Five Wells Coming Off Confidential List -- July 25, 2022

Far Side: link here.

WTI: $96.52

Natural gas: $8.46

Active rigs: 42 or thereabouts.

Tuesday, July 26, 2022: 26 for the month, 26 for the quarter, 365 for the year

• 38676, conf, CLR, Bang 5-4H1,
• 37496, conf, Petro-Hunt, State 159-94-25A-36-2H,

Monday, July 25, 2022: 24 for the month, 24 for the quarter, 363 for the year

• 37497, conf, Petro-Hunt, State 159-94-25A-36-3H,

Sunday, July 24, 2022: 23 for the month, 23 for the quarter, 362 for the year

• 38675, conf,  CLR, Bang 6-4H,
• 37498, conf, Petro-Hunt, State 159-94-25A-36-1HS, 

RBN Energy: will the propane market be prepared for winter?

We are only two months away from the official start of propane heating season in the U.S., and inventories are 3.5 MMbbl lower than last year, or 2.6 MMbbl below the five-year week-on-week low. Volumetrically, it’s a story very much like last summer: Propane exports are running high and while production is up it’s not increasing fast enough to get inventories back to where we would like to see them. But propane prices are not behaving at all like last year. At this point in 2021, the price of propane was moving higher, both in absolute terms and relative to the price of crude oil. This year, prices have been falling for the past four months and are much weaker relative to crude than a year ago. With low inventories and low prices, what are the prospects for the propane market being prepared for the upcoming heating season? And what are the risks if there's a cold-weather surprise? We’ll consider those issues and more in the blog series we begin today, focusing first on how we got here.  

Propane Exports, Seasonality and Inventories

The highly seasonal U.S. propane market is traditionally divided into two halves: April through September, when the industry builds inventories, and October through March, when inventories are drawn down to meet winter demand. About this time each year, the industry is laser-focused on the status and pace of inventory increases, and whether it looks like there will be enough supply to meet the expected surge in demand during the impending heating season, particularly if an unusual spell of sustained cold weather hits the market. In recent years this calculus has become increasingly complex as exports have overtaken total domestic demand for propane.