The Million Dollar Way (The Bakken Oil Blog): For The Archives: Colorado Braces For Worst Winter Storm in 135 Years -- March 12, 2021

First group:

10-Year Treasury: link here. Up almost 11 basis points; now at 1.633%.
DXY: link here. Up slightly, at 91.75.
Silver: link here. Down a bit, at $25.635.
CBOE volatility index: link here. Up a bit, at 22.24.

Second group:

30-Year Treasury: link here. Up over 11 basis points, may trend toward 12 basis points; now at 2.397%.

Dow in record territory again.

NASDAQ off around 200 points.

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Texas Freeze: Big Energy Wins

As oil and gas majors surprisingly stand to profit in the long-term from the Texas storm last month, several regulators emerge largely unscathed. In the wake of the severe winter storm that hit Texas in February, causing blackouts and water shortages across the state, reforms to avoid the deadly cost of extreme weather conditions could mean regional oil majors bounce back big in the future.

As smaller companies are hit hard following grid failures in the storm, people look to bigger firms, such as Vistra, NRG, Exelon and Calpine to provide a more stable source of energy.

This is likely to lead to bigger energy companies across the state acquiring smaller, local companies that people no longer trust to supply their power.

The four major Texan companies, together, own around half of the total capacity of the grid, with the remaining share relatively fragmented.

One company, Brazos Electric Power Cooperative Inc., has already filed for bankruptcy and several look to follow soon due to defaulted power payments. According to CNBC, Texas energy companies have failed to pay the $345 million required in damages from last month’s storm.

In total, electricity providers are thought to have dodged $2.46 billion in power and service charges according to the Electric Reliability Council of Texas (ERCOT). ERCOT has threatened to name the firms in question if they do not meet payments in the future.

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US Shale Could Disrupt OPEC+ Plans
Link here.

US shale could disrupt OPEC+ plans.Current oil prices are high enough to warrant increased U.S. shale activity in the second half of the year if prices hold around these levels, according to JP Morgan.

“At current prices, most U.S. onshore operators are economic, leaving a vast group of operators, from large public companies to private players, in good position to ramp up activity in 2H21 and build solid momentum for higher volumes in 2022,” analysts at JP Morgan said in a weekly note as carried by Reuters.
Early on Friday, the spot U.S. benchmark WTI crude was trading at $65.76.

Following the largest ever annual collapse in U.S. crude oil production in 2020, the U.S. shale patch is not rushing to ramp up production in 2021, even though oil prices have rallied by 30 percent this year. U.S. producers, especially large listed companies, are expected to stick to capital discipline and reward shareholders rather than ramp up production.

However, smaller privately held oil firms are benefiting from higher oil prices as their primary way of generating cash is increased production.

This could spoil the oil management policy of the OPEC+ group again. [It's hard to believe that "smaller privately held oil firms could have that kind of effect on OPEC+.]

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Global Warming Hits Colorado

Link here.