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

Sunday, March 24, 2019

DUC well backlog falls to 6.5 months on jump in completions; oil supplies see largest draw since July

after rising to a 4 month high midweek on the largest drop in US crude supplies since July, oil prices ended the week little changed after renewed fears of economic weakness knocked prices back...after ending last week 4.4% higher at $58.52 a barrel on lower inventories and supply disruptions, prices for US crude to be delivered in April rose 57 cents to $59.09 a barrel on Monday, supported by another OPEC commitment to continue supply cuts til June, and signs of a drop in U.S. crude supplies....an early rally then stalled on Tuesday after reports of Chinese pushback in trade talks, but oil prices still held near multi-month highs as OPEC reported higher "conformity" with their production cut agreement, with US crude finishing just 6 cents lower at $59.03 a barrel...prices then slumped 70 cents early Wednesday, but rallied later to a new 2019 high, after the EIA reported the largest oil storage drop since July, with the April oil contract expiring 80 cents higher at $59.83 a barrel while the contract for May crude rose 93 cents to $60.23 a barrel...May oil prices pulled back from those mulitmonth highs on Thursday after the Fed signaled there would be no rate increases in 2019, citing concerns over global growth prospects, which could threaten energy demand...oil prices then tanked with equity markets on Friday as fears of a global slowdown spread, falling to as low as $58.28 a barrel, but recovered to finish down 94 cents at $59.04 a barrel, thus managing to eke out a third straight weekly gain, with May oil finishing up 0.4% from its week-ago finish...

natural gas prices, meanwhile, finished lower, as cold weather forecasts early in the week, which had pushed gas prices 5.5 cents higher on Monday and 2.4 cents higher on Tuesday, gave way to warmer weather models and lower natural gas prices later in the week, when prices of natural gas for April delivery fell 5.4 cents on Wednesday, rose a tenth of a cent with the storage report on Thursday, and then fell 6.8 cents on Friday, to end the week at $2.753 per mmBTU, a decrease of 1.5% from the prior week's $2.795 per mmBTU close..

the natural gas storage report for the week ending March 15th from the EIA indicated that the quantity of natural gas held in storage in the US fell by 47 billion cubic feet to 1,143 billion cubic feet over the week, which meant our gas supplies ended the period 315 billion cubic feet, or 21.5% below the 1,458 billion cubic feet that were in storage on March 16th of last year, and 556 billion cubic feet, or 32.7% below the five-year average of 1,699 billion cubic feet of natural gas that have typically remained in storage after two full weeks of March....this week's 47 billion cubic feet withdrawal from US natural gas supplies was close to the 48 billion cubic feet withdrawal that analysts surveyed by S&P Global Platts had expected, but it was less than the average of 56 billion cubic feet of natural gas that have been withdrawn from US gas storage during the same winter week over the last 5 years....

with the heating season coming to a close soon, we'll include a graphic that includes this year's and last year's weekly change in natural gas inventories, as well as the long term averages, so we can get an idea what to expect, and what it will take to bring our current natural gas supplies back into the normal range...

March 23 2019 natural gas storage as of March 15

the above graph was copied from a blog post at Bespoke Weather that was published on Thursday of this week, shortly after the release of the natural gas storage report...on this graph, weekly withdrawals from natural gas storage in billions of cubic feet are shown below the zero line, and weekly additions to natural gas storage in billions of cubic feet are shown above the zero line; hence, the dark blue graph for 2019 shows this year's weekly withdrawals year to date, the red graph shows 2018's weekly additions and withdrawals of natural gas from storage, the green graph shows the 5 year average weekly change of natural gas in storage, and the orange graph shows the historical average weekly change of natural gas supplies in EIA data going back to 1992...

at the bottom far left corner in red you can see the record withdrawal of 359 billion of cubic feet of natural gas during the first week in January of 2018, and a withdrawal of 288 billion cubic feet during the third week of January 2018 that would have also been a record withdrawal if not for the first week; which combined lowered our natural gas supplies to 17.5% below normal to start last year, a deficit which persisted throughout the summer, despite near normal additions to storage....then, for the week ending November 16th 2018, you can see the big red spike downward that represented the largest drop in our natural gas supplies ever in mid-November, which came after our natural gas supplies had already started the winter at a 15 year low, and thus left us in an even more precarious situation...however, our supply deficit began to recover with the smallest Christmas-week withdrawal in 13 years, as you can see in the red spike higher on the far right side of the graphic, beginning a trend which persisted into January, when our withdrawals of natural gas remained well below normal, as you can see in the far left of the blue graph...

then, as you can see in the blue 2019 graph, our cold February and early March this year have more recently resulted in above normal withdrawals of gas from storage, up until this week, which have thus left our supplies 32.7% below the 5 year average of natural gas in storage, and 21.5% below last year's already well below normal levels...observed weather and forecasts indicate that the next two weeks should see withdrawals of gas from storage close to normal, before we head into April, when our natural gas needs should be able to be met out of production....nonetheless, our supplies as of this report are still 315 billion cubic feet below where they were on the same date last year, so to merely bring our supplies of gas back to the low levels that we started this past winter at, we have to add an average of 10 billion cubic feet more natural gas to storage each week this spring and summer than we did last year...on the graphic above, that would mean the blue graph would have to consistently stay above the red one through the next seven months, just to avoid going into the winter of 2020 in worse shape than we started this past winter..

The Latest US Oil Supply and Disposition Data from the EIA

this week's US oil data from the US Energy Information Administration, reporting on the week ending March 15th, indicated a big increase in our crude oil exports and a correspondingly large withdrawal from our commercial supplies of crude....our imports of crude oil rose by an average of 186,000 barrels per day to an average of 6,932,000 barrels per day, after falling by an average of 255,000 barrels per day the prior week, while our exports of crude oil rose by an average of 846,000 barrels per day to 3,392,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,540,000 barrels of per day during the week ending March 15th, 660,000 fewer barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was estimated to be 100,000 barrels per day greater than last week at 12,100,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 15,640,000 barrels per day during this reporting week...

meanwhile, US oil refineries were using 16,198,000 barrels of crude per day during the week ending March 15th, 178,000 more barrels per day than the amount of oil they used during the prior week, while over the same period 1,370,000 barrels of oil per day were reportedly being withdrawn from the oil that's in storage in the US.....therefore, this week's crude oil figures from the EIA would seem to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 812,000 more barrels per day than the oil refineries reported they used during the week....to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (-812,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that is labeled in their footnotes as "unaccounted for crude oil"....with that large of a disparity, we have to figure one or more of this week's oil metrics is in error by a statistically significant amount.. (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) indicated that the 4 week average of our oil imports fell to an average of 6,649,000 barrels per day last week, now 11.2% less than the 7,487,000 barrel per day average that we were importing over the same four-week period last year.... the 1,370,000 barrel per day decrease in our total crude inventories all came out of our commercially available stocks of crude oil, as the oil stored in our Strategic Petroleum Reserve remained unchanged...this week's crude oil production was reported to be 100,000 barrels per day higher at 12,100,000 barrels per day because the rounded estimate for output from wells in the lower 48 states rose by 100,000 barrels per day to 11,600,000 barrels per day, while a 4,000 barrel per day increase in Alaska's oil production to 484,000 barrels per day was not enough to make a difference in the rounded national total...last year's US crude oil production for the week ending March 16th was at 10,407,000 barrels per day, so this reporting week's rounded oil production figure was 16.3% above that of a year ago, and 43.6% 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 88.9% of their capacity in using 16,198,000 barrels of crude per day during the week ending March 15th, up from 87.6% of capacity the prior week, but still a bit lower than before Venezuelan imports of heavy crude​ that Gulf Coast refineries are optimized to use were cut off....the 16,198,000 barrels per day of oil that were refined this week were down by 3.5% from the 16,777,000 barrels of crude per day that were being processed during the week ending March 16th, 2018, when US refineries were operating at 91.7% of capacity... 

with the increase in the amount of oil being refined, the gasoline output from our refineries was also higher, rising by 190,000 barrels per day to 9,925,000 barrels per day during the week ending March 15th, after our refineries' gasoline output had decreased by 117,000 barrels per day the prior week....with that increase in ​​the week's gasoline output, ​this week's gasoline production​ was​ little changed from the 9,932,000 barrels of gasoline that were being produced daily during the same week last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 67,000 barrels per day to 4,923,000 barrels per day, after that output had decreased by 63,000 barrels per day the prior week....after this week's increase, the week's distillates production was more than 9.3% above the 4,503,000 barrels of distillates per day that were being produced during the week ending March 16th, 2018.... 

even with the increase in our gasoline production, the supply of gasoline left in storage at the end of the week fell by 4,587,000 barrels to 241,503,000 barrels over the week to March 15th, after supplies had fallen by 4,624,000 barrels over the prior week....our gasoline supplies continued to fall again this week because the amount of gasoline supplied to US markets increased by 269,000 barrels per day to 9,409,000 barrels per day, after increasing by 78,000 barrels per day the prior week, even as our exports of gasoline fell by 272,000 barrels per day to 659,000 barrels per day, while our imports of gasoline rose by 220,000 barrels per day to 793,000 barrels per day...after having reached a record high eight weeks ago, our gasoline inventories are now fractionally below last March 16th's level of 243,065,000 barrels, even as they remain roughly 2% above the five year average of our gasoline supplies at this time of the year...

likewise, even with the increase in our distillates production, our supplies of distillate fuels fell for the 18th time in twenty-six weeks, decreasing by 4,127,000 barrels to 132,242,000 barrels during the week ending March 15th, after our distillates supplies had increased by 383,000 barrels over the prior week...our distillates supplies decreased by this week because the amount of distillates supplied to US markets, a proxy for our domestic demand, rose by 753,000 barrels per day to 4,706,000 barrels per day, and because our imports of distillates fell by 136,000 barrels per day to 102,000 barrels per day, while our exports of distillates fell by 177,000 barrels per day to 909,000 barrels per day...but even with this week's inventory decrease, our distillate supplies ended the week 0.9% above the 131,044,000 barrels that we had stored on March 16th, 2018, but fell to roughly 4% below the five year average of distillates stocks for this time of the year...

finally, with the big jump in this week's oil exports, our commercial supplies of crude oil in storage decreased for the third time in 9 weeks, falling by 9,589,000 barrels over the week, from 449,072,000 barrels on March 8th to 439,483,000 barrels on March 15th...with that big draw, the largest since July of last year, our crude oil inventories are now roughly 2% below the recent five-year average of crude oil supplies for this time of year, but remain around 30% above the prior 5 year (2009 - 2013) average of crude oil stocks after the second full week of March, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had mostly been rising since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of March 15th were still 2.6% above the 428,306,000 barrels of oil we had stored on March 16th of 2018, while falling to 17.6% below the 533,110,000 barrels of oil that we had in storage on March 17th of 2017, and 12.4% below the 501,517,000 barrels of oil we had in storage on March 18th of 2016...       

This Week's Rig Count

US drilling rig activity slowed for the fifth week in a row and is now down by 7% so far this year, as the lower prices for both oil and natural gas we've seen since year end​ combined with​ the large backlog of uncompleted wells​​ have continued to impact drilling decisions....Baker Hughes reported that the total count of rotary rigs running in the US fell by 10 rig to 1016 rigs over the week ending March 22nd, which was still 21 more rigs than the 995 rigs that were in use as of the March 23rd report of 2018, but down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...  

the count of rigs drilling for oil fell by 9 rig​s​ to 824 rigs this week, which was still 20 more oil rigs than were running a year ago, while it was well below 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 decreased by 1 to 192 natural gas rigs, which was just 2 more than the 190 natural gas rigs that were drilling a year ago, but way down from the modern era high of 1,606 natural gas targeting rigs that were deployed on August 29th, 2008...

drilling activity offshore in the Gulf of Mexico was down by 2 rigs to 20 rigs this week, which was still up by 7 rigs from the 13 rigs active in the Gulf a year ago, which was a multiyear low at that time...the count of active horizontal drilling rigs decreased by 7 rigs to 900 horizontal rigs this week, which was still 30 more horizontal rigs active than the 870 horizontal rigs that were in use in the US on March 23rd of last year, but was down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014.....at the same time, the vertical rig count decreased by 1 rig to 53 vertical rigs this week, which was also down by 10 rigs from the 63 vertical rigs that were in use during the same week of last year....in addition, the directional rig count was down by 2 to 63 directional rigs this week, which was ​still ​up by 1 rig from the 62 directional rigs that were operating on March 23rd of 2018... 

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major producing states, and the second table 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 March 22nd, the second column shows the change in the number of working rigs between last week's count (March 15th) and this week's (March 22nd) count, the third column shows last week's March 15th active rig count, the 4th column shows the change between the number of rigs running on Friday and those running before the equivalent 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 23rd of March, 2018...    

March 22 2019 rig count summary

as you can see, half of this week's rig decrease was ​from the Permian of west Texas and New Mexico, which has now seen their uncompleted well total top 4,000, reducing the​ir​ incentive to drill more...in the Texas Permian, 3 rigs were pulled out of Texas Oil District 8, which would generally correspond to the core Permian Delaware, and one rig was removed from Texas Oil District 7C, or what would be the southern part of the Permian Midland basin...since a total of 5 rigs were pulled out of the Permian, one of them was th​erefore pulled ​out ​from the Permian Delaware in New Mexico, where there was thus also another rig shut down in another part of the state...other than the 4 rig decrease in Texas, you ​also ​see Louisiana's rig count was down by 3; those included the 2 rigs ​shut down ​in the state's Gulf of Mexico waters, and a gas ​rig pulled from the Haynesville shale in the northwest quadrant of the state...​in addition to that ​Haynesville natural gas​ rig, another gas rig was pulled out of the Arkoma Woodford in Oklahoma, while a natural gas rig was added in Ohio's Utica shale...other than those 3, all other changes this week were oil directed rigs, including the 4 rigs shut down in basins not tracked separately by Baker Hughes, which are not shown above...

DUC well report for February

Monday of the  past week saw the release of the EIA's Drilling Productivity Report for March, which includes the EIA's February data for drilled but uncompleted oil and gas wells in the 7 most productive shale regions...for the 11th month in a row, this report showed an increase in uncompleted wells nationally in February, even as drilling of new wells decreased ​and completions of drilled wells increased....like most previous months, this month's uncompleted well increase was largely due to an increase of newly drilled but uncompleted wells (DUCs) in the Permian basin of western Texas and New Mexico, with modest increases of uncompleted wells in the Eagle Ford of south Texas and the Niobrara chalk of the Rockies front range also contributing...for all 7 sedimentary regions covered by this report, the total count of DUC wells increased by 93 wells, from a revised 8,483 DUC wells in January to 8,576 DUC wells in February, a 24.5% increase from the 6,887 wells that had been drilled but remained uncompleted as of the end of February a year ago...that was as 1,418 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during February, down by 14 from the 1,432 wells drilled in January, while 1,325 wells were completed and brought into production by fracking, a increase of 113 well completions from the 1,212 completions seen in January...at the February completion rate, the 8,576 drilled but uncompleted wells left at the end of the month represent a 6.5 month backlog of wells that have been drilled but not yet fracked...  

as has been the case for most of the past two years, the February DUC well increases were predominantly oil wells, with most of those in the Permian basin...the Permian basin saw its total count of uncompleted wells rise by 88, from 3,916 DUC wells in January to 4,004 DUCs in February, as 574 new wells were drilled into the Permian, but only 486 wells in the region were fracked...at the same time, DUC wells in the Eagle Ford of south Texas increased by 16, from 1,527 DUC wells in January to 1,543 DUCs in February, as 208 wells were drilled in the Eagle Ford during January, while 192 Eagle Ford wells were completed...over the same period, the drilled but uncompleted well count in the Niobrara chalk of the Rockies' front range increased by 8 wells to 527, as 194 Niobrara wells were drilled in February while 186 Niobrara wells were being fracked...in addition, the natural gas producing Haynesville shale of the northern Louisiana-Texas border region also saw their uncompleted well inventory increase by 4 wells to 211, as 57 wells were drilled into the Haynesville during February, while 53 Haynesville wells were fracked during the same period... meanwhile, DUC wells in the Bakken of North Dakota rose by 1, from 722 DUC wells in January to 723 DUCs in February, as 113 wells were drilled into the Bakken in January, while 112 of the drilled wells in that basin were completed...

on the other hand, the number of DUC wells in the Anadarko basin region centered in Oklahoma decreased by 18 to 1,053, as 145 wells were drilled into the Anadarko basin during February while 163 Anadarko wells were being fracked....lastly, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 6 wells, from 521 DUCs in January to 515 DUCs in February, as 1​27 wells were drilled into the Marcellus and Utica shales, while 1​33 of the already drilled wells in the region were fracked.....thus, for the month of February, DUCs in the five oil basins tracked by in this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) increased by a net of 95 wells to 7,850 wells, while the uncompleted well count in the natural gas basins (the Marcellus, Utica, and the Haynesville) decreased by 2 wells to 726 wells, although as the report notes, once into production, more than half the wells drilled nationally will produce both oil and natural gas...

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note: there's more here..

Sunday, March 17, 2019

largest March natural gas draw on record cuts supplies to 34% below normal; global oil surplus persists despite OPEC cuts

oil prices rose to a four month high before pulling back a bit this past week, as repeated power outages in Venezuela cut their oil exports to zero and the EIA reported a surprise drop in US crude supplies....after ending little changed at $56.07 a barrel on economic concerns last week, contract prices for US crude to be delivered in April rose 72 cents to $56.79 a barrel on Monday, lifted by comments from the Saudi oil minister that OPEC-led supply cuts would continue til at least June....oil prices then rallied to as high as $57.55 a barrel on Tuesday after a country wide power blackout in Venezuela disrupted both oil production and exports, but settled just 8 cents higher at $56.87 a barrel as the gains were limited by a report from the International Energy Agency that the surge in U.S. output would continue til 2024...oil prices then rose steadily throughout Wednesday, first due to a Tuesday evening report from the American Petroleum Institute showing an unexpected decline in oil and fuel supplies, and then in the afternoon after the weekly EIA data confirmed the drop in crude supplies and in gasoline inventories, with oil prices ending the day $1.37 higher at a 4 month high of $58.61 a barrel....oil extended those gains on Thursday, rising 35 cents to $58.61 a barrel, after the OPEC secretariat urged producers to continue supply cuts ahead of a meeting between representatives of Russia and the cartel....oil prices finally eased slightly on Friday after hitting a new 2019 high at $58.95 a barrel, as a slew of weak US economic reports renewed demand concerns, with oil closing 9 cents lower at $58.52 a barrel, but still finishing with a weekly gain of 4.4%, the sharpest weekly rise since the period ended Feb. 15th...

natural gas prices, on the other hand, finished the week lower, as forecasts turned warmer and the last big withdrawal of gas from supplies for this winter was a bit less than traders had expected...prices of natural gas for April delivery were initially down 9.3 cents, or more than 3% to $2.772 per mmBTU on Monday, after forecasts for late March had turned warmer over the weekend....gas prices then pushed 1.2 cents higher on Tuesday and 3.6 cents higher on Wednesday, as traders anticipated what was to be a record storage report for March on Thursday...although natural gas contracts sold off with the release of the report, prices still ended Thursday 3.5 cents higher on concerns about depletion of the natural gas stored in salt domes in the South...with a warmer forecast for late March released on Friday, prices then fell back 6 cents to end the week 2.4% lower at $2.795 per mmBTU...

the natural gas storage report for the week ending March 8th from the EIA indicated that the quantity of natural gas held in storage in the US fell by a March record 204 billion cubic feet to 1,186  billion cubic feet over the week, which meant our gas supplies ended the period 359 billion cubic feet, or 22.3% below the 1,545 billion cubic feet that were in storage on March 9th of last year, and 569 billion cubic feet, or 34.2% below the five-year average of 1,755 billion cubic feet of natural gas that have typically remained in storage after the first full week of March....this week's 204 billion cubic feet withdrawal from US natural gas supplies was a bit less than the 209 billion cubic feet withdrawal that analyst's surveys had forecast, but it was more than double the average of 99 billion cubic feet of natural gas that have been withdrawn from US gas storage during the same winter week over the last 5 years.... 

with a record March withdrawal of gas from storage this week, we'll include below the summary table that heads up the Weekly Natural Gas Storage Report page at the EIA to bring you all up to date with where our supplies stand now... 

March 16 2019 natural gas in storage as of March 8

the above table came from Weekly Natural Gas Storage Report for March 8th, and it shows the amount of natural gas in storage as of March 8th in billions of cubic feet in each of 5 major US regions and in total in the first column, the amount of natural gas in storage on March 1st in the 2nd column, and the difference between the two in the third or "net change" column, with negative numbers in that column representing a natural gas withdrawal during the week...then, the 5th and 6th columns show the amount of natural gas in storage as of March 8th of last year, and the percentage change from last year to this year, while the last two columns show the five year average amount of gas in storage on March 8th for the years 2014 to 2018, and again the percentage change from that 5 year average to this year's natural gas inventory on the same date... 

you can see from that table that natural gas storage facilities in the Eastern US saw a 49 billion cubic feet draw from their supplies over the week, which was well more than their average 34 billion cubic foot withdrawal during the same week over the past five years, and hence the region's gas supply deficit rose to 22.5% below average for this time of year, up from the 16.4% shortfall shown on this table last week...at the same time, natural gas supplies in the Midwest fell by 51 billion cubic feet, also quite a bit higher than their normal 32 billion cubic feet pull for that date, as their supply deficit increased to 27.9% below the average for the second weekend of March, up from 21.4% below normal last week...meanwhile, the South Central region saw a 88 billion cubic feet drop in their supplies, way above their normal 23 billion cubic foot withdrawal, as their natural gas storage deficit increased from 23.5% to 33.5% below their five-year average for this time of year...at the same time, 7 billion cubic feet were pulled out of natural gas supplies in the sparsely populated Mountain region, which has only averaged a 4 billion cubic feet withdrawal during this same week over the last 5 years, and hence their gas supply deficit from normal rose to 43.1%, up from 39.2% a week ago...finally, 10 billion cubic feet of natural gas were withdrawn from storage in the Pacific region, in contrast to the 5 billion cubic feet normally withdrawn in those western states during the same week of March, and hence their natural gas supply deficit rose to 48.7% below normal for this time of year, up from 45.1% a week ago....  

even with natural gas supplies as depleted as they are now, and even with supplies in the Pacific and Mountain regions already at their modern day lows, it seems unlikely that we'd see any shortages any more at this time of year, since we've usually warmed enough nationally by April to begin adding surplus gas to storage for next winter....so it's natural gas for next winter that we'll have to be concerned about now, since our supplies as of this report are now 359 billion cubic feet below where they were on the same date in 2018...unless we can improve considerably on 2018's surplus, and can add at least 10 billion cubic feet o​r more natural gas to storage each week this year than we did last year, we risk starting next winter with supplies lower than we started the current one, which was at a 15 year low at the time...

The Latest US Oil Supply and Disposition Data from the EIA

this week's US oil data from the US Energy Information Administration, reporting on the week ending March 8th, indicated a modest decreases in both our crude oil imports and our oil exports, but a withdrawal from our commercial supplies of crude, as oil that was unaccounted shifted from the supply side of the balance sheet to the demand side....our imports of crude oil fell by an average of 255,000 barrels per day to an average of 6,746,000 barrels per day, after rising by an average of 1,084,000 barrels per day the prior week, while our exports of crude oil fell by an average of 257,000 barrels per day to 2,546,000  barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,200,000 barrels of per day during the week ending March 8th, 2,000 more barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was estimated to be 100,000 barrels per day lower than last week at 12,000,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 16,200,000 barrels per day during this reporting week...

meanwhile, US oil refineries were using 16,020,000 barrels of crude per day during the week ending March 8th, 30,000 more barrels per day than the amount of oil they used during the prior week, while over the same period 522,000 barrels of oil per day were reportedly being withdrawn from the oil that's in storage in the US.....therefore, this week's crude oil figures from the EIA would seem to indicate that our total working supply of oil from net imports, from oilfield production, and from storage was 732,000 more barrels per day than the oil refineries reported they used during the week....to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (-732,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that is labeled in their footnotes as "unaccounted for crude oil"....since last week's unaccounted oil was at +700,000 barrels per day, that means 1,432,000 million barrels of oil per day disappeared off the US oil balance sheet from one week to the next, meaning that any comparison of figures from this week to last week is essentially meaningless.. (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) indicated that the 4 week average of our oil imports rose to an average of 6,797,000 barrels per day last week, now 9.0% less than the 7,473,000 barrel per day average that we were importing over the same four-week period last year.... the 522,000 barrel per day decrease in our total crude inventories all came out of our commercially available stocks of crude oil, as the oil stored in our Strategic Petroleum Reserve remained unchanged...this week's crude oil production was reported to be 100,000 barrels per day lower at 12,000,000 barrels per day because the rounded estimate for output from wells in the lower 48 states fell by 100,000 barrels per day to 11,500,000 barrels per day, while a  6,000 barrel per day decrease in Alaska's oil production to 480,000 barrels per day was not enough to make a difference in the rounded national total...last year's US crude oil production for the week ending March 9th was at 10,381,000 barrels per day, so this reporting week's rounded oil production figure was 15.6% above that of a year ago, and 42.4% 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 87.6% of their capacity in using 16,020,000 barrels of crude per day during the week ending March 8th, up from 87.5% of capacity the prior week, but still lower than before Venezuelan imports of heavy crude were cut off....the 16,020,000 barrels per day of oil that were refined this week were down by 0.9% from the 16,162,000 barrels of crude per day that were being processed during the week ending March 9th, 2018, when US refineries were operating at 90.0% of capacity... 

with little change in the amount of oil being refined, the gasoline output from our refineries was somewhat lower, falling by 117,000 barrels per day to 9,735,000 barrels per day during the week ending March 8th, after our refineries' gasoline output had increased by 299,000 barrels per day the prior week....with that decrease in the week's gasoline output, our gasoline production was 5.3% lower than the 10,280,000 barrels of gasoline that were being produced daily during the same week last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 63,000 barrels per day to 4,856,000 barrels per day, after that output had increased by 103,000 barrels per day the prior week....but even after this week's decrease, the week's distillates production was more than 8.4% above the 4,478,000 barrels of distillates per day that were being produced during the week ending March 9th, 2018.... 

with the decrease in our gasoline production, the supply of gasoline left in storage at the end of the week fell by 4,624,000 barrels to 246,090,000 barrels over the week to March 8th, after supplies had fallen by 4,227,000 barrels over the prior week....our gasoline supplies fell again this week in part because the amount of gasoline supplied to US markets increased by 78,000 barrels per day to 9,140,000 barrels per day, after increasing by 81,000 barrels per day the prior week, and because our exports of gasoline rose by 20,000 barrels per day to 931,000 barrels per day, even as our imports of gasoline rose by 18,000 barrels per day to 573,000 barrels per day...after having reached a record high seven weeks ago, our gasoline inventories are still fractionally above last March 9th's level of 244,758,000 barrels, and remain roughly 2% above the five year average of our gasoline supplies at this time of the year...

even with the decrease in our distillates production, our supplies of distillate fuels rose for the 8th time in twenty-five weeks, increasing by 383,000 barrels to 136,369,000 barrels during the week ending March 8th, but after our distillates supplies had decreased by 2,393,000 barrels over the prior week...our distillates supplies increased by this week because our exports of distillates fell by 284,000 barrels per day to 1,086,000 barrels per day, while our imports of distillates fell by 8,000 barrels per day to 238,000 barrels per day, and because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 192,000 barrels per day to 3,953,000 barrels per day...with this week's inventory increase, our distillate supplies ended the week 2.5% above the 133,066,000 barrels that we had stored on March 9th, 2018, but remained roughly 1% below the five year average of distillates stocks for this time of the year...

finally, while 1,432,000 million barrels of oil per day went missing from last week​'s stats​ to this week​'s​, our commercial supplies of crude oil in storage decreased for the second time in 8 weeks, falling by 3,862,000 barrels over the week, from 452,934,000 barrels on March 1st to 449,072,000 barrels on March 8th...but with weekly increases in 17 out of the past 25 weeks, our crude oil inventories are still roughly 2% above the recent five-year average of crude oil supplies for this time of year, and around 35% above the prior 5 year (2009 - 2013) average of crude oil stocks after the first full week of March, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had mostly been rising since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of March 8th were 4.2% above the 430,928,000 barrels of oil we had stored on March 9th of 2018, while falling to 15.0% below the 528,156,000 barrels of oil that we had in storage on March 10th of 2017, and 8.8% below the 492,160,000 barrels of oil we had in storage on March 11th of 2016...      

OPEC's Monthly Oil Market Report

next we're going to review OPEC's March Oil Market Report (covering February OPEC & global oil data), which was released on Thursday of this past week, and which is available as a free download, and hence it's the report we check for monthly global oil supply and demand data...the first table from this monthly report that we'll look at is from the page numbered 60 of that report (pdf page 70), 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 an impartial adjudicator as to whether their output quotas and production cuts are being met, to thus resolve any potential disputes that could arise if each member reported their own figures...

February 2019 OPEC crude output via secondary sources

as we can see on this table of official oil production data, OPEC's oil output fell by 221,000 barrels per day to 30,549,000 barrels per day in February, from their revised January production total of 30,770,000 barrels per day...however that January figure was originally reported as 30,806,000 barrels per day, so that means their production for February was effectively a 257,000 barrel per day decrease from the previously reported figures (for your reference, here is the table of the official January OPEC output figures as reported a month ago, before this month's revisions)...

as we can tell from the far right column on the table above, output cuts by Saudi Arabia and Venezuela alone accounted for this month's production reduction, with the cut of 142,000 barrels per day in the oil output from Venezuela being​ involuntary,​ due to US sanctions on their exports....except for Iraq and Nigeria, the oil output from the other OPEC members shown above is pretty close to the output allocations assigned to each member after their December 7th meeting, when they agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers...this can be seen in the table of OPEC production allocations we've included below:

February 6 2019 Platts on OPEC allocations

the above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, which has more details: the column of numbers shows average daily production quota in millions of barrels of oil per day for each of the OPEC members for the first 6 months of this year, as was agreed to at their December 2018 meeting...note that Venezuela and Iran, whose oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by disruptive civil strife, are exempt from any production quotas, yet the oil output of all of them remains below that of the 4th quarter of 2018 shown in the fifth column of the OPEC production table above...

the next graphic we'll include shows us both OPEC and world oil production monthly on the same graph, over the period from March 2017 to February 2019, and it comes from page 61 (pdf page 71) of the March OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC 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...     

February 2019 OPEC report global oil supply

OPEC's preliminary estimate indicates that total global oil production fell by 0.16 million barrels per day to 99.15 million barrels per day in February, after January's total global output figure was revised down by 10,000 barrels per day from the 99.32 million barrels per day global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 65,000 barrels per day in February after that revision, with increased oil output from US, the UK and Brazil the major reasons for the non-OPEC production increase.... the 99.15 million barrels per day produced globally in February was also 1.50 million barrels per day, or 1.5% higher than the revised 97.65 million barrels of oil per day that were being produced globally in February a year ago (see the March 2018 OPEC report online (pdf) for the originally reported February 2018 details)...after the February decrease in OPEC's output, their February oil production of 30,549,000 barrels per day represented just 30.8% of what was produced globally during the month, down from the 31.0% share they reported for January....OPEC's February 2018 production was reported at 32,186,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year's total and new member Congo from this year's, are now producing 1,351,000 fewer barrels per day of oil than they were producing a year ago, with a 576,000 barrel per day decrease in output from Venezuela and a 1,070,000 barrel per day decrease in output from Iran from that time more than offsetting the year over year production increases of 245,000 barrels per day from the Emirates, 208,000 barrels per day from Iraq and 105,000 barrels per day from the Saudis...   

however, despite the 0.16 million barrels per day decrease in global oil output we've seen during February, on top of the revised 1.02 million barrels per day decrease in January, we still had a small surplus in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us... 

February 2019 OPEC report global oil demand

the table above comes from page 35 of the February OPEC Monthly Oil Market Report (pdf page 45), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2019 over the rest of the table...on the "Total world" line in the second column, we've circled in blue the figure that's relevant for February, which is their revised estimate of global oil demand during the first quarter of 2018...       

OPEC's estimate is that during the 1st quarter of this year, all oil consuming regions of the globe have been using 99.02 million barrels of oil per day, which was the same as their estimate of a month ago....meanwhile, 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 still producing 99.15 million barrels per day during February, which means that there was a surplus of around 130,000 barrels per day in global oil production as compared to the demand now estimated for the month...in addition, with the downward revision of 10,000 barrels per day to January's output, the revised oil output surplus for January would now have been 290,000 barrels per day...

we should also note that the previous estimate for 2018's oil demand was revised 40,000 barrels per day lower with this report, a figure which we've highlighted in green...that downward revision wasn't evenly spread over the whole year, however, as the 2018 demand table on page 34 of the March OPEC Monthly Oil Market Report (pdf page 44) shows that demand for the 4th quarter was revised 210,000 barrels per day lower, and that demand for the 3rd quarter was revised 50,000 barrels per day lower, while oil demand for 2018's 1st and 2nd quarter was unrevised from previously published figures...that means that for all of 2018, global oil demand exceeded production by roughly ​14,450,000 barrels, a comparatively tiny net oil shortfall that would be the equivalent of less than 3 and a half hours of global oil production at the revised December production rate...... 

This Week's Rig Count

US drilling activity slowed for the fourth week in a row, while active rigs are still down 6% so far this year, as the lower prices for both oil and natural gas we've seen in recent weeks and the large backlog of uncompleted wells continue to impact drilling decisions....Baker Hughes reported that the total count of rotary rigs running in the US fell by 1 rig to 1026 rigs over the week ending March 15th, which was still 36 more rigs than the 990 rigs that were in use as of the March 16th report of 2018, but down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...  

the count of rigs drilling for oil fell by 1 rig to 833 rigs this week, which was still 33 more oil rigs than were running a year ago, while it was well below 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 unchanged at 193 natural gas rigs, which was just 4 more than the 189 natural gas rigs that were drilling a year ago, but way down from the modern era high of 1,606 natural gas targeting rigs that were deployed on August 29th, 2008...

drilling activity offshore in the Gulf of Mexico was unchanged at 22 rigs this week, which is up by 9 from the 13 rigs active in the Gulf a year ago, which was sitting at a multiyear low at that time...the count of active horizontal drilling rigs increased by 3 rigs to 907 horizontal rigs this week, which was also 42 more horizontal rigs active than the 865 horizontal rigs that were in use in the US on March 16th of last year, but was down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014.....on the other hand, the vertical rig count decreased by 2 rigs to 54 vertical rigs this week, which was also down by 3 rigs from the 57 vertical rigs that were in use during the same week of last year....at the same time, the directional rig count was down by 2 to 65 directional rigs this week, which was also down from the 68  directional rigs that were operating on March 16th of 2018... 

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major producing states, and the second table 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 March 15th, the second column shows the change in the number of working rigs between last week's count (March 8th) and this week's (March 15th) count, the third column shows last week's March 8th active rig count, the 4th column shows the change between the number of rigs running on Friday and those running before the equivalent 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 16th of March, 2018...   

March 15 2019 rig count summary

as you can see, the rig decreases this week were concentrated in the Cana Woodford and Mississippian Lime, which are both in Oklahoma, although the Mississippian formation does stretch into Kansas, while the week's major drilling increase was in the Williston basin of North Dakota...those were all oil directed rigs, by the way; there were no net state or basin changes whatsoever in any natural gas rig metrics this week...in the Permian basin, which still accounts for more than half of the horizontal drilling nationally, single rig decreases are shown in Texas Oil District 8, which corresponds to the core Permian Delaware, and Texas Oil District 7C, or the southern Permian Midland basin, while a Permian rig was concurrently added in the Permian Delaware on the New Mexico side of the state line...meanwhile, the 3 rig increase in Alaska reverses the 4 rig decrease in the state the prior week, so those changes may have been weather related, rather than based on any economics of future production....we would also note that other than the changes shown above in the major producing states, Alabama also had its only rig pulled out this week, rendering the state rigless for the second time this year, in contrast to a year ago, when there was one rig active in the state....

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Note:  there’s more here

Sunday, March 10, 2019

Ohio’s active drilling rigs drop by 5 and are now down by more over the past year than all other states combined

oil prices were little changed over the past week, as early optimism about a US - China trade deal gave way to renewed economic uncertainly by the end of the week... after falling 3% to $55.80 a barrel on signs of global economic weakness the prior week, prices of US crude for April delivery initially rose 79 cents to $56.59 a barrel on Monday, as the U.S. and China were thought to be near a settlement of the trade dispute that's been threatening to reduce oil demand... after continuing higher early Tuesday, oil prices came under pressure after the restart of Libya's biggest oilfield and after a Chinese forecast of slower economic growth, and ended the day's trading 3 cents lower at $56.56 a barrel...oil prices turned ​down again on Wednesday,after EIA data showed an unexpectedly large increase in crude inventories, with oil settling 34 cents lower at $56.22 a barrel...oil prices retreated again early on Thursday, after the European Central Bank cut its economic growth forecast for the continent, but rose later to close 44 cents higher at $56.66 a barrel after new data showed that OPEC had cut its February oil output to the lowest in nearly four years....oil then sold off early on Friday on weak data from China, poor jobs figures in the U.S., and news that Norway’s sovereign wealth fund was divesting from the oil sector, with oil prices ​dropping more than $2 to a 3 week low of $54.52, but then pared much of th​os​e early losses after another decline in oil-drilling rigs suggested a slowing of domestic production, and ended down just 59 cents at $56.07 a barrel, thus managing to end the week a half-percent higher than where it began...

natural gas prices also managed to end a bit higher for the week, but with even less volatility than oil, as the ongoing cold outbreak was already a given and traders were limited to reacting to nuanced changes in the forecasts...hence, after falling two tenths of a cent on Monday, rising 2.7 cents on Tuesday, falling 4.3 cents Wednesday, rising 2.5 cents on Thursday, and a tenth of a penny on Friday, natural gas for April delivery ended the week at $2.865 per mmBTU, an increase of just six-tenths of a cent for the entire week...

the natural gas storage report for the week ending March 1st from the EIA indicated that the quantity of natural gas held in storage in the US fell by 149 billion cubic feet to 1,390 billion cubic feet over the week, which meant our gas supplies ended the period 243 billion cubic feet, or 14.9% below the 1,633 billion cubic feet that were in storage on March 2nd of last year, and 464 billion cubic feet, or 25.0% below the five-year average of 1,854 billion cubic feet of natural gas that have typically remained in storage at the beginning of March....this week's 149 billion cubic feet withdrawal from US natural gas supplies was in line with the consensus forecasts, but it was 40 billion cubic feet more than the average of 109 billion cubic feet of natural gas that have been withdrawn from US gas storage during the same winter week over the last 5 years.... 

natural gas storage facilities in the Eastern US saw a 43 billion cubic feet draw from their supplies over the week, well more than their average 31 billion cubic foot withdrawal during the same week over the past five years, and thus the region's gas supply deficit rose to 16.4% below average for this time of year, up from the 12.2% shortfall shown last week....meanwhile, natural gas supplies in the Midwest fell by 47 billion cubic feet, also higher than their normal 38 billion cubic feet regional pull for the date, as their supply deficit increased to 21.4% below the average for the beginning of March, up from 17.7% below normal last week...at the same time, the South Central region saw a 41 billion cubic feet drop in their natural gas supplies, well above their normal 27 billion cubic foot withdrawal, as their natural gas storage deficit increased from 20.8% to 23.5% below their five-year average for this time of year...on the other hand, only 6 billion cubic feet were pulled out of natural gas supplies in the mostly sparsely populated Mountain region, the same as the 6 billion cubic feet withdrawal during this same week over the last 5 years, but their gas supply deficit from normal still rose to 39.2%, up from 37.3% a week ago...finally, 10 billion cubic feet of natural gas were withdrawn from storage in the Pacific region, compared to the 9 billion cubic feet normally withdrawn from storage in those western states during the same week of winter, and as a result their natural gas supply deficit rose to 45.1% below normal for this time of year, up from 42.7% a week ago.... 

while the weekly report we've just reviewed obviously showed a greater than normal withdrawal of natural gas nationwide due to the colder than normal temperatures, the current week that will report next week is shaping up to be ​near ​a record for this time of year, which we can see from the graphic below:

March 9 2019 regional temperatures from Feb 22 to Mar 7

the above graphic, from the EIA's interactive natural gas storage dashboard, shows the daily average regional temperatures for each of the 5 regions covered by the storage report over the period from February 22nd through March 7th...in addition, it also color-codes each of those average daily temperatures to indicate how much above​ normal (tan)​ or below normal​ (blue)​ they are, as indicated by the legend at the bottom of the graphic...thus you can see for the week ending March 1st which we have just reviewed, average temperatures in the East ran between 38 and 49 degrees Fahrenheit, and most of those​ average​ temperatures were above normal, as indicated by the tan shading...we also see that each of the other regions other than the Pacific had two days of temperatures above during the period; February 23rd and 24th in the Midwest, February 23rd and 27th in the South, and February 28th and March 1st in the Mountain states...​so while it was colder than average nationally, there were a number of days that mitigated that cold​

however, when we look at the temperatures that have influenced natural gas withdrawals for the coming week's report, we can see that they have been much colder across the board, with the exception of the Pacific, which was still colder than normal each day nonetheless...included in that period were two days - March 4 and March 5 - in both the Midwest and South Central wherein ​average ​temperatures were more than 20 degrees below normal for those dates...in additon, temperatures in the East shift from above normal in the week to March 1st to below normal for the week following...so there's a good chance the next report will show one of the largest natural gas withdrawals on record for this late in the winter, if not the largest....

The Latest US Oil Supply and Disposition Data from the EIA

this week's US oil data from the US Energy Information Administration, reporting on the week ending March 1st, indicated a big rebound in our crude oil imports from last week's 23 year low​, accompanied by​ a moderate​ly large​ drop in our oil exports, and hence there was a large​ ​surplus ​of ​oil ​left ​to ​add to ​our commercial supplies of crude....our imports of crude oil rose by an average of 1,084,000 barrels per day to an average of 7,001,000 barrels per day, after falling by an average of 1,605,000 barrels per day to a 23 year low the prior week, while our exports of crude oil fell by an average of 556,000 barrels per day to 2,803,000  barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,198,000 barrels of per day during the week ending March 1st, 1,640,000 more barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was estimated to be unchanged at 12,100,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 16,298,000 barrels per day during this reporting week...

meanwhile, US oil refineries were using 15,990,000 barrels of crude per day during the week ending March 1st, 100,000 more barrels per day than the amount of oil they used during the prior week, while over the same period 1,008,000 barrels of oil per day were reportedly being added to the oil that's in storage in the US.....therefore, this week's crude oil figures from the EIA would seem to indicate that our total working supply of oil from net imports and from oilfield production was 700,000 fewer barrels per day than the oil that was added to storage plus what refineries reported they used during the week....to account for that disparity between the supply of oil and the disposition of it, the EIA inserted a (+700,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that is labeled in their footnotes as "unaccounted for crude oil"....an "unaccounted for oil" figure of that magnitude means that one or more of this week's oil stats is in error by a statistically significant amount (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) indicated that the 4 week average of our oil imports fell to an average of 6,663,000 barrels per day last week, now 11.7% less than the 7,549,000 barrel per day average that we were importing over the same four-week period last year.... the 1,008,000 barrel per day increase in our total crude inventories included an addition of 1,011,000 barrels per day to our commercially available stocks of crude oil, which was slightly offset by an initial 3,000 barrels per day withdraw​al​ from the oil stored in our Strategic Petroleum Reserve, probably front-running the administration's plan to sell 6 million barrels from the Strategic Petroleum Reserve between April and May to raise funds to modernize the facilities...this week's crude oil production was reported to be unchanged at a record 12,100,000 barrels per day because the rounded estimate for output from wells in the lower 48 states rose was unchanged at 11,600,000 barrels per day, while the 5,000 barrel per day decrease in Alaska's oil production to 486,000 barrels per day was not enough to make a difference in the rounded national total...last year's US crude oil production for the week ending February 23rd was at 10,369,000 barrels per day, so this reporting week's rounded oil production figure was 16.7% above that of a year ago, and 43.6% 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 87.5% of their capacity in using 15,990,000 barrels of crude per day during the week ending March 1st, up from 87.1% of capacity the prior week, but still lower than before heavy Venezuelan imports were cut off....the 15,990,000 barrels per day of oil that were refined this week was still the highest on record for the first of March, but essentially little changed from the 15,935,000 barrels of crude per day that were being processed during the week ending March 2nd, 2018, when US refineries were operating at 88.0% of capacity... 

with the increase in the amount of oil being refined, the gasoline output from our refineries was also higher, rising by 299,000 barrels per day to 9,852,000 barrels per day during the week ending March 1st, after our refineries' gasoline output had increased by 64,000 barrels per day the prior week....but even with that big increase in this week's gasoline output, our gasoline production was fractionally lower than the 9,923,000 barrels of gasoline that were being produced daily during the same week last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 103,000 barrels per day to 4,919,000 barrels per day, after that output had increased by 57,000 barrels per day the prior week....after that increase, this week's distillates production was more than 7.0% above the 4,596,000 barrels of distillates per day that were being produced during the week ending March 2nd, 2018.... 

despite the increase in our gasoline production, the supply of gasoline ​left ​in storage at the end of the week fell by 4,227,000 barrels to 250,714,000 barrels ​over the week to March 1st, after falling by 1,906,000 barrels over the prior week....our gasoline supplies fell again this week in part because the amount of gasoline supplied to US markets increased by 81,000 barrels per day to 9,062,000 barrels per day, after increasing by 181,000 barrels per day the prior week, and ​because our exports of gasoline rose by 96,000 barrels per day to 911,000 barrels per day, even as our imports of gasoline rose by 82,000 barrels per day to 555,000 barrels per day...after having set a record high six weeks ago, our gasoline inventories are now fractionally below last March 2nd's level of 251,029,000 barrels, while they remain roughly 3% above the five year average of our gasoline supplies at this time of the year...

even with the increase in our distillates production, our supplies of distillate fuels fell for the 17th time in twenty-four weeks, decreasing by 2,393,000 barrels to 135,986,000 barrels during the week ending March 1st, after our distillates supplies had decreased by 303,000 barrels over the prior week...our distillates supplies decreased by more this week than last because because our exports of distillates rose by 248,000 barrels per day to 1,362,000 barrels per day, while our imports of distillates fell by 85,000 barrels per day to 246,000 barrels per day, and because the amount of distillates supplied to US markets, a proxy for our domestic demand, rose by 69,000 barrels per day to 4,145,000 barrels per day...with this week's inventory decrease, our distillate supplies ended the week more than 1.0% below the 137,426,000 barrels that we had stored on March 2nd, 2018, and fell to roughly 3% below the five year average of distillates stocks for this time of the year...

finally, with the big jump in our oil imports and the moderate​ly large​ drop in our ​oil ​exports, our commercial supplies of crude oil in storage increased for the sixth time in 7 weeks, rising by 7,069,000 barrels over the week, from 445,865,000 barrels on February 22nd to 452,934,000 barrels on March 1st...with weekly increases in 17 out of the last 24 weeks, our crude oil inventories are now roughly 4% above the recent five-year average of crude oil supplies for this time of year, and more than 35% above the prior 5 year (2009 - 2013) average of crude oil stocks for the first of March, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories had mostly been rising since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of March 1st were 6.3% above the 425,906,000 barrels of oil we had stored on March 2nd of 2018, while remaining 14.3% below the 528,393,000 barrels of oil that we had in storage on March 3rd of 2017, and 7.7% below the 490,843,000 barrels of oil we had in storage on March 4th of 2016...     

This Week's Rig Count

US drilling activity slowed for the third week in a row and ​active rigs are now down 6% so far this year, as lower prices for both oil and natural gas ​and a large backlog of uncompleted wells ​continue to impact drilling decisions....Baker Hughes reported that the total count of rotary rigs running in the US fell by 11 rigs to 1027 rigs over the week ending March 8th, which was still 43 more rigs than the 984 rigs that were in use as of the March 9th report of 2018, but down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...  

the count of rigs drilling for oil fell by 9 rigs to 834 rigs this week, which was still 38 more oil rigs than were running a year ago, while it was well below 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 decreased by 2 rigs to 193 natural gas rigs, which was just 5 more than the 188 natural gas rigs that were drilling a year ago, but way down from the modern era high of 1,606 natural gas targeting rigs that were deployed on August 29th, 2008...

drilling activity offshore in the Gulf of Mexico was unchanged at 22 rigs this week, which is up by 9 from the 13 rigs active in the Gulf a year ago, which was at a multiyear low at that time...the count of active horizontal drilling rigs decreased by 7 rigs to 904 horizontal rigs this week, which was still 56 more horizontal rigs active than the 848 horizontal rigs that were in use in the US on March 9th of last year, but was down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014.....at the same time, the vertical rig count decreased by 4 rigs to 56 vertical rigs this week, which was also down by 5 rigs from the 61 vertical rigs that were in use during the same week of last year....on the other hand, the directional rig count was unchanged at 67 directional rigs this week, which was still down from the 75 directional rigs that were operating on March 9th of 2018... 

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major producing states, and the second table 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 March 8th, the second column shows the change in the number of working rigs between last week's count (March 1st) and this week's (March 8th) count, the third column shows last week's March 1st active rig count, the 4th column shows the change between the number of rigs running on Friday and those running before the equivalent 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 9th of March, 2018...   

March 8 2019 rig count summary

as you can see, the 5 rig drop in Ohio's Utica shale accounted for almost half of this week's rig decrease, and it leaves Ohio down by 9 rigs from a year ago, the largest year over year decrease in drilling in any producing state, and one of only four states where drilling has decreased from a year ago...despite that Ohio drop, however, natural gas rigs were only down by ​two, ​because 3 rigs were added to those drilling in Pennsylvania's Marcellus, which is now up by 5 rigs from last year...in addition, while the Haynesville shows no net change in its rig count, one natural gas rig was added in the Haynesville in northern Louisiana, while one Haynesville natural gas rig was shut down in northeast Texas at the same time...​among oil rigs, ​the one rig drop shown for the Permian basin also masks a bit of underlying activity...Permian basin changes in Texas include the addition of 3 rigs in Texas Oil District 8, which corresponds to the core Permian Delaware, while single rigs were being pulled out of Texas Oil District 8A, which would correspond to the northern Permian Midland, and Texas Oil District 7C, or the southern Permian Midland...since Texas thus saw net addition of one Permian rig, the two rigs that were pulled out in New Mexico ​must have ​also been working the Permian Delaware...also not​e​ that other than the numbers shown above for the major producing states, Indiana also had a rig pulled out this week, but still has one remaining, up from a year ago. when there was no activity in the state....

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Sunday, March 3, 2019

natural gas supplies 21.6% below seasonal average & falling; another US oil output record; oil imports drop to 23 year low

oil prices ended the week lower for the first time in three weeks as concerns about global economic weakness overwhelmed the OPEC-led supply cuts that had been driving prices higher...after rising $1.67 or 3% to $57.26 a barrel on th​os​e OPEC cuts and optimism for a US-China trade deal last week, prices for US crude for April delivery fell $1.78 to $55.48 a barrel on Monday after Trump tweeted “Oil prices getting too high" at OPEC, triggering a selloff that sent prices tumbling more than 3%...oil then traded in a narrow range on Tuesday on indications that OPEC planned to maintain their production cuts despite Trump's pressure, with April US crude finishing up 2 cents at $55.50 a barrel....oil prices rose early on Wednesday, after the Saudis brushed off Trump's tweet, with the Saudi Energy Minister responding to Trump by saying "We are taking it easy." and spiked higher later that day after the EIA reported the largest drop in US crude inventories in seven months, with oil closing $1.44 higher at $56.94 a barrel...that inventory rally continued into Thursday, but prices came under pressure from weak economic data from China and diminished expectations for a resolution to the US China trade dispute, but still ended 28 cents higher at $57.22 a barrel, even after the Energy Department announced it would ​pull 6 million barrels from the Strategic Petroleum Reserve and sell them into the market for delivery between April and May...after opening higher on Friday, the stream of weak economic reports from the US and Asia finally caught up with prices, as demand worries pushed oil down $1.42 or 2.5 percent to settle at $55.80 a per barrel, thus finishing the week​ roughly 3% ​lower than the prior Friday close, as even data showing a drop in OPEC output to its lowest in four years failed to support prices.

meanwhile, natural gas prices rose for a third straight week as weather forecasts continued to indicate winter like temperatures would continue into March...the contract for March natural gas spiked 11.9 cents or 4% on Monday as weather model guidance indicated even colder temperatures for the first third of March and added another 1.9 cents to end at $2.855 per mmBTU as trading in March natural gas expired...natural gas for April delivery, meanwhile, which ended last week at $2.739 per mmBTU, concurrently rose 7.6 cents higher on Monday and fell 1.9 cents on Tuesday, was little changed on Wednesday, and was trading nearly 3 cents higher at $2.827 on Thursday before the natural gas storage report came in weaker than expected and cut the day's increase to 1.3 cents...a cold-related spike in cash prices then pulled the April contract higher on Friday, topping $2.87 before it settled back to close at $2.859 per mmBTU, an increase of 4.7 cents on the day​..​

the natural gas storage report for the week ending February 22nd from the EIA indicated that the quantity of natural gas held in storage in the US fell by 166 billion cubic feet to 1,539 billion cubic feet over the week, which meant our gas supplies ended the period 154 billion cubic feet, or 9.1% below the 1,693 billion cubic feet that were in storage on February 23rd of last year, and 424 billion cubic feet, or 21.6% below the five-year average of 1,963 billion cubic feet of natural gas that have typically remained in storage after the third week of February....this week's 166 billion cubic feet withdrawal from US natural gas supplies was a bit less than the median 171 billion cubic feet ​withdrawal ​of stored gas that a Reuters poll of 19 market analysts expected, but was quite a bit more than the average of 104 billion cubic feet of natural gas that have been withdrawn from US gas storage during the same winter week over the last 5 years....

to put this week's natural gas storage report into perspective, we'll include the summary table that heads up the Weekly Natural Gas Storage Report page at the EIA below..

March 2 2019 natural gas storage as of February 22nd

as mentioned, the above table comes from Weekly Natural Gas Storage Report for February 22nd, and it shows the amount of natural gas in storage as of February 22nd in billions of cubic feet in each of 5 major US regions and in total in the first column, the amount of natural gas in storage on February 15th in the 2nd column, and the difference between the two in the third or "net change" column, with negative numbers in that column representing a natural gas withdrawal during the week...then, the 4th and 5th columns show the amount of natural gas in storage as of February 22nd of last year, and the percentage change from last year to this year, while the last two columns show the five year average amount of gas in storage on February 22nd for the years 2014 to 2018, and again the percentage change from that 5 year average to this year's natural gas inventory on the same date...

hence, you can see​ from that table​ that natural gas storage facilities in the Eastern US saw a 41 billion cubic feet draw from their supplies over the week, which turns out to be more than their average 35 billion cubic foot withdrawal during the same week over the past five years, and hence the region's gas supply deficit rose to 12.2% below average for this time of year, up from the 9.8% shortfall​ shown​ last week....meanwhile, natural gas supplies in the Midwest fell by 51 billion cubic feet, also higher than their normal 39 billion cubic feet pull for that date, as their supply deficit increased to 17.7 below the ​average for the third weekend of February, up from 14.0% below normal last week...the South Central region saw a 55 billion cubic feet drop in their supplies, way above their normal 19 billion cubic foot withdrawal, as their natural gas storage deficit increased from 16.1% to 20.8% below their five-year average for this time of year...at the same time, 8 billion cubic feet were pulled out of natural gas supplies in the sparsely populated Mountain region, which has only averaged a 4 billion cubic feet withdrawal during this same week over the last 5 years, and hence their gas supply deficit from normal rose to 37.3%, up from 33.1% a week ago...finally, 16 billion cubic feet of natural gas were withdrawn from storage in the Pacific region, in contrast to the 5 billion cubic feet normally withdrawn ​in those western states ​during the same week of February, and hence their natural gas supply deficit rose to 42.7% below normal for this time of year, up from 36.7% a week ago.... 

the forecasts continue to show colder than normal weather for the next two weeks for most of the US, and colder than normal for the next month for the south central states, so the supply deficits will get worse before they get better....however, April is rapidly approaching, and natural gas withdrawals should ​no longer be needed once it gets here...after that, the amount of gas that's in storage compared to a year ago - now 154 billion cubic feet less - will be the number that we'll be watching, because sometime between now and the Fall ​we will have to improve on last year's storage numbers, or we'll start next winter in the same fix that we started this one..

The Latest US Oil Supply and Disposition Data from the EIA

this week's US oil data from the US Energy Information Administration, reporting on the week ending February 22nd, indicated a big drop to a new 23 year low in our crude oil imports, while our oil exports continued near last week's record high pace, and hence our commercial supplies of crude oil saw their largest drop in ​7 ​months....our imports of crude oil fell by an average of 1,605,000 barrels per day to an average of 5,917,000 barrels per day, after rising by an average of 1,312,000 barrels per day the prior week, while our exports of crude oil fell by an average of 248,000 barrels per day to 3,359,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,558,000 barrels of per day during the week ending February 22nd, 1,357,000 fewer barrels per day than the net of our imports minus exports during the prior week...over the same period, field production of crude oil from US wells was estimated to be 100,000 barrels per day higher at a record 12,100,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well​ production totaled an average of 14,658,000 barrels per day during this reporting week...

meanwhile, US oil refineries were using 15,890,000 barrels of crude per day during the week ending February 22nd, 179,000 more barrels per day than the amount of oil they used during the prior week, while over the same period 1,235,000 barrels of oil per day were reportedly being pulled out of the oil that's in storage in the US....so for once, this week's crude oil figures from the EIA indicate that our total working supply of oil from net imports, from oilfield production, and from storage was close to what refineries reported they used during the week, and hence the figure on line 13 of the weekly U.S. Petroleum Balance Sheet, representing "unaccounted for crude oil", was only 3,000 barrels per day, the smallest error we've seen in years...

further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to an average of 6,699,000 barrels per day last week, 10.9% less than the 7,521,000 barrel per day average that we were importing over the same four-week period last year.... the 1,235,000 barrel per day decrease in our total crude inventories was all pulled out of our commercially available stocks of crude oil, while the oil stored in our Strategic Petroleum Reserve remained unchanged....this week's crude oil production was reported to be 100,000 barrels per day higher at a record 12,100,000 barrels per day because the rounded estimate for output from wells in the lower 48 states rose by 100,000 barrels per day to 11,600,000 barrels per day, while the 4,000 barrel per day increase in Alaska's oil production to 491,000 barrels per day was not enough to make a difference in the rounded national total...last year's US crude oil production for the week ending February 23rd was at 10,283,000 barrels per day, so this reporting week's rounded oil production figure was 17.7% above that of a year ago, and 43.6% 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 87.1% of their capacity in using 15,890,000 barrels of crude per day during the week ending February 22nd, up from 85.9% of capacity the prior week, which had been the lowest capacity utilization rate in 16 months....the 15,890,000 barrels per day of oil that were refined this week was still the highest on record for the last full week of February, but little changed from the 15,882,000 barrels of crude per day that were being processed during the week ending February 23rd, 2018, when US refineries were operating at 87.8% of capacity... 

with the increase in the amount of oil being refined, the gasoline output from our refineries was also higher, rising by 64,000 barrels per day to 9,553,000 barrels per day during the week ending February 22nd, after our refineries' gasoline output had decreased by 130,000 barrels per day the prior week....with that increase in this week's gasoline output, our gasoline production was 1.7% higher than the 9,391,000 barrels of gasoline that were being produced daily during the same week last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 57,000 barrels per day to 4,816,000 barrels per day, after that output had decreased by 5,000 barrels per day the prior week....after that increase, this week's distillates production was almost 7.8% above the 4,469,000 barrels of distillates per day that were being produced during the week ending February 23rd, 2018.... 

despite the increase in our gasoline production, our supply of gasoline in storage at the end of the week fell by 1,906,000 barrels to 254,941,000 barrels by February 22nd, after falling by 1,454,000 barrels over the prior week....our gasoline supplies fell again this week in part because the amount of gasoline supplied to US markets increased by 181,000 barrels per day to 8,981,000 barrels per day, after increasing by 152,000 barrels per day the prior week, even as our imports of gasoline rose by 53,000 barrels per day to 473,000 barrels per day and as our exports of gasoline rose by 3,000 barrels per day to 815,000 barrels per day...after having set a record high five weeks ago, our gasoline inventories are now just 1.2% higher than last February 23rd's level of 251,817,000 barrels, and roughly 3% above the five year average of our gasoline supplies at this time of the year...

even with the increase in our distillates production, our supplies of distillate fuels fell for the 16th time in twenty-three weeks, but just by 303,000 barrels to 138,379,000 barrels during the week ending February 22nd, after our distillates supplies had decreased by 1,517,000 barrels over the prior week...our distillates supplies decreased less this week than last because the amount of distillates supplied to US markets, a proxy for our domestic demand, fell by 149,000 barrels per day to 4,076,000 barrels per day, and because our exports of distillates fell by 77,000 barrels per day to 1,114,000 barrels per day, while our imports of distillates fell by 100,000 barrels per day to 131,000 barrels per day....with this week's small decrease, our distillate supplies ended the week fractionally above the 137,985,000 barrels that we had stored on February 23rd, 2018, but remained roughly 2% below the five year average of distillates stocks for this time of the year...

finally, with the big drop in our oil imports forcing refineries to pull oil out of storage to meet their needs, our commercial supplies of crude oil in storage decreased for the first time in 6 weeks, falling by 8,647,000 barrels over the week, from a 15 month high of 454,512,000 barrels on February 15th to 445,865,000 barrels on February 22nd...however, with weekly increases in 16 out of the last 23 weeks, our crude oil inventories are still roughly 3% above the recent five-year average of crude oil supplies for this time of year, and more than 35% above the prior 5 year (2009 - 2013) average ​​of crude oil stocks for the middle of February, with the disparity between those figures arising because it wasn't until early 2015 that our oil inventories first rose above 400 million barrels...since our crude oil inventories have mostly been rising since this past Fall, after generally falling until then through most of the prior year and a half, our oil supplies as of February 22nd were still 5.3% above the 423,498,000 barrels of oil we had stored on February 23rd of 2018, while falling to 14.3% below the 520,184,000 barrels of oil that we had in storage on February 24th of 2017, and 8.4% below the 486,699,000 barrels of oil we had in storage on February 26th of 2016...    

This Week's Rig Count

US drilling ​rig ​activity slowed for the second week in a row and​ is now several dozen rigs below the levels of this past Fall, when both oil prices and natural gas prices were somewhat higher....Baker Hughes reported that the total count of rotary rigs running in the US fell by 9 rigs to 1038 rigs over the week ending March 1st, which was still 57 more rigs than the 981 rigs that were in use as of the March 2nd report of 2018, but down from the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC announced their attempt to flood the global oil market...  

the count of rigs drilling for oil fell by 10 rigs to 843 rigs this week, which was still 43 more oil rigs than were running a year ago, while it was well below 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 1 rig to 195 natural gas rigs, which was also 14 more rigs than the 181 natural gas rigs that were drilling a year ago, but way down from the modern era high of 1,606 natural gas targeting rigs that were deployed on August 29th, 2008...

drilling activity offshore in the Gulf of Mexico increased by a total of 3 rigs to 22 rigs this week, as 2 more platforms offshore from Louisiana started drilling this week while one more rig was added offshore from Texas, where there are now three rigs drilling in state waters...the 19 rigs running offshore from Louisiana is up from the 13 rigs active there a year ago, while the 3 Texas offshore rigs are also an increase from the single rig active in Texas waters last year at this time, and the most drilling activity offshore from Texas since March 2016..

the count of active horizontal drilling rigs decreased by 5 rigs to 911 horizontal rigs this week, which was still 64 more horizontal rigs active than the 842 horizontal rigs that were in use in the US on March 2nd of last year, but was down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014.....in addition, the vertical rig count decreased by 3 rigs to 60 vertical rigs this week, which was still up by 1 rig from the 59 vertical rigs that were in use during the same week of last year....likewise, the directional rig count decreased by 1 rig to 67 directional rigs this week, which was also down from the 75 directional rigs that were operating on March 2nd of 2018... 

the details on this week's changes in drilling activity by state and by shale basin are included in our screenshot below of that part of the rig count summary pdf from Baker Hughes that shows those changes...the first table below shows weekly and year over year rig count changes for the major producing states, and the second table 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 March 1st, the second column shows the change in the number of working rigs between last week's count (February 22nd) and this week's (March 1st) count, the third column shows last week's February 22nd active rig count, the 4th column shows the change between the number of rigs running on Friday and those running before the equivalent 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 2nd of March, 2018...     

March 1 2019 rig count summary

as you can see, ​the drop in ​this week's rig count was anchored by the 7 rigs that were pulled out of the Permian basin, with most of the other changes in large producing states other than California and Alaska more on the order of statistical noise that we'd expect to see as rigs are in transit from one location to another...changes in the Permian included 8 rigs being pulled out of Texas Oil District 8, or the core Permian Delaware, which still has 309 rigs drilling there, while 1 rig was added back in Texas Oil District 8A, which would correspond to the northern Permian Midland...th​ose Texas changes strongly suggest​ that the rig that was shut down in New Mexico was in an 'other' basin among those not included in Baker Hughes' summary...the only evident change among natural gas rigs was the single rig added in the Haynesville of northern Louisiana; the rig that was added in the Ft Worth area Barnett shale was an oil rig, joining ​the natural gas rig that was already operating there...and other than the changes in the major producing states you see above, Mississippi drillers also added a rig this week and now have 4 rigs deployed, which is up from 3 rigs running in the state during the same week of a year ago...

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