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, May 9, 2021

record jump in oil exports leads to largest inventory draw since January​, with ​12 million barrels still unaccounted for

record jump in oil exports to a 54 week high leads to largest crude inventory draw since January​, with ​12 million barrels still unaccounted for; refinery utilization rate is highest in 58 weeks; ​gas rigs see largest increase in 37 months

oil prices rose this week as traders antipitated higher demand for fuel as global economies eased Covid-related restrictions... after rising 2.3% to $63.58 a barrel last week on strong economic reports and on rising product demand, the contract price of US light sweet crude for June delivery traded lower Monday morning in Asia as surging COVID-19 cases in India dampened fuel demand hopes, but opened higher and rose in New York trading, supported by a weaker U.S. dollar, as hopes for a demand recovery outweighed worries about surging infections in India, with oil settling 91 cents higher at $64.49 a barrel....oil prices moved higher a second day on Tuesday as traders bet that easing COVID-19 restrictions in the U.S. and Europe would lead to higher fuel demand, and closed $1.20, or nearly 2% higher at $65.69 a barrel, after more U.S. states eased lockdowns and the EU sought to encourage travellers...oil prices extended those gains in after hours trading after the American Petroleum Institute reported the largest draw from US crude supplies since January, and opened 76 cents higher on Wednesday, but then faded late to close 6 cents lower at $65.63 a barrel, as traders reconsidered the outlook for oil demand in light of rising gasoline supplies...oil prices moved lower again on Thursday after Saudi Arabia cut the selling price of its crude to Asia, and ended trading down 92 cents at $64.71 a barrel amid uneven recovery signs among countries still battling the coronavirus...oil prices edged higher in Asia trading early Friday as global economic recovery and easing travel curbs in the US and Europe buoyed the fuel demand outlook, even as the surging pandemic in India capped prices, and June oil went on to close 19 cents higher to $64.90 a barrel in New York, and thus posted a 2.1% gain on the week...

natural gas prices also edged higher this week on near record exports and on forecasts for a cooling trend...after rising 4.0% to $2.931 per mmBTU last week on record exports and on declining gas field output, the contract price of natural gas for June delivery opened higher on Monday and climbed 3.5 cents to a 10 week high of $2.966 per mmBTU, despite forecasts for milder weather, on forecasts for near record exports...prices held steady at a 10-week high on Tuesday on forecasts for cooler weather, settling a tenth of a cent higher at $2.967 per mmBTU. but then slid 2.9 cents to $2.938 per mmBTU on Wednesday ahead of expectations for a more substantial build in underground inventories with this week’s EIA storage report...however, prices​ ​slipped​ ​again on Thursday, despite a bullish inventory print and continued robust demand for both LNG and pipeline exports, and settled a penny lower at $2.928 per mmBTU...natural gas​ ​prices rebounded Friday, rising 3.0 cents to $2.958 per mmBTU, on forecasts for cooler weather and higher heating next week and hence finished week 0.9% higher, even as they failed to penetrate the $3 level or match the highs set earlier in the week...

the natural gas storage report from the EIA for the week ending April 30th indicated that the amount of natural gas held in underground storage in the US rose by 60 billion cubic feet to 1,958 billion cubic feet by the end of the week, which left our gas supplies 345 billion cubic feet, or 15.0% below the 2,303 billion cubic feet that were in storage on April 30th of last year, and 61 billion cubic feet, or 3​.0% below the five-year average of 2,019 billion cubic feet of natural gas that have been in storage as of the 30th of April in recent years....the 60 billion cubic feet that were added to US natural gas storage this week was more than the average forecast of a 51 billion cubic foot addition from an S&P Global Platts survey of analysts, but was well below the average addition of 81 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, as well as well below the 103 billion cubic feet added to natural gas storage during the corresponding week of 2020...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending April 30th showed that because of a drop in our oil imports and a big increase in our oil exports, we needed to withdraw oil from our stored commercial crude supplies for the fourth time in eleven weeks and for the 26th time in the past forty-one weeks....our imports of crude oil fell by an average of 1,164,000 barrels per day to an average of 5,451,000 barrels per day, after risng by an average of 1,211,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 1,581,000 barrels per day to an average of 4,122,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 1,329,000 barrels of per day during the week ending April 30th, 2,745,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 10,900,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 12,229,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 15,243,000 barrels of crude per day during the week ending April 30th, 225,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 1,291,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was 1,722,000 barrels per day less than what our oil refineries reported they used during the week.....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+1,722,000) 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 they label in their footnotes as "unaccounted for crude oil", thus suggesting there must have been a error or errors of that magnitude in this week's oil supply & demand figures that we have just transcribed....furthermore, since last week's EIA fudge factor was at (-150,000) barrels per day, there was a 1,872,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, which renders the week over week supply and demand changes we have just transcribed meaningless....however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as they're published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,831,000 barrels per day last week, which is​ still​ 7.8% more than the 5,408,000 barrel per day average that we were importing over the same four-week Covid impacted period last year... the 1,291,000 barrel per day net withdrawal from our crude inventories included a 150,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, and a 1,141,000 barrel per day withdrawal from our commercially available stocks of crude oil....this week's crude oil production was reported to be unchanged at 10,900,000 barrels per day even though the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 10,400,000 barrels per day because a 15,000 barrel per day increase in Alaska's oil production to 457,000 barrels per day added 100,000 barrels per day to the rounded national total....our prepandemic record high US crude oil production was at a rounded 13,100,000 barrels per day​ ​during the week ending March 13th 2020, so this reporting week's reported oil production figure was 16.8% below that of our production peak, yet still 29.3% above 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 86.5% of their capacity while using those 15,243,000 barrels of crude per day during the week ending April 30th, up from 85.4% the prior week, and the highest refinery utilization rate in 58 weeks, reflecting the refinery utilization level during the last week before the pandemic related refinery slowdown...while the 15,243,000 barrels per day of oil that were refined this week were 17.4% higher than the 12,976,000 barrels of crude that were being processed daily during the week ending May 1st of last year, they were still 7.1% below the 16,405,000 barrels of crude that were being processed daily during the week ending May 3rd, 2019, when US refineries were operating at a still low 88.9% of capacity...

even with this week's increase in the amount of oil being refined, the gasoline output from our refineries decreased by 483,000 barrels per day to 9,146,000 barrels per day during the week ending April 30th, after our gasoline output had increased by 243,000 barrels per day over the prior week...while this week's gasoline production was 36.4% higher than the 6,705,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 8.3% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 9.7% below the gasoline production of 10,129,000 barrels per day during the week ending May 3rd, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 128,000 barrels per day to 4,498,000 barrels per day, after our distillates output had increased by 71,000 barrels per day over the prior week... and since the onset of the pandemic last year didn't appear to impact distillates' production, this week's distillates output was still 11.5% lower than the 5,082,000 barrels of distillates that were being produced daily during the week ending May 1st, 2020...

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the nineteenth time in twenty-five weeks, and for 23rd time in 43 weeks, rising by 737,000 barrels to 235,811,000 barrels during the week ending April 30th, after our gasoline inventories had increased by 92,000 barrels over the prior week...our gasoline supplies managed to increase again this week because the amount of gasoline supplied to US users decreased by 13,000 barrels per day to 8,864,000 barrels per day and because our exports of gasoline fell by 49,000 barrels per day to 555,000 barrels per day while our imports of gasoline fell by 1,000 barrels per day to 1,020,000 barrels per day....but even after five straight inventory increases, our gasoline supplies still were 8.0% lower than last May 1st's gasoline inventories of 256,407,000 barrels, and about  2% below the five year average of our gasoline supplies for this time of the year... 

with the decrease in our distillates production, our supplies of distillate fuels also decreased for the 10th time in 20 weeks and for the 24rd time in thirty-six weeks, falling by 2,896,000 barrels to 136,153,000 barrels during the week ending April 30th, after our distillates supplies had decreased by 3,342,000 barrels during the prior week....our distillates supplies fell by a bit less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 205,000 barrels per day to 4,125,000 barrels per day, while our imports of distillates rose by 34,000 barrels per day to 68,000 barrels per day, and while our exports of distillates rose by 48,000 barrels per day to 956,000 barrels per day....after four consecutive inventory decreases, our distillate supplies at the end of the week were 10.1% below the 151,490,000 barrels of distillates that we had in storage on May 1st, 2020, and about 2% below the five year average of distillates stocks for this time of the year...

finally, with the drop in our oil imports and the big jump in our oil exports, our commercial supplies of crude oil in storage fell for the 14th time in the past twenty-five weeks and for the 27th time in the past year, decreasing by 7,990,000 barrels, from 493,107,000 barrels on April 23rd to 485,117,000 barrels on April 30th....after this week's decrease, our commercial crude oil inventories fell to about 2% below the most recent five-year average of crude oil supplies for this time of year, but were still about 37.3% above the average of our crude oil stocks as of the end of April over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the Covid lockdowns of last spring, our commercial crude oil supplies as of April 30th ​were 9.1% less than the 532,221,000 barrels of oil we had in commercial storage on May 1st of 2020, but still 4.0% more than the 466,604,000 barrels of oil that we had in storage on May 3rd of 2019, and also 11.8% more than the 433,758,000 barrels of oil we had in commercial storage on May 4th of 2018...     

This Week's Rig Count

The US rig count rose for the 30th time over the past 34 weeks during the week ending May 7th, but is still down by 43.5% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 8 to 448 rigs this past week, which was also up by 74 rigs from the pandemic hit 374 rigs that were in use as of the May 8th report of 2020, but was still 1,481 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil was up by 2 to 344 oil rigs this week, after falling by 1 the prior week, thus giving us 52 more oil rigs than were running a year ago, but still just 21.4% of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was up by 7 to 103 natural gas rigs, the biggest gas rig jump since March 2018, which was also up by 23 natural gas rigs from the 80 natural gas rigs that were drilling a year ago, but still just 6.6% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008....however, the so-called "miscellaneous" rig that had been drilling in Lake County, California was pulled out this week, leaving just a horizontal rig in the Permian basin in Midland county Texas that was classified as 'miscellaneous' this week, compared to the "miscellaneous" rig count of two a year ago..

The Gulf of Mexico rig count was unchanged at 13 rigs this week, with 12 of those rigs now drilling for oil in Louisiana's offshore waters and 1 rig continuing to drill for oil in Alaminos Canyon offshore from Texas...that was 2 fewer Gulf of Mexico rigs than the 1​5 rigs drilling in the Gulf a year ago, when all 15 Gulf rigs were drilling for oil offshore from Louisiana...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig totals are equal to the Gulf rig counts...meanwhile, in addition to those rigs offshore, a rig continues to drill through an inland lake in St Mary parish Louisiana, matching the "inland waters" rig count of one a year ago...

The count of active horizontal drilling rigs was up by 10 to 408 horizontal rigs this week, which was also up by 70 rigs from the 338 horizontal rigs that were in use in the US on May 8th of last year, and less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....meanwhile, the directional rig count was unchanged at 23 directional rigs this week, which was​ still​ down by four from the 27 directional rigs that were operating during the same week a year ago....at the same time, the vertical rig count was down by 2 to 17 vertical rigs this week, but those were up by 8 from the 9 vertical rigs that were in use on May 8th of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of May 7th, the second column shows the change in the number of working rigs between last week's count (April 30th) and this week's (May 7th) count, the third column shows last week's April 30th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 8th of May, 2020..    

May 7th 2021 rig count summary

​from the tables above, it's not entirely obvious where that 7 rig increase in natural gas rigs was this week....checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that that three​ oil​ rigs were added in Texas Oil District 8, which is the core Permian Delaware, that two​ oil​ rigs added in Texas Oil District 7C, which encompasses the southern counties of the Permian Midland, and that another​ oil​ rig was added in Texas Oil District 8A, which includes the northern counties of the Permian Midland, while the last​ oil​ rig remaining in Texas Oil District 7B, which includes furthest east counties of the Permian Midland, was pulled out, thus accounting for the national Permian basin​ 5 rig​ increase...elsewhere in Texas, we had a natural gas rig added in Texas Oil District 1, and two oil rigs pulled out of Texas Oil District 2, all of which had to be Eagle Ford rigs, to account for both the increase of one gas rig and the loss of two oil rigs in the Eagle Ford, which now has 31 oil rigs and two gas rigs​ deployed​...in addition, a natural gas rig was added in Texas Oil District 6, accounting for one of the Haynesville shale rigs seen above, whiile the other three Haynesville rigs​ ​were added in northern Louisiana...thus to get to our 7 natural gas rigs, we have the 4 that were added in the Haynesville shale, the gas rig that was added in the Eagle Ford, the​ gas​ rig that was added in Pennsylvania's Marcellus, and a natural gas rig that was added in a basin that Baker Hughes doesn't track, which could have been in Utah, since that's the only obvious rig addition we haven't accounted for yet... 

+

+

note: there’s more here...

Monday, May 3, 2021

refinery utilization rate highest in 57 weeks; gasoline output at a 58 week high; imports of distillates at a 35 week low

oil prices moved higher this week as strong economic reports and rising product demand overshadowed the Covid disaster unfolding in India....after falling 1.6% to $62.14 a barrel last week on rising global Covid cases and on a surprise increase in US crude supplies, the contract price of US light sweet crude for June delivery opened lower and fell over 2% early Monday amid soaring coronavirus cases in major oil importer India but recovered to settle just 23 cents lower at $61.91 a barrel on Monday, as other news, particularly from the U.S., was looking a lot better, lending to traders' optimism...oil prices continued higher on Tuesday after OPEC and its allies projected a strong recovery in global oil demand this year, and finished with a $1.03 gain at $62.94 a barrel even after OPEC, Russia and other producers agreed to stick to plans to raise output slightly starting May 1...oil prices dipped early Wednesday after the API reported a surprise build of crude supplies, but then surged to the highest level in over a month as declining oil product supplies and signs of stronger demand buttressed expectations for a revival in global consumption, and settled 92 cents, or 1.5% higher, at $63.86 per barrel....oil prices jumped to a six week high with the release of the US GDP report on Thursday morning, and held most of the early gains to end $1.15 higher at $65.01 a barrel, even as India continued to struggle with another rise in Covid-19 cases...oil prices dropped early on Friday as profit-taking and a strengthening U.S. dollar brought a end to the week’s rally, with oil closing $1.43 to $63.58 a barrel as investors unloaded positions after weak Japanese crude import data and on concern about fuel demand in India, but still ending with a gain of 2.3% on the week and of more than 7% for the month...

natural gas prices also finished higher this week, on record exports and on declining gas field output... after rising 1.9% to $2.730 per mmBTU last week on an outbreak of record cold east of the Rockies, the contract price of natural gas for May delivery opened lower on Monday but gradually reversed course to close 6.0 cents higher at $2.790 per mmBTU, as continuously strong export demand pushed prices into positive territory...prices then jumped 8.3 cents to a nine-week high of 2.873 per mmBTU on record exports and lower gas output on Tuesday, and then rose another 5.2 cents on Wednesday as traders speculated that the much colder-than-usual weather last week might have led utilities to have pulled gas from storage, as trading in the May contract expired with May natural gas priced at $2.925 per mmBTU...with natural gas price quotes now referencing the contract price of natural gas for June delivery, prices reversed on Thursday and fell 4.9 cents to $2.911 per mmBTU, after EIA storage data showed natural gas inventories grew more than expected....natural gas prices then recovered 2.0 cents on Friday settle at $2.911 per mmBTU on forecasts for cooler weather over the next two weeks+, record exports and a small decline in output, and hence managed to end the week more than 7% higher, while the May contract, which had closed last week at $2.818 per mmBTU, posted a 4.0% gain...

the natural gas storage report from the EIA for the week ending April 23rd indicated that the amount of natural gas held in underground storage in the US rose by 15 billion cubic feet to 1,898 billion cubic feet by the end of the week, which left our gas supplies 302 billion cubic feet, or 13.7% below the 2,200 billion cubic feet that were in storage on April 23rd of last year, and 40 billion cubic feet, or 2.1% below the five-year average of 1,938 billion cubic feet of natural gas that have been in storage as of the 23rd of April in recent years....the 15 billion cubic feet that were added to US natural gas storage this week was more than the average forecast of a 9 billion cubic foot addition from an S&P Global Platts survey of analysts, but measured well below the average addition of 67 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, as well as well below the 66 billion cubic feet added to natural gas storage during the corresponding week of 2020...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending April 23rd showed that because of a big increase in our oil imports, we had surplus oil to add to our stored commercial crude supplies for the seventh time in ten weeks and for the 15th time in the past fort​y​ weeks....our imports of crude oil rose by an average of 1,211,000 barrels per day to an average of 6,616,000 barrels per day, after falling by an average of 448,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 7,000 barrels per day to an average of 2,541,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 4,075,000 barrels of per day during the week ending April 23rd, 1,218,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly 100,000 barrels per day lower at 10,900,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 14,975,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 15,018,000 barrels of crude per day during the week ending April 23rd, 253,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 194,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was a rounded 150,000 barrels per day more than what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (-150,000) 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 they label in their footnotes as "unaccounted for crude oil", thus suggesting there must have been a error or errors of that magnitude in this week's oil supply & demand figures that we have just transcribed.....furthermore, since last week's EIA fudge factor was at +887,000 barrels per day, there was a 1,038,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, which renders the week over week supply and demand changes we have just transcribed meaningless....however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as they're published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 6,034,000 barrels per day last week, which is now 10.7% more than the 5,448,000 barrel per day average that we were importing over the same four-week Covid impacted period last year... the 194,000 barrel per day net withdrawal from our crude inventories included a 207,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, which was slighly offset by a 13,000 barrel per day addition to our commercially available stocks of crude oil....this week's crude oil production was reported to be 100,000 barrels per day lower at 10,900,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day lower at 10,500,000 barrels per day, while a 3,000 barrel per day decrease in Alaska's oil production to 442,000 barrels per day did not impact the rounded national total....our prepandemic record high US crude oil production during the week ending March 13th 2020 was at a rounded 13,100,000 barrels per day, so this reporting week's reported oil production figure was 16.8% below that of our production peak, yet still 29.3% above 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 85.4% of their capacity while using those 15,018,000 barrels of crude per day during the week ending April 23rd, up from 85.0% the prior week, and the highest refinery utilization rate in 57 weeks, reflecting the refinery utilization level during the last week before the ​pandemic related slowdown...while the 15,018,000 barrels per day of oil that were refined this week were 17.7% higher than the 12,761,000 barrels of crude that were being processed daily during the week ending April 24th of last year, they were still 8.7% below the 16,446,000 barrels of crude that were being processed daily during the week ending April 26th, 2019, when US refineries were operating at a still low 89.2% of capacity...

with this week's increase in the amount of oil being refined, the gasoline output from our refineries increased by 243,000 barrels per day to a fifty-eight week high of 9,629,000 barrels per day during the week ending April 23rd, after our gasoline output had decreased by 229,000 barrels per day over the prior week...while this week's gasoline production was 43.0% higher than the 6,735,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 3.5% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 3.0% below the gasoline production of 9,927,000 barrels per day during the week ending April 26th, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 71,000 barrels per day to 4,626,000 barrels per day, after our distillates output had decreased by 89,000 barrels per day over the prior week... but since the onset of the pandemic ​last year ​didn't appear to impact distillates' production, this week's distillates output was still 7.1% lower than the 4,982,000 barrels of distillates that were being produced daily during the week ending April 24th, 2020...

with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the eighteenth time in twenty-four weeks, and for 22d time in 41 weeks, but only rose by 92,000 barrels to 235,074,000 barrels during the week ending April 23rd, after our gasoline inventories had increased by 85,000 barrels over the prior week...our gasoline supplies managed to increase this week because the amount of gasoline supplied to US users decreased by 227,000 barrels per day to 8,877,000 barrels per day while our imports of gasoline fell by 98,000 barrels per day to 1,021,000 barrels per day, and while our exports of gasoline fell by 73,000 barrels per day to 604,000 barrels per day....but even after four straight inventory increases, our gasoline supplies still were 9.4% lower than last April 24th's gasoline inventories of 259,565,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, even with the increase in our distillates production, our supplies of distillate fuels decreased for the 9th time in 19 weeks and for the 23rd time in thirty-five weeks, falling by 3,342,000 barrels to 139,049,000 barrels during the week ending April 23rd, after our distillates supplies had decreased by 1,073,000 barrels during the prior week....our distillates supplies fell by more this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 476,000 barrels per day to 4,330.000 barrels per day, while our imports of distillates fell by 27,000 barrels per day to a 32 week low of 135,000 barrels per day, and while our exports of distillates fell by 108,000 barrels per day to 908,000 barrels per day....after this week's inventory decrease, our distillate supplies at the end of the week were 2.1% below the 141,972,000 barrels of distillates that we had in storage on April 24th, 2020, and just about at the five year average of distillates stocks for this time of the year...

finally, with the big jump in our oil imports, our commercial supplies of crude oil in storage rose for the 11th time in the past twenty-four weeks and for the 26th time in the past year, but only by 90,000 barrels, from 493,017,000 barrels on April 16th to 493,107,000 barrels on April 23rd...after this week's nominal increase, our commercial crude oil inventories were close to the most recent five-year average of crude oil supplies for this time of year, and at about 42% above the average of our crude oil stocks as of the fourth weekend of April over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the ​Covid​ lockdowns of last spring, our commercial crude oil supplies as of April 23rd are now 6.5% less than the 527,631,000 barrels of oil we had in commercial storage on April 24th of 2020, but still 4.8% more than the 470,567,000 barrels of oil that we had in storage on April 26th of 2019, and also 13.1% more than the 435,955,000 barrels of oil we had in commercial storage on April 27th of 2018...     

This Week's Rig Count

The US rig count rose for the 29th time over the past 33 weeks during the week ending April 30th, but is still down by 44.5% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 2 to 440 rigs this past week, which was also up by 32 rigs from the pandemic hit 408 rigs that were in use as of the May 1st report of 2020, but was still 1,489 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil was down by 1 to 342 oil rigs this week, after falling by 1 the prior week, still leaving us with 17 more oil rigs than were running a year ago, but less than 21% of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was up by 2 to 96 natural gas rigs, which was also up by 15 natural gas rigs from the 81 natural gas rigs that were drilling a year ago, but still just 6.0% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition, a rig started drilling in  the Permian basin in Midland county Texas that was classified as 'miscellaneous' this week, while a "miscellaneous" rig also continued to drill in Lake County, California, thus matching the "miscellaneous" rig count of two a year ago..

The Gulf of Mexico rig count was up by 2 to 13 rigs this week, with 12 of those rigs now drilling for oil in Louisiana's offshore waters and 1 rig continuing to drill for oil in Alaminos Canyon offshore from Texas...that was 3 fewer Gulf of Mexico rigs than the 13 rigs drilling in the Gulf a year ago, when all 16 Gulf rigs were drilling for oil offshore from Louisiana...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig totals are equal to the Gulf rig counts...​however, ​in addition to those ​rigs ​offshore, a rig continued to drill through an inland lake in St Mary parish Louisiana, while a year ago there were no rigs deployed on inland waters...

The count of active horizontal drilling rigs was up by 1 to 398 horizontal rigs this week, which was also up by 24 rigs from the 374 horizontal rigs that were in use in the US on May 1st of last year, and less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....at the same time, the directional rig count was up by 4 rigs to 23  directional rigs this week, ​which was ​the same number of  directional rigs that were operating during the same week a year ago....on the other hand, the vertical rig count was down by 4 to 19 vertical rigs this week, but those were up by 8 from the 11 vertical rigs that were in use on May 1st of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of April 30th, the second column shows the change in the number of working rigs between last week's count (April 23rd) and this week's (April 30th) count, the third column shows last week's April 23rd active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 1st  of May, 2020..    

April 30 2021 rig count summary

as you can see, there were again just a few changes this week, with all of those in the South....checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that that four rigs were pulled out of Texas Oil District 8, which is the core Permian Delaware, and that three rigs added in Texas Oil District 7C, ​which ​encompas​ses the southern counties of the Permian Midland..​.​.since the Texas Permian was thus down by 1 this week, that means that the rig that was pulled out of New Mexico must have been targeting the farthest west reaches of the Permian Delaware to accounting for the national loss of two Permian rigs..​.​.elsewhere in Texas, we had single rigs added in Texas Oil District 1, Texas Oil District 3, and Texas Oil District 4, one of which was an oil rig that was added in the Eagle Ford, while the other two had to be natural gas rigs ​targetting a Texas basin not tracked by Baker Hughes, since the two Louisiana additions were oil rigs offshore, and other than the 'miscellaneous' rig addition, all other Permian changes also involved oil rigs..

+

+

Nore: there's more here..

Sunday, April 25, 2021

gasoline demand at an 8 month high; imports of distillates at a 26 week low..

oil prices moved lower this week on rising Covid cases global​ly ​and on a surprise increase in US crude supplies... after rising 6.1% to $63.13 a barrel last week on strong economic data and on upwardly revised demand forecasts, the contract price of US light sweet crude for May delivery opened lower on Monday on trader's jitters over surging Covid cases coronavirus cases in Europe and India, but recovered to finish with a 25 cent gain at $63.38 a barrel as a weaker dollar supported prices by making oil cheaper for holders of other currencies...oil prices continued higher early Tuesday, hitting a one month high of $64.30​,​ following reports of an outage in Libya, but pulled back on fears that India, the third-largest oil importer, would impose restrictions as coronavirus infections and deaths surged to record highs. and settled 94 cents lower at 62.44 a barrel, as trading in the May oil contract expired....with oil reports now referencing the contract price of US light sweet crude for June delivery, which had closed down 74 cents at 62.67 a barrel on Tuesday, oil prices opened lower on Wednesday after the American Petroleum Institute reported an unexpected increase in crude supplies, and then tumbled to close $1.32, or more than 2% lower at $61.35 per barrel after the EIA confirmed that crude oil stockpiles had unexpectedly edged higher last week...oil prices continued falling early Thursday on expectations that rising coronavirus cases in India and Japan would cause demand to decline, but recovered to close 8 cents higher at $61.43 per barrel as traders noted that overall oil demand remained robust in the two largest oil markets, the U.S. and China...oil prices moved higher again on Friday on strong economic reports from Europe and the US and settled with a gain of 71 cents at $62.14 a barrel but still finished with a loss of 1.6% on the week​,​ as spreading coronavirus cases in countries such as India tempered positive signs out of the U.S. and Europe..

on the other hand, natural gas prices finished higher this week on an outbreak of record cold that spread to most points east of the Rockies...after rising 6.1% to a five-week high of $2.680 per mmBTU last week on strong LNG exports and on an unexpected temperature drop, the contract price of natural gas for May delivery resumed its climb on Monday, buoyed by near-record export demand and the arrival of intensifying cold weather​,​ and settled 6.9 cents, or 2.6%, higher at a six week high of $2.749 per mmBTU...but prices slipped on Tuesday on forecasts for milder weather and lower heating demand over the next two weeks than ​was ​previously expected and finished 2.2 cents, or 0.8%, lower at $2.727 per mmBTU....natural gas price continued to retreat on Wednesday as production ticked higher and export demand slipped, closing down another 3.5 cents to $2.692 per mmBTU...however, prices rallied on a bullish natural gas storage report on Thursday and recouped the losses from both days, closing 5.7 cents higher at $2.749 per mmBTU, now a seven week high...prices were off 1.9 cents to $2.730 per mmBTU on Friday on forecasts for the weather to moderate over the next two weeks, but still finished the week 1.9% higher than the prior Friday's close..

the natural gas storage report from the EIA for the week ending April 16th indicated that the amount of natural gas held in underground storage in the US rose by 38 billion cubic feet to 1,883 billion cubic feet by the end of the week, which left our gas supplies 251 billion cubic feet, or 11.8% below the 2,134 billion cubic feet that were in storage on April ​16th of last year, but 12 billion cubic feet, or 0.6% above the five-year average of 1,871 billion cubic feet of natural gas that have been in storage as of the ​16th of April in recent years....the 38 billion cubic feet that were added to US natural gas storage this week was close to the average forecast of a 37 billion cubic foot addition from an S&P Global Platts survey of analysts, as well as ​to ​the average addition of 37 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years, but it was less than the 47 billion cubic feet added to natural gas storage during the corresponding week of 2020...

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending April 16th indicated that despite a decrease in our oil imports, a big increase in crude oil that the EIA could not account for meant we had surplus oil to add to our stored commercial crude supplies for the sixth time in nine weeks and for the 14th time in the past thirty-nine weeks....our imports of crude oil fell by an average of 448,000 barrels per day to an average of 5,405,000 barrels per day, after falling by an average of 411,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 31,000 barrels per day to an average of 2,548,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 2,857,000 barrels of per day during the week ending April 16th, 417,000 fewer barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly unchanged at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 13,857,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,765,000 barrels of crude per day during the week ending April 16th, 286,000 fewer barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 21,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was a rounded 887,000 barrels per day less than what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (+887,000) 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 they label in their footnotes as "unaccounted for crude oil", thus suggesting there must have been a error or errors of that magnitude in this week's oil supply & demand figures that we have just transcribed.....furthermore, since last week's fudge factor was at -222,000 barrels per day, there was a 1,109,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, which renders the week over week supply and demand changes we have just transcribed meaningless....however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as they're published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports fell to an average of 5,916,000 barrels per day last week, which was still 5.0% more than the 5,635,000 barrel per day average that we were importing over the same four-week ​Covid impacted ​period last year... the 21,000 barrel per day net withdrawal from our crude inventories included a 106,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes, which was mostly offset by a 85,000 barrel per day addition to our commercially available stocks of crude oil....this week's crude oil production was reported to be unchanged at 11,000,000 barrels per day even though the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 10,600,000 barrels per day, because an 11,000 barrel per day decrease in Alaska's oil production to 446,000 barrels per day subtracted 100,000 barrels per day the rounded national total (EIA's math)....our prepandemic record high US crude oil production during the week ending March 13th 2020 was at a rounded 13,100,000 barrels per day, so this reporting week's reported oil production figure was 16.0% below that of our production peak, yet still 30.5% above 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 85.0% of their capacity while using those 14,765,000 barrels of crude per day during the week ending April 16th, unchanged from the prior week, thus matching the highest refinery utilization rate in 56 weeks, reflecting the refinery utilization level during the last week before the Covid related slowdown...while the 14,765,000 barrels per day of oil that were refined this week were 18.5% higher than the 12,456,000 barrels of crude that were being processed daily during the week ending April 17th of last year, they were still 11.0% below the 16,583 ,000 barrels of crude that were being processed daily during the week ending April 19th, 2019, when US refineries were operating at a closer to normal 90.1% of capacity...

with th​is week's sudden decrease in the amount of oil being refined, the gasoline output from our refineries decreased by 229,000 barrels per day to 9,386​,​000 barrels per day during the week ending April 16th, after our gasoline output had increased by 336,000 barrels per day to a fifty-six week high of 9,615,000 barrels per day over the prior week...while this week's gasoline production was 51.3% higher than the 6,205,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 5.9% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 4.0% below the gasoline production of 9,781,000 barrels per day during the week ending April 19th, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) decreased by 88,000 barrels per day to 4,555,000 barrels per day, after our distillates output had increased by 4,000 barrels per day over the prior week... and since the onset of the pandemic didn't appear to impact distillates' production, this week's distillates output was still 9.0% lower than the 5,007,000 barrels of distillates that were being produced daily during the week ending April 17th, 2020...

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the seventeenth time in twenty-three weeks, and for 21st time in 40 weeks, but only rose by 85,000 barrels to 234,982,000 barrels during the week ending April 16th, after our gasoline inventories had increased by 309,000 barrels over the prior week...our gasoline supplies managed to increase this week even though the amount of gasoline supplied to US users increased by 160,000 barrels per day to an eight month high of 9,104,000 barrels per day because our imports of gasoline rose by 280,000 barrels per day to 1,119,000 barrels per day while our exports of gasoline rose by 14,000 barrels per day to 677,000 barrels per day....but even after three inventory increases, our gasoline supplies​ still​ were 10.8% lower than last April 17th's gasoline inventories of 263,234,000 barrels, and about 3% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the decrease in our distillates production, our supplies of distillate fuels decreased for the 8th time in 18 weeks and for the 22nd time in thirty-four weeks, falling by 1,073,000 barrels to 142,391,000 barrels during the week ending April 16th, after our distillates supplies had decreased by 2​,​083,000 barrels during the prior week....our distillates supplies fell by less this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 274,000 barrels per day to 3,854,000 barrels per day, while our imports of distillates fell by 99,000 barrels per day to a 26 week low of 162,000 barrels per day, and while our exports of distillates fell by 58,000 barrels per day to 1,016,000 barrels per day....even after this week's inventory decrease, our distillate supplies at the end of the week were still 4.0% above the 136,880,000 barrels of distillates that we had in storage on April 17th, 2020, and about 2% above the five year average of distillates stocks for this time of the year...

finally, with that big jump in unaccounted for crude, our commercial supplies of crude oil in storage rose for the 10th time in the past twenty-three weeks and for the 26th time in the past year, increasing by 594,000 barrels, from 492,423,000 barrels on April 9th to 493,017,000 barrels on April 16th...after this week's increase, our commercial crude oil inventories remained at 1% above the most recent five-year average of crude oil supplies for this time of year, and at about 43% above the average of our crude oil stocks as of the ​third weekend of April over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the spring lockdowns of last year, our commercial crude oil supplies as of April 16th are now 4.9% less than the 518,640,000 barrels of oil we had in commercial storage on April 17th of 2020, but still 7.0% more than the 460,633,000 barrels of oil that we had in storage on April 19th of 2019, and also 14.7% more than the 429,737,000 barrels of oil we had in commercial storage on April 20th of 2018...    

This Week's Rig Count

The US rig count fell for just the 3rd time over the past 32 weeks during the week ending April 23rd, but is still down by 44.7% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was down by 1 to 438 rigs this past week, which was ​also down by 27 rigs from the pandemic hit 465 rigs that were in use as of the April 24th report of 2020, and was 1,491 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil was down by 1 to 343 oil rigs this week, after rising by 7 the prior week, leaving us with 35 fewer oil rigs than were running a year ago, and less than 21% of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was unchanged at 94 natural gas rigs, which was up by 9 natural gas rigs from the 85 natural gas rigs that were drilling a year ago, but still just 5.9% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...meanwhile, a rig classified as 'miscellaneous' continued to drill in Lake County, California, while a year ago there were two such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count was down by 1 to 11 rigs this week, with 10 of those rigs drilling for oil in Louisiana's offshore waters and now 1 rig drilling for oil in Alaminos Canyon offshore from Texas...that was 6 fewer Gulf of Mexico rigs than the 17 rigs drilling in the Gulf a year ago, when 16 Gulf rigs were drilling for oil offshore from Louisiana and one rig was drilling for oil in Texas waters...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig totals are equal to the Gulf rig counts...in addition to those offshore, a rig continued to drill through an inland lake in St Mary parish Louisiana, while a year ago there were no rigs deployed on inland waters...

The count of active horizontal drilling rigs was down by 1 to 397 horizontal rigs this week, which was still down by 29 rigs from the 426 horizontal rigs that were in use in the US on April 24th of last year, and less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....at the same time, the directional rig count was also down a rig to 19 directional rigs this week, and those were still down by 4 from the 24 directional rigs that were operating during the same week a year ago....on the other hand, the vertical rig count was up by one to 22 vertical rigs this week, and those were up by 6 from the 16 vertical rigs that were in use on April 24th of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of April 23rd, the second column shows the change in the number of working rigs between last week's count (April 16th) and this week's (April 23rd) count, the third column shows last week's April 16th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 24th of April, 2020..    

April 23 2021 rig count summary

as you can see, there were just a few changes this week, ​with ​most of ​those in Texas....checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that that two rigs were pulled out of Texas Oil District 8, which is the core Permian Delaware, and that rigs in the other Permian basin districts in Texas were unchanged....since the Texas Permian was thus down by 2 this week, that means that the rig that was added in New Mexico must have been targeting the farthest west reaches of the Permian Delaware to accounting for the national loss of just one Permian rig...the only other rig change elsewhere in Texas was offshore platform that had been the state's waters that was shut down this week, thus accounting for the three rig decrease in Texas...rig activity in other states and other basins was unchanged in one of the slowest week's we've seen in tracking the US rig count..

+

+

Note: there's more here...

Sunday, April 18, 2021

gasoline output at 56 week high; refineries at 55 week high, oil supply close to demand, DUC well backlog at 10.8 months

oil prices finished higher this week on strong US economic data after OPEC and the IEA had already revised their oil demand forecasts higher...after falling 3.5% to $59.32 a barrel last week on rising ​oil ​supplies and fears of falling demand, the contract price of US light sweet crude for May delivery slipped in thin trading early on Monday as rising Covid-19 case numbers globally kept a lid on prices, but recovered to close 38 cents higher at $59.70 per barrel on optimism over the pace of coronavirus vaccinations in the United States​,​ and after the Yemeni Houthis said they fired missiles at Saudi oil sites...oil prices moved almost a dollar higher early Tuesday on the release of strong Chinese import data, but settled just 48 cents higher after the FDA halted use of Johnson & Johnson's COVID-19 vaccine over blood clot concerns...oil prices then jumped on Wednesday after the EIA reported a much larger draw from crude inventories than had been expected, and then finished $2.97 or nearly 5% higher at $63.15 a barrel on a report from the International Energy Agency that predicted global oil demand and supply would rebalance in the second half​,​ and that producers might then need to pump an additional 2 million barrels per day to meet demand...oil prices moved lower early Thursday following th​at sharp rise on Wednesday, but rallied again on a big jump in US retail sales as Americans spent their pandemic relief checks​,​ and as COVID-19 vaccinations allowed broader economic re-engagement, and closed 31 cents higher at a four week high of $63.46 per barrel...oil prices moved higher again early Friday after China reported their first-quarter GDP had jumped 18.3% year on year, but then drifted lower to close down 33 cents at $63.13 a barrel on concerns about rising Covid-19 infections in other major economies, but still managed to log a 6.1% gain on the week, with both US and global oil contracts posting their best weekly gains since the week ended March 5th...

natural gas prices also finished higher this week on stronger LNG exports and on an unexpected temperature drop...after falling 4.3% to $2.526 per mmBTU last week as it appeared the heating season had ended on warming April weather, the contract price of natural gas for May delivery opened fractionally higher on Monday and went on to gain 3.5 cents as a bout of chilly spring weather was forecast to sweep across large swaths of the Lower 48, likely providing a boost for gas demand and cash prices...natural gas prices rose another 5.8 cents to $2.619 per mmBTU on Tuesday as robust liquefied natural gas (LNG) levels fueled demand optimism and a dose of chilly weather also bolstered cash prices...natural gas continued higher on colder weather Wednesday, but faded as traders took profits late in the session prior to Thursday’s EIA inventory report​,​ and ended a tenth of a cent lower at $2.618 per mmBTU...natural gas prices rebounded Thursday as the government’s weekly inventory report proved bullish, and both weather forecasts and demand for U.S. exports remained favorable​,​ and closed 4.0 cents higher at $2.658 per mmBTU...the momentum continued into Friday as gas prices moved up another 2.2 cents on near-record LNG and pipeline exports, and on forecasts that power generators would burn more gas next week, to finish th​is week at a five-week high of $2.680 per mmBTU, also a 6.1% gain on the prior Friday's close...

the natural gas storage report from the EIA for the week ending April 9th indicated that the amount of natural gas held in underground storage in the US rose by 61 billion cubic feet to 1,845 billion cubic feet by the end of the week, which left our gas supplies 242 billion cubic feet, or 11.6% below the 2,087 billion cubic feet that were in storage on April 9th of last year, but now 11 billion cubic feet, or 0.6% above the five-year average of 1,834 billion cubic feet of natural gas that have been in storage as of the 9th of April in recent years....the 61 billion cubic feet that were added to US natural gas storage this week was less than the average forecast of a 65 billion cubic foot addition from an S&P Global Platts survey of analysts, and was also less than the 68 billion cubic feet added to natural gas storage during the corresponding week of​ 2020, but it far surpassed the average addition of 26 billion cubic feet of natural gas that have typically been injected into natural gas storage during the same week over the past 5 years..

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending April 9th indicated that despite an increase in our oil production and a decrease in our oil exports, we needed to withdraw oil from our stored commercial crude supplies for the third time in eight weeks and for the 25th time in the past thirty-eight weeks....our imports of crude oil fell by an average of 4​11,000 barrels per day to an average of 5,852,000 barrels per day, after rising by an average of 119,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 855,000 barrels per day to an average of 2,579,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,273,000 barrels of per day during the week ending April 9th, 444,000 more barrels per day than the net of our imports minus our exports during the prior week...over the same period, the production of crude oil from US wells was reportedly 100,000 barrels per day higher at 11,000,000 barrels per day, and hence our daily supply of oil from the net of our trade in oil and from well production appears to total an average of 14,273,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 15,051,000 barrels of crude per day during the week ending April 9th, 7,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA's surveys indicated that a net of 999,000 barrels of oil per day were being pulled out of the supplies of oil stored in the US....so based on that reported & estimated data, this week's crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports, from storage, and from oilfield production was a rounded 222,000 barrels per day more than what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just plugged a (-222,000) 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 they label in their footnotes as "unaccounted for crude oil", thus suggesting there must have been a error or errors of that magnitude in this week's oil supply & demand figures that we have just transcribed.....furthermore, since last week's fudge factor was at +811,000 barrels per day, there was a 1,033,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, which renders the week over week supply and demand changes we have just transcribed meaningless....however, since most everyone treats these weekly EIA reports as gospel and since these figures often drive oil pricing and hence decisions to drill or complete wells, we'll continue to report them as they're published, just as they're watched & believed to be accurate by most everyone in the industry....(for more on how this weekly oil data is gathered, and the possible reasons for that "unaccounted for" oil, see this EIA explainer)....

further details from the weekly Petroleum Status Report (pdf) indicate that the 4 week average of our oil imports rose to an average of 5,971,000 barrels per day last week, which was 0.7% more than the 5,929,000 barrel per day average that we were importing over the same four-week period last year... the 999,000 barrel per day net withdrawal from our crude inventories included an 841,000 barrel per day withdrawal from our commercially available stocks of crude oil, and a 153,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which has been leased for commerical purposes....this week's crude oil production was reported to be 100,000 barrels per day higher at 11,000,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states was 100,000 barrels per day higher at 10,500,000 barrels per day, while Alaska's oil production at 457,000 barrels per day added 500,000 barrels per day the rounded national total (EIA's math)....our prepandemic record high US crude oil production during the week ending March 13th 2020 was at a rounded 13,100,000 barrels per day, so this reporting week's rounded oil production figure was 16.0% below that of our production peak, yet still 30.5% above 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 85.0% of their capacity while using those 15,051,000 barrels of crude per day during the week ending April 9th, up from 84.0% of capacity during the prior week, and the highest refinery utilization in 55 weeks, reflecting the utilization level during the last week before the Covid related slowdown...while the 15,051,000 barrels per day of oil that were refined this week were 18.8% higher than the 12,665,000 barrels of crude that were being processed daily during the week ending April 10th of last year, they were still 6.4% below the 16,078,000 barrels of crude that were being processed daily during the week ending April 12th, 2019, when US refineries were operating at a​n unusually low 87.7% of capacity...

with the ongoing increase in the amount of oil being refined, the gasoline output from our refineries increased by 336,000 barrels per day to a fifty-six week high of 9,615,000 barrels per day during the week ending April 9th, after our gasoline output had decreased by 60,000 barrels per day over the prior week...while this week's gasoline production was 62.6% higher than the 5,915,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 3.6% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 3.0% below the gasoline production of 9,917,000 barrels per day during the week ending April 12th, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 4,000 barrels per day to 4,643,000 barrels per day, after our distillates output had decreased by 99,000 barrels per day over the prior week... but since the onset of the pandemic didn't appear to impact distillates' production, this week's distillates output was still 5.8% lower than the 4,927,000 barrels of distillates that were being produced daily during the week ending April 10th, 2020...

with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the sixteenth time in twenty-two weeks, and for 20th time in 39 weeks, but only rose by 309,000 barrels to 234,897,000 barrels during the week ending April 9th, after our gasoline inventories had increased by 4,044,000 barrels over the prior week...our gasoline supplies increased by less this week because our imports of gasoline fell by 458,000 barrels per day to 839,000 barrels per day while our exports of gasoline fell by 129,000 barrels per day to 663,000 barrels per day, and because the amount of gasoline supplied to US users increased by 163,000 barrels per day to 8,944,000 barrels per day...but even after two inventory increases, our gasoline supplies were 10.4% lower than last April 10th's gasoline inventories of 262,217,000 barrels, and about 2% below the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the insignificant increase in our distillates production, our supplies of distillate fuels decreased for the 7th time in 11 weeks and for the 21st time in thirty-three weeks, falling by 2,083,000 barrels to 143,464,000 barrels during the week ending April 9th, after our distillates supplies had increased by 1,452,000 barrels during the prior week....our distillates supplies fell this week because the amount of distillates supplied to US markets, an indicator of our domestic demand, rose by 464,000 barrels per day to 4,128,000 barrels per day, and because our imports of distillates fell by 64,000 barrels per day to a 25 week low of 261,000 barrels per day, while our exports of distillates fell by 18,000 barrels per day to 1,074,000 barrels per day....even after this week's inventory decrease, our distillate supplies at the end of the week were still 11.2% above the 129,004,000 barrels of distillates that we had in storage on April 10th, 2020, and about 4% above the five year average of distillates stocks for this time of the year...

finally, despite the drop in our oil exports, our commercial supplies of crude oil in storage fell for the 13th time in the past twenty-two weeks and for the 26th time in the past year, decreasing by 5,890,000 barrels, from 498,313,000 barrels on April 2nd to 492,423,000 barrels on April 9th...after this week's decrease, our commercial crude oil inventories​ slipped to just 1% above the most recent five-year average of crude oil supplies for this time of year, and to about 43% above the average of our crude oil stocks as of the first weekend of April over the 5 years at the beginning of this decade, with the disparity between those comparisons arising because it wasn't until early 2015 that our oil inventories first topped 400 million barrels....since our crude oil inventories had jumped to record highs during the spring lockdowns of last year, our commercial crude oil supplies as of April 9th are now 2.2% less than the 503,618,000 barrels of oil we had in commercial storage on April 10th of 2020, but still 8.2% more than the 455,154,000 barrels of oil that we had in storage on April 12th of 2019, and also 15.2% more than the 427,567,000 barrels of oil we had in commercial storage on April 13th of 2018...   

OPEC's Monthly Oil Market Report

Tuesday of this past week saw the release of OPEC's April Oil Market Report, which covers OPEC & global oil data for March, and hence it gives us a picture of the global oil supply & demand situation for the 3rd month after OPEC, the Russians, and other oil producers agreed to increase their oil production by 500,000 barrels per day starting January, from their prior commitment to cut production by 7.7 million barrels a day from an October 2018 peak, which had been earlier reduced from the 9.7 million barrels a day cuts they had imposed on themselves during May, June and July of 2020, and after the Saudis unilaterally decided to cut their own production by a million barrels per day during February and March of this year...before we start, we want to again caution that the oil demand estimates made herein, while the course of the Covid-19 pandemic still remains uncertain, should be considered as having a much larger margin of error than we'd expect from this report during stable and hence more predictable periods.. 

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

March 2021 OPEC crude output via secondary sources

as we can see from the above table of their oil production data, OPEC's oil output increased by a rounded 201,000 barrels per day to 25,042,000 barrels per day during March, up from their revised February production total of 24,842,000 barrels per day...however, that February output figure was originally reported as 24,848,000 barrels per day, which therefore means that OPEC's February production was revised 6,000 barrels per day lower with this report, and hence OPEC's March production was, in effect, a rounded 195,000 barrel per day increase from the previously reported OPEC production figure (for your reference, here is the table of the official February OPEC output figures as reported a month ago, before this month's revision)...

from the above table, we can see that a 137,000 barrels per day increase in Iran's production, an increase of 40,000 barrels per day in Angola's output, and a production increase of 26,000 barrels per day from Libya were the major factors in OPEC's March output increase; however, both Iran and Libya were exempt from quotas during March, and Angola's output increase is largely a reversal of their February production decrease, so OPEC's adherence to the negotiated production cuts appears to be intact...recall that last year's original oil producer's agreement was to cut production by 9.7 million barrels per day from an October 2018 baseline for just two months early in the pandemic, during May and June, but that agreement had been extended to include July at a meeting between OPEC and other producers on June 6th....then, in a subsequent meeting in July, OPEC and the other oil producers agreed to ease their deep supply cuts by 2 million barrels per day to 7.7 million barrels per day for August and subsequent months, which was thus the agreement that covered OPEC's output for the rest of 2020...the OPEC+ agreement for January's production, which was later extended to include February and March output, was to further ease their supply cuts by 500,000 barrels per day to 7.2 million barrels per day from that original baseline...however,  war torn Libya and US sanctioned OPEC members Iran and Venezuela have been exempt from the production cuts imposed by these agreements, and as we can see above, they all posted production increases this month...

for those OPEC members that do fall under the output quotas imposed by that series of revised agreements, we finally have a revised table of the output levels they are "voluntarily" required to adhere to:

March 2021 OPEC   production quotas

the above table was provided as a downloadable attachment to the press release following the press release following the 13th OPEC and non-OPEC Ministerial Meeting on January 5th of this year; it includes the reference production and expected production levels for the 10 members of OPEC that are expected to make cuts and for the other major oil producers who are party to what the press calls the "OPEC + agreement"....the first column in the above table shows the reference oil production baseline, in thousands of barrel per day from which each of the oil producers was to cut from, a figure which is based on each of the producer's October 2018 oil output, ie., a date before last year's and the prior year's output cuts took effect, and coincidently the highest monthly production of the era for most of the producers who are party to these cuts...the remaining columns show the adjustment, or cut, from that reference production level and then the oil output allowed for each producer under the agreement for the months of January, February and March...OPEC arrived at these figures by adjusting the 23% cut from the October 2018 baseline originally agreed to for May and June 2020 for subsequent agreements to "ease" that 23% cut by agreed to fractions, and it applied to all participants except for Mexico, who already had their oil production hedged to profit from lower prices...the OPEC member output quota is identical for each of the three months covered above; however, the ongoing agreements from theOPEC and non-OPEC Ministerial Meetings have allowed Russia and Kazakhstan to incrementally increase their oil output over February and March to meet seasonal increases in domestic demand...for March, Iraq, with an oil output of 3,914,000 per day, was the only OPEC member producing significantly more than their quota, which was more than covered by the Saudis unilaterally keeping their production a million barrels per day below their quota...

the next graphic from this month's report that we'll highlight shows us both OPEC and world oil production monthly on the same graph, over the period from April 2019 to March 2021, and it comes from page 49 (pdf page 59) of OPEC's April Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale.... 

March 2021 OPEC report global oil supply

after this month's reported 201,000 barrel per day increase in OPEC's production from what they produced a month earlier, OPEC's preliminary estimate indicates that total global liquids production increased by a rounded 1,220,000 barrels per day to average 93.23 million barrels per day in March, a reported increase which apparently came after February's total global output figure was revised down by 270,000 barrels per day from the 92.28 million barrels per day of global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 1,020,000 barrels per day in March after that revision, with an increase of 930,000 barrels per day from the US alone accounting for most of the non-OPEC production increase in March, as US production rebounded from the February freeze... 

after that increase in March's global output, the 93.23 million barrels of oil per day that were produced globally in March were still 7.22 million barrels per day, or 7.6% less than the revised 100.45 million barrels of oil per day that were being produced globally in March a year ago, which was the second month of additional production cuts of 500,000 barrels per day in an attempt to support prices (see the April 2020 OPEC report (online pdf) for the originally reported March  2020 details)...with this month's increase in OPEC's output, their March oil production of 25,042,000 barrels per day was at 26.9% of what was produced globally during the month, a decrease of 0.1% from their revised 27.0% share of the global total in February....OPEC's March 2020 production was reported at 28,612,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 3,570,000, or 12.5% fewer barrels per day of oil in March 2021 than what they produced a year earlier, when they accounted for 28.7% of global output...  

Even after the increases in both OPEC's and global oil output that we've seen in this report, the amount of oil being produced globally during the month still fell a bit short of the expected demand, as this next table from the OPEC report will show us...   

March 2021 OPEC report global oil demand copy

the above table came from page 27 of the April Oil Market Report (pdf page 37), and it shows regional and total oil demand estimates in millions of barrels per day for 2020 in the first column, and OPEC's estimate of oil demand by region and globally quarterly over 2021 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 March, which is their estimate of global oil demand during the first quarter of 2021... OPEC is estimating that during the 1st quarter of this year, all oil consuming regions of the globe have used an average of 93.43 million barrels of oil per day, which is a rounded 400,000 barrels per day upward revision from the 93.04 million barrels of oil per day of demand they were estimating for the first quarter a month ago (note that we have encircled this month's revisions in green), which still reflects quite a bit of coronavirus related demand destruction compared to 2019, when global demand averaged 99.98 million barrels per day....but as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world's oil producers were only producing 93.23 million barrels million barrels per day during March, which would imply that there was a shortage of around 200,000 barrels per day in global oil production in March when compared to the demand estimated for the month..

In addition to figuring the March global oil supply shortfall that's evident in this report, the downward revision of 270,000 barrels per day to February's global oil output that's implied in this report, combined with the 400,000 barrels per day upward revision to first quarter demand noted above, means that the 760,000 barrels per day global oil output shortage we had previously figured for February would now be revised to a shortage of 1,430,000 barrels per day...similarly, the oil surplus of 190,000 barrels per day we had previously figured for January would be revised to a shortage of 210,000 barrels per day in light of the 400,000 barrel per day upward revision to first quarter demand...

Note that in green we've also circled an upward revision of 120,000 barrels per day to 2020's demand, which also means that the supply shortfalls or surpluses that we previously reported for last year's months would need to be revised....a separate table on page 27 of the April Oil Market Report (pdf page 37) indicates the revisions to 2020 demand included an an upward revision of 80,000 barrels per day to 4th quarter demand, and an upward revision of 400,000 barrels per day to 1st quarter 2020 demand...

based on OPEC revisions of a month ago, we revised the oil shortages we had previously computed for the 4th quarter months to 1,180,000 barrels per day for December, 1,780,000 barrels per day for November, and 3,080,000 barrels per day for October...the upward revision of 80,000 barrels per day to 4th quarter demand will now mean those shortages would be revised to 1,260,000 barrels per day for December, 1,860,000 barrels per day for November, and 3,160,000 barrels per day for October...there was also an oil supply shortfall in the third quarter months, but it was somewhat smaller...however, since global demand was still depressed in the second quarter of 2020 due to the initial Covid surge, surpluses of oil averaging around 9.5 million barrels per day were being produced over those three months...meanwhile, the last time we revised estimates for 1st quarter 2020 oil surpluses, we had a record surplus of 17,550,000 barrels per day in March, a 1,670,000 barrel per day global oil output surplus in February, and a 700,000 barrel per day oil output surplus in January...;.with OPEC's new upward revision of 400,000 barrels per day to 1st quarter 2020 demand, those surpluses would be reduced to 17,150,000 barrels per day in March, a 1,270,000 barrel per day surplus in February, and a 300,000 barrel per day oil surplus in January of last year....so despite the upward revision to 2020's demand and OPEC's deep production cuts beginning in May of last year, the quanities of oil produced globally in 2020 still averaged well over 3 million barrels per day more than anyone wanted...by maintaining their production cuts despite current month shortages, OPEC obviously knows that, they just aren't talking about it publicly...

This Week's Rig Count

The US rig count rose for the 28th time over the past 31 weeks during the week ending April 16th, but it still remains down by 44.6% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 7 to 439 rigs this past week, which was still down by 90 rigs from the pandemic hit 529 rigs that were in use as of the April 17th report of 2020, and was 1,490 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil was up by 7 to 338 oil rigs this week, after being unchanged the prior week, leaving us with 94 fewer oil rigs than were running a year ago, and at 21.0% of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations was up by one to 94 natural gas rigs, which was up by 5 natural gas rigs from the 89 natural gas rigs that were drilling a year ago, but still just 5.9% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...meanwhile, the rig classified as 'miscellaneous' that had been drilling in the middle of the Permian basin in MIdland county Texas was shut down this week, leaving just one 'miscellaneous' rig, in Lake County, California, while a year ago there were two such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count was up by 1 to 12 rigs this week, with 10 of those rigs drilling for oil in Louisiana's offshore waters and now 2 rigs drilling for oil in Alaminos Canyon offshore from Texas...that was 5 fewer Gulf of Mexico rigs than the 17 rigs drilling in the Gulf a year ago, when 16 Gulf rigs were drilling for oil offshore from Louisiana and one rig was drilling for oil in Texas waters...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig totals are equal to the Gulf rig counts...in addition to those offshore, this week a platform was set up to drill through an inland lake in St Mary parish Louisiana, while a year ago there were no rigs deployed on inland waters...

The count of active horizontal drilling rigs was up by 4 to 398 horizontal rigs this week, which was still down by 85 rigs from the 483 horizontal rigs that were in use in the US on April 17th of last year, and less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....at the same time, the directional rig count was up by two rigs to 20  directional rigs this week, but those were still down by 8 from the 28 directional rigs that were operating during the same week a year ago....meanwhile, the vertical rig count was up by one to 21 vertical rigs this week, and those were up by 3 from the 18 vertical rigs that were in use on April 17th of 2020....

The details on this week's changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes...the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins...in both tables, the first column shows the active rig count as of April 16th, the second column shows the change in the number of working rigs between last week's count (April 9th) and this week's (April 16th) count, the third column shows last week's April 9th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running on the Friday before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 17th of April, 2020..    

April 16 2021 rig count summary

it appears that most of this week's changes were pretty straightforward...checking first for the details on the Permian basin in Texas from the Rigs by State file at Baker Hughes, we find that that one rig was added in Texas Oil District 8, which includes the core Permian Delaware, and  one rig was added in Texas Oil District 7C, which includes the southernmost counties of the Permian Midland basin, and yet another rig was added in in Texas Oil District 8A, which includes the northern counties of the Permian Midland basin, which thus means the rig count in the Texas Permian was up by 3 this week, accounting for the national change.....elsewhere in Texas, there were two rigs added in Texas Oil District 1, while two rigs were pulled out from Texas Oil District 2, which all could have been in the Eagle Ford shale, which stretches in a narrow band through the southeast part of the state, still leaving no net change in that basin...the Texas rig count was up by 5, however, because an offshore platform was added in the state's waters, and there was also a rig added in Texas Oil District 10, which accounts for one of the rigs added in the Granite Wash, which thus means the other Granite Wash addition was in Oklahoma, accounting for that state's increase...elsewhere, the rig addition in Louisiana was the previously mentioned inland waters rig in St Mary parish, and another oil rig was added in North Dakota's Williston basin....meanwhile, the natural gas rig count was up by one despite the loss of one in Pennsylvania's Marcellus because the inland waters rig in Louisiana was a gas rig and one of the Permian rigs added this week was also targetting natural gas...

DUC well report for March

Monday of this past week saw the release of the EIA's Drilling Productivity Report for April, which includes the EIA's March data for drilled but uncompleted ​(DUC) ​oil and gas wells in the 7 most productive shale regions....that data showed a decrease in uncompleted wells nationally for the 10th month in a row, as both completions of drilled wells and drilling of new wells both increased, but remained far below the pre-pandemic levels...for the 7 sedimentary regions covered by this report, the total count of DUC wells decreased by 177 wells, falling from 7,089 DUC wells in February to 6,912 DUC wells in March, which was also 17.5% fewer DUCs than the 8,379 wells that had been drilled but remained uncompleted as of the end of March of a year ago...this month's DUC decrease occurred as 464 wells were drilled in the 7 regions that this report covers (representing 87% of all U.S. onshore drilling operations) during March, up from the 396 wells that were drilled in February, while 641 wells were completed and brought into production by fracking, up from the 490 completions seen in February, but still down by 42.5% from the 1,115 completions seen in March of last year....at the March completion rate, the 6,912 drilled but uncompleted wells left at the end of the month represents a 10.8 month backlog of wells that have been drilled but are not yet fracked, down from the 14.7 month DUC well backlog of a month ago, with the understanding that this normally indicative backlog ratio is being skewed by a completion rate that is roughly half of the pre-pandemic norm...

both oil producing regions and natural gas producing regions saw DUC well decreases in March, as no basins ​were ​report​ed with DUC increases....the number of uncompleted wells remaining in the Permian basin of west Texas and New Mexico decreased by 56, from 3,219 DUC wells at the end of February to 3,163 DUCs at the end of March, as 214 new wells were drilled into the Permian during March, while 270 wells in the region were completed...at the same time, DUC wells in the Niobrara chalk of the Rockies' front range fell by 39, decreasing from 520 at the end of February to 481 DUC wells at the end of March, as 43 wells were drilled into the Niobrara chalk during March, while 82 Niobrara wells were being fracked....in addition, DUCs in the Eagle Ford of south Texas decreased by 28, from 1,037 DUC wells at the end of February to 1,009 DUCs at the end of March, as 44 wells were drilled in the Eagle Ford during March, while 72 already drilled Eagle Ford wells were completed...at the same time, there was also a decrease of 22 DUC wells in the Bakken of North Dakota, where DUC wells fell from 669 at the end of February to 677 DUCs at the end of March, as 25 wells were drilled into the Bakken during March, while 47 of the drilled wells in that basin were being fracked...meanwhile, the number of uncompleted wells remaining in Oklahoma's Anadarko decreased by 20, falling from 760 at the end of February to 740 DUC wells at the end of March, as 19 wells were drilled into the Anadarko basin during March, while 39 Anadarko wells were being fracked....

among the natural gas producing regions, the drilled but uncompleted well count in the Appalachian region, which includes the Utica shale, fell by 11 wells, from 559 DUCs at the end of February to 548 DUCs at the end of March, as 71 wells were drilled into the Marcellus and Utica shales during the month, while 82 of the already drilled wells in the region were fracked....in addition, the natural gas producing Haynesville shale of the northern Louisiana-Texas border region saw their uncompleted well inventory decrease by 1 to 324, as 48 wells were drilled into the Haynesville during March, while 49 of the already drilled Haynesville wells were fracked during the same period....thus, for the month of March, DUCs in the five major oil-producing basins tracked by this report (ie., the Anadarko, Bakken, Niobrara, Permian, and Eagle Ford) decreased by a total of 165 wells to 6,040 wells, while the uncompleted well count in the natural gas basins (the Marcellus, the Utica, and the Haynesville) decreased by 12 wells to 872 wells, although as this report notes, once into production, more than half the wells drilled nationally will produce both oil and gas...   

+

+   

note: there's more here...