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U.S. Rig Count Falls Slightly As Canada’s Rig Count Tanks

December 30, 2017

U.S. Rig Count Falls Slightly As Canada’s Rig Count Tanks

Eagle ford rig

The number of active oil and gas rigs dipped this week, according to Baker Hughes data, decreasing by 2 rigs, bringing the total rigs to 929 rigs, which is an addition of 271 rigs for the 2017 calendar year.

The number of oil rigs in the US stayed the same for the second week in a row, while the number of gas rigs decreased by 2. The number of oil rigs stands at 747 versus 525 a year ago. The number of gas rigs in the US now stands at 182, up from 132 a year ago.

At 10:04pm EST, the price of a WTI barrel was down $0.20 (+0.33%) to $60.04—a 2.5-year high, while the Brent barrel was trading up $0.18 (+0.27%) to $66.34, largely on the back of weeks of falling US crude oil inventory, and a surprise decrease in US crude oil production.

US crude oil production has been on a steady upward trajectory for nearly a quarter, which has previous limited price spikes that came on the back of the Forties shutdown and a pipeline bombing in Libya. But US crude oil production for the week ending December 22 came in at 9.754 million barrels per day—a hair off the previous week’s high, and breaking a nine-week production increase in the US. While the 9.754-million-barrel-per-day production level is still the second highest, the fact that production didn’t increase for a tenth week bolstered confidence.

The most alarming news this week is Canada’s rig count, which saw a decrease of 58 oil rigs and 16 gas rigs.

The Permian basin rig count stayed flat this week, but stands at 134 rigs above this same week last year. Williston and Haynesville basins lost rigs this week, with DJ-Niobrara gained 3.

At 1:09pm EST, WTI was trading at $60.36 (+$0.52) with Brent trading at $66.82 (+$0.66).

U.S. Oil & Gas Rig Count Falls As Brent Breaks $60

October 28, 2017

U.S. Oil & Gas Rig Count Falls As Brent Breaks $60

Oil

As Saudi’s comments regarding the OPEC extension send the Brent Crude benchmark over $60 in mid-day trading for the first time in more than two years, oil and gas rigs in the United States fell for yet another week, according to Baker Hughes, dipping 4 rigs.

The total oil and gas rig count in the United States now stands at 909 rigs, up 352 rigs from the year prior, with the number of oil rigs in the United States increasing by 1 this week and the number of natural gas rigs decreasing by 5. Canada saw a decline of 11 in the number of active oil and gas rigs. The US oil rig count now stands at 737.

The spot price for WTI is also trading up to its highest level in six months, up 2.07% on the day at $53.73 at 12:30pm EST. Brent crude was trading up 1.61% at $59.99 at that time—more than $2 over last week’s close.

The price increase is largely thanks to Saudi Crown Prince Mohammed bin Salman’s non-specific backing of an extended OPEC deal, reassurances that the Aramco IPO is still on track, and his commitment to move the country beyond fossil fuels. Fears that the Iraqi vs. Kurd conflict may not find a quick end also lent support to prices.

US crude oil production was up for the week ending October 20, after falling by almost a million barrels daily for the week prior. Oil production for the week ending October 20 was 9.507 million barrels per day, as things return to normal post-hurricane.

At 20 minutes after the hour, WTI was trading at $53.77, with Brent crude trading at $60.02.

…click on the above link to read the rest of the article…

World’s No.1 Oil Trader: U.S. To See Final Oil Output Spike In 2018

October 10, 2017

World’s No.1 Oil Trader: U.S. To See Final Oil Output Spike In 2018

Oil

The best is yet to come for US oil production—but it will be a short-lived hurrah, according to Ian Taylor, head of oil trading giant Vitol.

US oil production has steadily increased throughout 2017 as US drillers regained their footing after the oil price crash. What started out at 8.946 million bpd of crude oil production in the first week of January has now reached an average of 9.561 million bpd as of September 29, according to the EIA.

The EIA is expecting US oil production to reach 9.8 million bpd in 2018, according to the latest Short Term Energy Outlook.

US crude oil exports, too, have taken the world by storm, particularly over the last couple of weeks, as traders seize an opportunity created by the extra wide spread between WTI and Brent, which as of the latter part of September, reached $7 per barrel, according to data provided by S&P Global Platts.

These US exports are now flooding the global market—a global market that is still oil-heavy as OPEC members—well, most OPEC members—continue to dutifully curb oil production to alleviate the overhang. That overhang is smaller today than it was in December 2016—in fact, 130 million barrels smaller, according to OPEC Secretary General Mohammad Barkindo, but is still 171 million barrels too heavy as of August.

Still, Vitol feels that the current U.S. crude oil production growth is unsustainable beyond 2018.

Vitol is anticipating an increase in US crude production of 0.5 to 0.6 million bpd in 2018, at which point the increase in production would cause cost inflation, rendering at least some of today’s current production projects unprofitable. And according to Vitol, some are barely profitable as it is.

“If you look at the economics on most of the big Permian players, not many of them make a lot of money,” Taylor said, speaking to Reuters.

For now, Vitol is expecting “boringly rangebound” prices, but eventually, the expected slowdown in production, along with “robust” demand growth, will inevitably push up prices past that stubborn $50-$60 level.

U.S. Oil Rig Count Continues To Collapse

September 16, 2017

U.S. Oil Rig Count Continues To Collapse

Bakken

The number of active oil and gas rigs in the United States fell this week by 8 rigs.

The total oil and gas rig count in the United States now stands at 936 rigs, up 430 rigs from the year prior, with the number of oil rigs in the United States decreasing by 7 this week and the number of gas rigs decreasing by 1. Canada, meanwhile, added 10 oil rigs for the week ending September 15.

Oil rigs in the United States now number 749—333 rigs above this time last year.

Although the number of oil rigs are still up significantly year on year, the increases slowed in the second quarter, and have reversed in the third. The first quarter 2017 saw 137 oil rigs added in the United States, while the second quarter 2017 saw 97 rigs added. In stark contrast, the third quarter, for which there are still two weeks to go, has seen the total number of rigs decrease by 7.

The spot price for WTI fell earlier on Friday, down 0.16 percent to $49.81 at 11:53am. Brent crude, however, was trading up 0.27 percent on the day at $55.62.

Prices have been volatile in August and so far in September, with WTI going as low as $45.58 on August 31, and as high as $50.50, which it reached yesterday—the highest level we’ve seen in six weeks—as global production declined 720,000 barrels per day in August compared to July, according to OPEC’s Monthly Oil Report. It was the first drop in four months.

(Click to enlarge)

At 10 minutes after the hour, WTI was trading at $49.69 with Brent crude trading at $55.40.

Cattle Deaths Spark Renewed Oil Drilling Controversy

February 4, 2016

Cattle Deaths Spark Renewed Oil Drilling Controversy

Following the mysterious death of seven cattle near an oil field in Kansas, public health authorities are investigating whether oil drilling could be the cause.

In late December, seven dead cattle were found near an oil field in the Cimarron National Grassland, Kansas, and authorities believe that cows inhaled something toxic, prompting them to deny public access to the 2,500-acre Cimarron National Grassland until at least May.

Six of the cattle were discovered together in a low-lying area, while a seventh was found a short distance away, with local veterinarians identifying the ingestion or inhalation of something toxic leading to pulmonary edema or fluid in the lungs as a possible cause, though the cause of death has not been officially declared.

More specifically, they suspect the cattle may have inhaled hydrogen sulfide—a toxic gas that can be released in the oil and gas drilling process. They haven’t pinpointed the cause officially, but it was enough to implement an emergency order to halt public access to the area for a prolonged period.

While the general public is denied access to the grassland, oil and gas companies operating in the Stirrup Oil Field area here are still operational, including Anadarko Petroleum, Merit Energy and Argent Energy.

“It is kind of a unique situation we’re dealing with and I’m honestly afraid we’ll never find the answer,” local veterinarian Tera Barnhardt told media.

It would not be the first mysterious cattle deaths tentatively linked to oil and gas drilling.

In 2012, 140 cattle were exposed to fracking wastewater in northcentral Pennsylvania when an impoundment was breached. Approximately 70 cows died, and the remainder produced only 11 calves, of which three survived. Another 17 cows died in Louisiana that same year after being exposed to spilled fracking fluid, according to Cornell University.

…click on the above link to read the rest of the article…

Oil Bust Could End Dollar Domination

January 15, 2016

Oil Bust Could End Dollar Domination

The US dollar survived the collapse of Bretton Woods in the ‘70s because its use in crude oil transactions made it the king of reserve currencies, but can it survive a collapse of petro dollars? Can the world survive the catastrophic geopolitical consquences that would follow?

There is an overriding belief that the U.S. dollar can hold onto its status as the world’s king reserve currency simply because of petro dollars. But in recent years, a serious threat to this system has developed—and the risk of the dollar being dethroned is very real.

The U.S. dollar has reigned supreme since the end of WWII, when the Bretton Woods system gave it is initial power. With Bretton Woods’collapse in 1971, oil became its new saviour and kingmaker as the U.S. dollar became the prime currency for crude oil transactions.

In 1973, the U.S. made a pact with the Saudi King to conduct all crude oil trades in U.S. dollars—in return for U.S. protection of its oil fields. Because of world hunger for crude, the demand for U.S. dollars experienced a similar, sustained hunger.

Related: $380 Billion In Upstream Projects Delayed As Oil Keeps Tanking

The major producers of crude oil had an abundance of dollars, which was recycled back into the system to purchase dollar-denominated assets. The consumers pay for crude oil in dollars; hence, they always have to keep a steady reserve of dollars, thereby maintaining a high demand for the the currency.

This is now under threat, and history risks being repeated.

The Bretton Woods system failed due to the over valuation of the dollar as spending increased over the war in Vietnam war and America’s Great Society programs.

…click on the above link to read the rest of the article…

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