Masters Of War

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

Monday, February 15, 2021

oil prices at 13 month high; US oil supplies at a 42 week low*; global oil supply and demand balanced

(*erroneously stated as a 45 week low last week)

oil prices finished higher for a second straight week on progress towards a US economic stimulus package and on a big drop in US crude inventories....after rising 9% to $56.85 a barrel last week on ongoing OPEC production cuts and on the economic stimulus package making its way through Congress, the contract price of US light sweet crude for March delivery opened higher on Monday on supply cuts among key producers and hopes for further U.S. economic stimulus and never looked back, settling $1.12 higher at $57.97 a barrel while the global benchmark Brent crude settled above $60 a barrel for the first time since January of last year...US oil prices edged up early on Tuesday, reaching their highest in 13 months, as supply cuts by major producers and optimism over a recovery in fuel demand supported energy markets, with US crude rising 39 cents to $58.36 a barrel, led by gains in Brent, which rose for an eighth straight day and topped $61 a barrel...oil prices opened higher again on Wednesday on the American Petroleum Institute's report of a larger than expected drop in crude inventories and held those gains as the EIA reported an even larger drop in oil supplies and finished trading 32 cents higher at $58.68 a barrel, with global prices posting the longest streak of price gains in over two years, supported by producer supply cuts and hopes that vaccine rollouts would drive a recovery in fuel demand....but the rally in oil prices snapped on Thursday after both OPEC and the International Energy Agency (IEA) said renewed lockdowns and the emergence of new coronavirus variants reduced the prospect of a swift demand recovery. and US crude settled 44 cents lower at $58.24 a barrel as technical analysis showed both benchmarks remained in overbought territory...nonetheless, the oil price rally resumed on Friday as progress towards a new stimulus boosted hopes for increased fuel demand, and then jumped to settle $1.23, or more than 2% higher at $59.47 a barrel, after the Houthis' air force hit an airport and air base in Saudi Arabia with a drones attack...hence the March oil contract finished the week 4.6% higher, with US oil prices ending at their highest since early January of last year..

natural gas prices also finished the week modestly higher, as forecasts for bitter cold over most of the Lower 48 threatened to turn the natural gas storage surplus into a deficit....after jumping 11.7% to $2.863 per mmBTU last week on forecasts for continuing below normal temperatures through the end of February, the contract price of natural gas for March delivery opened higher and pushed towards $3 early Monday, but pulled back from the highs on weather model volatility to settle just 1.9 cents higher at $2.882 per mmBTU...Monday's reversal continued on Tuesday, with March gas prices shedding 4.7 cents with the brutal cold circulating through the Lower 48 seen fading before month’s end and a more seasonal pattern to follow thereafter...but natural gas prices rebounded on Wednesday to finish 7.6 cents higher at $2.911 per mmBTU as the frigid air penetrating the north/central United States stalled, leaving large population centers to bear sub-zero temperatures....gas prices then slipped 4.3 cents on Thursday as the cold air outbreak was seen weakening later this month and the weekly storage report disappointed traders, but rebounded again on Friday to close 4.4 cents higher at $2.912 per mmBTU, as bitter cold temperatures blanketed the Lower 48, and threatened to freeze off output throughout most of the country’s production basins, and thus finished the week 1.7% higher than the prior Friday's close...

the natural gas storage report from the EIA for the week ending February 5th indicated that the amount of natural gas held in underground storage in the US fell by 171 billion cubic feet to 2,518 billion cubic feet by the end of the week, which left our gas supplies 9 billion cubic feet, or 0.4% below the 2,527 billion cubic feet that were in storage on February 5th of last year, and 152 billion cubic feet, or 6.4% above the five-year average of 2,366 billion cubic feet of natural gas that have been in storage as of the 5th of February in recent years....the 171 billion cubic feet that were drawn out of US natural gas storage this week was a bit less than the average forecast of a 175 billion cubic foot withdrawal from an S&P Global Platts survey of analysts, but way more than the 121 billion cubic foot withdrawal from natural gas storage seen during the corresponding week of a year earlier, and also more than the average withdrawal of 125 billion cubic feet of natural gas that have typically been pulled out of natural gas storage during the same week over the past 5 years... 

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending February 5th indicated that despite a drop in our oil exports, we still had to withdraw oil from our stored commercial crude supplies for the tenth time in the past twelve weeks and for the 23rd time in the past thirty-five weeks.... our imports of crude oil fell by an average of 650,000 barrels per day to an average of 5,857,000 barrels per day, after rising by an average of 1,443,000 barrels per day during the prior week, while our exports of crude oil fell by an average of 866,000 barrels per day to 2,617,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,240,000 barrels of per day during the week ending February 5th, 216,000 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 increased​ by​ 100,000 barrels per day to 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 14,240,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 14,793,000 barrels of crude per day during the week ending February 5th, 152,000 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 973,000 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 420,000 barrels per day more than what our oil refineries reported they used during the week....to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA just inserted a (-420,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the average daily supply of oil and the data for the average daily consumption of it balance out, essentially a balance sheet fudge factor that they label in their footnotes as "unaccounted for crude oil", thus suggesting that there must have been an error or errors of that magnitude in the oil supply & demand figures that we have just transcribed....furthermore, since last week's fudge factor was at +575,000 barrels per day, there was a 995,000 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 unreliable....however, since most everyone treats these weekly EIA figures 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 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 5,868,000 barrels per day last week, which was 12.0% less than the 6,671,000 barrel per day average that we were importing over the same four-week period last year.....the 973,000 barrel per day net withdrawal from our crude inventories was due to a 949,000 barrels per day withdrawal from our commercially available stocks of crude oil, and a 24,000 barrel per day withdrawal from our Strategic Petroleum Reserve, space in which is being leased for commercial 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 a 1,000 barrel per day decrease to 507,000 barrels per day in Alaska's oil production had no impact on the rounded national total....last year's US crude oil production for the week ending February 7th was rounded to 13,000,000 barrels per day, so this reporting week's rounded oil production figure was 15.4% below that of a year ago, yet still 30.5% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016...    

meanwhile, US oil refineries were operating at 83.0% of their capacity while using those 14,793,000 barrels of crude per day during the week ending February 5th, up from 82.3% of capacity during the prior week...however, since US refinery utilization had averaged the lowest on record through 2020 and has barely recovered, the 14,793,000 barrels per day of oil that were refined this week were still 7.7% fewer barrels than the 16,020,000 barrels of crude that were being processed daily during the week ending February 7th of last year, when US refineries were operating at an also low 88.0% of capacity...

with the increase in the amount of oil being refined, the gasoline output from our refineries was higher for the 4th time in 12 weeks, increasing by 236,000 barrels per day to 8,656,000 barrels per day during the week ending February 5th, after our gasoline output had decreased by 253,000 barrels per day over the prior week...but since our gasoline production is still recovering from a multi-year low in the wake of this Spring's covid-related lockdowns, this week's gasoline output was still 6.3% lower than the 9,241,000 barrels of gasoline that were being produced daily over the same week of last year....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 38,000 barrels per day to 4,660,000 barrels per day, after our distillates output had increased by 104,000 barrels per day over the prior week....but since our distillates' production is also ​recovering from a three year low, that output was 3.7% less than the 4,837,000 barrels of distillates that were being produced daily during the week ending February 7th, 2020...

with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 10th time in thirteen weeks, and for 14th time in 31 weeks, rising by 4,259,000 barrels to 252,153,000 barrels during the week ending February 5th, after our gasoline inventories had increased by 4,467,000 barrels over the prior week...our gasoline supplies increased this week even as the amount of gasoline supplied to US users increased by 87,000 barrels per day to 7,857,000 barrels per day, as our exports of gasoline fell by 43,000 barrels per day to 737,000 barrels per day, while our imports of gasoline rose by 99,000 barrels per day to 657,000 barrels per day....but even after this week's inventory increase, our gasoline supplies were still 1.8% lower than last February 7th's gasoline inventories of 261,049,000 barrels, and near 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 16th time in 24 weeks and for the 29th time in the past year, falling by 1,732,000 barrels to 161,106,000 barrels during the week ending February 5th, after our distillates supplies had decreased by 9,000 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 110,000 barrels per day to 4,308,000 barrels per day, and because our imports of distillates fell by 162,000 barrels per day to 356,000 barrels per day and because our exports of distillates rose by 13,000 barrels per day to 956,000 barrels per day...but even after this week's inventory decrease, our distillate supplies at the end of the week were still 14.1% above the 141,222,000 barrels of distillates that we had in storage on February 7th, 2020, and about 7% above the five year average of distillates stocks for this time of the year...

finally, even with the ​big ​drop in our oil exports, our commercial supplies of crude oil in storage (not including the commercial oil being stored in the SPR) fell for the 21st time in the past twenty-nine weeks, and for the 24th time in the past year, decreasing by 6,645,000 barrels, from 475,659,000 barrels on January 29th to 469,014,000 barrels on February 5th, the lowest oil inventory level since March 20th...but even after that decrease, our commercial crude oil inventories were about 2% above the five-year average of crude oil supplies for this time of year, and 38.4% above the prior 5 year (2011 - 2015) average of our crude oil stocks as of the first week of February, 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​ during the lockdowns​ this spring after generally rising over the past two years, except for during the past 8 weeks and during the past two summers, after generally falling over the year and a half prior to September of 2018, our commercial crude oil supplies as of February 5th were still 6.0% more than the 442,468,000 barrels of oil we had in commercial storage on February 7th of 2020, 4.9% above the 447,207,000 barrels of oil that we had in storage on February 8th of 2019, and also 11.6% more than the 420,254,000 barrels of oil we had in commercial storage on February 2nd of 2018... 

OPEC's Monthly Oil Market Report

Thursday of this past week saw the release of OPEC's February Oil Market Report, which covers OPEC & global oil data for January, and hence it gives us a picture of the global oil supply & demand situation after OPEC, the Russians, and other oil producers agreed to increase their oil production by 500,000 barrels per day during 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....again, before we look at what this month's report shows us, we should again caution that estimating oil demand while the course of the Covid-19 pandemic remains uncertain is pretty speculative, and hence the demand estimates we'll be reporting this month should again be considered as having a much larger margin of error than we'd expect from this report during stable and hence more predictable periods.. 

the first table from this monthly report that we'll check is from the page numbered 47 of this month's report (pdf page 57), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate...for all their official production measurements, OPEC uses an average of estimates from six "secondary sources", namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thereby avert any potential disputes that could arise if each member reported their own figures...

January 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 181,000 barrels per day to 25,496,000 barrels per day during January, up from their revised December production total of 25,315,000 barrels per day...however, that December output figure was originally reported as 25,362,000 barrels per day, which therefore means that OPEC's December production was revised 47,000 barrels per day lower with this report, and hence January's production was, in effect, a rounded 134,000 barrel per day increase from the previously reported OPEC production figure (for your reference, here is the table of the official December OPEC output figures as reported a month ago, before this month's revisions)...

from the above table, we can see that a 89,000 barrels per day increase in the Saudi's production, an increase of 72,000 barrels per day in Venezuela's output, and a production increase of 62,000 barrels per day from Iran were the major factors in OPEC's January output increase, while several OPEC members failed to take advantage of the new agreement to increase production...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 agreement for January's production, which has now been extended to include February's 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 had been exempt from the production cuts imposed by these agreements, and as we can see above, Iran and Venezuela both saw major increases this month...

since there had never seemed to be a published table or listing available of how much each OPEC member was expected to produce under the eased production cuts of August through December, or the new ones for January, we had been including the table that shows the ​original​ October 2018 reference production for each of the OPEC members (as well as other producers party to the mid-April agreement), as well as the production level each of those producers was expected to cut their output to during May, June, and July...we'll include that table once again now, though with two modifications to that agreement since, it becomes more difficult to compute the production quotas that each of the OPEC members was expected to hold to in January:

April 13th 2020 OPEC   emergency cuts

the first column in the above table shows the oil production baseline, in thousands of barrel per day from which each of the oil producers was to cut from, 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 second column shows how much each participant had originally committed to cut during May and June in thousands of barrel per day, which was 23% of the October 2018 baseline for all participants except for Mexico, while the last column shows the production level each participant had agreed to after that cut...the producer's agreement for August through December of last year amended the above such that each member would be allowed to reduce their production cut shown above (ie, the "voluntary adjustment" shown above) by 20%...for example, Algeria's "cut" was expected to be 241,000 barrels per day from May thru July, which would reduce their oil production to 816,000 barrels per day over that period...under the agreement for August through December, Algeria would reduce their "cut" by 20%, or to 193,000 barrels per day, thus allowing them to produce 864,000 barrels per day during those months...with the agreement for January, Algeria would be able to reduce their production cut by another 5% from the "voluntary adjustment" figure shown above, or to 181,000 barrels per day, thus allowing them to produce 876,000 barrels per day during January....offhand, by comparing the above table's voluntary allocation less 25% from the initial OPEC production cut, it appears that Equitorial Guinea, Gabon and Kuwait had all exceeded their revised allocation during January, but that the group as a whole still remained below the quota they would have been allowed to produce for the month...

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 February 2019 to January 2021, and it comes from page 48 (pdf page 58) of the February OPEC Monthly Oil Market Report....on this graph, the cerulean blue bars represent OPEC's monthly oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale.... 

January 2021 OPEC report global oil supply

after the reported 181,000 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 430,000 barrels per day to average 93.12 million barrels per day in January, a reported increase which apparently came after December's total global output figure was revised down by 240,000 barrels per day from the 92.93 million barrels per day of global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 250,000 barrels per day in January after that revision, with oil production increases of 290,000 barrels per day from the OECD countries alone accounting for more than the total non-OPEC production increase in January... 

after that increase in January's global output, the 92.93 million barrels of oil per day that were produced globally in January were 7.33 million barrels per day, or 7.3% less than the revised 100.26 million barrels of oil per day that were being produced globally in January a year ago, which was the first month of additional production cuts of 500,000 barrels per day in an attempt to support prices (see the February 2020 OPEC report (online pdf) for the originally reported January 2020 details)...with this month's increase in OPEC's output, their January oil production of 25,496,000 barrels per day was at 27.4% of what was produced globally during the month, an increase from their revised 27.3% share of the global total in December....OPEC's January 2020 production, which included 537,000 barrels per day from former OPEC member Ecuador, was reported at 28,858,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 2,825,000, or 10.0% fewer barrels per day of oil in January 2021 than what they produced a year earlier, when they accounted for 28.8% of global output...  

However, even after the increase in OPEC's and global oil output that we've seen in this report, there was still a small shortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us...   

January 2021 OPEC report global oil demand

the above table came from page 26 of the February Oil Market Report (pdf page 36), 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 January, which is their estimate of global oil demand during the first quarter of 2020... OPEC is estimating that during the 1st quarter of this year, all oil consuming regions of the globe will be using an average of 93.22 million barrels of oil per day, which is a 950,000 barrels per day downward revision from the 94.17 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), still reflecting 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 producing 93.12 million barrels million barrels per day during January, which would imply that there was a modest shortage of around ​100,000 barrels per day in global oil production in January when compared to the demand estimated for the month..

In addition to the revision the first quarter's global oil demand, you can see encircled in green that OPEC has also revised global demand for 2020 upwards by 250,000 barrels per day, which thus means that the supply shortfalls or surpluses that we previously reported for last year would need to be revised....a month ago we estimated a global shortage of around 370,000 barrels per day in global oil production during December, based on the figures that were published at that time...however, as we saw earlier, December's global output figure was was revised down by 240,000 barrels per day from those figures, while global demand for the 4th quarter of 2020 was revised 330,000 barrels per day higher, so with those revised figures, we now find that global oil production in December was running roughly ​940,000 barrels per day short of demand... 

in addition to figuring December's revised global oil supply shortfall that's evident in this report, the upward revision of 330,000 barrels per day to November's global oil output means that the 1,210,000 barrels per day global oil output shortage we had previously figured for November would now be revised to a shortage of 1,540,000 barrels per day..,similarly, the 2,510,000 barrels per day global oil output shortage we had previously figured for October would now be revised to a shortage of 2,840,000 barrels per day once we account for the 330,000 barrels per day upward revision to fourth quarter demand...

As part that upward revision of 250,000 barrels per day in 2020 global demand, OPEC revised 3rd quarter 2020 demand higher by 220,000 barrels per day, revised 2nd quarter 2020 demand higher by 270,000 barrels per day, and revised first quarter 2020 demand higher by 170,000 barrels per day...those revisions mean that theglobal oil supply shortfall we had previously reported for the third quarter months would have to be revised higher by 220,000 barrels per day, that the large global oil surpluses we had previously reported for the second quarter months would have to be revised lower by 270,000 barrels per day, and that the record global oil surplus we had previously reported for March and the surpluses for the other first quarter months would have to be revised lower by 170,000 barrels per day...

This Week's Rig Count

The US rig count rose for the 21st time in the past twenty-two weeks during the week ending February 12th, but for just the 23rd time in the past 48 weeks, and hence it is still down by virtually half over that forty-seven week period....Baker Hughes reported that the total count of rotary rigs running in the US rose by 5 to 397 rigs this past week, which was still down by 393 rigs from the 790 rigs that were in use as of the February 14th report of 2020, and was also still 7 fewer rigs than the all time low rig count prior to 2020, and 1,532 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began to flood the global oil market in their first attempt to put US shale out of business....

The number of rigs drilling for oil increased by 7 rigs to 299 oil rigs this week, after rising by 4 oil rigs the prior week, still leaving us with 372 fewer oil rigs than were running a year ago, and still less than a fifth of the recent high of 1609 rigs that were drilling for oil on October 10th, 2014....at the same time, the number of drilling rigs targeting natural gas bearing formations fell by 2 rigs to 90 natural gas rigs, which was also down by 20 natural gas rigs from the 110 natural gas rigs that were drilling a year ago, and just 5.6% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008...in addition to those rigs drilling for oil or gas, one rig classified as 'miscellaneous' continued to drill in Lake County, California this week, while a year ago there were two such "miscellaneous" rigs deployed...

The Gulf of Mexico rig count increased by 1 to 17 rigs this week, with 15 of those rigs now drilling for oil in Louisiana's offshore waters and 2 drilling for oil in Alaminos Canyon offshore from Texas...that was 6 fewer Gulf of Mexico rigs than the 23 rigs drilling in the Gulf a year ago, when 20 Gulf rigs were drilling for oil offshore from Louisiana, one rig was drilling for natural gas in the Mississippi Canyon offshore from Louisiana, another rig was drilling for natural gas in the West Delta field offshore from Louisiana, and one rig was drilling for oil offshore from Texas...since there are no rigs operating off of other US shores at this time, nor were there a year ago, this week's national offshore rig figures are equal to the Gulf rig counts....however, in addition to those rigs drilling in the Gulf, one rig continues to drill through an inland body of water in Lafourche Parish, south of New Orleans, while a year ago there were no rigs drilling on US inland waters..

The count of active horizontal drilling rigs was up by 2 to 344 horizontal rigs this week, which was still less than a half of the 713 horizontal rigs that were in use in the US on February 14th 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 vertical rig count was up by 3 to 23 vertical rigs this week, but those were still down by 7 from the 30 vertical rigs that were operating during the same week a year ago....meanwhile, the directional rig count was unchanged at 18 directional rigs this week, and those were also down by 29 from the 47 directional rigs that were in use on February 14th 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 February 12th, the second column shows the change in the number of working rigs between last week's count (February 5th) and this week's (February 12th) count, the third column shows last week's February 5th 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 14th of February, 2020..    

February 12 2021 rig count summary

it appears that most of this week's rig changes took place in Texas...checking first for the details on the Permian in Texas from the Rigs by State file at Baker Hughes, we find that there were 3 new rigs added in Texas Oil District 8, which corresponds to the core Permian Delaware, that one rig was added in Texas Oil District 8A, which encompasses the northern counties of the Permian Midland basin, and that​ ​another rig was added in Texas Oil District 7B, which includes the easternmost counties of the Permian in Texas, thus accounting for the 5 rig increase in the Permian nationally...elsewhere in Texas, there there was an oil rig added in Texas Oil District 1, there was another oil rig added in Texas Oil District 2, and there was a natural gas rig pulled out of Texas Oil District 4, which together account for the one rig addition in the Eagle Ford shale, which stretches in a narrow band through the southeast counties of the state...there was also a natural gas rig pulled out of the Haynesville shale in Texas Oil District 6, hence accounting for the two rig decrease in natural gas drilling...other changes nationally include the rig addition offshore from Louisiana, a rig addition in North Dakota's Williston basin, and a rig pulled out of an Oklahoma basin that Baker Hughes does not identify...

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note: there's more here...

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