No Wells Coming Off Confidential List Today; WTI Breaks Below $40 -- Again -- October 15, 2020

Russia: likely to slash drilling again in 2021 -- Bloomberg, link here. Close reading of this article suggests the Russian oil sector is in deep doo-doo. Archived.

The nation’s producers, which have reduced oil drilling by as much as one-third so far this year, may cut it by a further 20% in 2021.

OPEC basket, link here: trading at $41.20. Bottom line: Saudi, at some point, will have to wake up to the fact that, unless unforeseen and major forces intervene, we're in a $45-oil environment for as far out as one can reasonably "predict" oil prices. Vision 2030 unraveling.

WTI: drops below $40 despite "bigger than expected draw." The jobless claims report today, I assume, has folks concerned. I don't think folks have yet come to terms that we're still in the early innings when it comes to Chinese flu. Less than 3% of Americans have been diagnosed with Chinese flu and here we are, in the eighth month or so of virtue signaling, where 85% of those who have tested positive for the flu were "wearing masks." France and the UK are in huge trouble. I assume we will see some headlines coming out of France over the weekend regarding the seriousness there.

**********************************
Back to the Bakken

Active rigs:

$39.56	10/15/2020	10/15/2019	10/15/2018	10/15/2017	10/15/2016
Active Rigs	16	60	68	59	31

Only one more well coming off the confidential list between today and through next Monday -- no wells coming off the confidential list today.

RBN Energy: rising LNG exports from Texas reshapes Gulf coast gas flows. 

With the rise of U.S. LNG exports in recent years, southern Louisiana has become a focal point for natural gas demand, pulling in gas supply from near and far and all directions. That market was severely disrupted this summer as COVID-19 decimated global LNG demand and hammered the economics of U.S. LNG exports. 

Pipeline flows into southern Louisiana during those months went from record-breaking highs that pushed the limits of the area’s infrastructure capacity to levels consistent with 2018, when the Bayou State’s LNG export capacity was just 2.65 Bcf/d, compared with 4.9 Bcf/d now. More recently, an active hurricane season has also curtailed exports. But demand for U.S. LNG is rebounding, and as LNG feedgas heads back to its previous highs and beyond, a new flow dynamic is emerging along the Gulf Coast, driven by the 1.35 Bcf/d of new export capacity in Texas that came online this year. 

Flows between Louisiana and Texas are reversing as an increasing amount of gas is needed on the western side of the Sabine River to feed the Corpus Christi and Freeport LNG facilities. The incremental gas demand and flow reversal will create new challenges and constraints for the region’s pipeline infrastructure as steady exports resume. Flows into Louisiana will be higher than ever, but so will flows out of Louisiana heading west to serve additional LNG demand. Today, we begin a series discussing how LNG demand is changing gas flows along the U.S. Gulf Coast.