Frac Sand Shortages and Ngas prices - May 18

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In the news

Short sand supplies will slow growth of US oil output. Journal of Petroleum Technology.
Shale oil producers in the US and Canada are likely to stick to their slow growth plans this year because they lack the sand, steel, drilling rigs, and pressure-pumping capacity required to grow faster. Demand outstrips supply in those four key sectors and is expected to remain the case into 2023 because service companies are not able, or willing, to pick up the cost of rapid growth. “The supply chain issues we are seeing now are one of the main limiting factors in US shale growth” said Ryan Hassler, senior analyst covering US and Canadian shale for Rystad. What is limiting growth is that adding capacity is costly, and it “is like every oilfield service company has run out of cash,” said Richard Spears, vice president of Spears and Associates.

Natural gas prices have already doubled this year. A hot summer could push them even higher. CNBC.
U.S. natural gas prices more than doubled since the start of the year, and this summer’s air-conditioning season could send them soaring by at least another 25%. “In the last month, there has not been a meaningful uptick in U.S. lower 48 states production,” said Matt Palmer, senior director North American natural gas at S&P Global Commodity Insights. “You’re seeing exports running full out on LNG; power burn from the power sector is really strong and layer in the heat we’re seeing and the expectation that the southern tier of the continent in May and June will see well above normal temperatures. That’s a recipe for higher prices.”