Time To Learn A Bit More About The Burn In Burnaby -- July 19, 2018 -- Vancouver Sends Its Biggest Oil Shipment To Canada Since 2015 -- Huge Story

Update

July 20, 2018: Camp Cloud, the protest camp, was given an eviction notice by the city of Burnaby yesterday. The folks have 72 hours to clear out.

Original Post 

From oilprice.com:

A tanker loaded with around 514,000 barrels of oil has set sail from Vancouver en route to China in what is the largest shipment of oil from the Canadian port to the world’s top oil importer since 2015, according to Thomson Reuters trade flow data.

The Serene Sea Aframax tanker was loaded at Kinder Morgan’s Westridge Marine Terminal in Vancouver and set sail on July 4 toward the southern Chinese province of Guangdong, where it is expected to arrive on July 26. This latest shipment would bring Canada’s oil exports to China to 16,600 bpd for the month of July, Thomson Reuters data show.

Canadian oil shipments to China and to Asia are a rare sight, also because oil-rich but landlocked Alberta doesn’t have enough pipeline capacity to the West Coast. Most of the crude oil shipped out of Vancouver is being delivered to the U.S. West Coast.
But in recent months, oil shipments out of Vancouver to Asia have picked up, and tankers have departed to China, South Korea, and Thailand, according to Thomson Reuters data.

In April, the Solomon Sea oil tanker and the Diva oil tanker departed from Vancouver for ports in Thailand and South Korea, and eastern China, respectively. Thomson Reuters flows show that the two tankers carried a combined 742,000 barrels of crude oil to Asian customers.

From TransCanada / Trans Mountain:

From google maps:

49 Years Later, The US Sets A Crude Oil Production Milestone -- 11 Million BOPD -- July 19, 2018

JFK: "I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth." -- source, May 25, 1961.

Neil Armstrong becomes the first man to step on the moon -- July 20, 1969.

Almost to the day, 49 years later, the US set another milestone: for the first time ever, the US produced 11 million bopd.

In July, 1969, when Armstrong was bouncing on the moon, the US was producing 9.295 million bopd -- source.

Between 1969 and 2018, the low point seems to have been 3.971 million bbls in September, 2008.

In ten years the US has gone from less than 4 million bopd to more than 11 million bopd, and is exporting 3 million bopd (because it's the wrong kind of oil).

And that milestone, despite a takeaway capacity issue in the biggest play in the US right now, the Permian.

US supply of crude oil: 23.4 days. For newbies, it's been as high as 34 days (March, 2017). For oil bulls, one would like to see the "historical sweet spot" of about 19 - 21 days. We've talked about this on numerous occasions. Trump is considering releasing oil from the SPR: at best that will extend the supply of crude oil to 25.3 days, maybe 25.4 days, all things being equal.

Global supply (search: oil global days supply) of crude oil, from the EIA: 60 days.

Saudi Arabia has yet to recover from their "trillion-dollar mistake." Why? Because: investors in oil don't care about crude's price drop -- the writer got it exactly right --

Crude prices are down yet European oil companies are weathering the slump, signaling a change in fortunes for last year’s laggards.

While benchmark Brent crude has fallen more than 9 percent over the past week, the Stoxx Europe 600 Oil & Gas index has retreated just 3.9 percent. The reason? Oil companies’ discipline during the 2014-2016 crash [or as I call it, the "Saudi Arabian trillion-dollar mistake] proved to investors they can now easily withstand such crude-price corrections.

“Oil companies have done a good job adjusting their budgets to the lower oil-price environment and their shareholders are now benefiting from that,” said Ahmed Ben Salem, an analyst at Oddo Bhf. “The resilience is mainly linked to the fact that oil companies have an oil cash breakeven as low as $50 per barrel and their budget and share-buyback plans are based on $60.” 

Disclaimer: this is not an investment site.

Average price of Bakken last month according to the NDIC: slightly more than $61/bbl. Break-even price for oil in some of the better Bakken is less than $25/bbl (previously posted).

Houston Will Overtake Cushing As The Universe's Key Crude Oil Hub -- For The Next Century -- July 19, 2018

Texas, the new center of the universe: Houston will overtake Cushing as the world's key hub. Link here.  Rank them in order of "importance":

• ICE
• WTI
• Brent
• OPEC basket
• LLS

From oilprice.com:

Intercontinental Exchange Inc. (ICE) announced plans to launch an oil futures with physical delivery in Houston, and the contract could launch as soon as this quarter, subject to regulatory review. “The Houston delivery point has become the pricing center for U.S. crude oil production and exports, and the new flat price futures contract is designed to serve hedging and trading opportunities in this growing market,” ICE said in a statement.

Houston is now the “central delivery point for U.S. crude,” with proximity to upstream production in Texas, abundant refining and storage capacity along the Gulf Coast, and coastal facilities that have allowed a crude oil export boom over the past two years. The ICE Permian WTI futures contract will provide price discovery, settlement and delivery at Magellan Midstream Partners, L.P.’s terminal in East Houston, ICE said.

“The recent price divergence between Cushing-based WTI and Brent is a reminder that although Cushing is a marker for local crude fundamentals in the midcontinent, it diverges for pricing waterborne U.S. crude,” Jeff Barbuto, Vice President of Oil Markets at ICE, said in a statement.

Much more at the link. 

Fast And Furious -- July 19, 2018 -- With Absolutely No Fanfare, US Crude Oil Production Hits 11 Million BPD For First Time Ever

Jobless claims: link here --

• consensus: 220K
• actual: 207K
• change: -8K  

Texas, the new center of the universe: Houston will overtake Cushing as the world's key hub. Link here.  Rank them in order of "importance":

• ICE
• WTI
• Brent
• OPEC basket
• LLS

Texas heat: Texas sets back-to-back electricity demand records, and likely to keep setting new records -- summer is just beginning here in Texas. Electricity demand in Texas dwarfs that of California. Amazing.

• DFW hit 106 late Wednesday afternoon -- but it was a dry heat
• Love Field, downtown Dallas, hit 107
• Spinks Airport, Ft Worth, hit 108
• yesterday, a new record, between 4 and 5 p.m.: 72,192 MW
• yesterday, one hour earlier: also set a record -- broken one hour later
• both of those records topped the August, 2016, mark of 71,110 MW
• California demand record was around 54,000 MW set some years ago

Most important political story for me, today, so far: "Trump will win this round with the Deep State." -- amgreatness.com. 

Stories I might get back to later:

• scientists track new source of neutrinos -- great article, must read
• Saudi gasoline consumption will surge -- the women love muscle cars 
• bike-sharing? Down and out -- who didn't see this coming?

Rigzone articles that need to be read:

• crude edges up as fuel supply drop outweighs rising crude stocks
• here's why investors in oil don't care about crude's price drop -- the writer got it exactly right 
• TransCanada celebrates Mexico pipeline start-up
• on? off? one thing we can all agree on: Libya doesn't matter  
• US crude oil output hits 11 million bpd for first time ever

Fake story of the year: the average American is sitting on $32,000 in cash -- Tanza Loudenback, Business Insider.  Does anyone really believe this? The "average" American is holding more than $32,000 in cash. I'm pretty average, I suppose, and even I don't have nearly that much in cash.

The average American is holding more than $32,000 in cash, a new study from NerdWallet found. It calculated that because the money is sitting in a traditional savings account earning less than 1% in interest, the saver is missing out on an estimated $140,000 in investment returns over 30 years — and that's assuming a conservative 6% return rate on stock market investments.

Comment: An internal link takes you to a site where you are able to one-click to open an account at Ally (the old GM Financial); E*Trade; or, Merrill Lynch.

Comment: NerdWallet has lost all credibility from my perspective.

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Back to the Bakken

Wells coming off confidential list today:

• 33992, SI/NC, Hess, BB-Burk-LE-151-95-1807H-9, Blue Buttes, no production data,
• 33680, 827, Liberty Resources, Rice 158-94-25-36-1MBH, East Tioga, t1/18; cum 63K 5/18;
• 33041, 606, Oasis, Patsy 5198 12-17 10B, Siverston, t1/18; cum 117K 5/18;
• 33096, 1,905, CLR, Monroe 12-2H1, Banks, t3/18; cum 30K 5/18, constrained production;

Active rigs:

$68.53↑	7/19/2018	07/19/2017	07/19/2016	07/19/2015	07/19/2014
Active Rigs	68	59	30	73	195

RBN Energy: part 6, more Texas fractionation capacity beyond the Mont Belvieu Hub.

The NGL storage and fractionation hub at Mont Belvieu, TX, grabs all the attention, but more than 1 MMb/d of fractionation capacity — nearly one-third of Texas’s total — is located elsewhere in the Lone Star State. And with NGL production and demand for fractionation services soaring in the Permian, SCOOP/STACK and other nearby plays, the market will need all the fractionation capacity it can find. We’ve heard that there’s little, if any, gap between what the existing fractionators in Mont Belvieu can handle and what they’re being asked to process. That’s music to the ears of fractionation-plant owners elsewhere in Texas — assuming they aren’t already at capacity themselves, they might be able to pick up some overflow business from Mont Belvieu. Today, we continue our review of fractionators and other key NGL-related infrastructure along the Gulf Coast.

This is the sixth episode in our series. In the first episode, we discussed the fact that potential U.S. NGL production — including ethane that is rejected into natural gas — is now approaching 5 MMb/d, and noted that a number of new, ethane-consuming steam crackers are coming online along the Texas and Louisiana Gulf Coast, conveniently close to the NGL storage and fractionation hub in Mont Belvieu. We also talked about the strong export market for liquefied petroleum gas (LPG) — propane and normal butane — which has averaged more than 1 MMb/d in the first half of 2018 (almost all of it being shipped out of Gulf Coast ports), and for ethane exports too.

In part 2, we began a company-by-company review of the five big fractionation players in Mont Belvieu with a look at Enterprise Products Partners, which has more fractionators (nine) and more fractionation capacity (755 Mb/d) than anyone else there. We also discussed the Enterprise-owned NGL pipelines that transport y-grade to Mont Belvieu, its NGL and purity-product storage, and its Houston Ship Channel export terminals for LPG and ethane.

Then, in part 3, we looked at the fractionation assets of Cedar Bayou Fractionators (CBF; a joint venture 88%-owned by Targa Resources) and Lone Star NGL, a subsidiary of Energy Transfer Partners. We noted that Targa’s Galena Park Marine Terminal on the Houston Ship Channel has the capacity to send out up to 230 Mb/d of propane and/or normal butane, and that propane and normal butane coming out of Lone Star NGL’s Mont Belvieu fractionation plants can be piped on Energy Transfer’s Mariner South pipeline to the company’s 200-Mb/d LPG export terminal in Nederland, TX.

In part 4, we discussed the fractionation plants owned by ONEOK and Gulf Coast Fractionators at Mont Belvieu, and in part 5, we started a brief review of fractionation capacity and other key NGL-related assets located elsewhere in Texas — that is, not in Mont Belvieu — with a look at the fractionators owned by Enterprise, Chevron Phillips Chemical and Phillips 66.

***********************************

The Video

From above: scientists track new source of neutrinos -- great article, must read. The video --

Lonesome Friends of Science, John Prine

Disclaimer: Lots Of Typographical And Factual Errors -- July 18, 2018

A lot of long and detailed posts have been posted in the past couple of hours. I have not had time to proofread them and the spell checkers and fact checkers go home at 4:30 p.m. daily. So, I assume there will be a lot of typographical and factual errors in the posts -- let's say for the entire day. I'll spot a lot of them later this evening.

If there are errors that significantly affect the content of the post, let me know. But, minor spelling errors, grammar, yada, yada, yada, just ignore them. I'll get to most of them eventually.

Oh, before I forget. The price of gasoline in Texas has fallen below $2.50 -- one can easily find regular gasoline for $2.49/gallon north of DFW. My journals suggest that this is about 20 cents/gallon more than last year at this time, and it's possible we haven't seen the lows yet. 

Gasoline demand, exactly as "stated" earlier today:

If the economy is doing so well, and gasoline is "relatively inexpensive," why is gasoline demand about the same as last year? I don't know; just a rhetorical question.