Logistics

A first-of-its-kind frac sand logistics solution set to debut in the Permian Basin later this year may help transform the way proppant is delivered to support hydraulic fracturing operations there. If it works as advertised, it will represent another advance in the streamlining of oil and gas production in the U.S.’s most prolific shale play. In today’s RBN blog, we‘ll explore how Atlas Energy Solutions aims to mechanize the delivery of sand to crude-oil-focused well sites in the Permian. 

The ratio between crude oil and natural gas (NYMEX) futures yesterday was 27.7. That is crude prices in $/Bbl were 27.7 X natural gas prices in $/MMbtu. The ratio today is far higher than its historical norm of 7.5X before 2007.  It started to increase in 2008 and reached 54 X last year when gas prices crashed below $2/MMBtu. This year the ratio has averaged 27 X and has shown no clear trend up or down. The ratio is important because it underpins two of the key features of the shale boom to the US economy – cheap energy in the form of natural gas and higher prices for refined product and petrochemical exports. Today we attempt to discern the future direction of the ratio.