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Friday, August 9, 2019

Notes From All Over, Part 2 -- August 9, 2019

Permian: not on its way out -- Rigzone. Even Nick Cunningham over at oilprice says the Permian will grow to 8 million bopd. Saudi Arabia maximum sustained, maybe 11 million bopd. Permian on its way out? Rystad said quite the opposite. Data points:
typical Permian well currently produces approximately 830 bopd during its second month of production -- an all-time high

EIA dashboards:

Ethanol: Brazil considers dropping barriers to US ethanol. Wow, it's great to have a businessman in the White House, along with that guy that always falls asleep at meetings over at "Commerce."

Aramco cuts prices for oil headed to Asia. Will raise prices for northwest Europe. Oh, well. Link here.

Piped-out?

 
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5 comments:

  1. AnonymousAugust 9, 2019 at 11:34 AM

    We saw similar thing with Bakken when DAPL opened and was short of bopd to fill it. Meant that prices were a little higher than Cushing. Probably similar thing in the Permian and even less of a premium (as there are free barrels headed to WF and Cushing that can divert to direct pipes from Midland to the coast.

    Overall, sure there will be an impact, but no big deal from a producer standpoint. Maybe a couple bucks. Less than the variations in world oil price just based off of trade/OPEC etc. gyrations.

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    Replies
    1. Bruce OksolAugust 9, 2019 at 11:48 AM

      ".... a couple of bucks/bbl..." I have some readers that would suggest "a couple of bucks/bbl" is a significant cost. That's locked in by contract; doesn't change with spot price of oil.

      I remember some years ago when I first started blogging, someone reminded me that oil was the "biggest" commodity traded globally (based on dollars, believe) and that swings of just pennies could mean quite a bit.

      Delete
    2. Bruce OksolAugust 9, 2019 at 11:51 AM

      A VLCC, 2 million bbls, can load in two days; every penny difference in price = $20,000.

      "A couple of bucks ..." on 2 million bbls = $4 million dollars?

      Delete
  2. AnonymousAugust 9, 2019 at 4:58 PM

    OK, WTI Midland goes from 53.5 to 55.5. Still not the 75 that people were hoping for in SEP18. Still not the 65ish that was the average in 2018.

    I mean sure every dollar helps. But part of being an analytical thinker is knowing magnitudes. If I fly the A-6 without any ordnance, yeah it's faster than normal. Still a pig compared to an F-18. (Albeit an all weather, heavy load, carrier capable bomber that should never have been replaced. But still, if you are talking speed, it's important to know the magnitude.)

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