Six months on from the height of the crude oil price rout of April 2020 and the unprecedented market convulsions that followed, energy markets appear to be settling into a state of hyper-uncertainty amidst the ongoing pandemic. Crude oil prices have been downright equanimous, stabilizing near $40/bbl in recent months. Volatility has reigned in the gas market, but it has thus far managed to avoid a major collapse, and the NGLs market has dodged a complete derailment from norms, if barely. The relative calm provides the perfect opportunity to assess how COVID-era energy markets are operating and what lies ahead — which is what we’ll be doing next week at RBN’s Virtual School of Energy. There’s a new order taking shape, and we’re rolling out RBN’s freshly updated outlooks for U.S. crude oil, natural gas and NGL markets. As always, we’ll pull back the curtain on the fundamental analysis and models behind our forecasts, so you can understand how we arrived at our answers, and gain the skills and tools to adjust the assumptions as markets evolve. As you’ve gathered by now, today’s blog is an unabashed advertorial for our virtual conference, but read on if you’d like to hear more about the underlying premise behind our latest outlook.
The last time we held our School of Energy online was in April — pretty much in the middle of the COVID meltdown. As we were holding the April conference, market turbulence was hitting a crescendo. Crude prices dropped below $20/bbl that week, propane prices were up by a dime a gallon, gas was bouncing up and down 5-10% each day, and the market was hard-pressed to know what would happen in the next five days, much less six months or a year. Demand was decimated by stay-at-home and other measures to combat COVID, the OPEC+ failure in early March remained unresolved, and crude oil storage was at risk of hitting capacity constraints. Within days of the conference, crude prices crashed to negative $37/bbl, before returning to positive territory — a stark reminder of the futility of forecasting flows and prices at the time.
In some ways, not much has changed since then; COVID is still with us, the toll in human lives has been horrendous, big pieces of the economy are still shut down, air travel is still comatose, and conferences are still virtual. The market has also since weathered a wipeout in LNG exports. What has changed, though, is that energy markets, like the rest of the world, have learned to adapt to life in a pandemic. So has RBN’s framework for understanding how energy markets are behaving.
Ever since the collapse of OPEC+ and COVID struck, the RBN team has been retooling our production, infrastructure, and supply/demand models to reflect the new world order. Now that the market has gotten a breather from the rapid-fire punches of early 2020 and is operating somewhat more rationally, it’s a good time to assess what the recovery will look like longer term, in the upcoming months and years. That is what our Fall Virtual School of Energy is all about. Before we get to the highlights of our findings, here’s a little bit about the format. While this will be our 14th School of Energy, it’s our third time going virtual, and what that means is that you’ll not only be able to attend the conference online in real time on October 20-21, asking questions as we go, but after the conference, all the materials will be available for replay, in whatever order you choose. So you can view the modules you want during the online sessions and go back to look at any other modules after the fact. That way, you can view the sessions that are of most interest to you RIGHT NOW! And it’s not too late to sign up. You can register, here.
Canadian crude output is rising, requiring new export routes. As traditional pathways face constraints, the U.S. Rockies—especially the Guernsey, WY hub—are emerging as key corridors for moving Canadian heavy crude to downstream markets, including the Gulf Coast.
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About the song
"Good Times Bad Times" was written by John Paul Jones, Jimmy Page, and John Bonham, and it appears as the first song on side one of Led Zeppelin's debut album, Led Zeppelin. It was released as the only single from the album in March 1969, and would reach #80 on the Billboard Hot 100 Singles chart. Bonham's unique triplet patterns on the kick drum, along with Page's guitar solos played through a rotating Leslie organ speaker and Jones' heavy bass riff, helped to kick off Led Zeppelin's debut album as something unique and different. Jones has stated that the riff he wrote for the song is the most difficult one he has ever written. Personnel on the record were: Robert Plant (lead vocals), Jimmy Page (guitar, backing vocals), John Paul Jones (bass, backing vocals), and John Bonham (drums, backing vocals).
Led Zeppelin was recorded between September and October 1968 at Olympic Studios in London, with Jimmy Page producing and his lifelong friend, Glyn Johns, engineering. Financed by Jimmy Page and his manager Peter Grant, the whole album was recorded in 36 hours. Page and Grant wanted the freedom of recording the album when, where, and how they wanted, without being beholden to a record company. This strategy worked out very well for them, with Atlantic buying the finished master from the band and releasing it on their label in January 1969. The album went to #10 on the Billboard Top 200 Albums chart and has been certified 8x Platinum by the Recording Industry Association of America.
Led Zeppelin was an English rock band formed in London in 1968 by Jimmy Page, Robert Plant, John Bonham, and John Paul Jones. Progenitors of heavy guitar blues-rock, the band has sold over 300 million records worldwide. They have released eight studio albums, four live albums, ten compilation albums, and 16 singles. They have won one American Music Award, five Grammy Awards, and two Ivor Novello Awards. They are recipients of the Kennedy Center Honor, and are members of the Rock and Roll Hall of Fame and the UK Music Hall of Fame. John Bonham died in September 1980, after which the band officially disbanded. They reunited, with John Bonham's son Jason on drums, for a one-off show for Ahmet Ertegun's Tribute Concert in London in December 2007. Page, Plant, and Jones have continued on with various projects independent of each other to this date.
