Just When You Thought It Couldn't Get Any Worse: The Upcoming Release Of Crude Oil From The SPR -- RBN Energy -- September 9, 2020

OPEC basket, link here: $40.29. Holy mackerel. Remains in free-fall. This is simply amazing. I haven't seen anything like this in quite some time. By the way, one has to ask the question (again), why now? Why didn't this happen a month ago; a week ago? This happened very suddenly beginning September 1, 2020, but accelerated through the third, and snowballing September 7, the day after it seemed to stabilize. There are three direct reasons to explain the timing with a fourth contributing reason:

• traders were waiting to see how the US driving season would end on Labor Day weekend (preliminary numbers now suggest gasoline demand in the US dropped, after initial projections looked good)
• by September 1, 2020, traders realized that all that hype about Hurricane Laura was just that. Hype. Laura went from "unsurvivable" to "no-impact" in less than a day;
• huge setback in fight against Covid came to light on Monday, September 9, 2020 (yet to post); will affect global demand for crude oil going for forward; although I have trouble accepting this as a huge factor, it was another nail in the coffin, as they say (yet to be posted)
  
• contributing to the OPEC basket meltdown:
• those reports of crude oil tankers off China with up to 40 days wait to off load
  

Most interesting: this free fall in the OPEC basket price comes at a time when "all" the pundits are suggesting we will be "re-balanced" by the end of the year; certainly doesn't look that way

• we will start to see that narrative change by the end of September

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Back to the Bakken

Active rigs:

$37.41	9/9/2020	09/09/2019	09/09/2018	09/09/2017	09/09/2016
Active Rigs	11	62	66	55	37

Wells coming off the confidential list -- Tuesday, September 8, 2020:

• 36835, loc/NC,  XTO, HBU Muller 31X-12F, Hofflund,
  
• 36777, SI/A, Whiting, Iverson 11-14-3H, Sanish, t--; cum 75K 4.5 months;
  
• 36113, drl/A,  Hess, GO-Dahl-156-97-2215H-2, Dollar Joe, t--; cum 71K 4.8 months;
  
• 33866, drl/drl,  Hess, BL-Myrtrice-LW-156-96-2535H-1, Beaver Lodge; section line well; 2560-acre spacing
  

A bit of background.

• 36835
• spud March 10, 2020
• Three Forks
• TD: May 7, 2020
• 9.5 total days of drilling
• 92.2% of thelateral wellbore was within the target interval; 100% within the TF 1st bench
• 36777
• spud: September 17, 2019
• surface hole, TD reached: September 17, 2019
• vertical curve 1, TD reached: September 20, 2019
• TD: September 23, 2019
• four days of drilling?
• 36113
• spud: November 23, 2019
• KOP reached at 4:08 p.m. CT, November 26, 2019; drilling of the curve began immediately;
• TD: December 1, 2019
• vertical drilled in two runs
• 10' target window centered 25' below the top of the middle Bakken
• lateral, begun: November 29, 2019, 1:40 a.m. CT
• TD: December 1, 2019, 5:55 p.m. CT; 2.5 days drilling
  

RBN Energy: the upcoming release of crude oil from the strategic petroleum reserve. Archived.

As the year 2020 wears on, it seems that every month brings a new surprise. In August, in addition to the ongoing pandemic and protests, a major hurricane was added to the mix. What comes next is anybody’s guess. A zombie apocalypse? An alien invasion? At this point, the possibilities seem boundless. And the energy industry has been no stranger to this year’s turmoil, what with COVID-related demand destruction, an oil-price collapse, and production shut-ins. Amidst the chaos, the Department of Energy (DOE) announced that for the first time, private-sector energy companies would be allowed to store crude oil in the U.S.’s Strategic Petroleum Reserve (SPR), which resulted in the leasing of 23 MMbbl of capacity. Recently, those volumes have begun to be drawn back out. Today, we examine the factors influencing movements of crude oil into and out of the U.S. SPR.

RBN is pleased to announce that today’s blog is the winning submission in our first-ever blog writing competition held for students in Texas A&M’s Trading Risk & Investment Program (TRIP).