Last updateFri, 05 Jun 2020 3pm

Loose Valve Caused ExxonMobil Refinery Fire

An internal report from ExxonMobil showed that the Baton Rouge, LA refinery fire on Feb. 11 “was caused by air getting into a line containing hydrocarbon material in a pipe rack and igniting,” WAFB reports. That resulting fire caused the pipe to leak and then affected other lines nearby.

“ExxonMobil says it will ensure the valves associated with the air getting into the line are locked in a closed position to prevent it from happening again.”

U.S. Water Business Hurt by Drilling Slowdown

By the end of 2022, produced water from oil and gas wells in onshore U.S. plays is expected to fall to nearly 20 billion barrels annually, reflecting an oilfield water market valued at $28 billion, according to analysis by IHS Markit. While still considerable, these volumes represent a decline of nearly 4% from 2019 volumes, driven by plunging oil prices and falling oil demand due, in part, to COVID-19 impacts.

“After the recent oil price collapse and demand destruction for oil due to COVID-19 and other market factors, we now expect the total water management market size in the U.S. to drop about 20% below our previous estimates,” said Paola Perez-Peña, principal research analyst at IHS Markit and lead author of its water market analysis. “The dramatic decrease in drilling and completion (D&C) activity in the next two years will significantly reduce frack water volumes, while the decline in produced water volumes will be less severe.”

EIA Cuts 2020, 2021 U.S. Oil Production Forecasts

The U.S. Energy Information Administration (EIA) forecasts significant decreases in U.S. liquid fuels demand during the first half of 2020 as a result of COVID-19 travel restrictions and significant disruptions to business and economic activity. EIA expects that the largest impacts will occur in the second quarter of 2020, before gradually dissipating over the course of the next 18 months.

Energy M&A Activity in U.S. Down Big in First Quarter

Enverus has released its first quarter summary of M&A activity, which revealed a substantial collapse as oil prices plunged to 18-year lows. Only $770 million in U.S. upstream deals were completed during the first quarter of 2020—less than one-tenth of the ~$8 billion average for Q1 from 2010-2019. Virtually all deal activity occurred before the global COVID-19 pandemic and production hike from Saudi Arabia slammed markets in early March.

Chemical Activity Barometer Falls Sharply in March

The Chemical Activity Barometer (CAB) from the American Chemistry Council fell 2.6% in March on a three-month moving average basis following a downwardly revised 0.1% gain in February. On a year-over-year basis, the barometer fell 1.3% in March.

The unadjusted data shows an 8.0% decline in March following a 1.1% decline in February and a 1.2% gain in January. The unadjusted decline in March is the largest in the post-World War II period. The diffusion index slumped to 27% in March. The diffusion index marks the number of positive contributors relative to the total number of indicators monitored. The CAB reading for February was revised downward by 1.13 points and that for January was revised downward by 0.38 points.

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