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.
A couple of weeks back in “A Market of Contradictions: Ethanol Mandates, Motor Gasoline and the Blend Wall” we looked at how US refiners are on the hook to blend more and more ethanol into a diminishing pool of gasoline (the blend wall) under Renewable Fuel Standard (RFS) legislation.
The ratio between crude oil and natural gas (NYMEX) futures yesterday was 31.8. That is crude prices in $/Bbl were 31.8 X natural gas prices in $/MMbtu. In the 10 years from August 1997 to August 2007 the ratio averaged 7.5 X – that was the old world.
September NYMEX natural gas closed up a nickel yesterday at $2.96/MMbtu. The January 2013 contract closed at $3.537 – a winter summer spread of $0.57/MMbtu, but the average seasonal spread in the futures market has fallen from $0.62/MMbtu just two years ago to $0.39/MMbtu this week.
Eagle Ford crude production is close to 600 Mb/d as of July 2012. Most forecasts show that number increasing to about 1,200 Mb/d over the next five years. Takeaway projects being developed today to go online by 2013 have capacity for 1,650 Mb/d.
On Friday purity ethane in Mont Belvieu came in at 36.4 cnts/gal on OPIS, up 1.5 cnts while Conway ethane in E/P mix was up 1.25 cnts to 15.75 cnts/gal. Given that at this time last month Conway was trading at a dismal 2.25 ctns/gal while Mont Belvieu was wallowing under 30 cnts/gal, these
Yesterday we learned that Gulf Coast diesel cracks (margins over crude) averaged $12.88/Bbl since August 2010 (read it here if you missed it). The result has been a Gulf Coast diesel-refining boom.
Gulf Coast diesel cracks (margins over crude) have averaged $8/Bbl more than gasoline for the past two years. As a result, Gulf Coast refiners have been producing more diesel than gasoline for the first time since records began. US demand for diesel has remained flat but exports have boomed.
Oil production from the North Dakota Bakken shale reached 639 Mb/d in May 2012. Associated natural gas production was 651 MMcf/d. So far oil production has been the main focus for Bakken producers. Gas production has been an afterthought.
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.
On June 1st, Mont Belvieu propane non-TET fell to 70 cnts/gal from about 150 cnts/gal six months earlier, down more than 50%. See Graph #1 below.
Natural gas liquids trading is quite unlike natural gas or crude oil. Natural gas is natural gas. It is a truly fungible commodity. Crude oil varies widely in quality, but it is still crude oil. Not so, NGLs. Each of the five NGLs has different physical characteristi
