WTI Flirting With $54 -- Thursday, February 20, 2020

Back to the future: if you have time to read only one story, this is the story. Over at Watts Up With That: Japan! Back to fossil fuel (shhh! coal). This is being reported by the Midget Oligarch Reporting on News Service (MORONS):

• MJaGA
• a lot of graphs
• a lot of short clips

Shale divs: three shale producers competing to see who can grow dividends to meet investor demands: Concho Resources Inc., Diamondback Energy Inc., and Devon Energy Corp. Bloomberg via Rigzone.

Boom: US oil export story has really just started. Rigzone contributor.

Growth has been particularly impressive since the trade war with China (having a 5 percent tariff on U.S. crude) has effectively taken the world’s biggest import market away. For example, U.S. crude exports to China in November were just 62,000 b/d, compared to 231,000 b/d in 2018. Compensating, Canada, South Korea, and the UK have become the largest U.S. crude importers. Canada, for instance, imported about 170 million barrels of U.S. crude last year. This is a staggering 11-fold boom since 2010, even more notable since Canada is itself a country with rising production amid flat demand.

Fast-growing India has also become more vital for U.S. oil exporters. The world’s third largest consumer imported almost 95 million barrels of U.S. crude in 2019, a 10-fold bounce from 2017 alone. Refinery-short Mexico has dominated product purchases, taking in some 65 percent of U.S. gasoline exports and 33 percent of diesel sales. Natural gas liquids are also quickly gaining market share in the U.S. export complex, quadrupling since 2013 to ~1.9 million b/d in 2019.

Looking forward, the U.S. oil export story has really just started. China, for instance, just announced that it will half its tariff on U.S. crude to 2.5 percent and buy nearly $55 billion in U.S. energy over the next two years. This will surely put crude in the spotlight: China still has a 25 percent tariff on U.S. LNG. The prize is obvious. At 10.2 million b/d, China’s crude imports in 2019 were up 10 percent and set a record for a 17th straight year. 

Boom: oil demand growth to quintuple next year. Rigzone. 

• 2020 demand: a reduction in growth demand by 793,000 bopd
• 2021 demand: a huge demand in growth; up by 2.34 million bopd

Boom: Morgan Stanley to acquire E*Trade, in $13 billion deal. Great news for Schwab. 

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Back to the Bakken

Active rigs:

$53.99	2/20/2020	02/20/2019	02/20/2018	02/20/2017	02/20/2016
Active Rigs	56	66	56	40	38

Wells coming off the confidential list:

Thursday, February 20, 2020: 47 for the month; 154 for the quarter, 154 for the year:

• 36691, SI/NC, Petro Harvester, FTH1 22-15 161-92B, Foothills, t--; cum 7K over 27 days;
• 36284, 1,243, Nine Point Energy, Hovde E 150-100-6-7-6H, Spring Creek, t9/19; cum 128K 12/19;
• 34361, 1,733, EOG, Liberty LR 49-1109H, 4 sections, Parshall, t8/19; cum 128K 12/19; see this note;
• 33511, 1,769, EOG, Liberty LR 50-1109H, ICO, Parshall, t8/19; cum 174K 12/19; see this note;

RBN Energy: NuStar reaping benefits of Permian gathering and export investments.

The fortunes of U.S. midstream companies in 2020 and beyond will be largely determined by how shrewdly they invested during the frenzied infrastructure build-out of the past few years. One of the most interesting case studies is San Antonio-based NuStar Energy, a master limited partnership born in 2001 to hold refiner Valero Energy’s midstream assets and spun off as a separate entity in 2007.

In May 2017, as the industry was still recovering from the late 2014 plunge in crude oil prices, the MLP made a major play to capture growing Permian production through the ~$1.5 billion acquisition of Navigator Energy, which owned a crude oil gathering, transportation, and terminaling system in the Midland Basin. The purchase was widely panned as overpriced by analysts and investors, and NuStar’s unit price plummeted by 60%. But by 2019, the company’s Permian acquisition — and soaring exports from its Corpus Christi terminal — drove big year-on-year gains in NuStar’s fourth-quarter 2019 operating income and EBITDA. Today, we preview our new Spotlight report on NuStar.