Oil Prices

A few years back, crude-by-rail (CBR) emerged as the go-to fix that enabled pipeline-constrained shale regions to move fast-increasing volumes of oil to market. A total of 178 rail terminals were built or significantly expanded, with 99 loading terminals and 79 unloading terminals developed in the U.S. and Canada.  But changes in the market -- lower oil prices, slowing/declining production, new pipeline capacity -- have been challenging and undermining CBR.  Only about 20% of U.S. nameplate capacity is being used, and further declines in CBR volumes are expected, prompting serious questions about CBR’s future role.  Today, we discuss RBN Energy’s latest Drill Down Report, which examines CBR’s pros and cons, its evolution, and its current status and prospects.

Prices headed up!!  That’s something that you haven’t heard much lately.   But big changes are just over the horizon for NGLs as new petrochemical plants and export projects come online.   These projects will encounter a market environment far different than what was expected when they were being planned.  Instead of an oversupplied market driving NGLs lower relative to crude oil and natural gas, the projects will confront a tight market, with NGL prices higher relative to the other hydrocarbons. In today’s blog we explain why what must go up must come down, and vice versa.

Estimates of how much oil or natural gas are “technically” or “economically” recoverable are moving targets. Until just a few years ago, the hydrocarbon-producing potential of the Bakken, the Permian and the Marcellus were vastly underestimated—hardly anyone would have wagered in 1995 that North Dakota, West Texas and northeastern Pennsylvania would emerge as oil and gas hotspots. So what are we to make of California’s Monterey tight oil play, which as recently as 2011 was hailed as the next big thing for tight-oil production, but which is now on just about no one’s mind? Today, we consider what it might take to turn a hydrocarbon frog into a prince.

The development of US liquefied natural gas (LNG) export facilities is picking up steam. Four projects—Sabine Pass LNG, Cameron LNG, Cove Point LNG, and Freeport LNG—are now under construction (up from only one this past summer), and Sabine Pass is only a year or so away from liquefying and exporting its first LNG. But what about Western Canada? It’s got tremendous LNG export potential, but project proposals continue to face headwinds from cost concerns, regulatory uncertainty and the most recent hurdle – lower oil prices. Today, we consider the latest news on efforts to move Western Canadian gas to Japan and other overseas markets.