Permian frac sand prices continue to hold steady this week, with FOB Kermit 100m and 40/70m prices rising by $0.15 and $1.00 per ton each this week. The market for FOB Kermit 40/70m has tightened this week, with a slightly greater pickup in demand than expected relative to current production levels. This is evidenced by the widened 100m-40/70m spread at Kermit. FOB Odessa Northern White sand prices remained flat again this week, suggesting continued limited demand for Northern White products in the Permian.
Permian frac sand prices continue to hold steady on thin volume this week, with FOB Kermit 100m and 40/70m prices up by $0.25 per ton each this week. FOB Odessa Northern White sand prices remained flat this week.
In North Dakota, a used Caterpillar Oil swabbing rig which would cost over $500,000 new was sold for $27,500 (a 95% discount) in just 51 seconds during a live online auction for oilfield equipment in early June.
Permian frac sand prices have bounced off of the lows, as FOB Kermit 100m and 40/70m prices rose by 40 cents and 50 cents per ton respectively over the last week.
In the Permian, despite hearing frac sand supplier chatter regarding a pickup in prices and activity later in June and/or into July, Permian frac sand prices have furthered their decline. FOB Kermit 100m and 40/70m prices fell by 7% over the last week, given the news that despite oil prices rising to nearly $40 per barrel, the industry has not yet seen any significant response in frac spread count, which currently sits at 58 frac crews for the week ending June 5, 2020. The Baker Hughes US onshore rig count has fallen to a record low for a 5th straight week, currently sitting at 284 active rigs. It is the lowest ever, according to data going back to 1940. The rig count currently sits 71% below the count this time last year.
In the Northern White market, 100m, 40/70m, and 30/50m mine gate prices remained relatively stable, falling by less than 1% each this week across the board. FOB Northern White Odessa 40/70m rose by 1%, amid glimmers of optimism in the Permian basin as WTI prices continue their slow, but steady climb.
Advancements in technology are best implemented under the correct context, and in oil and gas, a significant talking point with respect to context is volatility; especially with regards to the international trade standoff started by Russia and Saudi Arabia, as well as the hit to global crude oil demand brought into being via the coronavirus pandemic. With the recent volatility in energy markets, we choose to introduce three advancements in technology (one of which is our own) that are a good fit for the boom and bust cycles of oil and gas. Amazon Web Services Cloud Computing, Epic’s DH350 mobile drilling rig, and PanXchange Sand®.
In the Northern White market, FOB Northern White Odessa 40/70m, as well as 100m, 40/70m, and 30/50m mine gate prices remained relatively stable, falling by less than 1% each this week across the board.
Virtually every physical commodity market (even specialty markets such as industrial hemp and specialty sand for the energy industry) is currently experiencing a significant oversupply scenario.
The team at PanXchange wanted to shed some perspective on how calamitous of a downturn this has been for the US OFS and frac sand markets.