RBN Energy With Bakken Natural Gas Update; Four Wells Come Off The Confidential List Today; NDARC Drops To 16 -- May 14, 2020

US oil supply: another record -- an incredible 42 days of crude oil supply in the US. Link here. 

Jobless claims, link here:

• prior: 3.169 million
• revised: 3.176 million
• consensus: 2.5 million
• actual: 2.981 million
• we must be trending toward 40 million first-time jobless claims in last couple of months
• best estimate: US unemployment jumps to 10%

Rasmussen daily president poll: at same point in presidency, May 13:

• Trump: 47%
• Obama: 46%

One giant re-set: think about the implications with $20-oil for the next two decades.

• the geo-political effects would be breathtaking
• changes in the global economy would be likewise breathtaking

Twitter scroll:

• Saudis slash oil sales to Asian buyers: well, so much for this latest attempt to regain market share
• IEA: oil producers the world over are shutting in supply faster than anyone had anticipated; a historic decline (see below) 
• US crude oil production, most recent: 
• 9.44 million bpd
• a drop of about 3 million bpd from Marc
• Kuwait: tells buyers to load less crude on ships in June
• oil on floating storage soars to record highs, but peak still some way off;  link at S&P Global Platts; 
• SPR to buy up to one million bbls of sweet crude oil from small to midsize domestic producers
• Beijing traffic:
• rush hour traffic is now above 2019 congestion
• off-peak hours: traffic well below 2019 levels
• analysis: folks using private transportation to get to work; shunning buses, subways. light rail (same thing we're seeing in US)

IEA:

• US to be biggest contributor to global supply cuts by year-end
• US shale, as swing producer, turns on a dime
• but can it recover just as quickly if necessary to prevent oil price crisis at other extreme?
• Saudi crude oil output may drop to 2002 low (and sell for $25 -- think about that)
• demand to fall to 8.6 millio bopd in 2020

Saudi Arabia: well, so much for this latest attempt to regain market share

• cutting sales of oil to the US and Europe by about half 
• Saudis slash oil sales to Asian buyers

Fascinating: look at these numbers --

• global oil supply rose by 260,000 bpd -- talk about false precision but that's another story -- but global oil supply rose by only 260,000 bpd inApril
• global oil supply at 100.05 million bpd in April
• 260,000 / 100.05 = 0.26%
• forecast by EIA: global oil supply will fall by 12 million bpd month/month in May
• forecast by EIA: global oil supply will fall to 88 million bpd in May -- I find that amazing

IEA's May oil market report has been released (note this is the IEA report, not the EIA report):

• the report is here;
• global oil demand will fall by 8.6 million bpd in 2020
• oil supply is set to fall by a spectacular 12 million bpd in May 
• this will be a nine-year low in global oil supply
• the peak decline for global refining activity has shifted to May

Comment: I don't recall any government bureaucracy, in recent memory, using the word "spectacular" to describe anything.

OPEC basket, link here:  $23.25. Even if the price of oil doubles, Saudi can't make it on $46-oil;

Floating storage: link here to S&P Global Platts.

• currently: 180 million bbls crude oil on floating storage
• highest level in the history of the oil oil market
• a rise of almost 95% in the past two months
• but peak is still "a far way off"
• floating storage
• day rates: 
• during the rush at the end of March: 
• $120,000 / day for VLCCs
• periods up to one year at $85,000 / day
• currently (this week): $55,000/day storage costs on VLCCs
• will likely take a very, very long time to balance
• currently 200 million bbls of oil and products on floating storage
• represents 5% of global carrying capacity
• estimate: 10 - 20% of the global tanker fleet represents a "reasonable" ceiling for floating storage
• would allow 400 million to 800 million bbls of crude oil and products
• freight rates stay elevated as storage tightens spot tonnage
• inland storage crisis may have been averted but demand still in doldrums;
• biggest loser? West African crude oil
• parting shot:

"The current supply losses, OPEC's determination, and trend towards opening up point to stronger oil prices than we believed earlier," it said in a note. "[But] we are not overly bullish as much anxiety persists, particularly around demand and the impact of opening up from lockdowns on the infection rate."

Airbnb: industry crumbles;

Disneyland? to be closed for one year?

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Back to the Bakken

Active rigs:

$26.12	5/14/2020	05/14/2019	05/14/2018	05/14/2017	05/14/2016
Active Rigs	16	65	60	51	27

Four wells coming off the confidential list today  -- Thursday, May 14, 2020: 46 for the month; 96 for the quarter, 323 for the year:

• 36799, drl, WPX, Nighthawk 6-34HUL, Heart Butte, no production data,
• 36459, SI/NC, BR, Glacierfill 1F, Clear Greek,
• 35746, SI/NC, Zavanna, Usher 28-21 4TFH XW, Patent Gate,
• 35386, SI/A, CLR, Palmer 4-25H1, Haystack Butte, t--; cum 6K over 9 days;

RBN Energy: Bakken gas supplies plunge as oil production pulls back. Archived. This is really, really cool. Not only is this an RBN Energy post on the Bakken, but it features one of my all-time favorite poet-writer-singer-Zen master. LOL.