Down To Ten Active Rigs; No Wells Coming Off The Confidential List -- September 22, 2020

US housing: existing home sales hit 14-year high; prices race to record peak. Link here.

• pent-up demand, after sector came to complete stop in March, 2020
• low-interest rates
• work-from-home
• school-from-home
• city centers are dead (everything is closed)
  
• city centers are dangerous
• flight to lower-income jurisdictions: 
• intra-state (upstate vs Manhattan, for example)
  
• inter-state (NY to FL; CA to TX
  
• interestingly, the linked article had all those reasons except the reasons why folks are rushing to the suburbs
• as much as anything it has to do with "moms" 
• concerned about safety
• concerned about schools
• very, very interesting phenomenon
• I'll bet it's as much about moms wanting a safer environment, better schools as dads wanting to pay less taxes (and, I'm using "moms" and "dads" generically, as metonyms, no sexism implied although I'm sure it's already been inferred. LOL.
  

US miles: US drivers' mileage in July (2020) falls to lowest for the month of July since 2012. Link here. 

• The biggest declines were seen on the East Coast, where mileage in the North fell 15.4% and in the South by 11.3%. Driving on urban Interstate roads fell by 14.8%, the sharpest decline seen in single road category.
• U.S. mileage has been below year-ago levels since March, when American businesses and schools first closed due to the virus. The lowest levels were seen in April, when government restrictions were most widespread.

Jet fuel: it's now so inexpensive, it's being used in sea-going tankers. Link here.  Next? Your neighborhood filling station. LOL. 

EVs: by the way, speaking of which, on social media someone suggested it was just a matter of time for local service stations to start installing EV charging stations; maybe, but it suggests to me those who say that haven't thought this through. If it's such a great idea why haven't we seen it across the board yet, at least along the interstates? Hey, let's go back to "US miles' above.

OXY: read this article any way you want; my take on it -- Warren Buffett drives a hard bargain; selling your soul to the devil.

OXY will pay Buffett's Berkshire Hathaway $200 million in dividends on preferred shares in cash, rather than common stock. Bloomberg sees it as OXY "getting stronger." It sounds like Warren is saying, "show me the money." 

OPEC basket, a "w" recovery, or a dead cat bounce? Link here.  

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Back to the Bakken

Active rigs:

$39.80	9/22/2020	09/22/2019	09/22/2018	09/22/2017	09/22/2016
Active Rigs	10	58	66	58	33

No wells come off the confidential list today.

RBN Energy: a rebound in Canadian CBR may not come until 2021.

Western Canada’s relentless, decade-long increase in crude oil production began maxing out its export pipeline capacity in the past few years. With more supply than could be carried by pipelines, exporting crude by rail tank car became the next best alternative, leading to record amounts of rail-based exports earlier this year. However, this year’s wild swings in oil prices and COVID-led demand destruction resulted in drastic production cutbacks that freed up space on pipelines and put the kibosh on more expensive crude-by-rail, at least temporarily. Things are shifting again, though. With oil production recovering somewhat in the past couple of months and excess pipeline capacity dwindling, are we headed for a resurgence in the use of rail to export Canadian crude? Today, we conclude a series on Western Canada crude production and takeaway options with an analysis of what’s ahead for crude-by-rail.

Crude oil has been transported to market by rail tank car since the late 19th century but pipelines overtook rail as a more reliable and cost-effective alternative early in the twentieth. While pipelines remain the safest and cheapest means of delivering large quantities of barrels to refiners, moving crude by rail never really disappeared and has played a vital role in terms of destination flexibility and as an option when pipeline capacity is in short supply. That’s certainly been the case in Western Canada in recent years, as production growth outpaced the addition of new pipeline takeaway capacity and forced shippers to turn to rail with increasing frequency as a supplement to pipelines. That trend was interrupted this spring, however, when a combination of demand destruction and sharply lower crude oil prices spurred a sharp decline in production.