Wednesday, March 31, 2021

WTI Drops Below $60 -- March 31, 2021

Again, due to severe time constraints this week, there will be minimal blogging.

For the archives:

S&P 500 reaches record high; traders eye Biden's $2 trillion infrastructure proposal; if $2 trillion excites the market to record highs, why not $4 trillion or even a $100 trillion? Paul Krugman says deficits / debt (one or the other, maybe both) don't matter. There will be a slight drag on the GDP, paying the interest, and a few "feel-good" taxes on the rich, but for that we get 100's of millions of new jobs, mild inflation of 2% to 5% (good for the life insurance industry) and a carbon-free country. The market says, "go for it." Link here. Seriously, what stands between $2 trillion and $100 trillion in new stimulus, infrastructure, and recurring monthly payments to those in need (universal basic income), and while we are at, finally get the reparations issue(s) resolved. 

Gasoline demand: link here

WTI: drops 2.3%; drops below $60. Trading at $59.16.

OPEC basket (a day delay): $63.37. Saudi Arabia can't meet it's projected budget with $60-oil.

Back to the Bakken

Active rigs:

Active Rigs1443666049

Five new permits: see this post for the MRO and Kraken permits, #38231 - #38235, inclusive. 

Ten permits renewed:

  • Enerplus: one Elephant permit, one Warthog permit, one Zebra permit, one Gazelle permit, one Fossa permit, one Aardwolf permit, one Meerkat permit, one Salmon permit, one Sturgeon permit, and on Lemur permit, all in Dunn County.

Saudi's Foreign Exchange Reserves Drop Again -- And In A 31-Day Month -- 28-Day Month To Follow -- March 31, 2021

Wow, how many times have it been said: Saudi Arabia can't "make it' on $60 oil. More corroboration / more validation:

Link here

Foreign Foreign Exchange Reserves in Saudi Arabia decreased to 1687980 SAR Million in January from 1701209 SAR Million in December of 2020.

It doesn't matter how Saudi Arabia spins this story, this is really, really bad news. Remember: January is a 31-day month; February, at least here in the USA, is a 28-day month.

All things being equal, February, 2021, should be significantly worse. 

Weekly EIA Petroleum Report -- March 31, 2021

From a reader:

The 914 is out.

Still hanging above 11 MM bopd, but down a small amount. Typical ND seasonal drop. NM up a bit and nipping on ND's heels. GOM and TX up a bit also.

FEB will be down hard because of freezes, I expect. MAR and APR should be strong though.

Weekly EIA petroleum report: link here.

  • US crude oil in storage decreased by 0.9 million bbls from the previous week (again, the EIA data and the API data living in two different universes; I'm not even sure those two universes are parallel)
  • US crude oil in storage is 501.8 million bbls; still 6% above the five-year average;
  • imports averaged 6.1 million bbls/day; increased by 0.5 million b/d; four-week average -- a whopping 9.4% less than the same four-week period last year; wow!
  • refiners are operating at 83.9% operating capacity;
  • distillate fuel inventories increased by 2.5 million bbls; 4% above the five-year average:
  • jet fuel supplied as down 30.2% compared with same four-week period last year;

Gasoline demand:

WTI Barely Holding Above $60; Active Rig Count At 14 -- March 31, 2021

Back to the Bakken

Active rigs:

Active Rigs1443666049

No wells coming off confidential list today

RBN Energy: the ins and outs of crude storage at the Permian's Crane hub -- Part 2. Archived.

Midland may be the king of crude oil hubs in the Permian, with its immense storage capacity and robust trading activity, but the hub in Crane, TX, is at least a prince — and a particularly interesting one at that. In addition to its 7 MMbbl of tankage for storing, staging, and blending crude (and another 1 MMbbl on the way), Crane offers a slew of inbound pipelines from both the Delaware and Midland basin, plus links to and from the Midland hub and a number of outbound pipelines to both the Corpus Christi and Houston markets. Just as important to know about, are the various intra-hub connections among Crane’s 10 terminals, because they reveal how you can get crude to pretty much wherever you need it to be. Today, we continue a series on crude storage in West Texas and southeastern New Mexico.

Storage and distribution hubs play important and often underappreciated roles, both in helping to choreograph the transport of crude oil from the lease to end-users and in enabling traders and others to take advantage of commercial opportunities. This is especially true in the Permian, the U.S.’s leading oil-producing region, where multiple hubs have developed over the past few years to keep pace with production growth and pipeline build-outs. We also questioned the widely held view that the sudden fall-off in Permian production last year and the current expectation for only modest production growth in 2021 and beyond has left the region overbuilt from a midstream infrastructure perspective. In fact, while the Permian generally has sufficient takeaway capacity, there has been recent evidence of tightness in the Permian storage market. To understand why and where such issues may develop, today, we begin our hub-by-hub review, starting with the one in Crane, TX.