | 28 | 26291 | 26197 | 24211 | 35284 | 14125 | 18800 |
| SANISH | 9-2018 | 15 | 14907 | 14841 | 24676 | 15488 | 11025 | 2704 |
| SANISH | 8-2018 | 31 | 32766 | 32829 | 67328 | 44954 | 22985 | 19163 |
| SANISH | 7-2018 | 31 | 53187 | 53082 | 81509 | 75961 | 34423 | 37497 |
| SANISH | 6-2018 | 30 | 44723 | 44403 | 50258 | 67078 | 39049 | 24725 |
| SANISH | 5-2018 | 2 | 0 | 0 | 114 | 0 | 0 | 0 |
| SANISH | 4-2018 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
- 33242, 1,129, Oasis, Muri 5198 12-4 5B, Banks, 50 stages; 10 million lbs, t6/18; cum 157K 10/18;
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 10-2018 | 31 | 37076 | 37079 | 33145 | 88583 | 43636 | 44761 |
| BAKKEN | 9-2018 | 30 | 32182 | 31875 | 31751 | 70394 | 35842 | 34372 |
| BAKKEN | 8-2018 | 31 | 30148 | 30148 | 33803 | 65336 | 40268 | 24882 |
| BAKKEN | 7-2018 | 31 | 32186 | 32186 | 32496 | 73583 | 69734 | 3663 |
| BAKKEN | 6-2018 | 27 | 25323 | 25323 | 25571 | 53146 | 45039 | 7945 |
| BAKKEN | 5-2018 | 1 | 275 | 275 | 184 | 1604 | 0 | 1598 |
- 33110, 1,720, CLR, Wiley 10-25H, Pershing, 51 stages; 8.2 million lbs; a huge well: t7/18; cum 132K 10/18;
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 10-2018 | 31 | 26531 | 26528 | 14672 | 47268 | 42872 | 4159 |
| BAKKEN | 9-2018 | 30 | 32446 | 32422 | 21386 | 58301 | 53000 | 5035 |
| BAKKEN | 8-2018 | 31 | 32176 | 32234 | 25895 | 56273 | 52382 | 3650 |
| BAKKEN | 7-2018 | 31 | 38217 | 38044 | 30670 | 65401 | 61450 | 3729 |
| BAKKEN | 6-2018 | 4 | 1086 | 1086 | 0 | 663 | 0 | 663 |
| BAKKEN | 5-2018 | 3 | 903 | 903 | 1730 | 6528 | 0 | 6528 |
- 31264, SI/NC, Oasis, Kjorstad 5300 34-22 9B, Willow Creek, a huge well; t--; cum 98K 10/18;
| Pool | Date | Days | BBLS Oil | Runs | BBLS Water | MCF Prod | MCF Sold | Vent/Flare |
|---|---|---|---|---|---|---|---|---|
| BAKKEN | 10-2018 | 31 | 16338 | 16389 | 26305 | 29165 | 28905 | 0 |
| BAKKEN | 9-2018 | 30 | 20775 | 20696 | 26093 | 28032 | 27780 | 0 |
| BAKKEN | 8-2018 | 23 | 19542 | 19555 | 23132 | 21136 | 20943 | 0 |
| BAKKEN | 7-2018 | 30 | 18598 | 18422 | 28777 | 20938 | 18805 | 1881 |
| BAKKEN | 6-2018 | 30 | 22728 | 22498 | 44336 | 25624 | 25013 | 359 |
Bakken 2.0, 2.5, 3.0, 4.0 -- First Posted December 3, 2018
From FAQs.
82a. What do you mean by Bakken 2.0? See this post. Important data points:
82a. What do you mean by Bakken 2.0? See this post. Important data points:
- June, 2007: the very early days of the Bakken boom; began in Montana, 2000; Bakken 1.0
- October 19, 2016: the beginning of Bakken 2.0
- the event that triggered the Bakken 2.0 designation: the SM Energy announcement that it was selling some Bakken acreage/assets to Oasis
- it appears Permian Shale 2.0 began with the WPX, Noble, and XOM announcements regarding acquisitions in the Permian -- late 2016/early 2017
- Bakken 1.0: began in the summer of 2007; it was originally tagged "Bakken101" and I continue to use the "Bakken101" tag
- Bakken 2.0: October 19, 2016
- Bakken 2.5: April 10, 2018 -- correlates/corresponds with CLR's new completion strategies; North Dakota crude oil production to set new records; increased focus on the Permian vs the Bakken
- Bakken 3.0: We go to Bakken 3.0 if the "Lynn Helms' production surge (LHPS - 2018) is sustained for six months. Link here.
82c. Bakken 3.0 -- see above. The surge noted in 2018 certainly lasted for six months.
82d. Bakken 4.0 -- oil shock - market meltdown, 2020. Tag: "Meltdown_2020." And, of course, "Bakken_4.0. "New" and very common well designations started appearing just as we went to Bakken 4.0: SI/A; F/A; F/NC. Link here for examples. SI/A are wells that have been completed, have come off the confidential list, but are immediately shut in, sometimes with no production or very minimal production (less than 500 bbls) but often 15 days of great production, such as 17K bbls crude oil over 14 days. I didn't know whether to highlight them in "red" or "blue," but because they came off confidential list "on time," had been completed and had production following a frack, I highlighted them in "red." F/A; F/NC were wells that producing wells (DUCs) reported as completed. It appears that in Bakken 4.0 we will have wells that come off the confidential list, or the SI/NC list, but are immediately shut in or choked back significantly. See this post, dated March 26, 2020, first time I tagged a post with "Bakken_4.0."
82e. Bakken 4.5 -- rolling out Bakken 4.5. December 12, 2021.
82f. Bakken 5.0 -- Bakken has reached maturity, May 24, 2022.
82g. Bakken 5.5 -- January 22, 2023.
Bakken 101: across all "eras."
Unconventional 1.0; 2.0; and, 3.0 -- WoodMac.
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;
Qatar pulls out of OPEC; relationship sours.
Heavy sweet oil, rising star: from Bloomberg --
Wells coming off the confidential list --
Monday, December 3, 2018:
RBN Energy: winter demand offsets NGL fractionation capacity constraints.
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.
- 33695, 759, Oasis, Lite 5393 31-11 9B, Sanish, 50 stages;9.7 million lbs, t6/18; cum 102K 10/18;
- 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;
| $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
