Back To The Bakken -- Monday Morning -- November 20, 2023

Locator: 46114B. 

WTI: $77.37. Up nicely; up almost 2% over the weekend.

Tuesday, November 21, 2023: 126 for the month; 126 for the quarter, 696 for the year
39776, conf, CLR, North Tarentaise Federal 5-18H2,

Monday, November 20, 2023: 125 for the month; 125 for the quarter, 695 for the year
None.

Sunday, November 19, 2023: 125 for the month; 125 for the quarter, 695 for the year
39777, conf, CLR, North Tarentaise Federal 7-18H1,

Saturday, November 18, 2023: 124 for the month; 124 for the quarter, 694 for the year
39778, conf, CLR, North Tarentaise Federal 8-18HSL,
39079, conf, Hess, RS-State D-155-92-0203H-8,
23676, conf, EMEP Operating, Charles Davis 1-4-9H-142-94,

RBN Energy: mayhem in LPG export market as drought cuut Panama Canal traffic.

U.S. Gulf Coast LPG exports are sky-high, averaging just under 2 MMb/d in October, with nearly two-thirds of those volumes bound for Asia — a straight-shot trip once a Very Large Gas Carrier (VLGC) has passed through the Panama Canal. But an unprecedented dry spell has left the canal’s operators — and LPG shippers — in a real bind. The century-old maritime shortcut, which was expanded just a few years ago to accommodate more and larger vessels, uses massive amounts of fresh water, and to help conserve what’s left in the system’s main reservoir, the Panama Canal Authority (PCA) is ratcheting down how many ships can pass through each day. Worse yet, VLGCs are a low priority compared to other, larger vessels that pay higher tolls. That means that far fewer Asia-bound LPG ships will be using the Panama Canal for who knows how long. Instead, many shippers will need to make far longer, more costly trips through the Suez Canal or around the southern tip of Africa. In today’s RBN blog, we discuss what LPG shippers in particular are up against.

Earlier this year, in When the Levee Breaks, we examined the steady and spectacular rise in U.S. NGL production since the advent of the Shale Revolution — from 1.8 MMb/d in 2008 to more than 6.5 MMb/d today — and the drivers behind it. These include the related facts that most drilling is crude-oil-focused, most crude-centric basins are experiencing higher gas-to-oil ratios (GORs), and higher GORs mean more associated gas — and, in many basins (including the Permian), associated gas is highly saturated with NGLs. In a number of other recent blogs, including last month’s Connection, we looked at the critical role that rising LPG (propane and normal butane) exports play in balancing the U.S. markets for those products: Put simply, domestic demand for LPG has been close to flat for several years, so virtually all incremental production needs to be sent abroad.