Road to Mexico: Mexico's growing reliance on US oil will continue. Operative word in that headline over Rigzone -- "growing." Not just "reliance on US oil, but "growing reliance on US oil." Hmmm. Wow, I haven't seen "Cantarell" in a long, long time. North Dakota producing about the same amount as Mexico. Who wudda thought?
It has been a long and winding road for Mexico’s oil industry over the past 15 years. With the peaking of supergiant Cantarell, once the world’s second largest oil field, Mexico's crude production has been sliced in half to below 2 million b/d. Proven oil reserves have collapsed from 50 billion barrels 20 years ago to just 8 billion barrels today. Mexico’s crude oil exports to primary customer, the U.S., have been plummeting. From 2006-2018, shipments to the U.S. fell 60 percent to 720,000 b/d. After lengthy delays, Mexico in 2013 critically passed its Energy Reform to bring in outside investment and expertise to help production rebound. It remains a bumpy ride, however, and the new AMLO administration has been resistant to deregulation.
In turn, Mexico has been increasingly forced to deepen its dependence on the U.S. to meet oil demand at home. Falling production has been exacerbated by a refinery shortage, surging imports of refined products. In 2018, Mexico imported 1.2 million b/d of products from the U.S., or six times more than its intake before peak oil production. The country last year imported 520,000 b/d of gasoline from the U.S., nearly a five-fold boom over the past decade.About where we were last summer: $60.31 (WTI).
- Brent at $66.70 still not enough to meet Saudi's budget
Back to the Bakken
Rig count (AIIM/FWIW): Rigzone -- Texas dropped the most rigs, at eight. The following states also lost rigs this week:
- West Virginia (-3)
- Louisiana (-2)
- Alaska (-1)
- California (-1)
- Colorado (-1)
- Ohio (-1)
- Pennsylvania added two rigs
- while North Dakota and Oklahoma tacked on one rig apiece.
Monday, September 16, 2019: 43 for the month; 175 for the quarter:
- 35522, SI/NC, Hess, EN-Davenport-156-94-1003H-3, Big Butte, no production data,
- 36142, 181, Hunt, Cook 146-93-24-13H-4, Werner, t8/19; cum --;
- 35521, SI/NC, Hess, EN-Davenport-156-94-1003H-2, Big Butte, no production data,
- 35520, SI/NC, Hess, EN-Davenport-LE-156-94-1003H-1, Big Butte, no production data,
RBN Energy: Ethane prices bottom out, spurring a huge inventory build. Archived.
The ethane market isn’t for the faint at heart — it’s got lots of ups and downs, and it’s impacted by an unusually wide range of variables. A year ago this month, a combination of fractionation constraints in Mont Belvieu and rising demand from new ethane-only steam crackers sent ethane prices north of 60 cents/gallon. For most of the time since then, though, ethane prices were in something close to freefall, bottoming out at only 10 cents in late July before rebounding in recent weeks to 20 cents or so. During the big, months-long price decline, ethane traders and cracker operators did what anyone does when they can buy something they’ll need in the future for next to nothing — they stocked up. Today, we examine recent trends in ethane supply, demand, prices and storage levels, and take a look ahead.