January 30, 2019 -- Midland Crude Sells At A Premium To WTI -- RBN Energy

Wells coming off confidential list -- yet to be reported --
Wednesday, January 30, 2019: 101 wells for the month; 101 wells for the quarter

• 34199, 1,981, CLR, Norway 7-5H1, Fancy Buttes, t10/18; cum 15K over 9 days;
• 34006, 2,161, CLR, Radermecher 6-22H1,  Camel Butte, a huge well, 43K in one month; the Radermecher wells are tracked here; t9/18; cum 85K 11/18; one month with 43K;
• 34003, SI/NC, Hess, SC-1WX-152-99-0809H-5,  Banks, no production data,
• 33985, 940, Oasis, Dawson 5494 43-12 11T, Alkali Creek, t9/18; cum 93K 11/18;
• 33983, 784, Oasis, Dawson 5494 43-12 9T, Alkali Creek, t9/18; cum 71K 11/18;
• 33537, SI/NC, CLR, Holstein Federal 15-25H1, Elm Tree, producing, albeit very little,
• 31988, SI/NC, Petro-Hunt, Anderson 152-96-35D-26-1HS, Clear Creek, no production data,

Tuesday, January 29, 2019: 94 wells for the month; 94 wells for the quarter

• 34002, SI/NC, Hess, SC-1WX-152-99-0809H-4, Banks, no production data,
• 34001, SI/NC, Hess, SC-1WX-152-99-0809H-3, Banks, no production data,
• 33969, 1,077, Enerplus, Steel 147-93-09D-04H-TF, Moccasin Creek, a nice well; the "heavy metal" wells are tracked here; t8/18; cum 95K 11/18;

Active rigs:

$53.84	1/30/2019	01/30/2018	01/30/2017	01/30/2016	01/30/2015
Active Rigs	64	57	38	45	146

RBN Energy: Midland crude supply crunch squashes West Texas spreads.

The market is used to crude oil spreads in the Permian Basin being volatile. Fast-paced production growth, the addition of new takeaway pipelines — and the rapid filling of those new pipes — have all impacted in-basin pricing, and we’ve seen differentials from the Permian to its downstream markets — Cushing, OK, and the Gulf Coast — widen and narrow as supply and demand fundamentals have changed. But recently, things have gotten a lot wilder. In September 2018, the Midland discount to WTI at Cushing blew out to almost $18/bbl, then narrowed to less than $6/bbl only three weeks later, thanks largely to the start-up of Plains All American’s much-ballyhooed, 350-Mb/d Sunrise Expansion. As Sunrise started to fill up, price differentials initially widened for a brief period of time. But, as we kicked off 2019, the Midland-Cushing spread quickly shrank further and then flipped, with Midland last Friday (January 25) trading at a $1/bbl premium to Cushing crude. You might wonder, how the heck did that happen? In today’s blog, we discuss how things play out when abundant supply dries up like a prune and traders are suddenly caught in a tight market. Archived.

Posted previously:

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Benchmarks

Much, but not all, information below comes from wiki. See also this link, and also here. But this is probably the best site.

West Texas Intermediate (WTI) is a light, sweet crude oil produced in the United States that is priced at the crude oil trading hub of Cushing, Oklahoma. WTI is used as a benchmark for other types of crude oil produced in the United States, such as Mars, a medium, sour crude produced in the Gulf of Mexico, and Bakken, a light, sweet crude produced in North Dakota. WTI is also used as a benchmark for imported crude oil that is produced in Canada, Mexico, and South America.

WTI

• A wide variety of benchmark crude oils worldwide are considered to be light. The most prominent in North America is West Texas Intermediate (WTI):
• API gravity of 39.6° API; lighter than Brent, but not by much
• sulfur: 0.24% (sweet oil is defined as oil with sulfur content less than 0.5%)

Brent Crude

• "basket" changed in early 2017 due to older fields depleting
• Platts will add Norway's Troll to the basket of four British and Norwegian crude grades which is already uses to assess dated Brent from January 1, 2018
• this will join Brent, Forties, Oseberg, Ekofisk, or BFOE as they are known
• Troll: a light, sweet crude; operated by Statoil (also contributes to the Oseberg, Statfjord, Gullfaks, Grane and Asgard streams)
• the most commonly referenced benchmark oil from Europe is Brent Crude, which is
• 38.06° API

Dubai Crude

• the third most commonly quoted benchmark is Dubai Crude, which is 31° API
• this is considered light by Arabian standards but would not be considered light if produced in the U.S.

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Others

Saudia Arabia's Ghawar field:

• the largest oil field in the world, Saudi Arabia's Ghawar field
• light crude oils ranging from 33° API to 40° API (see above; most would consider Saudi oil to be medium/heavy; and sour

Alaska North Slope: from XOM -- 

• 31.4°
• sulfur: 0.96%

Bakken:

36 to 44 degrees API. The quality of this oil is excellent, almost identical to WTI. The benchmark crude oil is West Texas Intermediate, which is 40 degrees API sweet crude. It is the benchmark because it requires the least amount of processing in a modern refinery to make the most valuable products, unleaded gasoline and diesel fuel.

North Dakota Spearfish: 36°

• presentation, Corinthian, undated, perhaps early 2014 
• sulfur content: 0.8% to 1%

Mexico: generally heavy to medium-light; sulfur content

• Isthmus: 21.8°.3.3% sulfur
• Maya: 33.4°; 1.35% sulfur
• Olmeca: 37.3°; 0.84% sulfur

Iraqi: heavy oil

Crude oil found in Iraq varies significantly in quality, with API gravities generally ranging from 22° (heavy) to 35° (medium - light).

Over 70% of national oil reserves are below 28° API  and the International Energy Agency (IEA) predicted in its 2012 report on Iraq that future production is likely to include a larger share of heavier crudes. However some of the crudes produced at the Taq Taq field in the norther semi-autonomous Kurdistan region are as light as 48° API, dubbed by Reuters as "champagne crude." See Taq Taq here.  

California: heavy oil; pdf here -- old data, from 2004, but type of oil probably has not changed

• Kern County: heavy oil with 1.2% sulfur; accounts for 75% of California's on-shore production
• Los Angeles Basin: heavy oil; sulfur content 1.7% to 2.0%
• Off-shore: intermediate for the most part, 18° (heavy) to 36° (medium-light)

Ecuador: heavy oil; 24.1°

Seeks low-sulphur, light oil, September 1, 2015:

Net crude exporter Petroecuador issued a tender to import 30 million barrels of light sweet crude over the course of a year in an attempt to maximize diesel and gasoline production when its Esmeraldas refinery comes back online in the fourth quarter, market sources said Tuesday.

Petroecuador is seeking 30 million barrels of low sulfur crude oil with an API gravity of 28 degrees to be delivered in a one-year period, according to a tender issued late Monday.

The state-owned oil company is seeking the barrels "in order to optimize the Esmeraldas refinery operations, once the revamping has been complete," the tender said. 

Venezuela: heavy oil, similar to Canadian oil sands.