Two Wells Coming Off Confidential List; Pipeline Story Re-Posted; Blizzard Hit; Oil Holds At $98 -- April 26, 2022

Diesel, NY harbor: east coast (PADD1) diesel inventories are at the lowest levels in 26 years.

• creates perfect storm for big squeeze;
• NY harbor ULSD rose to $4 / gallon, equal to $175-oil
• globally, diesel is tightest of all refined products
• ISO NE
• NY ISO
• Long Island this morning: $81
  

Market: tight oil market myth becoming reality. S&P Global.

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Back to the Bakken

Pipeline: needs repeating. This pipeline to carry as much as one-fourth of all Bakken production from Johnson's Corner, east of Watford City, to national pipeline system. Historic. Gets little notice. 

The question one needs to ask is this: if current takeaway easily meets / exceeds current production, "who" feels we need another pipeline that would carry as much as 25% of current Bakken production, and why to "they" feel that way?

Blizzard outage: up to 60%. Footage, "falling like dominos."

How bad was it. Student are finally going back to school today, Tuesday.

Active rigs, affected by blizzard:

$98.89	4/26/2022	04/26/2021	04/26/2020	04/26/2019	04/26/2018
Active Rigs	20e	14	29	64	63

Tuesday, April 26, 2022: 50 for the month, 50 for the quarter, 209 for one year

• 38140, conf, CLR, Dennis FIU 12-8H, Cedar Coulee, no production data,
  
• 34135, conf, Oasis, Fraser Federal 5300 32-35 6BX, Camp, first production, 10/21; t--; cum 90K 2/22;
  

RBN Energy: power burn leads lower 48 gas demand gains on limited fuel switching.

Despite the highest natural gas futures prices in over a decade, its use for power generation in the Lower 48 has set records in recent months. This is in part by design: economics and environmental regulation have broadly favored gas-fired plants and pushed into retirement hundreds of coal-fired plants in the last decade or so, reducing price-driven fuel-switching capabilities between the two fuels. However, there’s more to it than that: a tight coal market, marked by low stockpiles, high export demand and record high prices, is limiting gas-to-coal switching even further, making gas burn for power much more inelastic to price. In today’s RBN blog, we take a closer look at this key intersection of the gas and coal markets.

There is no doubt that much of the run-up in natural gas futures prices these days is tied to the strained global LNG market and strong demand for U.S. LNG exports. LNG export terminals ran full tilt this winter and feedgas deliveries posted record highs, as new liquefaction capacity was commissioned and the Ukraine war threatened energy security in Europe and heated up global competition for U.S. cargoes. Producers’ muted response to higher demand and prices hasn’t helped matters. U.S. gas production, while posting strong gains compared with winter 2020-21, peaked in December 2021 before falling off in January and stagnated through the first quarter of 2022, and has yet to return to the pre-pandemic high of 96.2 Bcf/d in November 2019. 

The bottom line is that power burn played a significant role in drawing the storage inventory to its lowest level in three years this winter and has the potential to affect storage refill this injection season. Most remarkably, gas demand by power plants achieved these new heights during the winter and now the shoulder season — generally the low-demand periods for power generation — even as gas prices treaded 50%-90% higher year-on-year and hit multi-year highs this winter, and by April, soared to the highest level in more than 13 years (up nearly 150% from last year).

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Initial Production

The well:

• 34135, conf, Oasis, Fraser Federal 5300 32-35 6BX, Camp, first production, 10/21; t--; cum 90K 2/22;

Pool	Date	Days	BBLS Oil	Runs	BBLS Water	MCF Prod	MCF Sold	Vent/Flare
BAKKEN	2-2022	21	15804	15717	19801	36114	32432	2872
BAKKEN	1-2022	31	25306	25478	33075	110399	63842	45312
BAKKEN	12-2021	31	44331	44101	35208	83477	55647	26112
BAKKEN	11-2021	30	0	151	43524	63518	57578	4272
BAKKEN	10-2021	31	4089	3938	725	14662	11940	2633