Last week, the markets were mostly stronger with the exception of both Kermit 100 and 40/70 mesh. The divergent behavior of the past few weeks between Kermit and northern white markets is slightly deceiving. One might assume that the combination of positive movement for FOB Odessa and the negative movement for FOB Kermit might suggest a shift in demand; however, this is not the case.
Seasonally, the mid-March conversation typically begins to turn to dwindling northern white stockpiles and questioning of wet plant start-up timing. This time last year, burgeoning demand conflated with diminished stockpiles and severe weather constraints, causing the market to spike, which subsequently opened the door for a perfect entrance by the early Kermit/Monahan’s producers…
Baker Hughes Rig Count map 03-01-19
This week was by far the strongest week over week movement in Kermit pricing since PanXchange began tracking pricing, which is encouraging given the overall negative tone in the market. We believe the jump in pricing is driven largely by the supply side of the market; however, some cyclical demand factors do come into play.