Special guest speaker Rusty Braziel discussed the current marketing situations in the United States and their cause and effects on price increase trends and production highs and lows. He also hit closer to home talking about the fluctuations the Bakken has seen.
Braziel is the founder and executive chairman of RBN Energy. He is known for his expertise in the field of marketing, trading, and purchasing of energy commodities, along with his ability to bring clarity to the constant influx of information coming from energy markets.
“What we are going through in the markets these days is like nothing we have ever seen,” says Braziel. “We have a war, we have high prices, we have weaponized energy, we have pandemic recovery from COVID-19, we have an energy transition that threatens to change a whole lot, we have an economy that is looking like we could be dealing with a potential recession, we have wacky politics, and of course we have this thing called producer discipline that has a lot of producers that are not grilling as much at these prices as we would have thought they would, so it is a really different market.”
Braziel spoke on the spikes of prices seen over the past few years. He said, “This kind of volatility that we have seen over the past couple years is the way it is going to look for a long time to come.”
He explained that crude oil production dropped by over two million barrels a day during COVID-19 and is still down by over a million since before the pandemic. The rate over the past six months has remained flat. NGL production (propane, butane, ethane, and natural gas) has been trending in a different direction with a 20% increase since before the pandemic.
More talking points and trends included:
“Over the past three weeks, natural gas production in the United States has been hitting all-time records, and by all-time records I mean 100 BCF a day in the lower 48 states, so production is up.”
“About two million barrels of propane a day produced in the United States gets exported with the vast majority going to Asia. Except for unusual circumstances, the price of propane is almost totally dependent on what happens to International markets. If these markets do well, propane producers in the U.S. could do well.”
“Over the past six years, exports of LNG have increased from about zero to about 14% of all production in the United States.”
Braziel started and ended his discussion in the way he always does, which is factoring in a rock and roll song as the theme of his talking points. This time he used Born to Be Wild by Steppenwolf. His ending statement was, “The moral to the Bakken story and the rest of what is going on in the global energy markets is volatility, volatility, volatility. These markets are Born to Be Wild, and that’s not going to change anytime soon.”
