RBN’s Daily Energy Blog and Insights sharpen your energy IQ through fundamentals-based analysis that makes sense of North America’s energy market dynamics.
Permian crude production is set to increase 0.4 MMb/d to 1.8 MMb/d by December 2018 (Bentek). New pipeline capacity currently being built and planned to be in place by the end of 2015 should comfortably handle the output by then – primarily pushing Permian crude into the Houston market.
Rapid growth in U.S. gas exports to Mexico already is having profound effects north of the border, and things will only get more interesting. Gas producers in the Eagle Ford and other Texas shale plays are finding the new buyers they need.
The shale revolution has done away with natural gas price volatility, at least for now. And that has been a bad thing for natural gas storage. Merchant storage facilities make most of their money on either seasonal gas price differences or short-term price fluctuations, or both.
Over the past few weeks, NGL prices have dropped to levels relative to other hydrocarbon prices that we have not seen since the bad old days of 2009. Since early April 2013, the frac spread (see Another Fracing Problem and RBN Spotcheck graphs) has averaged less than a bargain basement leve
“Hey Joe, I said, where you goin' to run to now … where you gonna go?” now that no other options are left, Jimi Hendrix asked in his debut single, “Hey Joe.” Joe’s answer? “ I'm goin' way down south, way down south, way down south to Mexico way!”
The West Texas Intermediate (WTI) discount to Brent narrowed 80 percent since February 2013 to close at $4.05 on Monday July 8, 2013.
The West Texas Intermediate (WTI) discount to Brent has been as wide as $27/Bbl in the past two years and traded at an average of $17.50/Bbl in 2012. Since February this year the spread has narrowed 80 percent to less than $5/Bbl – closing at $4.55/Bbl on Friday (July 5, 2013).
Finding profitable markets for the rapidly increasing volumes of condensates produced in the Eagle Ford and other U.S. shale plays will be challenging.
Crude Oil TradeView provides up-to-date data and insights into the behavior of differentials for 33 crude assessments across North America. Each week, it also walks you through the reasoning of why differentials widen, narrow, flip (premium vs. discount), or blow out.
Valero’s brand new $1.6 B, 60 Mb/d hydrocracker is set to ramp up at the company’s Norco, LA refinery this month (July 2013). They added a similar unit to their Port Arthur refinery last year and plan to expand existing units at their other refineries.
Permian crude production is expected to increase 28 percent between 2013 and December 2018 to 1.8 MMb/d (Bentek). Existing pipeline takeaway capacity and local crude consumption are currently barely enough to handle production of 1.4 MMb/d.
