Friday, April 3, 2020

ND Rig Count Holds Steady At 43 -- April 3, 2020

Employment situation: posted, 7:30 a.m. CT. A quick look at the numbers suggest things were not as bad in March as forecast, or maybe they were. Absolutely impossible to predict how talking heads with interpret these numbers. April is going to be a humdinger.

Average workweek: 34.2 hours -- remains just below the ObamaCare mandate of 35 hours. I think that number is the most fascinating. History, link here.

Social distancing: I didn't read the story, I'm not interested. But over on twitter someone suggested that President Trump will mandate "social distancing" between rigs to minimize spread of coronavirus. That may be a problem in the Permian -- too many rigs too close together -- but in the Bakken, all rigs are at least six feet apart, the current recommendation from the CDC for "social distancing." In the Bakken, the closest two active rigs come together is 50 feet from each other on pad drilling.

Cartels and the Texas Railroad Commission: this is quite fascinating to watch. Will the TRRC become an ex officio member of OPEC? Will OPEC+ become OPEC++? I thought President Trump and the American public wanted lower gasoline prices. That reminds me, where did I put my copy of Alice in Wonderland?

Which reminds me: the best literary find last year -- The Annotated Wuthering Heights.

Iraq: exported more oil in March, 2020, than February, 2020, but revenues halved. The link is at Barron's; not sure why it isn't behind a paywall. 

Gas buddy:

Back to the Bakken

Active rigs:

Active Rigs4362584829

No wells coming off the confidential list today.

RBN Energy: crude crisis squeezes export terminals.
Just a few months ago, crude oil producers and marketers were wondering whether there would be enough marine terminal capacity along the Gulf Coast to handle the steadily increasing volumes of crude that would need to be exported over the next few years. Now, with WTI prices hovering around $25/bbl and producers slashing their 2020 drilling plans, expectations of rising U.S. production and exports are out the window. Instead, what may be shaping up is a fierce competition among the owners of existing storage facilities and loading docks to offer the most efficient, lowest-cost access to the water. Today, we continue our series with a look at two large Houston-area facilities: the Houston Fuel Oil Terminal and Seabrook Logistics Marine Terminal.
This is the second episode in our series. Earlier, we said that the volumes of mostly light, sweet crude from the Permian and other U.S. shale plays being shipped overseas have taken off since the ban on most exports of U.S. crude was lifted in late 2015 — from ~600 Mb/d in 2016 to ~2.7 MMb/d in 2019, and ~2.9 MMb/d in the first two and a half months of 2020.
We also referred back to an blog last summer, where we discussed our estimate that, as of mid-2019, crude oil export capacity along the Gulf Coast stood at about 5 MMb/d — enough to meet current needs but well short of what would be needed if export volumes kept rising. Finally, we began our review of marine terminals along the Texas and Louisiana coasts with a look at the Seaway Freeport and Seaway Texas City facilities, both part of the broader Seaway Crude Pipeline (SCP) system, which is jointly owned by Enterprise Products Partners and Enbridge. We estimated Seaway Freeport’s export capacity at 200 Mb/d and Seaway Texas City’s at 300 Mb/d. Today, we turn our attention to two other large marine terminals in the Houston region.


  1. One would think that with low oil prices, the incentive to convert refineries to light oil would be even higher. They're not paying top dollar for light oil and could spend that money on conversion. We're not running out of shale oil any time soon and it would cause the Saudis to have little control over OUR prices.

    1. Maybe RBN Energy will do an analysis on this some day. As it is, it appears that the US imports very little Saudi oil and I think the majority of that goes to California refineries and to their one refinery along the Gulf coast.

  2. Can you explain why Saudi actions cause our prices to fall? It appears that the Saudis and Russians import relatively very little oil to the US. OPEC sells us less than half of Non-OPEC countries.

    1. Forgetting about the difference between heavy and light oil (which is becoming less of a problem as refiners learn to work with both), the US is now a huge oil exporting country. We have been exporting our "excess" oil to new markets. Saudi Arabia prices their oil below our oil and those new markets (think China) will buy from Saudi Arabia and not the US. The US has huge production now (#1 in the world) and if it can't sell all that oil to domestic customers as well as foreign markets, the price will come down.