One Well Coming Off Confidential List -- The President's Winter -- December 16, 2021

Brandon's winter:

• Covid out of control.
• Fed takes away the "punch bowl"
• crude oil prices surging, again
• oil released from SPR was exported
  
• Putin and Xi too quiet
• NYT suggests he not run again
  

Bank of England: hikes. 

While no one was looking: WTI hits $72, again. 

Saudi SPR: uncomfortably low.  

Weekly petroleum report: that oil released from the SPR? Exported.

Chart of the day: yesterday, after the report, a reader asked whether "US implied crude oil demand" was an all-time high. Yes, it was. This is really quite stunning. Here's the chart: 

Misreading: I find it incredible how folks can misread so many things. Including me. But we move on.

Story of the day: Harold Hamm to donate $50 million to jump-start Energy Institute in Oklahoma. Bloomberg. Campus: Oklahoma State.

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Back to the Bakken

Active rigs: rig count an estimate based on recent NDIC reports. 

$71.98	12/16/2021	12/16/2020	12/16/2019	12/16/2018	12/16/2017
Active Rigs	30	14	53	67	53

Thursday, December 16, 2021: 70 for the month, 73 for the quarter, 325 for the year:
36303, conf, Bruin, FB Belford 148-95-22D-15-13T-LL,

RBN Energy: propane prices soared to the moon, then dropped like a rock. What's next.

Way back in the spring of this year, propane prices were behaving themselves. Mont Belvieu values were high relative to the previous two years, but no higher than what they ought to be with crude oil up to the mid-$70s/bbl range, as it was back then. 

Yet, market players were uncomfortable. Production was flat, exports were strong, and inventories were not increasing fast enough to get balances where they needed to be by winter. At that point the market got nervous and started bidding the price of propane higher. When exports continued at high rates and it looked like $100/bbl crude was a real possibility, propane buyers went into a feeding frenzy, and by early October propane prices blasted to levels not seen in a decade. Then the market calmed down. Weekly inventory numbers from EIA started to look like they might be OK after all, exports backed off, and propane prices started to decline. That’s supposed to happen toward the end of heating season, not at the beginning. 

The frenzy soon turned into a rout in a counter-seasonal price move egged on by concern about the COVID-Omicron variant that saw propane collapsing by 35% over a five-week period. All that price action happened during the summer and fall, instead of during the winter, as it usually does. We just got ahead of ourselves. So, what happens next?