Crude prices on the NYMEX fell below $50 a barrel briefly on Monday, but managed to close the trading day at $50.04. Tuesday morning the price fell to $48.47 in early electronic trading.
The really bad news is the price that Plains Marketing is offering to pay for crude oil produced in the Bakken shale play. Williston Basin Sweet (equivalent to WTI) fetched just $33.44 a barrel on Monday; Williston Basin Sour fetched just $24.33. No other grade of crude on the Plains price bulletin was priced lower than Williston Sour.
In our earlier look at the top producers in the Bakken, we noted the added transportation costs of $19 a barrel for Bakken crude headed by rail to the east coast and $11 a barrel for crude headed to the Gulf coast by pipeline. Adding the transportation cost to east coast refineries to the posted price of $33.44 gives a price per barrel at the refinery of $52.44. Because east coast crude is benchmarked to Brent, not WTI, the price paid was 1.2% below Monday’s closing price of $53.11 per barrel of Brent.
ALSO READ: Oil Prices Race Toward $20
The calculation for Bakken crude headed for the Gulf coast is similar, though slightly worse. The impact on Bakken producers’ stock was immediate and unpleasant. Here is a look at just three.
Whiting Petroleum Corp. (NYSE: WLL) is the largest producer in the Bakken, following its acquisition of Kodiak Oil & Gas. Whiting’s shares dropped more than 10% on Monday to close at $29.74, in a 52-week range of $24.13 to $92.92. In the third quarter of 2014, Whiting’s average sales price for a barrel of crude was $86.78. That number is ancient history.
Continental Resources Inc. (NYSE: CLR) dropped nearly 11% on Monday. Continental’s average selling price in the third quarter of last year was $85.49. Continental’s stock closed on Monday at $34.65, in a 52-week range of $30.06 to $80.91.
Hess Corp. (NYSE: HES) produces about 85% of its 74,000 daily barrels in the Bakken. The company’s average selling price in the third quarter was $86.01. The company’s stock dropped nearly 5% on Monday to close at $70.55, in a 52-week range of $63.80 to $104.50.
The outlook for Tuesday’s trading session does not offer a lot of reason to hope for a rebound.
ALSO READ: Credit Suisse Mixed on MLPs for 2015
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
