WTI Surges; Three Wells Coming Off Confidential List; Thirty-nine Active Rigs -- May 31, 2022

Firefox: now has one-click "cookie blocker." One click on the Firefox browser and all cookies are blocked. Ten minutes later: nope, not gonna use it. I have to re-sign in to every site every time, even if I move to a different site without signing out of the first. I guess I could keep opening new tabs. But, the feature definitely works. LOL. 

Netflix: one reason to subscribe for one month. Norm Macdonald's posthumous "Nothing Special."

Mexico: link to Charles Kennedy. Mexico's spend on fuel subsidy is double its oil exports revenue. And oil is running at incredibly high prices right now, exceeding $100/bbl. 

Kremlin:

• Russia says it will find other buyers after EU ban.
• Russia oil is selling at huge discounts.

Expensive: for those paying attention, it's going to be quite a summer for ISO-NE and ISO-NY. Nothing is ever so bad I can't make it worse. -- paraphrasing Joe Biden.

• for Queens, Brooklyn, Long Island (Nassau and Suffolk), think AOC, I've never seen the marginal cost of fuel over $100; right now it's $101.39. Later: marginal fuel is now over $107 / MWh
  
• wow, can you imagine what it would be had Amazon been allowed to build there?
  
• the entire state of NY is now over $100/MWh, except for North-D at $32.80 and the Mohawk Valley-E at $98.81.
• Later: Long Island is now over $181 / MWh. 
• At noon: Long island is $203.66 / MWh.
   

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Back to the Bakken

Oil surges:

• Brent: up 1.78%; up $2.17; trading at $123.80.
• WTI: up 3.02%; trading up $3.47; trading at $118.50
• earlier this a.m. had been up 4.04% trading above $119. 

Active rigs: 39 or thereabouts:

$119.10	5/31/2022	05/31/2021	05/31/2020	05/31/2019	05/31/2018
Active Rigs	39	22	11	64	61

Tuesday, May 31, 2022: 72 for the month, 137 for the quarter, 297 for the year

• None.

Monday, May 30, 2022: 72 for the month, 137 for the quarter, 297 for the year

• 38576, conf, Slawson, Howitzer 4-25H, Big Bend, no production data,

Sunday, May 29, 2022: 71 for the month, 136 for the quarter, 296 for the year

• 37100, conf, Zavanna, James 3-10 5H, Poe, first production, 12/21; t-- ; cum 120K 3/22;

Saturday, May 28, 2022: 70 for the month, 135 for the quarter, 295 for the year

• 36512, conf, Crescent Point Energy, CPEUSC Narcisse 3-8-5-158N-99W-MBH, Ellisville, no production data, 

RBN Energy: natural gas vs coal fuel costs, part 2. 

Natural gas futures prices have rocketed to 14-year highs in the past couple of months — during the lower-demand spring months, no less — and they are now trading at 3x where they were at this time last year. 

The CME/NYMEX Henry Hub futures for June delivery shot up to a high of $9.40/MMBtu in intraday trading last Thursday, the highest level we’ve seen since summer 2008, before expiring at $8.908/MMBtu, nearly $6 (~200%) higher than the June 2021 expiration settlement at just under $3/MMBtu. 

The newly prompt July futures retreated ~17 cents Friday to about $8.73/MMBtu, but that’s still nearly triple where July futures traded last year. It’s safe to say the low fuel cost of gas-fired power generation that defined the Shale Era has evaporated. Historically, at today’s sky-high prices, gas would have given up market share to coal in the power sector. However, the coal market is battling its own supply shortage and Eastern U.S. coal prices are at record highs. What does that mean for generation fuel costs and fuel switching? In today’s RBN blog, we break down the math for comparing gas vs. coal fuel costs.

A tight coal market and record-high coal prices in the Eastern U.S. have suppressed gas-to-coal switching in recent months, despite the gas market also contending with a supply squeeze and gas prices trading at Shale Era highs. The coal-market constraints have contributed to record, or near-record, gas demand in the power sector in most recent months, with gas gaining market share of total generation fuel demand — on top of wind and solar also increasing their share of the pie. Generation fuel dynamics were a driving factor in the tighter gas market balances this past winter and will continue to play a role during the injection season, including how power grids balance cost and reliability during times of extreme customer demand, such as the heat waves we’ve already seen this month in Texas and other parts of the country. With that in mind, it seemed a good time to revisit the basics of the fuel switching phenomenon, including the major factors behind it.

Initial production data:

• 37100, conf, Zavanna, James 3-10 5H, Poe, first production, 12/21; t-- ; cum 120K 3/22;

Date	Oil Runs	MCF Sold
3-2022	27157	76426
2-2022	28342	53877
1-2022	29169	29199
12-2021	31957	24184
11-2021	0	295