Grace Under Pressure -- April 16, 2020

I'm done for the day. I won't be replying to e-mail or moderating comments until later this evening. Sophia and I have a full day planned today. And, wow, it's going to be a full day.

Good luck to all:


Words for the day:

• caparison
• carapace
• plastron 
• catafalque
• balaclava

If you need to catch on the news without getting depressed: the Babylon Bee. 

Let's Re-Cap -- Technically, It's A Depression -- April 16, 2020

Scrolling down twitter:

• COP to cut production by 225,000 bopd
• Saudi Arabia told OPEC it cuts its crude production by 51,000 bpd to 9.733 million bpd in March 
• remember, Saudi Arabia started this, quibbling over 400,000 bopd
• Saudi Arabia completely mis-read this
• note: Saudi flooded the world with oil in March but yet is says its production actually declined;  if accurate, confirms my earlier posts that Saudi simply emptied its oil in onshore storage and moved it to offshore storage
• they needed to empty onshore storage to make room for continued production; shutting down wells in their old, old fields could irreparably damage existing wells
• Saudi Arabia now paying customers to take their oil off their hands; again confirming they are in a panic about saving their wells, their oil fields
• no one else has yet explained why Saudi would flood the world with oil in March while decreasing production
• on-shore oil storage, cost: $0/bbl
• off-shore oil storage: upwards of $50,000/day for an ULCC
• OPEC has secured historic global support for cuts to remove around 15 million bpd from the market over the next few months; is that enough?
• EIA -- a nominee for the Geico Rock Award? -- forecasts US crude oil production to decline because of low prices
• Baker Hughes will cut 234 jobs in Oklahoma City; cuts will be permanent;
• EIA weekly crude oil and refined products balances plunge
• OPEC: oil output rose by 821,000 bopd month-on-month in March to average 28.61 million bopd
• OPEC sees non-OPEC supply contracting by 15 million bopd in 2020
• OPEC sees demand for its crude dropping to lowest in 30 years
• COP to cut production by ~100,000 bpd to a gross 35,000 bopd; cutting production across US and Canada until market conditions improve -- they could be waiting a long, long time;
• total number now receiving unemployment benefits: 22 million
• definition of a depression: 20 million unemployed
• debate around the continued relevance of the Brent benchmark amid its growing inability to fully reflect regional price signals has been heightened by the sharp fall in oil prices -- Argus Media;

and, finally, I can't make this up:

The story not being reported: why did Saudi Arabia do this?

• empty their onshore storage, costing $0/bbl
• transferring that oil to offshore storage at upwards of $50,000/day for ULCC storage
• actually decreased production during the month of March when they said they were going to flood the market with oil
• the cuts that OPEC would agree to for the rest of 2020 would be based on March, 2020, production
• Saudi said it was about protecting their market share
• I think it's more about saving the integrity of their oil fields
• it looks like it's worth it to Saudi to pay China $10/bbl to take their oil
• old projections: Saudi would implode by 2025
• new projections: it may be a lot sooner than that
• House of Saud in deep doo-doo

Fast And Furious -- April 16, 2020

Link here. This is not the Babylon Bee. This is S&P Global Platts.

How's that Saudi Aramco IPO working out? 

Another Data Point To Fact-Check -- April 16, 2020

Fake news: AP reported that global deaths due to COVID-19 hit the two million mark this past week.

In fact: 120,000 deaths worldwide due to COVID-19. In the US, the CDC says it is using the most liberal definition when "counting" deaths due to COVID-19.

The definition: if one tests positive at the time of death for COVID-19, that is a "COVID-19" death, which, of course, a person who tests positive for COVID-19 and then shoots himself is tallied a COVID-19 death. Likewise, a COVID-19-postive homicide or a COVID-19-positive car-accident victim are also tallied as COVID-19 deaths. And, of course, that makes sense.

From the CDC's point of view, had that person not died from suicide, homicide, accident, the victim was likely to have died from the virus anyway --  well, at least a 1.5% chance.

AP COVID-19 data: fact-checked by Brian Williams, Rachel Madcow, and the NYT editorial board.

Re-posting: seriously -- I thought she had blonde roots. LOL. Hey, it's a joke. Okay, I take it back. I thought she was Norwegian -- who else but a Norski could make such a blunder? By the way, Brian Williams could claim he knew this all along, simply stringing his guest out -- he, the straight man; she, the comedienne.

Really Bad Math, Brian Williams Really Bad Math, Brian Williams

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Oh-Oh

Anticipation: US crude oil storage may be maxed out in weeks. If oil companies pay refiners to take their oil, will your neighborhood service station pay you to take their gasoline -- to get you to come into buy their Twinkies? Bragging rights still go to Wisconsin: 89 cents/gallon regular unleaded gasoline.

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Fact Check Please

Hard to beat this price: crude oil goes negative -- and not buy just a little -- Iran is paying China $7.20/bbl to take its oil off its hands -- at least that's how I'm reading this tweet -- it's so incredibly unbelievable, I hope a reader tells me I'm wrong --

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

That Graphic That Arab Light Is Selling For $17/Bbl --- Never Mind

Link here. This is not the Babylon Bee. This is S&P Global Platts.

How's that Saudi Aramco IPO working out? 

Thursday, April 16, 2020

Jobs, link here:

• prior: 6.6 million
• revised: pending
• consensus: 6 million; range as high as 8 million
• actual: 5.245 million

Saudi Arabia: 45 tankers -- no destinations, nowhere to go, no customers, and still producing too much oil. Graph of the day (year? decade? century?). This link is now at the sidebar at the right, near the top:

Hard to beat this price: crude oil goes negative -- and not buy just a little -- Iran is paying China $7.20/bbl to take its oil off its hands -- at least that's how I'm reading this tweet -- it's so incredibly unbelievable, I hope a reader tells me I'm wrong --

Weekly EIA petroleum report, link here:

• US crude oil in storage, week-over-week, change: increased by a (insert adjective here) 19.2 million bbls;
• US crude oil now in storage: 503.6 million bbls; 6% an already "fat" storage number; do we really need the SPR any more? another federal program that should probably go by the wayside (no, I'm not serious); this is simply staggering;
• refiners are operating at 69.1% capacity; something I have never, never, never, ever seen before;
• gasoline production actually increased last week, the EIA said with a straight face; up to 5.9 million bbls/day; should be nearing 10 million bbls per day under "normal" circumstances;
• distillate fuel production decreased week-over-week: averaging just under 5 million bbls/day; amazing it held near 5 milion

Gasoline demand, link here:

Re-balancing:

Week	Week Ending	Change	Million Bbls Storage
Week 0	November 21, 2018	4.9	446.9
Week 1	November 28, 2018	3.6	450.5
Week 2	December 6, 2018	-7.3	443.2
Week 3	December 12, 2018	-1.2	442.0
Week 4	December 19, 2018	-0.5	441.5
Week 5	December 28, 2018	0.0	441.4
Week 6	January 4, 2019	0.0	441.4
Week 7	January 9, 2019	-1.7	439.7
Week 8	January 16, 2019	-2.7	437.1
Week 9	January 24, 2019	8.0	445.0
Week 58	January 3, 2020	-11.5	429.9
Week 59	January 8, 2020	1.2	431.1
Week 60	January 15, 2020	-2.5	428.5
Week 61	January 23, 2020	-0.4	428.1
Week 62	January 29, 2020	3.5	431.7
Week 63	February 5, 2020	3.4	435.0
Week 64	February 12, 2020	7.5	442.5
Week 65	February 20, 2020	0.4	442.9
Week 66	February 26, 2020	0.5	443.3
Week 67	March 4, 2020	0.8	444.1
Week 68	March 11, 2020	7.7	451.8
Week 68	March 18, 2020	2.0	453.7
Week 69	March 25, 2020	1.6	455.4
Week 70	April 1, 2020	13.8	469.2
Week 71	April 8, 2020	15.2	484.4
Week 72	April 15, 2020	19.2	503.6

Jet fuel delivered:

Jet Fuel Delivered, Change, Four-Week/Four-Week
Week	Week Ending	Change
Week 0	March 11, 2020	-12.80%
Week 1	March 18, 2020	-12.60%
Week 2	March 25, 2020	-8.90%
Week 3	April 1, 2020	-16.40%
Week 4	April 8, 2020	-0.22%
Week 5	April 15, 2020	-39.70%

Crude oil imports:

Crude Oil Imports
Week	Week Ending	Raw Data, millions of bbls	Change
Week 0	March 11, 2029	6.4	0.174
Week 1	March 18, 2020	6.5	0.127
Week 2	March 25, 2020	6.1	-0.422
Week 3	April 1, 2020	6.0	-0.070
Week 4	April 8, 2020	5.9	-0.173
Week 5	April 15, 2020	5.7	-0.194

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Back to the Bakken

Active rigs:

$20.15	4/16/2020	04/16/2019	04/16/2018	04/16/2017	04/16/2016
Active Rigs	35	65	59	51	29

Two wells coming off the confidential list today --  Thursday, April 16, 2020: 14 for the month; 14 for the quarter, 269 for the year:

• 35818, 763, Oasis, Oasis Meiers 5692 11-19 10T; Three Forks, 40 stages; 6 million lbs; Alger, t10/19; cum 78K 2/20;
• 35704, 2,382, Hess, SC-Hoving-154-98-1003H-8; Three Forks, 36 stages; 10 million lbs; Truax, t10/19; cum 65K 2/20;

RBN Energy: is western Canada suddenly headed for a crude pipeline overbuild?

For most of the past three years, Western Canadian producers have had to deal with crude oil pipeline constraints — takeaway-capacity shortfalls serious enough to spur huge price discounts for the region’s benchmark Western Canadian Select (WCS) that are sufficient to support the higher cost of crude-by-rail alternatives. But things are changing, and fast. WCS prices are at or near historic lows — low enough to convince a number of producers to rein in their capital spending and production. Crude-by-rail use is down, and there’s even space available on the usually maxed-out Enbridge Mainline system, the region’s primary pipeline egress. And wouldn’t you know it, just as production is slipping and constraints are easing, real progress is being made on three big pipeline projects that had long been in limbo: the Line 3 Expansion, the Trans Mountain Expansion (TMX) and Keystone XL. Today, we provide an update on Western Canadian crude takeaway capacity and examine whether the region may — irony of ironies — end up with too much.

There’s never a dull moment in Western Canada’s hydrocarbon market. Since the earliest days of the RBN blogosphere, there’s been plenty to write about: new oil sands projects, rising bitumen production, the need for diluent, not enough pipeline capacity, steep price discounts for WCS, new rail-loading terminals — wildfires, even. Producers in the Canadian West have been through a lot, but they are now facing some of their toughest times ever. As we said a few days ago in Rock Bottom, while producers in the Permian and other shale plays in the U.S. have been hit by sub-$30 and even sub-$25/bbl prices for West Texas Intermediate (WTI), producers in Western Canada have seen prices for WCS fall to less than $10 and even $5/bbl. In response, a number of oil sands producers have decided in recent days to reduce their planned 2020 capital spending and trim their production; some said they’ll also scale back or even scrap their crude-by-rail programs due to the higher cost of transporting heated bitumen and “railbit” (bitumen plus diluent) by rail. Also, we understand that there’s been a decline in light-oil production in the region, again in response to super-low prices.