One Slawson Mauser Federal Well Comes Off Confidential List Today -- October 5, 2021

For the archives: Antarctica posts coldest winter since records began. 

FWIW, top stories from The LA Times today:

• research has confirmed the dramatic erosion of the Pfizer-BioNTech COVID-19 vaccine’s protection against “breakthrough” coronavirus infections
• as Congress considered COVID-19 relief earlier this year, mayors from across the U.S. pleaded for “immediate action” on billions of dollars to shore up their finances and revive their communities. But as of this summer, a majority of large cities and states hadn’t spent a penny of those funds.
• New Zealand admits it can no longer completely get rid of the coronavirus.

Energy crisis: scanning through my twitter feed this morning suggests this could be a very, very interesting year with regard to price of oil and natural gas. It's almost as if the folks following this closely are seeing one story and mainstream media is either seeing another story, missing it completely, or simply uninterested. 

Peak oil? This has been a consistent them on the blog for perhaps as long as the blog has been running. Not sure when I first posted this likelihood / possibility. Link here to Irina Slav. Most interesting: CNBC, et al, do not seem to have considered this. See Saudi Arabia production numbers -- non-government sources -- here. All things being equal, Saudi production is increased in the summer to meet domestic demand (power for a/c).

Bottom line: when it comes to OPEC production, ignore the speeches and press releases coming out of OPEC (Saudi Arabia); watch the production data. 

Oil, days of supply: the best indicator of where the US stands with regard is the amount of oil in storage measured in "days of supply" and that number is gradually increasing.

WTI: solidly above $78.

Is EU changing the narrative? A reader notes that the EU is suggesting more government control to supply affordable energy and confront climate change. The tea leaves suggest the EU leaders are not concerned in the least about the price of natural gas, with tea leaves suggesting they actually want natural gas to go much higher, make it so painful that voters clamor for more renewable energy. This is very fascinating. 

In the US: would the price of oil be the top story if it weren't for Covid? 

Let's check some ticker symbols, pre-market:

• ENB: no trading; closed yesterday: $40; P/E, 17;
• EPD: whoo-hoo! Up 4% yesterday; now at $22.63, up slightly pre-market; P/E, 13
• SRE: no trading; closed yesterday, $127, well off its high, but a $124-stock; P/E, 18;
• OKE: no trading; closed yesterday, $60; P/E, 20
• DVN: whoo-hoo; apparently pretty flat yesterday but up over two percent in pre-market today; P/E of 218;
• HES: no trading; closed at $82.78 yesterday; P/E, --
• EOG: flat yesterday, but up almost two percent in pre-market today; up $1.59, right at $88; which is its 52-week high; P/E 27
• AAPL: the only thing that matters for AAPL, it's P/E = 27.

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

Active rigs, updated end of day:

$78.48	10/5/2021	10/05/2020	10/05/2019	10/05/2018	10/05/2017
Active Rigs	27	11	58	64	59

One well coming off confidential list: 

Tuesday, October 5, 2021: 6 for the month, 6 for the quarter, 230 for the year:

• 37195, conf, Slawson, Mauser Federal 6-18-17H, North Fork, it is unlikely the scout ticket will be updated; NDIC has not updated scout tickets for several months; where production data is being updated it has been delayed. Cannot say if status of wells as reported on scout tickets is accurate any more.
  

RBN Energy: western Canada's propane balances look even tighter.

It wasn’t that long ago that Western Canada was awash in propane, sending the vast surplus for export by railcar to the U.S. That has changed in the past two years as direct exports to Asia opened up and Canada’s domestic demand for propane rose. With supplies becoming tighter, the combined effect with increasing demand spells trouble for higher exports to the U.S. this winter, a time when they are desperately needed. In today’s RBN blog, we explore the current Western Canadian propane market and what might be next in store.

Summary:

Of course, this does not mean supplies are in danger of running out, only that the difference between production and demand in 2021 and 2022 will be met from inventories. The stark shift in 2021 inventory levels so far this year versus 2020 reflects what has been a major mismatch between demand and production. For 2022, we think the increase in demand will still exceed rise in supply, resulting in another downshift for propane inventories, possibly sending them close to the record low seen in March 2013, when just 0.28 MMbbl were reported in storage.

There are plenty of uncertainties in this outlook, not the least of which is how severe the coming winter will be, not just in North America but also in Asia. A mild versus a cold winter could result in huge swings for either railed or marine exports and turn what is currently a snug market balance to an extremely tight or very loose one.

Putting that aside, there are some certainties that we can wrap our arms around looking to the end of 2022. For instance, Alberta propane demand will rise as Brookfield’s Heartland petchem complex begins operations. Marine exports are likely to be stronger next year compared to this year as the full impact of the Prince Rupert terminal becomes clear. Depending on the full magnitude and timing of these demand increases as well as the winter weather, railed propane exports, to the U.S. Midwest in particular, could fall as Alberta’s consumption and marine exports gobble up supplies.

But one needs to read the article to see how the summary is reached. Much more at the linked article.