Frigid weather: severe now but soon coming to an end. Natural gas doing well, but still below $3.00. Who wudda thought.
Wow: WTI flirting with $58. Up almost 2%; up another $1.05; trading at $57.90.
- 10-Year Treasury: link here. 1.176% trending up.
- DXY: link here. 90.92 trending down.
- Silver: link here. $27.560 trending up.
- CBOE volatility index: link here. 21.66 trending up
10:1: finally a nice example, back to 10:1 -- mid-morning trading:
- DOW 30: 31,300; up 151.49 points
- S&P 500: 3,900; up 15.2 points -- can't get much closer than that.
Back to the Bakken
Monday, February 8, 2021: 5 for the month, 38 for the quarter, 38 for the year.
- 37067, F/A, Hess, EN-Labar-15409401003H-10, Alkali Creek, first production, 8/20; t--; cum 134K 12/20;
- 36811, AL/A, Hess, TI-Jenson-158-94-0805H-1, Tioga, first production, 8/20; t--; cum 61K 12/20;
A blast of Arctic air plunges the Midwest and Northeast into deep freeze. Already-low propane inventories result in supply shortages in local markets. Propane transport trucks move product hundreds of miles from storage hubs to replenish regional terminals as markets scramble to meet surging propane demand. Are we talking about the nightmarish polar vortex winter of 2013-14, when regional propane inventories were sucked down dangerously low and Conway, KS, propane prices skyrocketed to almost $5.00/gal? No. We are talking about now. This is a description of what is happening today in U.S. propane country –– that belt of northern states that depend heavily on propane for heating. But this is not 2013-14. Things have changed. So in today’s blog we’ll explore how the latest polar vortex could be quite different than that weather-driven crisis seven years ago.
We’ve been particularly interested in the propane market this winter, where we warned of the possibility of a coming propane price squeeze. The big issue was exports, which were running at all-time highs and had the potential to deplete inventories at record rates. We worried that average days-supply, when calculated using both domestic demand and exports, had dropped to a five-year low, and that the market could get very tight. By January, that was just how things were playing out, with markets further complicated by long delays at the Panama Canal and, as a consequence, skyrocketing shipping rates. Then, a couple of weeks agowe looked at how frigid weather in Asia had pulled even more U.S. propane into export markets, and how that resulted in a Mont Belvieu price spike up to 95 cents/gallon (c/gal), and over a dollar per gallon at the Conway hub in Kansas. We wrapped up that blog by stating the blindingly obvious: “The short term is all in the hands of Mother Nature.”