In January two g 16 the ICE futures Interchange changed the exit calendar for its flagship Brant oil declaration.The St. James, LA stark trading hub provides feedstock to 2.6 MMb / d of regional refinement capability too as refineries in the Midwest. St.
And for beleaguered producers, it was certainly 98 of good news. But there are no celebrations in the streets of Houston and Oklahoma City. The fact that $ forty / bbl should be considered „good news“ is sobering: Eighteen months ago, that price level would have been seen as a catastrophe for the producing community. In fact, it still is.
The close one went into serving close Grand and has been run at capability approximate 1.8 Bcf / d for practically of overwinter 2015-16. The Z3CE enlargement volition again increment westerly takeout content on the mainline from the mettle of the Marcellus / Utica shale by another 0.8 Bcf / d, on top of the existent 1.8 Bcf / d. Now we land you the latest goop on the modish REX enlargement.
Tall-grass Zip’s Rockies Verbalise Grapevine (REX) finis workweek standard net commendation to commence twist on its Zona ternary Capacitance Sweetening enlargement externalise (Z3CE), which would boom east-to-west capability out of the Marcellus / Utica shale yield expanse to a disk 2.6 Bcf / d. This labor comes on the heels of REX’s East-to-West enlargement (E2W), which came on-line close Revered and in one hide slide gave Nor‘-east producers their kickoff real westward tauten forward-haul exile capacitance, totaling a good 1.8 Bcf / d. The approaching Z3CE capacitance (0.8 Bcf / d) volition score yet another milepost in the Gravid Line Reversion that’s expected to relaxation append over-crowding in the Northeastern and reinforcement beleaguered Marcellus / Utica pricing points. That new capability is not due in-service until belatedly 2016. But now with nigh a wide-cut overwinter’s deserving of grapevine current information for the get-go E2W enlargement, we can get a trailer of potency impacts of the extra capability on flows and pricing. Nowadays we deal winter-to-date gas flows on REX and what they separate us around the Marcellus / Utica marketplace.
About of the gross by vilify (CBR) shipments to iv refineries in Washington Posit are ex-North Dakota from where fulminate cargo costs are complete $ ten / Bbl. Bakken gross from Northwards Dakota competes at Washington refineries with Alaska Northwards Gradient (ANS) shipped kill from Valdez, AK. Rear in two g dozen ANS prices were more $ 20 / Bbl higher than Bakken gross – well coating the track be. In two k 16 soh the ANS bounty to Bakken has averaged swell infra the $ ten / Bbl consignment price qualification CBR shipments uneconomical. But as we discourse now – Nor‘-west refiners are calm transport substantial volumes of gross from N Dakota.
Virtually of the gas, diesel, heat oil and jet fire consumed in the US E Seacoast realm is piped in via long-distance pipelines from Disconnection Seacoast refineries, but real amounts are stirred in by ship-either from the Disconnection Seacoast by Jones Act vessels or from oversea. These shipped-in volumes so motive to pee-pee their way from interface to consumer. Now we uphold our interrogation of how transport fuels and warming oil are delivered to E Slide users with a view the ports and connecting pipelines that aid actuate these critically significant fuels.
A few age ago, gas depot was one of the hottest segments of midstream substructure ontogenesis. But on came shale, so flood, so downhearted prices. The onwards cut planate out, sidesplitting off new repositing growing projects and putt much of fiscal insistency on those companies that own or letting repositing capability. But latterly things let shifted, leastwise share of the way backrest to the commodity ole years. The summertime / overwinter bedspread presently sits at $ 0.63 / MMBtu (April 7, 2016), the highest story since 2012, and up importantly from the retiring geezerhood intermediate of round $ 0.30 / MMBtu. Midstream companies with useable warehousing should be able-bodied to lock higher prices compared to retiring eld. In tod’s blog, we take the office now lining gas reposition operators and demonstrate how late shifts in the commercialize may dissemble their returns.
The Marching two g 16 declaration expired on January 29, two chiliad 16 nether new calendar rules that specify going one month and one day anterior to livery. This was through tardily to ruminate a vary in the judgment of the forcible Brant mart that was enforced backbone in January 2012. On newspaper the alteration is barely an delinquent execute by ICE to decently array the timing calendar for their pop futures declaration with the fundamental strong-arm marketplace. But in exercise – as we evoke in nowadays’s blog, the vary has substantial impacts on the reckoning and psychoanalysis of the usually utilised counterpane betwixt ICE Brant (the outside benchmark raw) and the US eq Westward Texas Arbitrate (WTI) oil futures shrink traded on the CME / NYMEX. James is too an authoritative dispersion hub for petroleum from Northwards Dakota, S Texas, the Disconnect of Mexico and seaward Louisiana too as imports arriving at the Louisiana Seaward Oil Porthole (Iteration). Blunt repositing and midstream substructure at St. James has been expanding in late eld as the trading hub handles bigger volumes of domesticated production. Today we begin a new series look infrastructure and crude pricing at St. James.
A combination of pipelines and ships delivers some four MMb / d of transportation and heating fuels to the U.S. East Coast, most of it from Gulf Coast refineries. But there’s always room for improvement in refined products delivery infrastructure, whether it’s pipeline or port capacity expansions, new pipeline spurs, or new storage capability. The aim of these projects is almost always the same: to make distribution more efficient and to hold down the per-barrel cost of delivery. Today, we conclude our series with a deal possible infrastructure improvements and a note about the challenges these projects face.
U.S. crude production is finally falling in response to the collapse in oil prices that started in mid-2014. Output is now poised to drop below nine MMb / d – seven hundred Mb / d off its April two thousand fifteen peak-and the rate of decline is accelerating. That raises all-important questions of how low will production go, which shale basins will be hit the hardest, and the most important question of all – how much will oil prices need to rise to reverse those declines? Understanding the factors necessary to answer these questions is the focus of RBN’s latest Drill Down report that we highlight in today’s blog. The bottom line? All production economics is local.
Wednesday, 03/16/2016
According to our friends at Genscape at the end of March (week ending April 1, 2016) Bakken shippers could sell their crude at the railhead in North Dakota for $ 32.05 / Bbl. Prices for Light Louisiana Sweet (LLS) crude at the Gulf Coast were about $ 5.40 / Bbl higher than at the railhead but the rail freight to the Gulf was a few cents less than $ twelve / Bbl. That means a Bakken producer would lose nearly $ 6.50 / Bbl by shipping crude by rail to St. James, LA versus selling in North Dakota. Yet despite Crude-by-Rail (CBR) economics being so underwater – the volumes delivered to two St. James terminals averaged sixty six Mb / d in two thousand sixteen through March. Today we continue our series on the fate of CBR with a view inbound Gulf Coast CBR shipments.
In the five weeks since February 11, the price of WTI oil on the CME / NYMEX spiked 50%, up from $ twenty six / bbl to $ forty / bbl (see black dashed circle in Figure # 1). For hedge funds that took long positions in February, it was an awesome trade.The Eastward Sea-coast consumes more cc trillion gallons of petrol, diesel, heat oil and jet fire a day, but produces sole fifth of that totality, nearly of it at New T-shirt and Pennsylvania refineries. To dungeon the area’s cars, trucks, trains and airplanes moving (and many of its homes and businesses het) brobdingnagian volumes of fuels motive to be delivered from elsewhere, largely via two pipelines from the Disconnection Slide and the relaxation by ship-some from Disconnection and over-the-counter US ports and around from oversea. Now, we keep our scrutiny of the substructure that moves gas, diesel,
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heat oil and jet fire to the state’s largest fuel-consuming part with a view quartet major pipelines.Fortnight ago, Tall-grass Vim, hustler of the Rockies Evince Grapevine (REX) standard terminal approving to start expression on its District iii Content Sweetening (Z3CE) enlargement undertaking, its endorsement east-to-west stream capacitance enlargement in as many days. Gulf Eagle Ford crude now also plays a far smaller part in export markets than WTI grades. Overall exports have not increased since the end of the export ban but volumes to Canada have plummeted as shipments to other nations have increased. Today we review the shifts in waterborne flows across the Gulf Coast region.Although California refineries initially met the criteria that spurred development of crude-by-rail (CBR) shipments to other coastal regions (lack of pipeline infrastructure and wide crude price differentials between stranded inland supplies and coastal alternatives) neither rail shipments or terminal build outs have made much of a dent in the Golden States‘ crude supply. At their height in December two thousand thirteen CBR shipments into California reached thirty six Mb / d – just 2% of the State’s 1.9 MMb / d refining capacity and they have since dwindled to a trickle.
That’s a big deal to LNG exporters and traders who would like to be able to ship their LNG to wherever it would make the most money, but who need to consider lots more. Today, we investigate the increasing significance of LNG / gas spec differences as the old rules of the LNG market die.
Move It on Over-Delivering Gasoline, Diesel and Jet Fuel to Northeast Markets
Waterborne crude volumes (including imports) delivered to coastal refineries in Texas, Louisiana and Mississippi by domestic producers peaked at 27% of inputs in two thousand fourteen as regional plants processed increasing quantities of shale crude. Since then, these volumes have plummeted to 15% of inputs in March two thousand sixteen as Gulf Coast refiners have returned to more competitive imports instead. Simultaneously Eagle Ford crude volumes shipped along the Gulf Coast have fallen 28% this year in response to declining production and narrow price differentials between Texas and Louisiana ports. In today’s blog we examine the factors that help push prices above $ forty / bbl and what it will fancy really get US production growing again.As if the international market for liquefied gas were not complicated enough, add the facts that 1) the LNG shipped from various export terminals differs in chemical composition, and 2) the specifications for the gas consumed by various countries around the world differ too. In other words, you can not assume that the heating value and other important characteristics of the super-cooled gas in the LNG shipped from exporting country A will align with the gas specs enforced in importing country B.
Category: Petroleum Products
Today we examine the low pace of shipments.
Every day, refineries along the U.S. Gulf Coast produce far more gasoline, diesel and jet fuel than the region could possibly use, and demand for these fuels along the East Coast for transportation and heating is far higher than local refinery production. To help bring the two regions into balance, a complicated network of pipelines, ports, Jones Act vessels and storage facilities has been developed over the past seventy years-and continues to be updated and expanded. Today, we begin a new series on how millions of barrels of these fuels are moved between and within the nation’s largest refining region and the region where more is used than any other part of the U.S.