Masters Of War

Come you masters of war You that build all the guns You that build the death planes You that build all the bombs You that hide behind walls You that hide behind desks I just want you to know I can see through your masks. You that never done nothin' But build to destroy You play with my world Like it's your little toy You put a gun in my hand And you hide from my eyes And you turn and run farther When the fast bullets fly. Like Judas of old You lie and deceive A world war can be won You want me to believe But I see through your eyes And I see through your brain Like I see through the water That runs down my drain. You fasten all the triggers For the others to fire Then you set back and watch When the death count gets higher You hide in your mansion' As young people's blood Flows out of their bodies And is buried in the mud. You've thrown the worst fear That can ever be hurled Fear to bring children Into the world For threatening my baby Unborn and unnamed You ain't worth the blood That runs in your veins. How much do I know To talk out of turn You might say that I'm young You might say I'm unlearned But there's one thing I know Though I'm younger than you That even Jesus would never Forgive what you do. Let me ask you one question Is your money that good Will it buy you forgiveness Do you think that it could I think you will find When your death takes its toll All the money you made Will never buy back your soul. And I hope that you die And your death'll come soon I will follow your casket In the pale afternoon And I'll watch while you're lowered Down to your deathbed And I'll stand over your grave 'Til I'm sure that you're dead.------- Bob Dylan 1963

Monday, January 18, 2021

global oil supply near December's demand; US distillates exports at a 40 mo low​; gasoline production at a 34 week low​

oil prices managed an increase for the tenth time out of the past eleven weeks despite a sharp selloff on Friday, as strength in equities, a weaker dollar, and strong Chinese demand bouyed prices...after rising 7.7% to a ten month high of $52.24 a barrel last week after the Saudis unilaterally cut their oil output, the contract price of US light sweet crude for February delivery opened higher on Monday but quickly turned lower as lockdowns spread and China saw its biggest daily increase in virus infections in more than five months, but came back to close a penny higher at $52.25 a barrel as pressure from a rising dollar and worries over a COVID-related hit to demand was overshadowed by optimism over prospects for near-term exports...oil prices started lower early Tuesday as traders remained concerned about climbing coronavirus cases globally, but turned higher to settle with a gain of 96 cents at $53.21 a barrel, as wall street rallied and the dollar weakened, raising the appeal of commodities priced in the currency....oil prices then rose overnightafter the API reported a surprisingly large crude inventory drawdown and hence opened higher Wednesday, but couldn't hold those gains even after the EIA also reported a larger than expected crude draw, ending down 30 cents at $52.91 a barrel after the U.S. dollar gained ground and inventories of gasoline and distillates rose more than expected...oil prices moved higher again on Thursday, boosted by a weaker dollar and bullish signs from Chinese import data and ended 66 cents, or 1.3%, higher at an 11 month high of $53.57 a barrel, buoyed by the ongoing Covid-19 vaccine rollout and expectations that the Biden administration’s proposed stimulus package would improve demand for crude...boosted by strong import data from China, oil prices opened higher on Friday, but quickly faded as the dollar rose and China ramped up lockdown measures to control its latest outbreak and tumbled more than 2% to end the session at $52.36 a barrel, down $1.21 on the day, but still up 12 cents on the week, as vaccine breakthroughs and Saudi Arabia’s earlier pledge to deepen output cuts continued to support prices...

natural gas price also saw a small increase this week as traders ​continue to bet that a polar air mass​ will arrive later this month....after rising 6.3% to $2.700 per mmBTU last week on forecasts for colder weather and greater heating demand later in January, the contract price of natural gas for February delivery opened 10 cents lower on Monday, following forecasts for mild weather and diminished heating demand, but rebounded in afternoon trading to finish 4.7 cents higher at $2.747 per mmBTU amid anticipation of a late-month Polar Vortex and a surge in frigid temperatures...natural gas prices surged 15 cents or more than 5%​​ early on Tuesday amid expectations for that intensifying cold air outbreak, but reversed in the afternoon when models showed “not quite as cold air into Western Canada, thereby pushing less impressive subfreezing air into the U.S. as well” in late January, with gas prices settling for a six-tenths of a cent gain at $2.753 per mmBTU...conflicting forecasts led to an erratic day of trading on Wednesday that saw natural gas prices swing between gains and losses several times before settling 2.6 cents lower at $2.727 per mmBTU, and then gas prices fell to their lowest in a week on Thursday on forecasts for milder weather and less heating demand over the next two weeks than was previously expected, even as the draw of ​natural ​gas from storage was larger than expected...on Friday, however, forecasts shifted back to greater expectations for a severe polar outbreak and stronger heating demand by late January, boosting gas prices by 7.1 cents to $2.737 per mmBTU, thus finishing 3.7 cents, or 1.4% higher on the week..

the natural gas storage report from the EIA for the week ending January 8th indicated that the quantity of natural gas held in underground storage in the US decreased by 134 billion cubic feet to 3,196 billion cubic feet by the end of the week, which left our gas supplies 126 billion cubic feet, or 4.1% higher than the 3,070 billion cubic feet that were in storage on January 8th of last year, and 218 billion cubic feet, or 7.3% above the five-year average of 2,978 billion cubic feet of natural gas that have been in storage as of the 8th of January in recent years....the 134 billion cubic feet that were drawn out of US natural gas storage this week was more than the average forecast of a 123 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, ​and ​still more than the 126 billion cubic feet withdrawal from natural gas storage seen during the corresponding week of a year earlier, but it was quite a bit less than the average withdrawal of 161 billion cubic feet of natural gas that have typically been pulled out of natural gas storage during the same week over the past 5 years​...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending January 8th indicated that despite an increase in oil imports and a decrease in oil exports, we still had to withdraw oil from our stored commercial ​crude ​supplies for the 7th time in the past eight weeks and for the 18th time in the past twenty-five weeks...our imports of crude oil rose by an average of 870,000 barrels per day to an average of 6,239,000 barrels per day, after rising by an average of 43,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 621,000 barrels per day to 3,011,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,228,000 barrels of per day during the week ending January 8th, 1,491,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 14,228,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,650,000 barrels of crude per day during the week ending January 8th, 274,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 464,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 43,000 barrels per day more than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (-43,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the data for the average daily consumption of it balance out, essentially a balance sheet fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting that there must have been an error or errors of that magnitude in the oil supply & demand figures that we have just transcribed....however, since last week's line 13 balance sheet adjustment was +495,000 barrels per day, indicating a week over week difference of 537,000 barrels per day in the fudge factor, the difference between those errors means any week over week comparisons of oil supply and demand figures reported here are pretty useless...still, since most everyone treats these weekly EIA figures as gospel and since these numbers often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as published, just as they're watched & believed to be accurate by most everyone in the industry.....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 5,625,000 barrels per day last week, which was still 14.9% less than the 6,611,000 barrel per day average that we were importing over the same four-week period last year.....the 464,000 barrel per day net withdrawal from our crude inventories was due to a 464,000 barrels per day withdrawal from our commercially available stocks of crude oil, while the oil supplies in our Strategic Petroleum Reserve remained unchanged....this week's crude oil production was reported to be unchanged at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 10,500,000 barrels per day, while a 3,000 barrel per day decrease to 511,000 barrels per day in Alaska's oil production had no impact on the rounded national total...last year's US crude oil production for the week ending January 10th was rounded to 13,000,000 barrels per day, so this reporting week's rounded oil production figure was 15.4% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 82.0% of their capacity while using those 14.650,000 barrels of crude per day during the week ending January 8th, up from 80.7% of capacity during the prior week, and matching the highest refinery utilization rate since March....however, since US refinery utilization averaged the lowest on record through 2020, the 14,650,000 barrels per day of oil that were refined this week were still 13.7% fewer barrels than the 16,973,000 barrels of crude that were being processed daily during the week ending January 10th of last year, when US refineries were operating at 92.2% of capacity...

despite the increase in the amount of oil being refined, gasoline output from our refineries was lower for the 6th time in 8 weeks, decreasing by 498,000 barrels per day to a 34 week low of 7,512,000 barrels per day during the week ending January 8th, after our gasoline output had decreased by 1,181,000 barrels per day over the prior week...and since our gasoline production was just beginning to recover from a multi-year low in the wake of this Spring's covid lockdowns, that further ​drop meant that this week's gasoline output was 19.1% less than the 9,281,000 barrels of gasoline that were being produced daily over the same week of last year....at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) ​​decreased by 124,000 barrels per day to 4,661,000 barrels per day, after our distillates output had increased by 146,000 barrels per day over the prior week....and since it was also just coming off a three year low, our distillates' production was 10.5% less than the 5,205,000 barrels of distillates per day that were being produced during the week ending January 10th, 2020...

even with the big drop in our gasoline production, our supply of gasoline in storage at the end of the week increased for the seventh time in nine weeks, for 11th time in 27 weeks, rising by 4,​395,000 barrels to 245,476,000 barrels during the week ending January 8th, after our gasoline inventories had ​increased by 4,519,000 barrels over the prior week...our gasoline supplies increased ​again ​this week even as the amount of gasoline supplied to US users increased by 91,000 barrels per day to 7,532,000 barrels per day, because our exports of gasoline fell by 285,000 barrels per day to 598,000 barrels per day, while our imports of gasoline fell by 62,000 barrels per day to 383,000 barrels per day....but even after this week's inventory increase, our gasoline supplies were 5.0% lower than last January 10th's gasoline inventories of 258,287,000 barrels, while about 1% above the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the 6th time in 7 weeks and for the 22nd time in the past year, rising by 4,786,000 barrels to 152,029,000 barrels during the week ending January 8th, after our distillates supplies had increased by 6,390,000 barrels during the prior week....our distillates supplies rose again this week even though the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 668​,​000 barrels per day to 3,609,000 barrels per day, because our exports of distillates fell by 518,000 barrels per day to a 40 month low of 714,000 barrels per day while our imports of distillates rose by 44,000 barrels per day to 346,000 barrels per day....after this week's inventory increase, our distillate supplies at the end of the week were 10.9% above the 147,221,000 barrels of distillates that we had in storage on January 10th, 2020, and about 9% above the five year average of distillates stocks for this time of the year...

finally, even with the increase in our oil imports and the decrease in our oil exports, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) fell for the 20th time in the past thirty-one weeks but for just the 23rd time in the past year, decreasing by 8,010,000 barrels, from 485,459,000 barrels on January 1st to 482,211,000 barrels on January 8th...but even after that decrease, our commercial crude oil inventories were still about 9% above the five-year average of crude oil supplies for this time of year, and about 47% above the prior 5 year (2011 - 2015) average of our crude oil stocks as of the second weekend of January, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had generally been rising over the past two years, except for this autumn and during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of January 8th were still 12.5% more than the 428,511,000 barrels of oil we had in commercial storage on January 10th of 2020, and also 10.3% more than the 437,055,000 barrels of oil that we had in storage on January 11th of 2019, and 16.9% above the 412,654,000 barrels of oil we had in commercial storage on January 12th of 2018...  

OPEC's Monthly Oil Market Report

Thursday of this past week saw the release of OPEC's January Oil Market Report, which covers OPEC & global oil data for December, and hence it gives us a picture of the global oil supply & demand situation over the fifth month of the extended agreement between OPEC, the Russians, and other oil producers, wherein they have agreed to cut production by 7.7 million barrels a day from the 2018 peak, reduced from the 9.7 million barrels a day cuts they had imposed on themselves during May, June and July....before we look at what this month's report shows us, we should again caution that estimating oil demand while the course of the Covid-19 pandemic remains uncertain is pretty speculative, and hence the demand estimates we'll be reporting this month should again be considered as having a much larger margin of error than we'd expect from this report during stable and hence more predictable periods.. 

the first table from this monthly report that we'll check is from the page numbered 48 of this month's report (pdf page 58), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures...

December 2020 OPEC crude output via secondary sources

as we can see from the above table of their oil production data, OPEC's oil output increased by 278,000 barrels per day to 25,362,000 barrels per day during December, from their revised November production total of 25,083,000 barrels per day...however, that November output figure was originally reported as 25,109,000 barrels per day, which thus means that OPEC's October production was revised 26,000 barrels per day lower with this report, and hence December's production was, in effect, a rounded 252,000 barrel per day increase from the previously reported OPEC production figure (for your reference, here is the table of the official November OPEC output figures as reported a month ago, before this month's revisions)...

from the above table, we can see that a 136,000 barrels per day increase in Libyan production, an increase of 76,000 barrels per day in Iraq's output, and a production increase of 63,000 barrels per day from the Emirates were the major factors in OPEC's December output increase...while Libyan production is still recovering from their years of civil strife, Iraq and UAE were the two major producers who objected to the extension of the current production cuts in meetings in early December...that contentious meeting resulted in an OPEC agreement to increase production by 500,000 barrel per day in January, so it appears that Iraq, the Emirates, and a few others may be jumping the gun on that increase...

recall that this year's original oil producer's agreement was to cut production by 9.7 million barrels per day from an October 2018 baseline for just two months early in the pandemic, during May and June, but that agreement was extended to include July at a meeting between OPEC and other producers on June 6th....then, in a subsequent meeting in July, OPEC and the other oil producers agreed to ease their deep supply cuts by 2 million barrels per day to 7.7 million barrels per day for August and subsequent months, which is thus the agreement that covers OPEC's output in this month's report...however, war torn Libya and US sanctioned OPEC members Iran and Venezuela were exempt from the production cuts imposed by that agreement, and as you can see above, together with Iraq and the Emirates, those exempt members account for this month's production increase... 

since there has never seemed to be a published table or listing available of how much each OPEC member was expected to produce under the eased production cuts of August through December, we've been including the table that shows the October 2018 reference production for each of the OPEC members (as well as other producers party to the mid-April agreement), as well as the production level each of those producers was expected to cut their output to during May, June, and July...from the following table, we can easily compute the production quotas that each of the OPEC members was expected to hold to in December:

April 13th 2020 OPEC   emergency cuts

the above table shows the oil production baseline in thousands of barrel per day from which each of the oil producers was to cut from in the first column, a figure which is based on each of the producer's October 2018 oil output, ie., a date before the past year's and this year's output cuts took effect, and coincidently the highest ​monthly ​production of the era for most of the producers ​who are ​party to these cuts; the second column shows how much each participant had originally committed to cut during May and June in thousands of barrel per day, which was 23% of the October 2018 baseline for all participants except for Mexico, while the last column shows the production level each participant had agreed to after that cut...the producer's agreement for August through the end of this year amends the above such that each member would be allowed to ​reduce their production cut shown above (ie, the "voluntary adjustment" shown above) by 20%...for example, Algeria's "cut" was expected to be 241,000 barrels per day from May thru July, which would reduce their oil production to 816,000 barrels per day over that period...under the new agreement for August and the following months, Algeria would reduce their "cut" by 20%, or to 193,000 barrels per day, thus allowing them to produce 864,000 barrels per day during December...offhand, by comparing this table's allocation ​plus​ ​20% to the initial OPEC production table above, it appears that only Iraq, who's December production should have been limited to 3,804,000 barrels per day, is the only OPEC member to have exceeded their production quota for December...

the next graphic from this month's report that we'll highlight shows us both OPEC and world oil production monthly on the same graph, over the period from January 2019 to December 2020, and it comes from page 50 (pdf page 60) of the November OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale.... 

December 2020 OPEC report global oil supply (2)

after the reported 278,000 barrel per day increase in OPEC's production from what they produced a month earlier, OPEC's preliminary estimate indicates that total global liquids production increased by a rounded 58 million barrels per day to average 92.93 million barrels per day in December, a reported increase which apparently came after November's total global output figure was revised down by 180,000 barrels per day from the 92.53 million barrels per day of global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 300,000 barrels per day in December after that revision, with oil production increases of 290,000 barrels per day from the OECD countries accounting for almost all of the non-OPEC production increase in December... after that increase in December's global output, the 92.93 million barrels of oil per day that were produced globally in December were 8.23 million barrels per day, or 8.1% less than the revised 101.16 million barrels of oil per day that were being produced globally in December a year ago, which was the 12th month of OPECs first round of production cuts (see the January 2020 OPEC report (online pdf) for the originally reported December 2019 details)...with this month's increase in OPEC's output, their December oil production of 25,362,000 barrels per day was at 27.3% of what was produced globally during the month, ​an increase from their revised 27.2% share of the global total in November.... OPEC's December 2019 production, which included 538,000 barrels per day from former OPEC member Ecuador, was reported at 29,444,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 3,544,000, or 12.2% fewer barrels per day of oil in December 2020 than what they produced a year earlier, when they accounted for 29.4% of global output... 

However, even after the increase in OPEC's and global oil output that we've seen in this report, there was still a ​mode​s​t s​hortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...   

December 2020 OPEC report global oil demand

the above table came from page 25 of the December OPEC Monthly Oil Market Report (pdf page 35), and it shows regional and total oil demand estimates in millions of barrels per day for 2019 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2020 over the rest of the table...on the "Total world" line in the fifth column, we've circled in blue the figure that's relevant for December, which is their estimate of global oil demand during the fourth quarter of 2020...

OPEC ​has estimated that during the 4th quarter of this year, all oil consuming regions of the globe ​had been using an average of 93.56 million barrels of oil per day, which is a 900,000 barrels per day upward revision from the 93.47 million barrels of oil per day they were estimating for the 4th quarter a month ago (note that we have encircled this month's revisions in green), still reflecting quite a bit of coronavirus related demand destruction compared to 2019, when 4th quarter global demand averaged 100.95 million barrels per day....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were producing 92.93 million barrels million barrels per day during December, which would imply that there was a shortage of around 370,000 barrels per day in global oil production in December when compared to the demand estimated for the month..

In addition to figuring December's global oil supply shortfall that's evident in this report, the downward revision of 180,000 barrels per day to November's global oil output that's implied in this report, plus the 90,000 barrels per day upward revision to fourth quarter demand noted above, means that the 940,000 barrels per day global oil output shortage we had previously figured for November would now be revised to a shortage of 1,210,000 barrels per day..,similarly, the 2,420,000 barrels per day global oil output shortage we had previously figured for October would now be revised to a shortage of 2,510,000 barrels per day once we account for the the 90,000 barrels per day upward revision to fourth quarter demand...

However, note that in green we've also circled an downward revision of 200,000 barrels per day to third quarter demand, a quarter when there was also shortage of oil production as compared to demand....that downward revision to demand means that the 600,000 barrels per day global oil output shortage we had previously figured for September would now be revised to a shortage of 400,000 barrels per day, that the 1,730,000 barrels per day global oil output shortage we had previously figured for August would now be revised to a shortage of 1,530,000 barrels per day, and that the 3,050,000 barrels per day global oil output shortage we had previously figured for July would now be revised to an estimated shortage of 2,850,000 barrels per day...

Note that we've also circled a downward revision of 20,000 barrels per day to second quarter demand, a quarter when there was a large excess of oil production due to coronavirus related lockdowns...based on that downward revision to demand, our previous estimate that there was a surplus of 4,900,000 barrels per day in June would now be revised up to a 4,920,000 barrels per day surplus, that the oil surplus of 7,680,000 barrels per day that we had previously figured for May would have to be revised to a surplus of 7,700,000 barrels per day, and that the 16,430,000 barrels per day surplus that we had previously figured for April would have to be revised to a surplus of 16,450,000 barrels per day...  

Finally, note there was also an upward revision of 200,000 barrels per day to first quarter demand, which we have also encircled in green on the table above...that means that the record global oil surplus of 17,750,000 barrels per day we had previously figured for March would have to be revised to a still record global oil surplus of 17,550,000 barrels per day, that the 1,870,000 barrel per day global oil production surplus we had figured for February would now be a 1,670,000 barrel per day global oil output surplus, and that the 900,000 barrel per day global oil output surplus we last had for January would now be revised to a 700,000 barrel per day oil output surplus.. so despite the shortage of oil that has developed in the second half of this year, it's obvious the world's oil producers had produced a lot of oil earlier this year that no one wanted...  

This Week's Rig Count

The US rig count rose for the 17th time in the past eighteen weeks during the week ending January 15th, but for just the 19th time in the past 44 weeks, and hence it is still down by 53.0% over that forty-four week period....Baker Hughes reported that the total count of rotary rigs running in the US rose by 13 to 373 rigs this past week, which was still down by 423 rigs from the 796 rigs that were in use as of the January 10th report of 2020, and was also still 31 fewer rigs than the all time low rig count prior to 2020, and 1,556 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil increased by 12 rigs to 287 oil rigs this week, after rising by 8 oil rigs the prior week, leaving us with 386 fewer oil rigs than were running a year ago, and still less than a fifth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was up by 1 to 85 natural gas rigs, which was still down by 35 natural gas rigs from the 120 natural gas rigs that were drilling a year ago, and just 5.3% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil or gas, one rig classified as 'miscellaneous' continue​d​ to drill in Lake County, California this week, while a year ago there were three such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count was down by 1 to 16 rigs this week, with 15 of those rigs drilling for oil in Louisiana's offshore waters, up from 14 last week, and one drilling for oil offshore from Texas, down from 3 a week ago...the total was 4 fewer Gulf rigs than the 20 rigs drilling in the Gulf a year ago, when 18 Gulf rigs were drilling for oil offshore from Louisiana, one rig was drilling for natural gas in the Mississippi Canyon offshore from Louisiana, and one rig was drilling for oil offshore from Texas...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig figures are equal to the Gulf rig counts....however, in addition to those rigs offshore, there are now 3 rigs drilling through inland bodies of water this week, one in Lafourche Parish, south of New Orleans, another in St Mary parish, farther west along the southern Louisiana coast, and ​an​other in Chambers County, Texas, just east of Houston, while a year ago there was just one rig drilling on US inland waters..

The count of active horizontal drilling rigs was up by 12 to 332 horizontal rigs this week, which was still 377 fewer horizontal rigs than the 709 horizontal rigs that were in use in the US on January 17th of last year, and less than a quarter of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the vertical rig count was up by one to 19 vertical rigs this week, but those were also still down by 24 from the 43 vertical rigs that were operating during the same week a year ago....meanwhile, the directional rig count was unchanged at 22 directional rigs this week, and those were still down by 22 from the 44 directional rigs that were in use on January 17th of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of January 15th, the second column shows the change in the number of working rigs between last week's count (January 8th) and this week's (January 15th) count, the third column shows last week's January 8th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running during the count before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 17th of January, 2020..    

January 15 2021 rig count summary

even as there were more changes in drilling activity this week than recently, most of the new rigs were concentrated in the Permian...checking for the details on the Permian in Texas from the Rigs by State file at Baker Hughes, we find that there were 8 new rigs added in Texas Oil District 8, which corresponds to the core Permian Delaware, and another rig was added in Texas Oil District 8A, which encompasses the northern counties in the Permian Midland, thus indicating that the Permian basin in Texas saw an increase of 9 rigs this week...since the national Permian rig count was up by 10, that means that the rig that was added in New Mexico must have been added in the far west reaches of the Permian Delaware, to account for the national Permian basin rig increase...elsewhere in Texas, there were 2 rigs added in Texas Oil District 1, which would account for the two rig increase in the Eagle Ford shale, and another rig added in Texas Oil District 10, which is usually indicative of a Granite Wash rig increase, but not this week, since the Granite Wash​ basin​ still shows no activity...rigs removed from Texas include one that ​had been drilling for oil offshore, and another pulled from Texas Oil District 6, which had been drilling in the Haynesville shale....the Haynesville shale still sho​w​s an increase, however, because two rigs were added in that basin in northern Louisiana; the other Louisiana rig increases were on inland waters and offshore...elsewhere, 2 oil rigs were added in Colorado, in the Niobrara chalk of the Rockies' front range, while oil rigs were pulled out of the Williston basin in Norht Dakota and from an unnamed basin in Oklahoma at the same time....this week's natural gas rig increase was in the aforementioned Haynesville shale, while the Marcellus shale showed no ​net ​change because while two rigs were pulled out of the Marcellus in Pennsylvania, two rigs were added in the Marcellus in West Virginia at the same time..

+

+

note: there's more here...

Sunday, January 10, 2021

gasoline demand at a 32 week low, gasoline supplies up ​most in 3​5 weeks; distillate​s​ supplies​ up most in 31 weeks​

oil exports at a forty-one week high & refinery utilization ​at a 19 week high led to largest drop in crude supplies since August; gasoline production fell ​by ​the most since March to a 7 month low, but gasoline demand at a 32 week low meant gasoline supplies jumped by ​the ​most in 3​5 weeks; distillate​s​ demand at a 15 week low​ led to largest increase in distillate​s​ supplies​ in 31 weeks​

oil prices rose for the ninth time out of the past ten weeks this week, after the Saudis unilaterally cut their oil output...after inching up 0.6% to $48.52 a barrel last week on a weaker dollar and on Trump's signing of the Covid stimulus bill, the contract price of US light sweet crude for February delivery opened lower on Monday as OPEC delayed their decision on extending their output cuts into February, and fell throughout the trading session to settle 90 cents lower at $47.62 per barrel as U.S. stocks fell 2% on concerns over the outcome of runoff Senate elections in Georgia....oil prices were lower again early Tuesday before OPEC+ resumed their meeting on February​'s oil​ output levels, but then jumped nearly 5% after news that Saudi Arabia would make​ large​ voluntary cuts to their oil output to finish $2.31 higher at $49.93 per barrel, as Mideast tensions rose after Iran seized a South Korean-flagged oil tanker in the Strait of Hormuz...oil prices were ​most​ly mixed early Wednesday after the American Petroleum Institute had reported a modest crude draw but large fuel inventory increases but then resumed their climb after the EIA reported the largest withdrawal from crude inventory since August before closing 70 cents higher at $50.63 per barrel...oil prices remained steady on Thursday even after Trump mobs stormed the U.S. Capitol, as oil traders focused on the likelihood of tighter supplies after Saudi Arabia had unilaterally agreed to cut output, and settled 20 cents higher at $50.83 per barrel as demand fears, slow vaccine rollouts, and the US political uncertainty took some wind out of the oil rally's sails...but the oil rally resumed Friday as traders focused on the Democratic victories in the Georgia elections that would boost the likelihood of a larger government stimulus, a​nd US crude prices settled $1.41, or 2.8%, higher at $52.24 a barrel, thus finishing the week with a 7.7% increase and at the highest price level since February of last year..

natural gas prices also moved higher this week on forecasts for colder weather and greater heating demand later in the month...after rising 1% to $2.539 per mmBTU last week in volatile trading on equally volatile swings in the weather outlook, the contract price of natural gas for February delivery opened 4% higher on Monday, on strong LNG exports, flat production, and an improved outlook for weather-driven demand, but drifted lower to settle with a 4.2 cent increase at $2.581 per mmBTU...February gas prices extended th​at increase on Tuesday, however, rising 12.1 cents to $2.702 per mmBTU, as weather models pointed to fresh bouts of cold air over the Midwest and East in the second half of January, and then added 1.4 cents ​to that gain ​on Wednesday on continued strength in LNG exports...natural gas prices inched up another 1.3 cents on Thursday after the EIA reported a withdrawal from gas inventories that was well above normal but below expectations, but pulled back 2.9 cents to finished the week with a 6.3% gain at $2.700 per mmBTU on a shift in weather forecasts that pointed to a potential delay in the onset of widespread freezing temperatures from early in the third full week of January to later in the month...

the natural gas storage report from the EIA for the week ending January 1st indicated that the quantity of natural gas held in underground storage in the US decreased by 130 billion cubic feet to 3,330 billion cubic feet by the end of the week, which left our gas supplies 138 billion cubic feet, or 4.2% higher than the 3,192 billion cubic feet that were in storage on January 1st of last year, and 201 billion cubic feet, or 6.4% above the five-year average of 3,129 billion cubic feet of natural gas that have been in storage as of the 1st of January in recent years....the 130 billion cubic feet that were drawn out of US natural gas storage this week was less than the average forecast of a 139 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, but it was higher than the average withdrawal of 115 billion cubic feet of natural gas that have typically been pulled out of natural gas storage during the same week over the past 5 years, and much more than the 48 billion cubic feet withdrawal from natural gas storage seen during the corresponding warmer week ​ending January 3rd, 2020.... 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending January 1st indicated that with our supply of and demand for oil little changed from the prior week, we had to withdraw oil from our stored commercial supplies for the 6th time in the past seven weeks and for the 18th time in the past twenty-four weeks...our imports of crude oil rose by an average of 43,000 barrels per day to an average of 5,369,000 barrels per day, after falling by an average of 238,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 7,000 barrels per day to a forty-one week high of 3,632,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 1,737,000 barrels of per day during the week ending January 1st, 36,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 12,737,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,376,000 barrels of crude per day during the week ending January 1st, 89,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 1,144,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 495,000 barrels per day less than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+495,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the data for the average daily consumption of it balance out, essentially a balance sheet fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting that there must have been an error or errors of that magnitude in the oil supply & demand figures that we have just transcribed....however, since most everyone treats these weekly EIA figures as gospel and since these numbers often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as they're published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,421,000 barrels per day last week, which was 18.1% less than the 6,617,000 barrel per day average that we were importing over the same four-week period last year.....the 1,144,000 barrel per day net withdrawal from our crude inventories was due to a 1,144,000 barrels per day withdrawal from our commercially available stocks of crude oil, while the oil supplies in our Strategic Petroleum Reserve remained unchanged....this week's crude oil production was reported to be unchanged at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 10,500,000 barrels per day, while a 1,000 barrel per day decrease to 514,000 barrels per day in Alaska's oil production had no impact on the rounded national total...last year's US crude oil production for the week ending January 3rd was rounded to 12,900,000 barrels per day, so this reporting week's rounded oil production figure was 14.7% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 80.7% of their capacity while using those 14,376,000 barrels of crude per day during the week ending January 1st, up from 79.4% of capacity during the prior week, and the highest refinery utilization rate since ​August....however, since refinery utilization ​averaged the lowest on record through 2020, the 14,376,000 barrels per day of oil that were refined this week were still 14.9% fewer barrels than the 16,897,000 barrels of crude that were being processed daily during the week ending January 3rd of last year, when US refineries were operating at 93.0% of capacity...

despite the increase in the amount of oil being refined, gasoline output from our refineries was lower for the 5th time in seven weeks, decreasing by 1,181,000 barrels per day to a seven month low of 8,010,000 barrels per day during the week ending January 1st, after our gasoline output had increased by 362,000 barrels per day over the prior week...and since our gasoline production was just beginning to recover from a multi-year low in the wake of this Spring's covid lockdowns, that drop meant that this week's gasoline output was 9.9% less than the 8,887,000 barrels of gasoline that were being produced daily over the same week of last year....on the other hand, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 146,000 barrels per day to 4,785,000 barrels per day, after our distillates output had increased by 49,000 barrels per day over the prior week....but since it's also just coming off a three year low, our distillates' production was also 9.9% less than the 5,311,000 barrels of distillates per day that were being produced during the week ending January 3rd, 2019...

even with the big drop in our gasoline production, our supply of gasoline in storage at the end of the week increased for the sixth time in eight weeks, for 11th time in 27 weeks, and by the most since the last week of April, rising by 4,519,000 barrels to 241,081,000 barrels during the week ending January 1st, after our gasoline inventories had decreased by 1,192,000 barrels over the prior week...our gasoline supplies increased this week because the amount of gasoline supplied to US users decreased by 687,000 barrels per day to a 32 week low of 7,441,000 barrels per day, and because our exports of gasoline fell by 28,000 barrels per day to 883,000 barrels per day, while our imports of gasoline fell by 156,000 barrels per day to 445,000 barrels per day....but even after this week's increase, our gasoline supplies were 4.2% lower than last January 3rd's gasoline inventories of 251,609,000 barrels, and near the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the 5th time in 6 weeks, for the 22nd time in the past year, and by the most since May 29th, rising by 6,390,000 barrels to 152,029,000 barrels during the week ending January 1st, after our distillates supplies had increased by 3,095,000 barrels during the prior week....our distillates supplies rose by more this week than last because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 653,000 barrels per day to a 15 week low of 2,941,000 barrels per day,​ even as our imports of distillates fell by 317,000 barrels per day to 302,000 barrels per day​ and as​ our exports of distillates rose by 10,000 barrels per day to 1,232,000 barrels per day....after this week's inventory increase, our distillate supplies at the end of the week were 13.9% above the 139,050,000 barrels of distillates that we had in storage on January 3rd, 2019, and about 4% above the five year average of distillates stocks for this time of the year...

finally, with the decrease in our oil imports and the increase in our oil exports, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) fell for the 19th time in the past thirty weeks but for just the 23rd time in the past year, decreasing by 8,010,000 barrels, from 493,469,000 barrels on December 25th to 485,459,000 barrels on January 1st....but even after that big decrease, our commercial crude oil inventories were still about 9% above the five-year average of crude oil supplies for this time of year, and about 48% above the prior 5 year (2011 - 2015) average of our crude oil stocks as of the first weekend of January, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had generally been rising over the past two years, except for this autumn and during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of January 1st were still 12.6% above the 431,060,000 barrels of oil we had in commercial storage on January 3rd of 2020, and also 10.4% more than the 439,738,000 barrels of oil that we had in storage on January 4th of 2019, and 15.7% above the 419,515,000 barrels of oil we had in commercial storage on January 5th of 2018...     

This Week's Rig Count

note: last week's rig count was released on Wednesday, December 30th, ahead of the New Year's weekend, so this week's rig count covers 9 days...that said, the US rig count rose for the 16th time in the past seventeen weeks during the period ending January 8th, but for just the 18th time in the past 43 weeks, and hence it is still down by 54.6% over that forty-three week period....Baker Hughes reported that the total count of rotary rigs running in the US rose by 9 to 360 rigs this past week, which was still down by 421 rigs from the 781 rigs that were in use as of the January 10th report of 2020, and was also still 44 fewer rigs than the all time low rig count prior to 2020, and 1,569 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil increased by 8 rigs to 275 oil rigs this week, after rising by 3 oil rigs the prior week, leaving us with 384 fewer oil rigs than were running a year ago, and still less than a fifth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was up by 1 to 84 natural gas rigs, which was still down by 35 natural gas rigs from the 119 natural gas rigs that were drilling a year ago, and just 5.2% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil or gas, one rig classified as 'miscellaneous' continue to drill in Lake County, California this week, while a year ago there were three such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count remained unchanged at 17 rigs this week, with 14 of those rigs drilling for oil in Louisiana's offshore waters and three drilling for oil offshore from Texas...that was 4 fewer Gulf rigs than the 21 rigs drilling in the Gulf a year ago, when 19 Gulf rigs were drilling for oil offshore from Louisiana, one rig was drilling for natural gas in the Mississippi Canyon offshore from Louisiana, and one rig was drilling for oil offshore from Texas...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig figures are equal to the Gulf rig counts....however, in addition to those rigs offshore, two rigs continue to drill through inland bodies of water this week, one in St Mary parish in southern Louisiana and the other in Chambers County, Texas, just east of Houston, while a year ago there was just one rig drilling on US inland waters..

The count of active horizontal drilling rigs was up by 7 to 320 horizontal rigs this week, which was still 378 fewer horizontal rigs than the 698 horizontal rigs that were in use in the US on January 10th of last year, and less than a quarter of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the directional rig count was up by 1 to 22 directional rigs this week, but those were still down by 23 from the 45 directional rigs that were operating during the same week a year ago....in addition, the vertical rig count was up by one to 18 vertical rigs this week, and those were also still down by 20 from the 38 vertical rigs that were in use on January 10th of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of January 8th, the second column shows the change in the number of working rigs between last week's count (December 30th) and this week's (January 8th) count, the third column shows last week's December 30th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running during the count before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the​ 10th of January, 2020..    

January 8 2021 rig count summary

as you can see, there were more changes in drilling activity this week than recently, with two basins showing 4 rig increases...checking for the details on the Permian in Texas from the Rigs by State file at Baker Hughes, we find that there were no changes in any Permian Texas Oil District, which thus means that the 4 rigs that were added in New Mexico must have been added in the far west reaches of the Permian Delaware to account for the national Permian basin rig increase... since the rig count in all other Texas oil districts also remained unchanged, that means that the rig that was pulled out of the panhandle region Granite Wash basin came out of Oklahoma, which had a rig added in the Cana Woodford and in some other ​oil ​basin that Baker Hughes doesn't aggregate at the same time...for natural gas seeking rigs, we had two rigs pulled out of the Utica shale, one from Ohio and one from Pennsylvania, while four rigs were added in the Marcellus, three in Pennsylvania and one in West Virginia...at the same time, a natural gas rig was pulled out of the Haynesville shale in DeSoto Parish, Louisiana, while an oil rig began drilling in nearby at the same time, in the first Haynesville shale oil drilling since November 2019...

+

+

note: there's more here

Sunday, January 3, 2021

oil ends 2020 down 20%; natural gas ends up 15%; oil exports at 40 week high

oil prices ended higher for the eighth week in the past nine this week, as a new stimulus bill and a weaker dollar supported prices...after falling 2.1% to $48.24 per barrel last week as a new mutant strain of the coronavirus spreading in the UK worried traders that it would hurt demand for energy, the contract price of US light sweet crude for February delivery rose more than 1% early on Monday after Trump signed the Covid stimulus bill, backing down from his earlier threat to block the $2.3 trillion package, but resumed their slide of the prior week by the afternoon on worries about how the new variant of the Covid-19 would impact demand for energy to end the day down 61 cents at $47.62 a barrel...but oil prices opened higher on Tuesday on progress on a final Brexit deal, which would stabilize trade between Europe and the UK, and finished with a gain of 38 cents at $48.00 a barrel on hopes that a larger pandemic aid payment to US consumers would spur fuel demand and stimulate economic growth...oil prices opened higher again on Wednesday after a bigger-than-anticipated draw from U.S. crude inventories was reported late Tuesday by the American Petroleum Institute, but then fluctuated between gains and losses even after the EIA data showed a larger-than-expected drop in U.S. crude inventories, before settling 40 cents higher at $48.40 a barrel, with gains limited by the detection in Colorado of the more contagious variant of the coronavirus that causes Covid-19...oil then traded in a narrow range in light trading on New Years Eve before settling 12 cents higher at $48.52 a barrel, thus posting a 0.6% gain on the week...while finishing the month of December 6.6% higher, oil contracts still lost more than a fifth of their value in 2020, as lockdowns to combat the coronavirus depressed economic activity and sent oil markets reeling...

natural gas prices also ended slightly higher in volatile trading this week, as prices first tumbled, and then rallied, on swings in the weather outlook...after falling 6.7% to $2.518 per mmBTU last week as the weather turned milder and inventory withdrawals failed to meet expectations, the contract price of natural gas for January delivery opened more than 8% lower on Monday and quickly fell to an 11% loss on weather models that suggested temperatures for much of the country could be well above normal for early January, before recovering a bit to close down 8 1/2% at $2.305 per mmBTU...but almost as quickly as it fell, the January Nymex natural gas futures contract rebounded sharply ahead of its expiration on Tuesday to post a 7% gain at $2.467 per mmBTU, as robust LNG demand took center stage...now quoting the contract price of natural gas for February delivery, which had ended last week at $2.512 per mmBTU and fell 18 cents monday before bouncing back11.8 cents Tuesday, natural gas prices fell 2.2 cents to $2.422 per mmBTU on Wednesday on a continued bearish weather outlook and a slip in LNG demand, before jumping 11.7 cents or nearly 5% higher to $2.539 per mmBTU on Thursday despite a bearish storage report, after weather models flipped colder for the next couple of weeks and gas production dipped back below 90 billion cubic feet per day ..natural gas ​price ​quotes thus finished the week 0.8% higher, with the February contract showing a 1.0% gain, as natural gas prices posted their strongest year since 2016...

the natural gas storage report from the EIA for the week ending December 25th indicated that the quantity of natural gas held in underground storage in the US decreased by 114 billion cubic feet to 3,460 billion cubic feet by the end of the week, which still left our gas supplies 251 billion cubic feet, or 7.8% higher than the 3,209 billion cubic feet that were in storage on December 25th of last year, and 206 billion cubic feet, or 6.3% above the five-year average of 3,254 billion cubic feet of natural gas that have been in storage as of the 25th of December in recent years....the 114 billion cubic feet that were drawn out of US natural gas storage this week was less than the average forecast of a 123 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, but ​it ​was higher than the average withdrawal of 105 billion cubic feet of natural gas that have typically been pulled out of natural gas storage during the same week over the past 5 years, and much more than the 87 billion cubic feet withdrawal from natural gas storage seen during the corresponding week of 2019....  

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending December 25th indicated that because of a decrease in our oil imports and another increase in our oil exports, we had to withdraw oil from our stored commercial supplies for the 16th time in the past twenty-three weeks and for the 22nd time in the past fifty weeks ...our imports of crude oil fell by an average of 238,000 barrels per day to an average of 5,326,000 barrels per day, after risng by an average of 140,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 526,000 barrels per day to a forty week high of 3,625,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 1,701,000 barrels of per day during the week ending December 25th, 764,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 12,701,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,287,000 barrels of crude per day during the week ending December 25th, 273,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 866,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 719,000 barrels per day less than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+719,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the data for the average daily consumption of it balance out, essentially a balance sheet fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting that there must have been an error or errors of that magnitude in the oil supply & demand figures that we have just transcribed....however, since most everyone treats these weekly EIA figures as gospel and since these numbers often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports slipped to an average of 5,698,000 barrels per day last week, which was 14.4% less than the 6,657,000 barrel per day average that we were importing over the same four-week period last year.....the 866,000 barrel per day net withdrawal from our crude inventories was due to a 866,000 barrels per day withdrawal from our commercially available stocks of crude oil, while the oil supplies in our Strategic Petroleum Reserve remained unchanged....this week's crude oil production was reported to be unchanged at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 10,500,000 barrels per day, while a 2,000 barrels per day decrease to 512,000 barrels per day in Alaska's oil production had no impact on the rounded national total...last year's US crude oil production for the week ending December 27th was rounded to 12,900,000 barrels per day, so this reporting week's rounded oil production figure was 14.7% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 79.4% of their capacity while using ​those​ 14,287,000 barrels of crude per day during the week ending December 25th, up from 78.0% of capacity during the prior week, but excluding the covid collapse earlier this year and the 2005, 2008, and 2017 hurricane-related refinery interruptions, still one of the lowest refinery utilization rates of the past twenty-eight years....hence, the 14,287,000 barrels per day of oil that were refined this week were still 17.3% fewer barrels than the 17,283,000 barrels of crude that were being processed daily during the week ending December 27th of last year, when US refineries were operating at 94.5% of capacity...

with the increase in the amount of oil being refined, gasoline output from our refineries was higher for the 2nd time in six weeks, increasing by 362,000 barrels per day to 9,191,000 barrels per day during the week ending December 18th, after our gasoline output had increased by 307,000 barrels per day over the prior week...but since our gasoline production is still recovering from a multi-year low in the wake of this Spring's covid lockdowns, this week's gasoline output was still 9.7% less than the 10,173,000 barrels of gasoline that were being produced daily over the same week of last year....at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 49,000 barrels per day to 4,639,000 barrels per day, after our distillates output had decreased by 14,000 barrels per day over the prior week....​but ​since it's also just coming off a three year low, our distillates' production was 12.7% less than the 5,311,000 barrels of distillates per day that were being produced during the week ending December 27th, 2019...

even with the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the second time in seven weeks and for 16th time in 26 weeks, falling by 1,192,000 barrels to 237,754,000 barrels during the week ending December 25th, after our gasoline inventories had decreased by 1,125,000 barrels over the prior week...our gasoline supplies decreased this again week because the amount of gasoline supplied to US users increased by 106,000 barrels per day to 8,128,000 barrels per day, and because our exports of gasoline rose by 154,000 barrels per day to 911,000 barrels per day, while our imports of gasoline rose by 30,000 barrels per day to 601,000 barrels per day....after this week's decrease, our gasoline supplies were 2.4% lower than last December 27th's gasoline inventories of 242,472,000 barrels, but still about 1% above the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the modest increase in our distillates production, our supplies of distillate fuels increased for the 4th time in 15 weeks, and for the 22nd time in the past year, rising by 3,095,000 barrels to 152,029,000 barrels during the week ending December 25th, after our distillates supplies had decreased by 2,325,000 barrels during the prior week....our distillates supplies rose this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 580,000 barrels per day to 3,594,000 barrels per day, and because our imports of distillates rose by 175,000 barrels per day to 444,000 barrels per day, while our exports of distillates rose by 29,000 barrels per day to 1,222,000 barrels per day....after this week's inventory increase, our distillate supplies at the end of the week were 13.7% above the 133,720,000 barrels of distillates that we had in storage on December 27th, 2019, and about 6% above the five year average of distillates stocks for this time of the year...

finally, with the decrease in our oil imports and the increase in our oil exports, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) fell for the 18th time in the past twenty-nine weeks but for just the 22nd time in the past year, decreasing by 6,065,000 barrels, from 499,534,000 barrels on December 18th to 493,469,000 barrels on December 25th....but even after that big decrease, our commercial crude oil inventories were still about 11% above the five-year average of crude oil supplies for this time of year, and about 50% above the prior 5 year (2010 - 2014) average of our crude oil stocks as of the last weekend of December, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had generally been rising over the past two years, except for this autumn and during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of December 25th were still 14.8% above the 429,896,000 barrels of oil we had in commercial storage on December 27th of 2019, and also 11.8% more than the 441,418,000 barrels of oil that we had in storage on December 28th of 2018, and 16.3% above the 424,463,000 barrels of oil we had in commercial storage on December 29th of 2017...     

This Week's Rig Count

note: this week's rig count was released on Wednesday ahead of the New Year's weekend, just as last week's rig count was released on Wednesday ahead of Christmas, which thus means that this week's count still covers 7 days, albeit not the usual 7 days ending on a Friday...that said, the US rig count rose for the 15th time in the past sixteen weeks during the period ending December 30th, but for just the 17th time in the past 42 weeks, and hence it is still down by 55.7% over that forty-two week period....Baker Hughes reported that the total count of rotary rigs running in the US rose by 3 to 351 rigs this past week, which was still down by 445 rigs from the 769 rigs that were in use as of the January 3rd report of 2020, and was also still 53 fewer rigs than the all time low rig count prior to this year, and 1,578 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil increased by 3 rigs to 267 oil rigs this week, after rising by 1 oil rig the prior week, leaving us with 403 fewer oil rigs than were running a year ago, and still less than a sixth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations remained unchanged at 83 natural gas rigs, which was still down by 40 natural gas rigs from the 123 natural gas rigs that were drilling a year ago, and just 5.3% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil or gas, one rig classified as 'miscellaneous' continue to drill in Lake County, California this week, while a year ago there were three such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count remained unchanged at 17 rigs this week, with 14 of those rigs drilling for oil in Louisiana's offshore waters and three drilling for oil offshore from Texas...that was 5 fewer Gulf rigs than the 22 rigs drilling in the Gulf a year ago, when 20 Gulf rigs were drilling for oil offshore from Louisiana, one rig was drilling for natural gas in the Mississippi Canyon offshore from Louisiana, and one rig was drilling for oil offshore from Texas...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig figures are equal to the Gulf rig counts....however, in addition to those rigs offshore, two rigs continue to drill through inland bodies of water this week, one in St Mary parish in southern Louisiana and the other in Chambers County, Texas, just east of Houston, while a year ago there was just one rig drilling on US inland waters..

The count of active horizontal drilling rigs was up by 4 to 313 horizontal rigs this week, which was still 388 fewer horizontal rigs than the 701 horizontal rigs that were in use in the US on January 3rd of last year, and less than a quarter of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...on the other hand, the directional rig count was down by 1 to 21 directional rigs this week, and those were also down by 30 from the 51 directional rigs that were operating during the same week a year ago....meanwhile, the vertical rig count was unchanged at 17 vertical rigs this week, and those were still down by 27from the 44 vertical rigs that were in use on January 3rd of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of December 30th, the second column shows the change in the number of working rigs between last week's count (December 23rd) and this week's (December 30th) count, the third column shows last week's December 23rd active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running during the count before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 3rd of January, 2020..    

December 30 2020 rig count summary

as you can see, there were only a few changes in drilling activity this week...checking for the details on the Permian in Texas from the Rigs by State file at Baker Hughes, we find that two rigs were added in Texas Oil District 8, which corresponds to the core Permian Delaware, while the rig count in all other Texas oil districts remained unchanged, which thus accounts for the total change in Texas and the 2 rig increase in the Permian...this week's only other change is equally straightforward, as the rig that was added in Oklahoma was added in the Cana Woodford, thus accounting for the two other changes we see in the tables above...

+

+

+ note: there’s more here…

Sunday, December 27, 2020

oil falls first time in 8 weeks on spread of mutant virus; US oil supplies now more than 50% above the 2010-2014 average

oil prices fell for the first time in 8 weeks this week, as a mutant strain of the coronavirus spreading in the UK prompted a severe lockdown there and new travel restrictions world-wide...after rising more than 5% to $49.10 a barrel last week on a lower dollar and optimism about the vaccine rollouts, the contract price of US light sweet crude for January delivery fell in early trading on Monday as a new, fast-spreading mutant strain of coronavirus in the UK raised concerns that tighter restrictions there and elsewhere would stall th​e​ recovery in the need for fuel, and was down nearly $3 or 6% before recovering to close $1.36 lower at $47.74 a barrel despite the rollout of a new vaccine in the US, a congressional deal for a $900 billion coronavirus aid package, and European approval for the use of the COVID-19 vaccine developed by Pfizer, as trading in the January US oil contract expired...now quoting the contract price of US crude for February delivery, which had fallen $1.27 to $47.97 a barrel on Monday, oil prices continued sliding on Tuesday, following new travel bans and lockdowns in Europe and the U.S. to combat the fast-spreading variant of the disease, as February crude settled 95 cents lower at $47.02 a barrel, with losses limited after France's Europe minister said his country would restart freight to the UK by the next day...US oil prices then drifted lower in overseas trading after the American Petroleum Institute reported a surprise gain of 2.7 million barrels in US crude supplies, and then opened lower in New York on Wednesday and were down nearly 2% before the EIA reported withdrawals from U.S. inventories of crude, gasoline and distillate fuels, sparking a turnaround in oil prices which then settled 2.34%, or $1.10, higher at $48.12 per barrel...oil prices again moved higher on Thursday on news that Britain and the European Union had signed a post-Brexit trade deal and finished the shortened pre-holiday session 11 cents higher at $48.24 per barrel, but still finished the week 2.1% lower as traders fretted that a resurgence in the Covid-19 pandemic in the U.S. and Europe would hurt demand for energy​,​ without a sufficient bailout from government​s​ to promote consumer and business activity...

natural gas prices also ended lower this week, as the weather turned milder and inventory withdrawals failed to meet expectations...after rising 4.2% to $2.700 per mmBTU last week as major winter storms moved through the eastern US population centers, the contract price of natural gas for January delivery opened more than 1% higher on Monday as surging LNG exports and forecasts for colder weather in late December outweighed concerns over the new coronavirus strain, but slid from the initial spurt to close just a half cent higher at $2.705 per mmBTU as new UK travel restrictions were imposed by several European countries and Canada...natural gas prices then jumped on Tuesday on forecasts for colder weather and expectations of a large withdrawal of gas from storage and held on to settle 7.5 cents higher at $2.780 per mmBTU....however, natural gas futures plummeted on Wednesday as weather models continued to seesaw, gas production increased, export cargoes were cancelled, and the awaited inventory report fell sh​ort of market expectations, and finished 17.2 cents, or over 6% lower, at $2.608 per mmBTU...natural gas prices continued to sink in light Christmas eve trading amid mild temperatures and light heating demand across much of the Lower 48 and settled another 9.0 cents lower at $2.518 per mmBTU, thus closing with a 6.7% loss on the week..

the natural gas storage report from the EIA for the week ending December 18th indicated that the quantity of natural gas held in underground storage in the US decreased by 152 billion cubic feet to 3,574 billion cubic feet by the end of the week, which still left our gas supplies 278 billion cubic feet, or 8.4% higher than the 3,296 billion cubic feet that were in storage on December 18th of last year, and 218 billion cubic feet, or 6.8% above the five-year average of 3,356 billion cubic feet of natural gas that have been in storage as of the 18th of December in recent years....the 152 billion cubic feet that were drawn out of US natural gas storage this week was less than the average forecast from an S&P Global Platts survey of analysts who had expected a 154 billion cubic foot withdrawal, but was higher than the average withdrawal of 127 billion cubic feet of natural gas that have typically been pulled out of natural gas storage during the same week over the past 5 years, and ​more than ​the 146 billion cubic feet withdrawal from natural gas storage seen during the corresponding week of 2019.... 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending December 18th indicated that because of another big increase in our oil exports, we had to withdraw oil from our stored commercial supplies for the 15th time in the past twenty-two weeks and for the 21st time in the past forty-nine weeks ...our imports of crude oil rose by an average of 140,000 barrels per day to an average of 5,564,000 barrels per day, after falling by an average of 1,055,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 472,000 barrels per day to an average of 3,099,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,465,000 barrels of per day during the week ending December 18th, 322,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production totaled an average of 13,465,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,014,000 barrels of crude per day during the week ending December 18th, 169,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 80,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 469,000 barrels per day less than what our oil refineries reported they used during the week...to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (+469,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the data for the average daily consumption of it balance out, essentially a balance sheet fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting that there must have been an error or errors of that size in the oil supply & demand figures that we have just transcribed....furthermore, since last week's fudge factor was at -61,000 barrels per day, there was a 530,000 barrel per day balance sheet difference from a week ago, which renders the week over week supply and demand changes we have just transcribed unreliable...(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 5,717,000 barrels per day last week, which was still 12.9% less than the 6,566,000 barrel per day average that we were importing over the same four-week period last year.....the 80,000 barrel per day net withdrawal from our crude inventories was due to a 80,000 barrels per day withdrawal from our commercially available stocks of crude oil, while the oil supplies in our Strategic Petroleum Reserve remained unchanged....this week's crude oil production was reported to be unchanged at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was unchanged at 10,500,000 barrels per day, while a 13,000 barrels per day increase to 514,000 barrels per day in Alaska's oil production had no impact on the rounded national total...last year's US crude oil production for the week ending December 20th was rounded to 12,900,000 barrels per day, so this reporting week's rounded oil production figure was 14.7% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 78.0% of their capacity while using 14,014,000 barrels of crude per day during the week ending December 18th, down from 79.1% of capacity during the prior week, and excluding ​earlier this year and ​the 2005, 2008, and 2017 hurricane-related refinery interruptions, one of the lowest refinery utilization rates of the past twenty-eight years....hence, the 14,014,000 barrels per day of oil that were refined this week were still 17.5% fewer barrels than the 16,980,000 barrels of crude that were being processed daily during the week ending December 20th of last year, when US refineries were operating at 93.3% of capacity...

even with the decrease in the amount of oil being refined, gasoline output from our refineries was higher for the 2nd time in six weeks, increasing by 307,000 barrels per day to 8,829,000 barrels per day during the week ending December 18th, after our refineries' gasoline output had increased by 182,000 barrels per day over the prior week...but since our gasoline production is still recovering from a multi-year low in the wake of this Spring's covid lockdown, this week's gasoline output was still 14.0% less than the 10,269,000 barrels of gasoline that were being produced daily over the same week of last year....at the same time, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 14,000 barrels per day to 4,590,000 barrels per day, after our distillates output had decreased by 67,000 barrels per day over the prior week....since it's also just coming off a three year low, our distillates' production was 14.9% less than the 5,394,000 barrels of distillates per day that were being produced during the week ending December 20th, 2019...

even with the increase in our gasoline production, our supply of gasoline in storage at the end of the week decreased for the first time in six weeks and for 15th time in 25 weeks, falling by 1,125,000 barrels to 237,754,000 barrels during the week ending December 18th, after our gasoline inventories had increased by 1,020,000 barrels over the prior week...our gasoline supplies decreased this week because this week's adjustment to correct for the imbalance created by the blending of fuel ethanol and motor gasoline blending components was at +103,000 barrels per day vs last week's -370,000 barrels per day, and because the amount of gasoline supplied to US markets increased by 47,000 barrels per day to 8,022,000 barrels per day, and because our imports of gasoline fell by 40,000 barrels per day to 571,000 barrels per day while our exports of gasoline fell by 27,000 barrels per day to 757,000 barrels per day....after this week's decrease, our gasoline supplies were 0.6% lower than last December 20th's gasoline inventories of 239,260,000 barrels, but still about 4% above the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the modest decrease in our distillates production, our supplies of distillate fuels decreased for the 11th time in 14 weeks, and for the 30th time in the past year, falling by 2,325,000 barrels to 148,934,000 barrels during the week ending December 18th, after our distillates supplies had increased by 167,000 barrels during the prior week....our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 172,000 barrels per day to 4,174,000 barrels per day, and because our exports of distillates rose by 123,000 barrels per day to 1,193,000 barrels per day, and because our imports of distillates fell by 48,000 barrels per day to 444,000 barrels per day....but even after this week's inventory decrease, our distillate supplies at the end of the week were 19.2% above the 124,944,000 barrels of distillates that we had in storage on December 20th, 2019, and about 10% above the five year average of distillates stocks for this time of the year...

finally, with the increase in our oil exports, our commercial supplies of crude oil in storage (not including the commercial oil in the SPR) fell for the 17th time in the past twenty-eight weeks and for the 20th time in the past year, decreasing by 562,000 barrels, from 500,096,000 barrels on December 11th to 499,534,000 barrels on December 18th....but even after that ​modest ​decrease, our commercial crude oil inventories rose to 11% above the five-year average of crude oil supplies for this time of year, and ​rose to 50.8% above the prior 5 year (2010 - 2014) average of our crude oil stocks as of the third weekend of December, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had generally been rising over the past two years, except for this autumn and during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of December 18th were 13.2% above the 441,359,000 barrels of oil we had in commercial storage on December 20th of 2019, also 13.2% more than the 441,411,000 barrels of oil that we had in storage on December 21st of 2018, and 14.4% above the 436,491,000 barrels of oil we had in commercial storage on December 15th of 2017...     

This Week's Rig Count

note: this week's rig count was released on Wednesday ahead of the Christmas holiday, and hence only covers five days...nonetheless, the US rig count rose for the 14th time in the past fifteen weeks during the period ending December 23rd, but for just the 16th time in the past 41 weeks, and hence it is still down by 56.​1% over that thirty-eight week period....Baker Hughes reported that the total count of rotary rigs running in the US rose by 2 to 348 rigs this past week, which was still down by 457 rigs from the 805 rigs that were in use as of the December 27th report of 2019, and was also still 56 fewer rigs than the all time low rig count prior to this year, and 1,581 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil increased by 1 rig to 264 oil rigs this week, after rising by 5 oil rigs the prior week, leaving us with 413 fewer oil rigs than were running a year ago, and still less than a sixth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations increased by 2 to 85 natural gas rigs, which was still down by 42 natural gas rigs from the 125 natural gas rigs that were drilling a year ago, and just 5.3% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil ​or gas, one rig classified as 'miscellaneous' continue to drill in Lake County, California this week, while a year ago there were three such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count increased by 1 to 17 rigs this week, with 14 of those rigs drilling for oil in Louisiana's offshore waters and three drilling for oil offshore from Texas...that was still 6 fewer Gulf rigs than the 23 rigs drilling in the Gulf a year ago, when 21 Gulf rigs were drilling for oil offshore from Louisiana, one rig was drilling for natural gas in the Mississippi Canyon offshore from Louisiana, and one rig was drilling for oil offshore from Texas...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig figure​s​ are equal to the Gulf rig counts....however, in addition to those rigs offshore, two rigs continue to drill through inland bodies of water this week, one in St Mary parish in southern Louisiana and the other in Chambers County, Texas, just east of Houston, while a year ago there was just one rig drilling on US inland waters..

The count of active horizontal drilling rigs was up by 1 to 309 horizontal rigs this week, which was still 394 fewer horizontal rigs than the 703 horizontal rigs that were in use in the US on December 27th of last year, and less than a quarter of the record of 1372 horizontal rigs that were deployed on November 21st of 2014...at the same time, the directional rig count was up by 1 to 22 directional rigs this week, but those were also still down by 31 from the 53 directional rigs that were operating during the same week of last year....meanwhile, the vertical rig count was unchanged at 17 vertical rigs this week, and those were still down by 32 from the 49 vertical rigs that were in use on December 27th of 2019....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of December 23rd, the second column shows the change in the number of working rigs between last week's count (December 18th) and this week's (December 23rd) count, the third column shows last week's December 18th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running during the count before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 27th of December, 2019...    

December 23 2020 rig count summary

note that this week saw the first decrease in the Permian basin rig count since September 11th....so, first checking for the details on the Permian in Texas, we find that one rig was added in Texas Oil District 8, which corresponds to the core Permian Delaware, while one rig was pulled out of Texas Oil District 7C, which roughly corresponds to the southern portion of the Permian Midland, which thus means that the net Permian rig count in Texas was unchanged...since the Permian basin rig count was down by 1 rig nationally, that means that the rig that was shut down in New Mexico must have been pulled out of the farthest west reaches of the Permian Delaware, to account for the national Permian decrease...elsewhere in Texas, we ha​​ve a rig added in Texas Oil District 6, which accounts for one of this week's Haynesville shale rig additions. while the other two Haynesville rigs were added in adjacent north​west​ern Louisiana....those two Haynesville​ gas​ rigs and the oil rig that was added offshore account for Louisiana's 3 rig increase...at the same time, in Oklahoma we ha​d a rig added in the Cana-Woodford while there​ was a two rig increase in the state, which means that an Oklahoma rig was added in an "other" basin that Baker Hughes does not track...on the other hand, the rig count is down by one in Colorado because there was a rig pulled out of the Denver-Julesburg Niobrara chalk....meanwhile, for rigs targeting natural gas, we have the three rigs that were added in the Haynesville​ shale​, while a natural gas rig was pulled out of West Virginia​'s​ Marcellus at the same time..

+

+

note: there's more here....