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Update regarding my attached post, on 3/3/2022 BSEE permitted another “New Well” in the GOM. FYI, it was a new well for BP.
Mrs. Smith
Not to worry. Only a “what if” chat.
Mrs. Smith
Good point. Yes, drilling is the most important thing, but unless you are Big Oil you will need partners. Macroeconomics and the geopolitical situation both have great influence on the “economics” of an oil and gas prospect. Partners are necessary, but you will not get them unless the venture is shown to be viable and “commercial”.
Mrs. Smith
‘Crude oil prices increase above $100 per barrel following Russia’s invasion of Ukraine’, EIA Principle Contributors: Kevin Hack, Jimmy Troderman, Released 3/4/2022
https://www.eia.gov/todayinenergy/detail.php?id=51498#
Following reports that Russian forces further invaded Ukraine on Thursday, February 24, the front-month futures price of both Brent and West Texas Intermediate (WTI) crude oil have increased to more than $100 per barrel (b). The front-month Brent contract price closed just below $115/b on Wednesday, March 2, after rising and settling above $100/b on February 28. The Brent crude oil price last rose above $100/b in late 2014. The front-month WTI contract price closed above $110/b on March 2, after first settling above $100/b on March 1.
Brent crude oil is a type of crude oil from the North Sea in Northwest Europe that is commonly used as a global benchmark. West Texas Intermediate crude oil is used as a U.S. benchmark. Recent trading of these benchmarks has been more volatile lately than in the past. For example, on February 24, the price of Brent crude oil ranged from a high of $105.79/b to a low of $97.56/b, an intraday price range of $8.23/b that is nearly four times the average range during 2021. The only other time since January 2021 that the range exceeded $8/b was on November 26, in response to the World Health Organization’s identification of the coronavirus Omicron variant.
The Brent crude oil price decreased on February 25, but developments in the Ukraine-Russia conflict and new sanctions placed on Russia over the weekend contributed to an increase in the Brent price on February 28. Subsequent news about Russia's further invasion has had significant effects on crude oil trading throughout the past week.
Russia is the third-largest petroleum and liquid fuels producer in the world, after the United States and Saudi Arabia. (By the way, Russia is the No. 1 exporter of Wheat. Humm, will this year’s crops be planted in time?) It is also a major exporter of crude oil. Since mid-January 2022, the geopolitical risk related to Russia’s further invasion of Ukraine has contributed to higher and more volatile crude oil prices. Stronger petroleum demand as the COVID-19 pandemic has begun to ease and slower crude oil production growth have also put upward pressure on global crude oil prices.
FYI, I have tallied it up. I am 98.3% “on target” and gaining.
The U.S. Oil and Gas Rig Count reflects no changes and is currently at 650 rigs as of 3/04/2022. The GOM Offshore Rig Count remained unchanged from the previous week and is currently showing 12 rigs. Gulfslope’s Tau prospect is located in GOM Louisiana Offshore waters.
https://rigcount.bakerhughes.com
https://rigcount.bakerhughes.com/static-files/aa5b9064-c275-4a80-be5f-bde1b727ac68
WTI $113.14/bbl Up 5.01% - March Contract, 13:41 pm CDT 3/04/2022: https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 3/03/2022 Close
Crude Oil ($/barrel) Percent Change
WTI $107.69 -2.8
Brent $115.36 -3.0
Louisiana Light $110.69 -2.
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
I thought about that too a while ago. And I determined that there is no way for any of us to know for certain what plans are in place, if any. I would see that as a definite set back, but I do not know that it would necessarily mean the end of Gulfslope. I would miss his leadership however. I personally know several folks much older than 70 with the drive and capacity to continue leading a company. Based on Mr. Seitz’s record, I say he is one of those. Let us change the subject…
Notice that our supreme leadership does not want to restart USA energy. They want to buy oil from Iran. Talk about the masters of unintended consequences. And they want all of us to hunker down and use less energy in our daily lives until such time as renewables can take over supplying energy to America. So, “YES”, let all of us have a really bad recession or even a depression, so these fools can chase their socialist dreams while running around with their heads up their ???s. These are people that do not have the capacity to lead. All they do is dogmatically follow the dictates of their special interests. I do not think there is a creative idea or solution among any of them. An intellectual wasteland full of tyrannical tendencies. But I have to admit that our president has provided to us the appropriate wording to use in the face of these policies. “MALARKEY”!
Mrs. Smith
I have cleaned and polished my crystal ball, and I have been gazing into it for some time. And I do see the possibility of a definite boomerang. In fact, if the current administration intends to stand pat with their present policies regarding USA energy, I can foresee much future unrest as it pertains to those decisions.
What I am keeping an eye on is that, to me, this has the potential to become an unprecedented break down in the pact that our government represents the will of the people. Hopefully the politicians will snap out of it and remember that they are not rulers, but representatives. Honestly, I am somewhat concerned about it, because this administration’s attitude has always been that they know best about “what we the people need”, and they intended to see that we get it, whether we want it or not.
I hope they come to their senses in time. But if they do not, the midterm elections should eliminate most of those concerns. That is the ultimate boomerang that I see. Granted it is mostly a political solution, but then it is also mostly a political problem. If these guys insist on a continuing beat down of U.S. energy and domestic production, this is the only path forward for change that I see. Every American is going to be affected by these decisions, and if they do not like the outcomes, the political winds will change.
The leadership of a new congress will regain control of the laws and how the money is spent. The Executive Orders will be ignored and all the President can do is veto until the 2024 election. But in the meantime the energy industry will begin the process of picking up the pieces, and getting back to the oil business.
I think the boomerang is going to come down to whether or not the administration has the flexibility to respond to the needs of the country and the people. The easy way is that the administration decides to change course. The hard way is they get thrown out of power. Until then it is probably just turmoil and high prices.
Mrs. Smith
“Who would have thought just 6 months ago that prices would be in this range now? Other than me.”
Answer: Me, Mrs. Smith: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=166600751
Excerpt from my GSPE post No. 5712 in the Fall of 2021:
”Not sure I agree that WTI will be below $70/bbl next summer. With hyperinflation still a concern in that timeframe many wealthy individuals and countries will be buying up crude as a hedge, which will hold value better than currency. And crude is more liquid than gold. Many variables involved, but in my opinion crude should hold it’s valuation or increase as long as inflation is in play and demand stays on it’s current trajectory.”
Boy, do I have even more thoughts.
Mrs. Smith
Oil inventories decreased by 2.6 million barrels - EIA Weekly Petroleum Status Report, Release Date: 3/2/2022
Full Report with Graphs: https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
WTI $110.99/bbl - March Contract, 18:27 pm CDT 3/02/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
Summary of Weekly Petroleum Data for the week ending February 25, 2022
HIGHLIGHTS:
U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ending February 25, 2022 which was 153,000 barrels per day more than the previous week’s average. Refineries operated at 87.7% of their operable capacity last week. Gasoline production increased last week, averaging 9.3 million barrels per day. Distillate fuel production increased last week, averaging 4.7 million barrels per day.
U.S. crude oil imports averaged 5.8 million barrels per day last week, decreased by 1.1 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.2 million barrels per day, 9.4% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 603,000 barrels per day, and distillate fuel imports averaged 403,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.6 million barrels from the previous week. At 413.4 million barrels, U.S. crude oil inventories are about 12% below the five year average for this time of year. Total motor gasoline inventories decreased by 0.5 million barrels last week and are about 1% below the five year average for this time of year. Finished gasoline inventories increased while blending components inventories decreased last week. Distillate fuel inventories decreased by 0.6 million barrels last week and are about 16% below the five year average for this time of year. Propane/propylene inventories decreased by 0.8 million barrels last week and are about 20% below the five year average for this time of year. Total commercial petroleum inventories decreased by 3.9 million barrels last week.
Total products supplied over the last four-week period averaged 21.7 million barrels a day, up by 11.0% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.8 million barrels a day, up by 11.0% from the same period last year. Distillate fuel product supplied averaged 4.3 million barrels a day over the past four weeks, up by 5.0% from the same period last year. Jet fuel product supplied was up 24.5% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $91.68 per barrel on February 25, 2022, $0.42 above last week’s price and $30.13 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $2.782 per gallon, $0.039 more than last week’s price and $0.885 above a year ago. The spot price for No. 2 heating oil in the New York Harbor was $2.702 per gallon, $0.043 above last week’s price and $0.983 over a year ago.
The national average retail regular gasoline price increased to $3.608 per gallon on February 28, 2022, $0.078 above last week’s price and $0.897 over a year ago. The national average retail diesel fuel price increased to $4.104 per gallon, $0.049 per gallon more than last week’s price and $1.032 higher than a year ago.
26th OPEC and non-OPEC Ministerial Meeting concludes, Vienna, Austria, 02 Mar 2022
https://www.opec.org/opec_web/en/press_room/6830.htm
Following the conclusion of the 26th OPEC and non-OPEC Ministerial Meeting, held via videoconference on 2 March 2022, and based on internal consultation held exclusively by the OPEC and participating non-OPEC oil-producing countries in the Declaration of Cooperation of (DoC), it was noted that current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market, and that current volatility is not caused by changes in market fundamentals but by current geopolitical developments.
The OPEC and participating non-OPEC oil-producing countries decided to:
* Reaffirm the decision of the 10th Ministerial Meeting on 12 April 2020 and further endorsed in subsequent meetings including the 19th Ministerial Meeting on 18 July 2021.
* Reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th Ministerial Meeting and the decision to adjust upward the monthly overall production by 0.4 mb/d for the month of April 2022, as per the attached schedule.
* Reiterate the critical importance of adhering to full conformity and to the compensation mechanism taking advantage of the extension of the compensation period until the end of June 2022. Compensation plans should be submitted in accordance with the statement of the 15th Ministerial Meeting.
* Hold the 27th OPEC and non-OPEC Ministerial Meeting on 31 March 2022.
Russian supplies struggling for buyers while oil tops $110, by Sharon Cho and Alex Longley 3/2/2022
https://www.worldoil.com/news/2022/3/2/oil-tops-110-with-russian-supplies-struggling-for-buyers/
(Bloomberg) — Oil extended its relentless rally above $110 a barrel before an OPEC+ meeting as the severity of disruption to Russian supplies showed signs of growing.
Futures in London and New York both jumped above the threshold intraday, with West Texas Intermediate hitting the highest since 2013. The market’s structure has moved into super-backwardation, indicating extreme scarcity, while prices have also surged through major option strikes, exacerbating price swings.
Russia’s flagship Urals crude oil was offered for sale at a record discount but got no bidders, the latest indication that trading of oil from the country’s western ports is grinding to a halt. Consultant Energy Aspects said about 70% of Russian crude trade is currently frozen amid banking sanctions, spiking freight rates and wider political risks.
The global oil market had already tightened significantly prior to the invasion, after economies rebounded strongly from the pandemic. The disruption to Russian exports has the potential to drive crude prices even higher. Traders are paying the most in years betting that will happen, while banks including Morgan Stanley have boosted near-term forecasts.
In a bid to cool prices, the International Energy Agency announced a strategic oil reserve release, but so far it has done little to tame a rampant market. The situation across the energy sector is very serious, IEA Executive Director Fatih Birol said Tuesday.
“The next frontier of oil prices will be defined by prices in search of demand destruction,” RBC Capital Markets analysts including Michael Tran wrote in a note to clients. “Two weeks ago, our call for $115 a barrel by summer seemed aggressive, in light of the ongoing tightening fundamental framework, infused by geopolitics, there may be further risk to the upside.”
Prices
• Brent for May settlement gained 6.4% to $111.64 a barrel at 9:12 a.m. London.
• WTI for April delivery surged 6.4% at $110.02
Brent remains in deep backwardation, a bullish structure where prompt barrels are more expensive than later-dated cargoes, indicating nervousness over tightening supply. The benchmark’s prompt spread was $5.02 a barrel, a level not previously seen this century.
Russia’s invasion is entering a deadly new phase, which could result in more sanctions. President Joe Biden is facing pressure from lawmakers in both parties to cut off U.S. imports of Russian oil and gas to escalate the cost to Russia, which would likely provide another boost to global prices.
The impact of Russia’s invasion of Ukraine has reverberated far and wide. Oil majors such as BP Plc, Shell Plc and Exxon Mobil Corp are exiting Russia, while banks across the globe including in Singapore are restricting trade financing for raw materials.
Separately, the American Petroleum Institute reported U.S. crude inventories fell by 6.1 million barrels last week, according to people familiar with the data. Stockpiles at the key storage hub in Cushing also declined, the API said. Energy Information Administration figures are due later Wednesday.
Update: On 3/2/2022 the EIA reported, U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 2.6 million barrels from the previous week
FYI, as of March 1, 2022, the BOEM is reporting the two Tau leases as ‘active’, and Delek GOM Investments, Inc. as having a 75% lease assignment (working interest) in the two leases.
I noticed the following and take it as a positive development. Today, BSEE approved a permit on a ‘New Well’ in the GOM. It is the Anadarko No. 10 well with an Exploration Plan (EP) that was approved back in 3/2020. Coincidentally, the Tau No. 2 well’s EP was approved back in 2020 also. At this time, BSEE is continuing to permit ‘New Wells’ that are already in the queue.
On their latest 10-Q, Gulfslope stated that they were “actively finalizing the Application for Permit to Drill (APD) on the Tau No. 2 well”, which was filed with BSEE in 2/2020.
Perhaps the latest instructions from the current administration’s moratorium do not apply to permit applications that are already in the works. If this is the case, then the Tau No. 2 well will be a more viable future project than many others, and may attract the investment dollars needed to pursue drilling.
Mrs. Smith
Good job spec. 99.7% on target.
Anyone notice that some nut in Russia tweeted they might crash the ISS into the USA?
Do you think they sound a little desperate there?
The Ukraine is showing the Russian army to be not that great, and either NATO or the USA will kick Russia’s A$$ in a conventional war, so they are threatening with nukes. That is the same reason North Korea and Iran want nuclear weapons. Of course, with North Korea and Iran, the West could starve them into submission.
When the USA attacked Iraq in 1990 under Saddam Hussein, Iraq had the fourth or fifth largest army in the world behind the USA, Russia and China. You saw what happened to them then, and that was 30 years ago. I suspect that the USA has become even more lethal since then.
Russia is threatening nuclear war because they are shown to be paper tigers, and they realize that in a conflict, they would find NATO and the USA to be quite formidable. So they are worried and threatening nukes for the sake of intimidation as if they have never heard of MAD.
As you mentioned, I agree that one potential big effect for the GOM could come from some type of sanctions or embargo against Russian oil. Recently Russia supplied around 7% of the USA oil imports. So price effects to worldwide crude due to sanctions could be significant.
Of even more potential significance to the GOM, is that the moratoriums on the USA oil and gas industry will be much more difficult to rationalize and maintain. If there are sanctions against Russian crude, the administration will almost certainly need to push for more USA production to prevent a recession or even a depression, all of which will give the GOM a boost.
I really hope politicians, the masters of unintended consequences, do not overplay their hands and make things even worse. I predict things to not get that bad. I say that cooler heads will prevail. But one consequence will be to demonstrate to all rational and reasonable people that the USA needs to control it’s own energy destiny and not place our national welfare and standard of living in the hands of others subject to their whims and actions.
Mrs. Smith
Oil inventories increased by 4.5 million barrels - EIA Weekly Petroleum Status Report, Release Date: 2/24/2022
Full Report with Graphs: https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
WTI $91.31/bbl - March Contract, 13:41 pm CDT 2/25/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
Summary of Weekly Petroleum Data for the week ending February 18, 2022
HIGHLIGHTS:
U.S. crude oil refinery inputs averaged 15.2 million barrels per day during the week ending February 18, 2022 which was 344,000 barrels per day more than the previous week’s average. Refineries operated at 87.4% of their operable capacity last week. Gasoline production increased last week, averaging 9.3 million barrels per day. Distillate fuel production increased last week, averaging 4.7 million barrels per day.
U.S. crude oil imports averaged 6.8 million barrels per day last week, increased by 1.0 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.5 million barrels per day, 14.1% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 416,000 barrels per day, and distillate fuel imports averaged 416,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.5 million barrels from the previous week. At 416.0 million barrels, U.S. crude oil inventories are about 9% below the five year average for this time of year. Total motor gasoline inventories decreased by 0.6 million barrels last week and are about 3% below the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories decreased by 0.6 million barrels last week and are about 18% below the five year average for this time of year. Propane/propylene inventories decreased by 3.9 million barrels last week and are about 22% below the five year average for this time of year. Total commercial petroleum inventories decreased by 1.8 million barrels last week.
Total products supplied over the last four-week period averaged 21.9 million barrels a day, up by 12.1% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.6 million barrels a day, up by 10.7% from the same period last year. Distillate fuel product supplied averaged 4.4 million barrels a day over the past four weeks, up by 3.7% from the same period last year. Jet fuel product supplied was up 40.4% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $91.26 per barrel on February 18, 2022, $1.84 below last week’s price but $32.14 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $2.743 per gallon, $0.069 less than last week’s price but $0.936 above a year ago. The spot price for No. 2 heating oil in the New York Harbor was $2.659 per gallon, $0.201 below last week’s price but $0.958 over a year ago.
The national average retail regular gasoline price increased to $3.530 per gallon on February 21, 2022, $0.043 above last week’s price and $0.897 over a year ago. The national average retail diesel fuel price increased to $4.055 per gallon, $0.036 per gallon more than last week’s price and $1.082 higher than a year ago.
US Oil and Gas Rig Count up 5 reflecting 650 rigs as of 2/25/2022. GOM Offshore Rig Count remained unchanged from the previous week and is currently showing 12 rigs. Gulfslope’s Tau prospect is located in GOM Louisiana Offshore waters.
https://rigcount.bakerhughes.com
https://rigcount.bakerhughes.com/static-files/2111501b-7386-4e3a-a221-b38bb5090f8d
WTI $91.31/bbl - March Contract, 13:42 pm CDT 2/25/2022: https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 2/24/2022 Close
Crude Oil ($/barrel) Percent Change
WTI $92.77 +0.7
Brent $99.29 0.0
Louisiana Light $95.27 +0
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
This Week in Petroleum, Release Date: 2/24/2022
Full article with graphs: https://www.eia.gov/petroleum/weekly/
U.S. average regular gasoline and diesel prices increase
The U.S. average regular gasoline retail price increased more than 4 cents to $3.53 per gallon on February 21, 90 cents higher than a year ago. The Gulf Coast price increased more than 5 cents to $3.24 per gallon, the East Coast price increased 5 cents to $3.50 per gallon, the West Coast price increased more than 4 cents to $4.23 per gallon, the Midwest price increased more than 3 cents to $3.35 per gallon, and the Rocky Mountain price increased nearly 2 cents to $3.34 per gallon.
The U.S. average diesel fuel price increased nearly 4 cents to $4.06 per gallon on February 21, $1.08 higher than a year ago. The East Coast and Gulf Coast prices each increased nearly 5 cents to $4.11 per gallon and $3.83 per gallon, respectively, the West Coast price increased nearly 3 cents to $4.68 per gallon, the Midwest price increased more than 2 cents per gallon to $3.91 per gallon, and the Rocky Mountain price increased 2 cents per gallon to $3.93 per gallon.
Residential heating oil prices decrease, propane prices increase
As of February 21, 2022, residential heating oil prices averaged more than $3.94 per gallon, more than 1 cent per gallon below last week’s price but almost $1.14 per gallon higher than last year’s price at this time. Wholesale heating oil prices averaged nearly $2.97 per gallon, almost 18 cents per gallon below last week’s price but nearly $1.01 per gallon above last year’s price.
Residential propane prices averaged almost $2.85 per gallon, more than 1 cent per gallon above last week’s price and more than 35 cents per gallon above last year’s price. Wholesale propane prices averaged nearly $1.55 per gallon, almost 7 cents per gallon above last week’s price, and more than 7 cents per gallon above last year’s price.
Propane/propylene inventories decline
U.S. propane/propylene stocks decreased by 3.9 million barrels last week to 38.0 million barrels as of February 18, 2022, 10.9 million barrels (22.3%) less than the five-year (2017-2021) average inventory levels for this same time of year. Gulf Coast, East Coast, Rocky Mountain/West Coast, and Midwest inventories decreased by 2.2 million barrels, 0.9 million barrels, 0.4 million barrels, and 0.3 million barrels, respectively.
Low inventories and high demand boost global distillate crack spreads
Rising crude oil prices, low refinery production, and high consumption of distillate fuel, which includes diesel fuel and heating oil, have contributed to the highest nominal (not adjusted for inflation) middle distillate prices since 2014 (Figure 1). The front-month futures price for ultra-low sulfur diesel (ULSD) for delivery in New York Harbor (NYH ULSD) reached as high as $2.96 per gallon (gal) on February 14, 2022. On that same day, ULSD priced in the Amsterdam, Rotterdam, and Antwerp (ARA) hubs of Northwest Europe reached $2.74/gal, and distillate fuel oil priced in Singapore (Singapore 500 ppm) reached $2.54/gal. Prior to October 2021, distillate prices had not exceeded $2.50/gal in any of these three major pricing hubs since 2014.
Rising crude oil prices account for much of the increase in distillate prices. However, distillate prices, particularly in the United States, have increased relative to Brent crude oil prices (TYS))). In February 2022 to date, the difference between the price of ULSD and the price of Brent crude oil, or the ULSD–Brent crack spread, has averaged 62 cents/gal (Figure 2). By comparison, in 2014, when ULSD prices were last higher than the current prices, the widest monthly average ULSD–Brent crack spread was 51 cents/gal. Furthermore, since 2000, the monthly average crack spread has been wider only in May 2008, when global distillate demand was high, partly because of a transition in Europe to diesel-powered cars and light trucks.
The crack spread for NYH ULSD has been generally increasing as a monthly average since June 2020 and recently increased significantly with increasing demand (Figure 3). After distillate stocks in the U.S. East Coast (PADD 1) peaked at 52% above their five-year (2015–19) average in June 2020, they sharply decreased as distillate demand returned to pre-pandemic levels in early 2021. U.S. demand for distillate fuel has remained high due to high demand for trucking and rail freight transport in 2021 and 2022. Furthermore, cold weather in January 2022 contributed to greater demand in the Northeast, a region that relies on heating oil to heat almost 20% of its homes. Despite increased distillate demand, refinery utilization is still less than pre-pandemic levels, partly because of comparatively slower demand growth in other petroleum products. Furthermore, as jet fuel demand and crack spreads increase, refiners are shifting more of their production away from distillate in favor of jet fuel. This dynamic of high distillate demand and low production has contributed to persistent distillate stock draws in the United States. According to weekly data in our Weekly Petroleum Status Report (WPSR), distillate stocks in the U.S. East Coast were at 34 million barrels on February 18, 32% below their five-year (2017–2021) average for that time of year.
Europe and Asia are also experiencing trends of low distillate stocks and high prices. Partially because of lower refinery output and high U.S. demand and prices, other countries have been importing less distillate fuel oil from the United States. Furthermore, comparatively higher ULSD prices at New York Harbor have made it economical for countries to increase exports to the United States, despite low distillate stocks globally. As of February 17, ARA ULSD stocks were 11.5 million barrels, 42% lower than the five-year February average (Figure 4). ARA ULSD stocks have not been this low, on either an absolute basis or in comparison with five-year averages, since April 2014. European ULSD stock draws may have also increased recently as a result of large planned refinery outages, including Shell's 400,000-barrel-per-day (b/d) Pernis refinery in Rotterdam. In addition, a cyberattack on storage terminals at the ARA trading hub in early February disrupted normal inventory operations. In addition, ULSD demand is likely increasing as much of Europe lifts COVID-19-related travel restrictions. Lastly, like in the United States, high consumption in the Middle East and Asia has prompted countries in those regions to consume their products domestically rather than export to Europe. As a result of all of these factors, the ARA ULSD–Brent crack spread has averaged 43 cents/gal in February so far, 17 cents/gal higher than its five-year average for these days in February and the widest crack spread differential in our data going back to 2013.
At the Singapore trading hub, the distillate crack spread relative to Dubai crude oil has increased from as low as 8 cents/gal in May 2020 to 31 cents/gal in February 2022 (to date), which is higher than the five-year February average but lower than the crack spreads at the NYH and ARA trading hubs (Figure 5). Middle distillate stocks are 40% below their five-year average as of February 23. Similar to other markets, rising demand in Asia is likely contributing to high distillate stock draws. In addition, middle distillate crack spreads in Singapore may also be widening because the region has been receiving fewer imports from China, due to China’s lower export quotas and changes to China’s domestic distillate supplies and trade patterns since the middle of 2021.
In my opinion, there is just as good a chance that Gulfslope has the JU 144 rig under contract as anyone else.
Mr. Seitz recognizes, “numero uno”, he has to have a suitable rig already locked in to drill the Tau 2 well. And he is wise enough to know 1) that if the rig is delayed but still in route to the well site, and 2) Gulfslope has all their ducks lined up with the BOEM and BSEE for the Tau 2, then the BOEM should extend the lease if it happens to expire during that process. It is my understanding, this is just ‘one’ way the BOEM can extend an oil and gas lease.
A reminder, in February 2020 Gulfslope had the JU 102 under contract for the Tau 2 well with the same exact contract months of “March through May”, and they had ‘just’ filed the application for permit to drill. Their most recent 10-Q stated “Gulfslope is actively finalizing the permitting of the Tau #2 well”.
Something to consider.
Mrs. Smith
Cool, thanks. Lol……
Mrs. Smith
The Valaris February 2022 Fleet Status Report was just released today, 2/21/2022.
Excerpts from the February 2022 Valaris Fleet Status Report:
“VALARIS 144 awarded a one-well contract with an undisclosed operator in the U.S. Gulf of Mexico. The contract is expected to commence in the first quarter 2022 with a minimum duration of 68 days.”
”Contract Start Date Feb. 2022. Contract End Date May 2022”
There is that “minimum duration of 68 days” again. The Tau 2 well BOEM Exploration Plan reflects a tentative schedule of 137 days.
Note: See pages 1 and 8 on the pdf 2/2022 Valaris Fleet Report below:
https://s23.q4cdn.com/956522167/files/doc_downloads/fleet-status-report/2022/02.21.2022-Fleet-Status-Report_FINAL.pdf
Excerpts from my previous post 6033:
The Tau 2 BOEM Exploration Plan’s tentative days to drill is ”137 days” .
After reviewing the October 25, 2019 and February 13, 2020 Valaris ‘Fleet Status Reports’ as it pertains to Gulfslope. The two fleet reports reflected Gulfslope’s prior Valaris JU-102 rig contract “start and end month interval” somewhere around the 60 day range. Seems like a standard operating procedure between Gulfslope and Valaris. Does not necessarily mean anything except if this “undisclosed operator” is Gulfslope with a “minimum duration of 68 days”, that would not be such an unusual arrangement. Either way, the Valaris JU 102 rig contract start and end months on the Fleet Report would have to reflect a three month span to capture a “minimum duration of 68 days”.
If it is Gulfslope, there is always the old standby divide “137 days” by 2 and you get 68.5 days, or they just pulled it out of a hat.
Excerpts from my previous post 5995:
Note 1: Gulfslope Press Release 8/1/20019:
“GulfSlope contracted the Valaris (Ensco) 102 jackup rig to drill a subsalt test well at Vermilion 375 (Corvette Prospect). That rig was also suitable for drilling a second well at Tau.”
Specificatons on Valaris 144 JU Standard Duty Modern “Undisclosed Operator 1Q22”:
https://s23.q4cdn.com/956522167/files/doc_rigspecs/jackup/valaris-ju-144.pdf
Specifications on Valaris (Ensco) 102 JU Heavy Duty Harsh Environment - Stacked in the GOM:
https://s23.q4cdn.com/956522167/files/doc_rigspecs/jackup2021/VALARIS_102.pdf
Note 2: Hurricane season ended November 30, 2021 and will not resume until June 1, 2022.
Mrs. Smith
Some thoughts in answer to your question. If I remember correctly, the majority of Gulfslope’s Tau 1 well insurance monies have been used to reduce their Third-Party Debt and to clean up their Balance Sheet.
I believe it is important to reiterate that Mr. Seitz does not receive a salary. I have to ask myself, why would an intelligent, reasonable person tirelessly invest his valuable time unless he was committed to and confident in the outcome? Sure, it could only be the Wildcatter Spirit, but I suspect it is way more than just a feeling. A calling perhaps?
In one of their earlier news releases Gulfslope once commented that “Gulfslope management was aligned with the Gulfslope investor”. I still believe that is true today. Reminder, at anytime Mr. Seitz can demand payment of his Convertible Promissory Notes with Gulfslope, but he NEVER has, even with the millions of dollars Gulfslope received on the Tau 1 well insurance claims.
Just for grins, if you remove what is owed to Mr. Seitz from Gulfslope’s Working Capital calculation, the Working Capital drops to less than a negative $1 million. And then we, with an even bigger grin, can take it a little further and apply that same scenario to the Current Ratio, which really makes the company liquidity look more favorable. Of course I am not advocating for this scenario, because I absolutely believe that, once the company has the monies, Mr. Seitz deserves his share and maybe a bonus to boot. I am only stating the obvious, that as shareholders, we are very fortunate to have this management team guiding our outcome. Just giving credit and acknowledging that it is due.
Mrs. Smith
After further review of Gulfslope’s most recent financials there appears to be small signs of increased activity.
Gulfslope’s Third-Party Debt has steadily declined over the past five Quarters, almost entirely disappearing, that was until this Quarter when Gulfslope’s Accounts Payable increased by 260 percent.
Gulfslope’s Cash was reduced by roughly $600K, but a substantial part ($220K) was used to ‘Prepay’ for Goods, Services and Other Assets to be used in the future. While we do not know exactly what it was used for, it indicates that there is something happing down the pike.
Reminder, as of 9/30/2021 Gulfslope has a ‘Net Deferred Tax Asset’ of $13.1 million.
Mrs. Smith
Maybe these excerpts from Gulfslope’s latest 10-Q under ‘Oil and Gas Properties’ will provide you with some answers. I recommend reviewing Gulfslope’s previous financial statements and notes for additional information.
“In January 2019, the Tau well experienced an underground control of well event and as a result, the Company filed an insurance claim pursuant to its insurance policy with its insurance underwriters (the “Underwriters”). The total amount of the claim was approximately $10.8 million for 100% working interest after the insurance deductible amount. The Company received approximately $2.5 million of this amount and credited wells in process for approximately $0.9 million for the Company’s portion, and recorded an accrued payable for approximately $1.6 million, pending evaluation of distributions to the working interest owners. In December 2019, the accrued payable was settled by the issuance to the working interest partner of approximately 38.4 million shares of the Company’s common stock.”
“In May 2019, the Tau No. 1 well experienced a second underground control of well event and as a result, the Company filed an insurance claim. The claim was related to a subsurface well occurrence that happened during the drilling of the Company’s Tau No. 1 well on May 5, 2019 at a measured depth of 15,254 feet. The Company subsequently controlled the occurrence and ceased drilling operations and plugs were placed in the well to meet regulatory requirements prior to rig release. Pursuant to the Policy terms and conditions, the Underwriters were obligated to reimburse GulfSlope for qualified actual costs and expenses incurred to (i) regain control of the well, and (ii) restore or re-drill the well to 15,254 feet. Total costs and expenses to regain control of the well were determined to be approximately $4.8 million (net of deductible) for 100% working interest and all of this amount had been received as of December 31, 2020. GulfSlope’s share of this amount was approximately $1.2 million.”
“In November 2019, an agreement was reached with a working interest partner whereby the working interest partner re-conveyed to the Company their 5% interest in Tau and Canoe in exchange for the release of claims and the Company foregoing collection of accounts receivable owed by the working interest partner. As a result of this agreement approximately $3.6 million of accounts receivable was reclassified to oil and gas properties – unproved during the year ended September 30, 2020.”
“On July 27, 2020, the Company entered into a settlement with the Underwriters of the well control events insurance policy for their claims associated with the re-drilling of the Tau No. 1 well. In accordance with the settlement, in lieu of the insurer paying for the redrill of the well and for a complete release of any further liability under the insurance policy, the Company will receive approximately $6.6 million in cash net to its 25% working interest. At December 31, 2020, all of this amount has been received.”
Mrs. Smith
Gulfslope added this paragraph on their latest 10-Q under ‘Acquisition Stategy’. It has not been reflected on their previous SEC filings.
“We are encouraged by a combination of macroeconomic factors that make the US Gulf of Mexico an attractive target for producing property acquisitions. Transaction activity has remained low despite the ongoing recovery of commodity prices for oil and gas. Current holders of production are dominated by the historically active major oil and gas companies and a smaller set of pure play companies. Compelling motivations exist for many of these companies to divest, as US Gulf of Mexico producing assets may no longer be core holdings, given the competition for capital within their portfolios. Multiple existing holders of production have stated their intention to exit the US Gulf of Mexico. GulfSlope is a proven qualified operator in the US Gulf of Mexico and the management team has broad and deep offshore experience.”
Mrs. Smith
See my posts 6160 and 6165 in reply to your questions.
Mrs. Smith
If you are referring to the Tau 1 well insurance ‘claim’ settlement with the Underwriters “as of December 31, 2020, all the amounts had been received”.
Gulfslope has no legal proceedings or actions of any kind currently or pending against them. To my knowledge there never has been.
There you have it.
Mrs. Smith
One of the things I wanted to verify on the 10-Q was who ultimately made the annual ‘Delay Rental’ payments on the Tau BOEM leases. Evidently, Delek is engaged in participating in their 75% working interest as the annual Delay Rental payments were not made by Gulfslope’s fairy Godmother.
Mrs. Smith
Regarding the point that GSPE shares are not responding to oil price increases, something that occurred to me a while back is that, out of the billion or so shares of GSPE stock, only a few hundred thousand shares are ‘in play’ on a consistent basis.
The vast majority of shares are stable and not traded. Probably held by principal investors and the original friends and family folks. These are the people that will have John Sietz’s phone number. And he will take their calls. Of course we cannot know the content of what these calls entail, but the bottom line is that those shares are not being offered for purchase, so whatever the context is, it does not cause sales.
It would not surprise me to find out that the several hundred thousand shares that are consistently in play are the same shares that change hands over and over again, and possibly among the same group of buyers and sellers. And possibly that pool of shares is constantly dwindling because some of the purchasers will hold on to the stock once they gain possession.
The truth of the matter is that with only these couple hundred thousand shares of GSPE stock, and due to the lack of news, it is easier to influence the share price lower than to influence it higher. But those gyrations do not affect the vast majority of the shares. And since those movements do not seem to reflect the sentiments of the majority of the shareholders, I concluded that, as long as it is only this small number of shares moving among a relatively small number of individuals, I would not really pay that much attention to it.
That is just me. Others may have a much different level of risk tolerance. And if the daily volume was to increase to 100 million shares per day or so, that would certainly get my attention. Mostly because for that to happen will require very good news since really bad news will not result in that many buyers, even with a generous number of shares for sale at a greatly reduced price…
Now we just need for the Tau 2 well to get drilled and be successful.
Mrs. Smith
US Oil and Gas Rig Count up 10 reflecting 645 rigs as of 2/18/2022. GOM Offshore Rig Count decreased by 4 from the previous week and is currently showing 12 rigs. Gulfslope’s Tau prospect is located in GOM Louisiana Offshore waters.
https://rigcount.bakerhughes.com
https://rigcount.bakerhughes.com/static-files/bb8de1d3-3e3a-4ad1-9799-750e2840e634
WTI $91.62/bbl - March Contract, 12:28 pm CDT 2/18/2022: https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 2/17/2022 Close
Crude Oil ($/barrel) Percent Change
WTI $91.78 -2.2
Brent $95.28 -2.2
Louisiana Light $94.18 -2.
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
API Appeals Gulf of Mexico Lease Sale Ruling - Source: API News Release
https://www.api.org/news-policy-and-issues/news/2022/02/08/api-appeals-gulf-of-mexico-lease-sale-ruling
WASHINGTON, February 8, 2022 – The American Petroleum Institute (API) today filed a notice of appeal with the U.S. Court of Appeals for the D.C. Circuit of the decision by the D.C. District Court invalidating the results of the only federal lease sale for natural gas and oil held in 2021. The sale generated $198,511,834 in total bids, and the revenues received are directed to the U.S. Treasury, state and local governments, the Land and Water Conservation Fund and the Historic Preservation Fund.
“Today we’re taking action to preserve American energy leadership and ensure that development in the Gulf of Mexico can continue to play a critical role in meeting the nation’s energy needs, while generating billions in revenue for critical conservation programs,” API Senior Vice President for Policy, Economics and Regulatory Affairs Frank Macchiarola said. “At a time of rising energy costs and heightened geopolitical tensions, the misguided decision to cancel the only lease sale held last year is contributing to significant uncertainty for U.S. natural gas and oil producers and limiting access to the affordable, reliable energy that’s needed here in the U.S. and around the world. We call on the Department of Interior to join us in this effort and appeal the court’s ruling, which overlooked the comprehensive environmental analysis that the Bureau of Ocean and Energy Management conducted as part of the NEPA process prior to the lease sale, including careful consideration of the emissions impacts of reasonable alternatives.”
An Obama-era report analyzing the effects of offshore leasing restrictions found that U.S. greenhouse gas emissions will be little affected and could increase slightly if foreign imports increased in the absence of new U.S. offshore leasing and production. The report cites foreign energy sources would substitute for reduced American offshore supply, and that increased production and subsequent transport of foreign oil would lead to higher GHG emissions than energy produced here in the United States.
API represents all segments of America’s natural gas and oil industry, which supports more than 11 million U.S. jobs and is backed by a growing grassroots movement of millions of Americans. Its nearly 600 members produce, process and distribute the majority of the nation’s energy, and participate in API Energy Excellence®, which is accelerating environmental and safety progress by fostering new technologies and transparent reporting. API was formed in 1919 as a standards-setting organization and has developed more than 700 standards to enhance operational and environmental safety, efficiency and sustainability.
“API Appeals GOM Lease Sale Annulment’, By Blake Wright, Journal of Petroleum Technology, February 10, 2022.
https://jpt.spe.org/api-appeals-gom-lease-sale-annulment
The industry group called the decision by the court “misguided” and said it will result in significant uncertainty for Gulf of Mexico producers.
The American Petroleum Institute (API) filed a notice of appeal on 8 February with the US Court of Appeals for the DC Circuit of the decision by the DC District Court invalidating the results of the only federal lease sale for natural gas and oil held in 2021. The sale generated $198.5 million in total bids, and the revenues received are directed to the US Treasury, state and local governments, the Land and Water Conservation Fund, and the Historic Preservation Fund.
“Today we’re taking action to preserve American energy leadership and ensure that development in the Gulf of Mexico can continue to play a critical role in meeting the nation’s energy needs while generating billions in revenue for critical conservation programs,” said Frank Macchiarola, API senior vice president for policy, economics, and regulatory affairs. “At a time of rising energy costs and heightened geopolitical tensions, the misguided decision to cancel the only lease sale held last year is contributing to significant uncertainty for US natural gas and oil producers and limiting access to the affordable, reliable energy that’s needed here in the US and around the world.”
API said a 2016 report by the US Bureau of Ocean Energy Management analyzing the effects of offshore leasing restrictions found that US greenhouse-gas (GHG) emissions will be little affected and could increase slightly if foreign imports increased in the absence of new US offshore leasing and production. The report said foreign energy sources would substitute for reduced American offshore supply, and that increased production and subsequent transport of foreign oil would lead to higher GHG emissions than energy produced in the US.
“We call on the Department of Interior to join us in this effort and appeal the court’s ruling, which overlooked the comprehensive environmental analysis that the Bureau of Ocean and Energy Management conducted as part of the NEPA process prior to the lease sale, including careful consideration of the emissions impacts of reasonable alternatives,” added Macchiarola.
Last month, a US judge nullified the sale of Gulf of Mexico (GOM) offshore tracts that were part of Federal Lease Sale 257 held in November and ordered regulators to take a deeper look at the potential impacts on climate. US District Judge Rudolph Contreras in Washington, DC vacated the lease sale in a 67-page decision that found that the US Interior Department underestimated the climate impacts of the leases and doing a further analysis wouldn’t overly harm the companies seeking the leases.
Industry groups and oil companies argued that since the sealed bids have been opened and publicly read, there would be no way to “redo” the sale fairly as all the players now know which leases each were after.
‘La. Court Rejects Biden Carbon Emissions Cost Measure in Permits, Regs’, By Mary B. Powers, Engineering News-Record (ENR.com) - February 14, 2022
https://www.enr.com/articles/53603-la-court-rejects-biden-carbon-emissions-cost-measure-in-permits-regs
A federal district court judge in Lake Charles, La. has ‘barred’ the Biden administration from using a hefty increase in the value of the “social cost” of carbon emissions when taking actions such as granting facility permits and setting new regulations. Agencies are still required to consider the climate impacts of their regulations, however.
Ten states challenged President Joe Biden’s January 2021 executive order directing federal agencies to capture the full costs of greenhouse gas emissions as accurately as possible, including global damage. The order reversed the Trump administration decision to cut the social cost of carbon to $7 or less per metric ton—temporarily restoring the cost figure to the Obama-era level of $51 per metric ton while it prepared to release a new cost figure, expected in coming weeks.
Federal Judge James Cain agreed with the states that the higher cost would harm their ability to purchase affordable energy and simultaneously decrease their revenue from fossil energy lease sales. “Specifically, Louisiana will be directly harmed by the reduction of funds necessary to maintain the state’s coastal lands,” Cain, a Trump appointee, said in his 44-page decision.
The temporary ban only considers the requirement of federal agencies to consider global effects of greenhouse gases, the judge said, while also noting that Biden’s order did not comply with the federal Administrative Procedures Act.
Jim Krane and Mark Finley, energy fellows at Rice University, noted other ways to account for the costs of climate change. “A carbon tax is more straightforward and effective, but tougher to enact because it requires Congress to act,” they said in an opinion for the Conversation, a non-profit group. The tax would dissuade people from burning fossil fuels.
A marketplace for companies to trade emissions, cap-and-trade programs, are another form of carbon pricing, Krane and Finley said.
Louisiana Attorney General Jeff Landry claimed victory. “While our fight is far from over, I am pleased the court granted preliminary relief against the President’s unacceptable and unauthorized executive overreach,” he said in a statement.
Other states joining the complaint were Alabama, Florida, Georgia, Kentucky, Mississippi, South Dakota, Texas, West Virginia and Wyoming.
A Missouri federal court last year struck down a similar suit by conservative states, ruling they did not have standing to sue.
The administration had not issued a statement on the ruling or on its intent to appeal by ENR posting time.
API Monthly Statistical Report ‘MSR’, Released 2/17/2022. API Statistics Department & Office of the Chief Economist
For Notable Chart Details and Data By Section see ‘MSR’ pdf link: https://www.api.org/-/media/Files/News/2022/02/17/API-Monthly-Statistical-Report-Jan-2022.pdf
Petroleum Facts at a Glance: https://www.api.org/-/media/Files/News/2022/02/17/Petroleum-Facts-at-a-Glance-January-2022.pdf
EXECUTIVE SUMMARY:
Divergence was a recurrent theme in January with the strongest U.S. petroleum demand for the month of January on record since 1963, yet relatively flat crude oil production that remained down by 1.3 million barrels per day (mb/d) compared with its highest levels in November and December 2019. With demand having outpaced supply, refiners drew down U.S. crude oil inventories to their lowest level for January since 2015.
Consequently, U.S. crude oil imports rose by 0.2 mb/d for the month, and the U.S. was a net importer of 1.6 mb/d of total petroleum in January. With this combination of demand that outpaced supply, historically low inventories, and petroleum net imports at their highest level in nearly three years, market fundamentals translated into some of the highest oil and motor fuels prices since 2014.
January also marked a couple of records:
• January had the highest amount of demand for other oils – that is, intermediate products in refining and petrochemicals from which products like medical plastics and packaging are made – for any month since 1965, representing nearly one-third of U.S. petroleum demand.
• U.S. refined product exports decreased by 23.4% m/m (1.0 mb/d) from December and 31.4% y/y (1.7 mb/d) compared with Jan. 2021.
Both records could be due in part to pandemic-related effects. However, the relative dearth of domestic crude oil production appears to have eroded the feedstock advantage of many U.S. refiners, which in turn reinforced lower refinery throughput and capacity utilization rates.
Leading economic indicators remained mixed. API’s Distillate Economic IndicatorTM suggested solid growth of U.S. industrial production and broader economic activity (please see the following chart for details), However, the University of Michigan’s consumer sentiment index fell to its lowest level in a decade, and this has historically related to weaker consumer spending.
Demand
• Strongest U.S. petroleum demand for the month of January on record since 1963.
– Motor gasoline demand returned to the middle of its 5-year range.
– Trucking spurs strongest distillate demand since Jan. 2018.
– Jet fuel demand within 10% of its Jan. 2019 level.
– Residual fuel oil demand 2nd highest since Apr. 2018.
– Record high other oils’ demand of 7.0 mb/d.
Prices & Macroeconomy
• Highest crude oil and gasoline prices since 2014.
• Leading indicators suggest industrial growth, but sharply lower consumer sentiment.
Supply
• U.S. crude oil up by 0.1 mb/d m/m but still down by 1.3 mb/d from its highest levels in 2019.
International trade
• Record drop in U.S. refined product exports spurs the highest petroleum net imports in 30 months.
Industry operations
• Refinery inputs and capacity utilization decreased.
Inventories
• Lowest crude oil inventories since Aug. 2018; historically low refined product inventories.
PETROLEUM FACTS AT A GLANCE – February 2022 RELEASE:
1. Total U.S. supply of crude oil, natural gas liquids and other liquids in January 2022: 18,437,000 b/d, up by 1,113,000 b/d compared with January 2022 (January 2021: 17,324,000 b/d) [API]
2. U.S. crude oil production in January 2022: 11,625,000 b/d (of which 445,000 b/d was Alaskan) (January 2021: 11,056,000 b/d). U.S. production of natural gas liquids in January 2022: 5,692,000 b/d (January 2021: 5,188,000 b/d). [API]
3. Total petroleum products delivered to the domestic market in January 2022: 21,619,000 b/d (January 2021: 18,595,000 b/d). [API]
4. U.S. petroleum exports in January 2022: 6,731,000 b/d (January 2021: 8,729,000 b/d). [API]
5. U.S. petroleum trade balance expanded by 2,388,000 b/d to imply January 2022 net imports of 1,574,000 b/d (January 2021: 814,000 b/d net exports). [API]
Oil inventories increased by 1.1 million barrels - EIA Weekly Petroleum Status Report, Release Date: 2/16/2022.
Full Report with Graphs: https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
WTI $91.94/bbl - March Contract, 12:33 pm CDT 2/17/2022: https://oilprice.com/oil-price-charts/#WTI-Crude
Summary of Weekly Petroleum Data for the week ending February 11, 2022
HIGHLIGHTS:
U.S. crude oil refinery inputs averaged 14.9 million barrels per day during the week ending February 11, 2022 which was 0.7 million barrels per day less than the previous week’s average. Refineries operated at 85.3% of their operable capacity last week. Gasoline production decreased last week, averaging 8.8 million barrels per day. Distillate fuel production decreased last week, averaging 4.6 million barrels per day.
U.S. crude oil imports averaged 5.8 million barrels per day last week, decreased by 0.6 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.4 million barrels per day, 9.3% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 555,000 barrels per day, and distillate fuel imports averaged 437,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 1.1 million barrels from the previous week. At 411.5 million barrels, U.S. crude oil inventories are about 10% below the five year average for this time of year. Total motor gasoline inventories decreased by 1.3 million barrels last week and are about 3% below the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories decreased by 1.6 million barrels last week and are about 19% below the five year average for this time of year. Propane/propylene inventories decreased by 5.9 million barrels last week and are about 17% below the five year average for this time of year. Total commercial petroleum inventories decreased by 9.9 million barrels last week.
Total products supplied over the last four-week period averaged 22.1 million barrels a day, up by 11.9% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 8.6 million barrels a day, up by 8.0% from the same period last year. Distillate fuel product supplied averaged 4.5 million barrels a day over the past four weeks, up by 4.5% from the same period last year. Jet fuel product supplied was up 27.7% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $93.10 per barrel on February 11, 2022, $0.83 above last week’s price and $33.60 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $2.812 per gallon, $0.086 more than last week’s price and $1.100 above a year ago. The spot price for No. 2 heating oil in the New York Harbor was $2.860 per gallon, $0.084 above last week’s price and $1.199 over a year ago.
The national average retail regular gasoline price increased to $3.487 per gallon on February 14, 2022, $0.043 above last week’s price and $0.986 over a year ago. The national average retail diesel fuel price increased to $4.019 per gallon, $0.068 per gallon more than last week’s price and $1.143 higher than a year ago.
Thank you for the AIS tracking update. Possibly the 144 is headed into the mouth of the Mermentau River. Shipyard on the ICW?
Mrs. Smith
Yes, indeed Mr. Holmes, “the game is still afoot”.
By the way, I did notice a few additional items on the 10-Q, but I am not ready to discuss without further review.
Mrs. Smith
Did a quick scan and notice some “new” verbiage off GSPE’s 10-Q compared to their previous 10-K. Gulfslope “is actively finalizing the permitting of the Tau #2 well”, and “We are currently engaged in the process of seeking additional partners for the drilling of the Tau #2 well”.
Just to clarify, Gulfslope’s BOEM lease G36121 Ship Shoal (SS) Block 351 does not expire for almost four (4) more years. During the drilling of Tau 1 Gulfslope extended this lease for an additional three (3) years, which was two years before the original five (5) year lease expired. The original lease is 2017 - 2022, with an additional three years extended through October 31, 2025.
By the end of this week, I should have additional time to finish my review of the 10-Q.
It appears this little Texas oil and gas exploration company is still hanging in there.
Mrs. Smith
You are 100% correct on this one.
Understandable how the rig count would initially increase for onshore wells that are being re-entered or completed. But the USA will have to replenish it’s oil and gas reserves over the next 20 years, and research shows the next big oil and gas discoveries in the USA will have to come from offshore basins. Important to note below: Due to better permeability and higher porosity (higher flow rates) these offshore fields provide the opportunity to deplete the reservoirs with fewer wells. Less wells and more profits would be a win, win for GOM working interest partners.
Excerpt from my previous post number 5375:
“The Gulf of Mexico holds huge untapped offshore oil deposits that could help power the U.S. for decades. The energy super basin's longevity, whose giant offshore fields have reliably supplied consumers with oil and gas since the 1960s, is the result of a remarkable geologic past -- a story that began 200 million years ago among the fragments of Pangea, when a narrow, shallow seaway grew into an ocean basin, while around it mountains rose then eroded away. That's because the offshore -- where many of the giant fields are located -- offers industry a way of supplying the world's energy with fewer wells, which means less energy expended per barrel of oil produced. The processes that shaped the basin also deposited and preserved vast reserves of oil and gas, of which only a fraction has been extracted. Because of its geological history, the Gulf of Mexico remains one of the richest petroleum basins in the world. Despite 60 years of continuous exploration and development, the basin's ability to continue delivering new hydrocarbon reserves means it will remain a significant energy and economic resource for Texas and the nation for years to come, said lead author John Snedden, a senior research scientist at the University of Texas Institute for Geophysics (UTIG). “
Something to ponder.
By the way, I will be looking for more clues on Gulfslope’s upcoming 10-Q, and I do have a few important items I will be looking for. Wish me luck.
Mrs. Smith (Nancy Drew)
For the past ten years oil and gas exploration has steadily declined. As a whole, the industry has been contracting for the last seven years. But over the last two it has the beginnings of a big time rebirth.
Global demand for oil and gas is forecast to continue rising in 2022 - 2023. Crude pricing is predicted to keep pace and some are saying prices will go above $125/bbl, even without disruptions due to wars or conflicts.
Years of underinvestment in the global oil and gas sector has played a big part in why the industry is now struggling to grow its reserves and production. Even though OPEC+ is adding back the production that was shut-in during the 2020 economic lockdowns, that additional supply will be drained by the end of the year. Do not forget, OPEC has not been able to meet it’s monthly production targets for many months now and may not in the future either.
Russia does not have the ability to add significantly to it’s energy infrastructure. Besides Saudi Arabia, the other members of OPEC do not have the reserves to do it, and the Saudi’s seem to lack the political desire. Therefore the USA will play a major role in suppling the world’s energy needs. Not just from the onshore shale basins, but the offshore GOM super basins as well. The fact is oil and gas will remain a fundamental and critical part of the global energy mix for the next several decades. Remember, when there is potential for huge oil and gas industry profits you will see increased Capex spending.
One of the hurdles to get over is the current administration’s attitude towards energy production in the USA. This is causing institutional investors to hesitate to fund the projects. Once the political situation is overcome, look for those investors to begin funding the increased activity necessary to meet the global demand. GSPE will be part of this process.
Mrs. Smith
US Oil and Gas Rig Count up 22 reflecting 635 rigs as of 2/11/2022. GOM Offshore Rig Count remained unchanged from the previous week and is currently showing 16 rigs. Gulfslope’s Tau prospect is located in GOM Louisiana Offshore waters.
https://rigcount.bakerhughes.com
https://rigcount.bakerhughes.com/static-files/1dc3af9e-4280-4928-87b4-9a02df4b9341
WTI $93.66/bbl - Up 4.21% - March Contract, 15:18 pm CDT 02/11/2022: https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 2/10/2022 Close
Crude Oil ($/barrel) Percent Change
WTI $89.83 +0.3
Brent $96.37 +1.5
Louisiana Light $92.18 +0.
https://www.eia.gov/todayinenergy/prices.php