WTI Will Test $55 Today -- No Wells Coming Off Confidential List Today -- May 31, 2019

Updates

Later, 12:02 p.m. CT: well, that didn't take long. WTI drops below $55, now trading at $54.89.

There's a bit of smoke and mirrors with OPEC production numbers. "They" (Reuters) say that OPEC's total production dropped in May to a record low (since 2015) -- even though Saudi's production increased. Reuters suggests that even though Saudi Arabia increased its production, it was not enough to offset the loss of production by Iran. Oh, give me a break. Does one really think that Iran has not found a way to off-load their "sanctioned" oil? LOL. But, Saudi Arabia production, all things being equal, starts to increase in the summer due to increased a/c demands, so who knows where we really stand? The bottom line is that regardless of how much the Mideast produces, America has a glut of light oil, can't get enough heavy oil from Canada (thank you, Mr Obama) and with new tariffs on Mexico, WTI is now below $55. Brent? Saudi needs $70-Brent. Brent is now trading for about $64. "OPEC basket" is trading for about $68.

Original Post

MRO denied: link here. See this post for background and graphics. 

North Dakota's Board of University and School Lands has denied a leasing extension to an oil company that has sought to develop several Badlands mineral tracts since 2013.

The panel of five state elected officials chaired by Gov. Doug Burgum voted unanimously at its meeting Thursday morning to deny Marathon Oil's request for another 360-day leasing extension. The company has faced rough terrain, mixed landownership and protected species requirements in siting a drill pad.

Not surprising. From Rigzone, independents dominate US energy markets.  Data points:

• independents account for 83% of the nation's oil output and 90% of domestic natural gas / NGL production
• independents accounted for almost $600 billion in 2018 or almost 3% of US GDP

Not over until it's over: Icahn sues OXY, threatens fight for sale. Link to Bloomberg. Activist investor Carl Icahn launched a lawsuit against Occidental Petroleum Corp. with the goal of potentially seeking board seats and a sale of the company.

Politics trumps common sense: EPA will issue rule allowing E15 gasoline to be sold nationwide year-round -- a huge nod to Iowa voters prior to the 2020 election. 

Big Oil probably won't be buying Permian stragglers any time soon. Bloomberg. Seems at odds with what we all thought six months ago. 

Exxon Mobil Corp., Royal Dutch Shell Plc, Chevron Corp. and ConocoPhillips are all on record saying they are wary of scooping up smaller rivals at a time when would-be sellers are demanding premium payouts and global crude prices are under pressure from ample supplies.

There is “not always alignment among buyers and sellers,” Exxon Chief Executive Officer Darren Woods said Wednesday. He suggested Permian drillers may have to be squeezed by weak prices for a bit longer before they dial down their expectations.

“That’s often the case in a market, particularly in one that’s in transition,” Woods said.

In other words: the vultures will continue to circle. 

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Back to the Bakken

No wells coming off the confidential list today (there was no November 31 six months ago).

Active rigs:

$55.36	5/31/2019	05/31/2018	05/31/2017	05/31/2016	05/31/2015
Active Rigs	65	61	48	28	80

RBN Energy: what's driving new propane dehydrogenation projects in North America?

Global demand for propylene is rising, but lighter crude slates at U.S. refineries and the use of more ethane at U.S. (and overseas) steam crackers has reduced propylene production from these plants. That has led to the development of more “on-purpose” propylene production facilities — especially propane dehydrogenation (PDH) plants — in both the U.S. and Canada. More than 2 million metric tons/year of new PDH capacity has come online in North America since 2010, another 1.6 MMtpa is under development, and propane/propylene economics may well support still more capacity being built by the mid-2020s, maintaining the U.S. and Canada’s position as propylene and propylene-derivative exporters. Today, we begin a series looking at “on-purpose” production of propylene by PDH plants and what the development of these facilities will mean for U.S., Canadian and overseas markets.

Propylene — a particularly useful chemical building block — is used in downstream petrochemical processes to make a number of important materials, including polypropylene; acrylonitrile (used for acrylic fibers and coatings); propylene oxide (used for polyurethanes and other chemicals); oxo alcohols (used in PVC plasticizers and coatings); cumene (used to make epoxy resins and polycarbonate); and isopropyl alcohol (used as a solvent). About two-thirds of the propylene produced is used to make polypropylene — one of the best-selling plastics, second only to polyethylene. Polypropylene (or PP) is used extensively in automobiles and in the manufacture of packaging films, bottle caps, fiber ropes, as well as bicycle helmets and diapers. Global demand for propylene has been increasing at an average of about 5.2 MMtpa — a 3.6% compound annual growth rate (CAGR) — while North American demand is growing at a more modest average of 390,000 metric tons per year, for a CAGR of 2.2%. However, as we’ll get to in a moment, the traditional “co-product” sources of propylene supply have not kept up with demand — a situation that has led to the development of on-purpose propylene capacity on both sides of the U.S.-Canada border.

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The Physics Page

One of the best books I ever read on quantum theory was The Age of Entanglement: When Quantum Physics Was Born,  Louisa Gilder, c. 2008. The book was criticized by some readers because the "conversations" were fictional, made up by the author based on her reading of the source documents. Whatever. It appears that Jim Baggott, in 2011, provided a great, great follow-up to the book.

Baggott's book traces the history of development of quantum. I don't understand much of the science and none of the math but the historical vignettes of the various players are incredible.
I'm not sure it's the book I would recommend for newcomers to quantum, but for those who  have followed the subject for years, this is a great summary of how the science developed.