Two Wells Coming Off Confidential List; RBN Weighs In On SPR Release -- April 1, 2022

SPR:

• 410- 180 = 230 / 410 = six months from now, all things being equal, the SPR could be about half what it is now
• all things being equal, wouldn't that suggest, WTI will be priced higher in the future
• all things being equal, isn't an SPR release a win-win for everyone? 
• although not designed for that purpose, could "manipulating" the SPR, minimize oil price volatility?
  
• are we now in the normal state: contango? not quite yet? Futures.

High road: I know none of the issues on this one, but for the headline, the Dems hold the high road. If there's a wedge issue for me, this would be it.

• Vote:
• 232 - 193, along party lines
• all Dems were in favor; just 12 Republicans
• the vote should have been 435 - 0

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Back to the Bakken

Active rigs:

$100.00	4/1/2022	04/01/2021	04/01/2020	04/01/2019	04/01/2018
Active Rigs	33	13	43	65	60

Friday, April 1, 2022: 2 for the month, 2 for the quarter, 161 for the year

• 38546, conf, Ovintiv, Wisness State 152-96-16-21-5H, Westberg, no production daa,
  
• 36100, conf, CLR, Gordon Federal 8-5H1, Haystack Butte, first production 10/21; nice well;
  

RBN Energy: the real-life impacts of the planned crude oil releases from the SPR. Archived.

At first glance, it would appear that President Biden’s announcement regarding the release of up to 180 MMbbl of crude oil from the Strategic Petroleum Reserve over the next six months could have a significant impact. After all, it would, in a sense, increase the flow of U.S. oil into the market by almost 9% –– 11.7 MMb/d of current U.S. production plus an incremental 1 MMb/d from the SPR — and boost global supply by about 1%, which is no small thing. 

There are a few unknowns, though, such as (1) how much sweet crude oil and how much sour will be released, (2) where the pipelines connected to the four SPR sites could take that oil, (3) whether those pipelines have sufficient capacity to absorb the incremental flows out of SPR, and (4) what the ultimate market impacts of the SPR releases will be. 

In today’s RBN blog, we look at the president’s announcement and its implications.

Data points from the essay:

• because of increased utilization of pipelines and marine terminals along the Gulf Coast in recent years — and a few pipeline reversals — it has become more difficult to move large volumes of SPR-stockpiled crude without disrupting the existing flow of domestic production and Canadian imports.
• how much of each type of crude oil (sweet or sour) will be released
• the biggest risk the Dems have on this one: one month prior to the mid-term elections, the SPR will be at record lows. SPR storage is great for minimizing price hikes during natural disasters such as hurricanes. One month prior to the mid-terms, US is at max hurricane season.  
• a significant hurricane hitting TX / LA in October, and look for a huge spike in the price of gasolien just before folks start to vote.