US crude stockpiles fell by 1.6 million barrels last week, beating analyst expectations for a 1.8-million-barrel increase, according to the Energy Information Administration. Gasoline supplies climbed by 261,000 barrels, while distillate inventories were down by 2.4 million barrels.
An open season for Plains All American's Cactus II pipeline has ended, with the company securing long-term shipper contracts totaling 525,000 barrels per day -- representing about 90% of the system's initial capacity of 585,000 barrels per day. The 515-mile pipeline system from the Permian Basin to Corpus Christi, Texas, should become operational in the third quarter of 2019.
EQT, the largest US natural gas producer, plans to split its midstream business from upstream operations in a move that would create the third-largest US natural gas gathering company. The spinoff decision was welcome news for EQT shareholders, who believe the move would result in better rewards for them.
Energy Transfer Partners is exploring opportunities to develop a new crude oil pipeline from the Permian Basin to Nederland, Texas, a company executive said, without providing additional details. ETP also announced that the first phase of its Permian Express 3 pipeline entered service in the fourth quarter of 2017.
Before the oil downturn, higher oil prices would cause the US economy to slow down, but as the second shale boom turned the US into a major oil producer and soon-to-be net exporter of energy, the trend is showing signs of reversal. These days, the US economy is growing in tandem with oil prices as the increase in energy investment, production and jobs helps offset the harmful effects higher oil prices have on consumers.
In their quest for immediate returns, investors may force US shale drillers to scale back expansion plans, limiting their ability to capitalize on the current oil price rally that may have resulted in heftier payouts for shareholders in the long term. Shale players such as Anadarko Petroleum and Pioneer Natural Resources have seen their market values rise after announcing higher dividends this year, while the shares of companies that so far failed to improve returns have plunged at least 19% in the past 12 months.
Oil and natural gas drillers attending the first annual Permian Basin Water in Energy Conference called for increased use of recycled water in Permian drilling operations to avoid depleting the region's limited supplies of fresh water. To achieve this goal, operators should join forces and coordinate drilling and completion schedules to prevent frack hits and minimize water disposal at neighboring wells, says Tyler Hussey, water resources engineer with Apache.
Permian Basin shale producers including Encana and Devon Energy are pioneering a new drilling technique called cube development, which involves drilling at least a dozen wells off the same pad that simultaneously tap the multiple layers of shale rock beneath a driller's acreage. Supporters say this approach can save money in the long term thanks to improved resource recovery, but other Permian drillers are not as keen to adopt this technique, citing logistical challenges, high initial costs and difficulties in diagnosing wells.
The premier program offered by API WorkSafe is the Service Station Contractor Safety Program that identifies contractor personnel who have passed a standardized examination covering the latest service station industry safety practices, based on API Recommended Practice 1646, Safe Work Practices for Contractors Working at Retail Petroleum/Convenience Facilities. The program provides awareness-level training on key safety issues found at petroleum retail job sites. Coming soon: New interactive course covering API RP 1646, 2nd Edition. Learn more.
2018 API International Trade and Customs Conference, April 8-10, Savannah, Ga.
With so many dramatic changes domestically and internationally, the petroleum industry and its affiliates face new challenges and remarkable opportunities. Energy policy proves increasingly paramount with direct regard to economic development and trade vitality. Join API in April 2018 for the annual Customs Conference. With a wide range of speakers from relevant backgrounds, the 2018 conference seeks to tackle subjects that include foreign trade agreements, industry updates, sanctions and much more. Don't miss this exciting opportunity to learn and connect with industry members. We'll see you in Savannah. For more information, visit the event site.
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Growth is an erratic forward movement: two steps forward, one step back. Remember that and be very gentle with yourself.