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, 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...

No comments: