Monday, June 21, 2021

WTI: $73.60; Twenty Active Rigs; Eight New Permits -- June 21, 2021

Anticipation: this may be the most interesting two, six, twelve, twenty-four months ahead of us with regard to the price of oil that we have seen in some time. Right now backwardation is the word of the day. I have no idea if this Bloomberg link is just background noise or if it's a big deal. The Bloomberg writers seem to think it's a huge deal

  • futures contracts, premium traders are willing to pay for WTI:
    • $1.12/bbl
  • traders are willing to pay $1.12 more per bbl in September than in October (2021);
  • prior to this, the gap between the third- and fourth-closest contracts had only traded above $1 over two periods in the past thirteen years: in 2008 and from mid-2013 to mid-2014;
    • during both of those previous spans, oil prices were well above $100/bbl
  • "futures are now trading below $75 a barrel, making the current gap all the more extraordinary"
  • bottom line: this spread suggests traders see supplies of crude oil to significantly tighten by the end of the driving season in the US
  • Bank of America: "forecasts that oil may surge to $100 a barrel next year (2022)" -- next year could be as early as seven months from now but more likely a year from now;
  • Cushing storage tanks are being emptied (tends to corroborate backwardation); previously posted;

Watching: who will "move" first to take advantage of $75-oil?

  • Saudi Arabia?
  • US majors?
  • Permian shale operators?
  • July is almost here; if the tea leaves are being read correctly, we're going to see a lot of articles being written before the end of July (2021) that the supply crunch is going to be much than anyone saw coming;

Focus on fracking: see this link. Do the current numbers foreshadow a huge shortage of crude oil by Labor Day?

  • oil hits 32-month high -- that includes the two years prior to the pandemic lockdown;
  • refineries are already operating at a post-pandemic high

from that link, the latest on the US oil supply:

  • US oil data from the US Energy Information Administration for the week ending June 11th showed that because of a big increase in our oil exports and another increase in our refinery throughput
    • we again needed to withdraw oil from our stored commercial crude supplies for the sixth time in the past seven weeks and for the 20th time in the past thirty-one weeks
  • our imports of crude oil rose by an average of 108,000 barrels per day to an average of 6,746,000 barrels per day, after rising by an average of 1,007,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 953,000 barrels per day to an average of 3,884,000 barrels per day during the week, 
    • which meant that our effective trade in oil worked out to a net import average of 2,862,000 barrels of per day during the week ending June 11th, 845,000 fewer barrels per day than the net of our imports minus our exports during the prior week
  • over the same period, the production of crude oil from US wells reportedly rose by 200,000 barrels per day to 11,200,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 14,062,000 barrels per day during this reporting week... 

Does the EIA "US days of supply of crude oil" corroborate what so many seem to be saying? Link here. It's a pretty amazing graphic:

  • during the first three weeks of March, 2021: the US had 40+ days of crude oil inventory:
  • that's a huge supply inventory if things were not changing, but coming out of the global lockdown, things are changing;
  • the number of days of crude oil supply in the US dropped steadily for the next three months
  • most recent data, the second week of June, 2021, 6/11/21: down to less than 30 days.

Thirty days is more than enough; but it's the rate of decline that is being noticed by those who are watching this.

Back to the Bakken

Active rigs

Active Rigs2012646459

Eight new permits, #38385 - #38392, inclusive:

  • Operators: Hunt Oil (5); Petro-Hunt (2); Whiting
  • Fields: Green Lake, Smoky Butte, West Ambrose (Divide); and, Sanish (Mountrail)
  • Comments:
    • Hunt Oil has five new permits in Green Lake / Smoky Butte; they will be sited in lot 3 section 6-159-100;
      • they will be sited between 265 FNL and 345 FNL and between 1370 FWL and 1460 FWL; these wellheads are spaced 30 feet apart;
    • Petro-Hunt has two new West Ambrose permits:
      • the two wells to be sited in NWNE 13-162-100; 195 FNL and between 1635 and 1670 FEL;
    • Whiting has a new Sanish permit:
      • one permit for a Rudman well to be sited in NWNW 12-153-91, 515 FNL and 975 FWL

Two permits renewed:

  • Oasis: one Weisz and one Grad permit, both in Mountrail County;

One permit canceled:

  • EOG: a West Clark permit in McKenzie County canceled

Name change: This is pretty cool: Rimrock Oil changes names on four wells, from Charging Eagle wells to: Unicorn 15, Dragon 15, Mermaid 15, and Sasquatch 15, all sited in SWSE 19-147-91, Dunn County;

Notes From All Over -- The Afternoon-Interrupted Edition -- June 21, 2021

Happening now: huge rain storm / thunder storm / electrical storm just hit north Texas. If this was forecast, I completely missed it. I was finishing my tenth lap in the pool when I hightailed it out of there. But if forecast, I completely missed it and yet we know the global temperature will rise two degrees a hundred years from now. LOL. 

EVs: as we've said many, many times, no one has thought this through, link here. What's the penetration rate of EVs in California. Maybe 0.001%. And that few already overwhelms the grid. Has anyone thought this through?

Great photo:

If not the Bakken, this is exactly what the Bakken looks like.

Princess Leia's hair-do: Ms Carrie Fisher jokes about her parietal buns - hair-do in the Star Trek series. Interestingly, that hair-do looks a lot like the hair-do Audrey Hepburn had in Love in the Afternoon, as seen in the orchestra scene in which she plays a flute, I believe. 

Amazon Vs Walmart

Data points (link here:

  • not sure when, this year, next, the next year? But Amazon is on track to surpass Walmart as the nation's largest retailer;
  • 2020, during the lockdown: Amazon posted a profit of $21.3 billion, compared to $11.6 billion in 2019;
  • Amazon: 1Q21 profit more than tripled from a year ago;
  • Amazon: 1Q21 posted revenue of more than $100 billion, the second quarter in a row to pass that milestone;
  • in the first three months of this year, a profit of $8.1 billion; last year? $2.5 billion.
  • EPS: $15.79 vs forecast of about $9.00 per share
  • today, sudden storm, downpour -- do I go out in this weather to shop? Not on your life -- I'll click-order on

Word For The Day


Guitar pick.

From Bettany Hughes, Helen of Troy, c. 2005, p. 138:

The ancient world credited Sappho with beign the first both to speak directly about love and to describe eros as a 'bitter-sweet' experience (in fact she describes it as glukopikors, sweet-bitter), as well as inventing the plectrum and creating a new musical mode later used by tragic poets.

See also, Music in Ancient Greece: The Later Years. Link here.

Storage Available At Cushing -- June 21, 2021

Yesterday, June 20, 2021, I posted this:

  • from Bloomberg, empty oil tanks at key storage hub [CUSHING] show speedy demand rebound; note the emphasis on demand, not supply;

Did anyone look at the story?  From the story:

“Typically, in a backwardated market, its (sic) the storage that isn’t being used for operational purpose (sic) like the ones in Cushing, Oklahoma, that get emptied out first,” Barsamian said. “Storage at most other locations such as in Houston and Midland in Texas are (is) used for operational purposes and get (sic) emptied out later.”

Besides all the typographical errors in this Bloomberg story, it seems counterintuitive -- the operational ones get emptied out later.

How to explain this? Operational storage, being used now, is immediately refilled as the "operational" crude oil is drained from the storage tanks. Sort of like pouring concrete over a continuous twenty-four hours when there can be no interruption in the pour. Same with refiners and storage tanks. 

But I think there's a bigger story here. Anyone following the blog for any length of time will know why Cushing tanks may be a bit under-filled. 

Notes From All Over -- Early Afternoon Edition -- June 21, 2021

Ten-year chart, WTI at this link.

It's a fool's errand to predict the price of oil but when looking at this chart, two things jump out at me:
the price of oil can remain in a trading range for quite some time; and,
once the price of oil starts to move, it can move very, very quickly.


June 22, 2021: after the following photos were posted, a reader replied --

I always like to quantify the absurd actions from Washington. 
In the case of EV vs ICE, we use 10 million barrels of gas and 5 million barrels of diesel daily. 
At 38kw/gallon that is 8 trillion KW of electricity that will have to be produced and transmitted in addition to what we do now. At 2.2 MW per windmill that is over 3.6 million windmills needed, and ??? how many huge power lines, transformers distribution centers etc… 
P.T. Barnum was correct, there is a sucker born every minute. The insane part of all of it is there is no demand for electric cars, no power production or distribution and yet all the major auto manufacturers are investing billions in electric cars. I’ll stand by and watch what happens next.

Original Post
Faux Environmentalists Prefer EVs To ICE

What the EVs require, link here (; among everything else, no dual use:

What ICE require, link here:

In addition, over time, the pads will be returned to their original prairie state. And lots of dual use, and lots of mom-and-pop mineral owners receiving royalties.

Notes From All Over -- The Mid-Afternoon Edition -- June 21, 2021

What is it? Link here

Let's see:

  • the trailer: 3 x 3 x 4 = 36 wheels or 9 x 4 = 36 wheels
  • truck: 2 x 4 = 8 plus 4 (?) = an additional 12 wheels
  • anything this big and this long and this strange has to be associated with wind energy


US Covid-19 vaccination rollout: the numbers for the Monday report are pending, but the Sunday report was very, very dismal. 

Generally above 1.2 million, the Sunday report showed only 848,611 vaccinations given in the previous twenty-four hours. Last Sunday, exactly one week earlier, it was reported that 1,209,817 vaccinations were given (this would include one-time injections as well as second-dose injections. The decrease in number of vaccinations reported yesterday represents a 29.86% decline form the prior Sunday. Percent of Americans over the age of 18 considered fully vaccinated is running about 55%. That's a dismal number but compared to the global percentage of about 4%, the US is doing quite well, thank you. 
The president's goal: having 70% of all Americans over the age of 18 (or is it over the age of twelve, now?) to be fully vaccinated by July 4, 2021. Not gonna happen at this rate. 
Safety and efficacy? This appears to be the largest study of any vaccine ever developed and both safety and efficacy seem to be "proved."

PGA: the story seems to have changed a bit. Previously, about two weeks ago, the articles suggested PGA players were not getting their Covid-19 vaccinations. Now, it appears that that may not be entirely accurate. See today's WSJ article on Rahm winning the US Open. See this blog from June 5, 2021. I'm not sure the "stories" add up. But then that's just me. And remember, if this is accurate, the vaccines have been available for more than six months. 

From the linked WSJ article:

Over the course of 15 days, Rahm rode a pandemic roller coaster unlike anything else in sports since the onset of the pandemic. He received the results of a positive Covid-19 test on national television when he was on the verge of winning another tournament. Instead of collecting a $1.7 million prize, he quarantined. And this weekend he emerged in the most dramatic way possible: Rahm actually won the US Open.

Say What? -- June 21, 2021

"Where Are All The $70-Brent Bulls Now?"

From May 20, 2021:

Over on twitter earlier today, someone asked, "where are all the $70-Brent bulls now?"

My reply: "Quietly buying Chevron stock."

Brent today: flat, down 3 cents. Trading at $65.

See ten-year history here.

For A Reader

There are a series of these, probaby about a dozen. Produced for the BBC, used as "fillers" between the British comedies when they aired  here in the states, late Sunday night.

Bang, Bang -- And Just Like That, MRO Has Another Gusher -- June 21, 2021

Constitutional carry: Texas - permitless carry

Quick: is there even any other state in the union that has a similar law on the books? 

 Quick: what makes this video unique? 

Back to the Bakken

The MRO Sherman well is on the Chauncey-Winona pad, tracked, here.

Record IPs in the Bakken are tracked here.

The Antelope-Sanish oil field is tracked here, but has not been updated in a long, long time.

MRO: we knew it was going to be big, but how many thought MRO would report a "7,000" IP? The well:

  • 36223, 7,146, MRO, Sherman USA 21-2TFH, Antelope-Sanish, t12/20; cum 239K 4/21; January, 2021, production extrapolates to 87K over 30 days; first bench Three Fork; 45 stages; 195,502 bbls = 8.2 million gallons (moderate frack); drilling unit: 1280 acres;
PoolDateDaysBBLS OilRunsBBLS WaterMCF ProdMCF SoldVent/Flare

$73.00 -- June 21, 2021

Cash gushing in the oil patch: from ArgusMedia. I haven't read the article yet; I hope the writer doesn't use the word "restraint." 

$100 oil? Another bank says it's possible -- $100 oil in 2022.

Back to the Bakken

Active rigs:

Active Rigs2112646459

Six wells coming off the confidential list --

Monday, June 21, 2021: 76 for the month, 100 for the quarter, 178 for the year:

  • 37375, drl/NC, CRL, Gale 7-32H, Cedar Coulee, no production data,
  • 36851, 2,761,  Hess, EN-VP And R-LW-154-94-2536H-1, Alkali Creek, t12/20; cum 129K 4/21;
  • 35807, drl/NC, Petro-Hunt, Hagen 144-98-12D-1-2H, Little Knife, no production data,

Sunday, June 20, 2021: 73 for the month, 97 for the quarter, 175 for the year:

  • None.
Saturday, June 19, 2021: 73 for the month, 97 for the quarter, 175 for the year:
  • 37373, drl/NC, CLR, Gale 5-32H, Cedar Coulee, no production data ,
  • 36223, 7,146, MRO, Sherman USA 21-2TFH, Antelope-Sanish, t12/20; cum 239K 4/21;
  • 34333, loc/NC, Ovintiv, Kestrel 154-96-33-28-10H, Grinnell, first production, t--; cum--;

RBN Energy: the US's existing and planned CO2 pipeline networks, part 3.

Using carbon dioxide for enhanced oil recovery offers tremendous potential for CO2 sequestration. The problem is, most the CO2 used in EOR today is produced from natural underground sources, only to be piped to EOR sites and put underground again. Realizing the full promise of CO2-for-EOR would require sourcing more and more anthropogenic CO2, or A-CO2 — in other words, “man-made” CO2 that is captured from power generation and industrial processes. In addition to the environmental benefits, there are two other drivers for making this switch from natural CO2 to A-CO2: the first is that some of the natural sources of CO2 used today for EOR are dwindling, and the second is that the push to sequester man-made CO2 is backed by tax credits and other government-backed incentives. No matter the CO2 sourcing, CO2-for-EOR requires pipelines to transport the CO2 from where it is produced to EOR sites. Today, we continue our series on the rapidly evolving CO2 market and the huge opportunities that may await those who pursue them.