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, June 14, 2021

oil and natural gas prices at fresh highs; refinery utilization at a 17 month high; global oil shortage at 1.6 million bpd

oil prices at another 31 month high; natural gas price at a 7 month high; refinery utilization at a 17 month high, refinery throughput at a 14 month high;  biggest jump in gasoline inventories in 14 months; global oil shortage at 1.59 million barrels per day in May, despite 630,000 bpd production increase.

oil prices rose to a new 31 month high for ​a third ​consecutive ​week on forecasts from both the EIA and IEA for higher fuel demand in the second half of this year...after rising 5% to $69.62 a barrel last week on ongoing OPEC+ production restraint and on falling US crude supplies, the contract price of US light sweet crude for July delivery opened lower on Monday and slid more than 1% as traders awaited the outcome of this week's talks between Iran and the US over a deal that was expected to boost crude supplies, but clawed back part of the early losses to finish 39 cents lower at $69.23 a barrel as increased demand expectations for Europe and the U.S. placed a floor under the market...oil prices extended their loss early Tuesday on profit taking and on a stronger U.S. dollar, but rallied after US Secretary of State Blinken said that hundreds of sanctions targeting Iran are likely to remain in place even if Iran returned to compliance to settle 82 cents higher at $70.05 a barrel, thus closing above $70 for the first time since October 2018....after reaching $70.62 in early trading, oil prices dipped on Wednesday after the EIA reported big increases in gasoline and distillates inventories, and settled 9 cents, or 0.1%, lower at $69.96 a barrel, mostly due to weak fuel demand following the Memorial Day weekend, normally the kickoff of the peak summer driving season...after opening lower Thursday, oil prices drew support from higher-than-forecast U.S. inflation data and a strong demand outlook, and finished 33 cents higher at $70.29 a barrel after the EIA forecast a decline in global oil inventories and higher prices in the second half of 2021....oil prices rose again Friday after the IEA (International Energy Agency) said that OPEC would need to increase production to meet demand in the 2nd half, and finished up 62 cents at a fresh multi-year high of $70.91 a barrel, thus finishing the week 1.9% higher and posting its third straight weekly rise to the highest settle since mid-October 2018...

at the same time, natural gas prices rose for the ninth time in ten weeks and settled at a 7 month high, after a major eastern pipeline annouced pressure and volume restrictions...after rising 3.7% to $3.097 per mmBTU last week on forecasts for hot weather and high AC demand, the contract price of natural gas for July delivery opened higher Monday but faded to close 2.7 cents lower at $3.070 per mmBTU after gas output rose and the eastern US forecast shifted to a little further cooler for the next couple of weeks...but July natural gas prices rose 5.8 cents to a 15-week high of $3.128 per mmBTU on Tuesday after the European weather model projected a larger increase in cooling degree days (CDD) over the next two weeks than was previously expected...natural gas prices held steady despite hotter forecasts on Wednesday and closed just a tenth of cent higher at $3.129 per mmBTU​, and then were up a modest 2.0 cents to $3.149 per mmBTU even with a bearish storage report on Thursday as higher temperatures and Appalachian supply concerns kept pressure on prices​...but natural gas prices jumped 5% Friday after a major natural gas pipeline warned that pressure restrictions it had in place could last through the end of September and settled 14.7 cents higher at $3.296 per mmBTU, thus ending ​​trading at a 7 month high​, and ​with an increase of 6.4% on the week...

the natural gas storage report from the EIA for the week ending June 4th indicated that the amount of natural gas held in underground storage in the US rose by 98 billion cubic feet to 2,411  billion cubic feet by the end of the week, which still left our gas supplies 383 billion cubic feet, or 13.7% below the 2,794 billion cubic feet that were in storage on June 4th of last year, and 55 billion cubic feet, or 2.2% below the five-year average of 2,466 billion cubic feet of natural gas that have been in storage as of the 4th of June in recent years....the 98 billion cubic feet that were added to US natural gas storage this week was a bit above the average forecast of a 95 billion cubic foot addition from an S&P Global Platts survey of analysts, and was also above the average addition of 92 billion cubic feet of natural gas that have typically been injected into natural gas storage during the first week of June over the past 5 years, as well as just above the 95 billion cubic feet that were 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 June 4th showed that despite a​ big increase in our oil imports and an increase in our crude production, we still needed to withdraw oil from our stored commercial crude supplies for the eighth time in the past sixteen weeks and for the 30th time in the past forty-six weeks....our imports of crude oil rose by an average of 1,007,000 barrels per day to an average of 6,638,000 barrels per day, after falling by an average of 641,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 387,000 barrels per day to an average of 2,931,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,707,000 barrels of per day during the week ending June 4th, 620,000 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 reportedly rose by 200,000 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 14,707,000 barrels per day during this reporting week... 

meanwhile, US oil refineries reported they were processing 15,925,000 barrels of crude per day during the week ending June 4th, 327,000 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 941,000 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 276,000 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 (+276,000) 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 (+892,000) barrels per day, that means there was a 615,000 barrel per day balance sheet difference in the unaccounted for crude oil figure from a week ago, thus rendering the week over week supply and demand changes we have just transcribed useless....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 6,238,000 barrels per day last week, which was 1.9% less than the 630,000 barrel per day average that we were importing over the same four-week period last year... the 941,000 barrel per day net withdrawal from our crude inventories included​ ​a 749,000 barrel per day withdrawal from our designated commercially available stocks of crude oil​, and ​a 193,000 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 200,000 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 200,000 barrels per day higher at 10,600,000 barrels per day, while an 3,000 barrel per day increase in Alaska's oil production to 443,000 barrels per day had no impact on the rounded national total...​.​US crude oil production was at ​a prepandemic record high ​of 13,100,000 barrels per day during the week ending March 13th 2020, so this 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 91.3% of their capacity while using those 15,925,000 barrels of crude per day during the week ending June 4th, up from 88.7%​ of capacity​ ​the prior week, and the highest refinery utilization since January 10th of last year...while the 15,925,000 barrels per day of oil that were refined this week were the most since February 21, 2020 and 18.1% higher than the 13,484,000 barrels of crude that were being processed daily during the pandemic impacted week ending June 5th of last year, they were still 6.7% below the 17,064,000 barrels of crude that were being processed daily during the week ending June 7th, 2019, when US refineries were operating at a close to summertime normal 95.7% of capacity...

even with this week's increase in the amount of oil being refined, the gasoline output from our refineries decreased by 135,000 barrels per day to 4,762,000 barrels per day during the week ending June 4th, after our gasoline output had decreased by 182,000 barrels per day over the prior week...while this week's gasoline production was still 15.9% higher than the 8,139,000 barrels of gasoline that were being produced daily over the same week of last year, it was still 5.4% lower than the March 13th 2020 pre-pandemic high of 9,974,000 barrels per day, and 8.2% below the gasoline production of 10,276,000 barrels per day during the week ending June 7th, 2019....meanwhile, our refineries' production of distillate fuels (diesel fuel and heat oil) increased by 111,000 barrels per day to 4,918,000 barrels per day, after our distillates output had increased by 142,000 barrels per day over the prior week...while the pandemic pullback of last year didn't have much of an impact on distillates' production, this week's distillates output was still 3.3% more than the 4,762,000 barrels of distillates that were being produced daily during the week ending June 5th, 2020...

even with the decrease in our gasoline production, our supply of gasoline in storage at the end of the week increased for the eighth time in ten weeks, and for the 22nd time in thirty weeks, rising by 7,046,000 barrels to 241,026,000 barrels during the week ending June 4th, after our gasoline inventories had increased by 1,499,000 barrels over the prior week...our gasoline supplies increased by more this week because the amount of gasoline supplied to US users decreased by 666,000 barrels per day to 8,480,000 barrels per day, even as our exports of gasoline rose by 397,000 barrels per day to 957,000 barrels per day, while our imports of gasoline rose by 117,000 barrels per day to 1,050,000 barrels per day...​and ​even after this week's inventory increase, our gasoline supplies were 6.8% lower than last June 5th's gasoline inventories of 258,661,000 barrels, but close to the five year average of our gasoline supplies for this time of the year... 

meanwhile, with the increase in our distillates production, our supplies of distillate fuels increased for the second time in nine weeks and for the 12th time in 25 weeks, rising by 4,412,000 barrels to 132,802,000 barrels during the week ending June 4th, after our distillates supplies had increased by 3,720,000 barrels during the prior week....our distillates supplies rose this again week because the amount of distillates supplied to US markets, an indicator of our domestic demand, fell by 400,000 barrels per day to 3,413,000 barrels per day, even as our imports of distillates fell by 327,000 barrels per day to 189,000 barrels per day while our exports of distillates rose by 85,000 barrels per day to 1,063,000 barrels per day....but after seven inventory decreases over the past 9 weeks, our distillate supplies at the end of the week were still 22.0% below the 175,829,000 barrels of distillates that we had in storage on June 5th, 2020, and about 5% below the five year average of distillates stocks for this time of the year...

finally, with the ongoing increase in our oil refining, our commercial supplies of crude oil in storage fell for the 19th time in the past thirty weeks and for the 25th time in the past year, decreasing by 5,241,000 barrels, from 479,270,000 barrels on May 28th to 474,029,000 barrels on June 4th, after our crude supplies had decreased by 5,079,000 barrels the prior week....after this week's decrease, our commercial crude oil inventories were about 4% below the most recent five-year average of crude oil supplies for this time of year, but were still about 34% above the average of our crude oil stocks as of the the first week of Junw 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 June 4th were 11.9% less than the 538,065,000 barrels of oil we had in commercial storage on June 5th of 2020, and now 2.4% less than the 485,470,000 barrels of oil that we had in storage on June 7th of 2019, but still 9.6% more than the 432,441,000 barrels of oil we had in commercial storage on June 8th of 2018...        

OPEC's Monthly Oil Market Report

Thursday of this past week saw the release of OPEC's June Oil Market Report, which covers OPEC & global oil data for May, and hence it gives us a picture of the global oil supply & demand situation for the first month of the modest output easing policy initiated by OPEC and other producers at their early April meeting, which was actually the fourth production quota policy change they've made over the past year, all in response to the pandemic-related slowdown and subsquent recovery....but before we start, we want to again caution that the oil demand estimates made by OPEC herein, while the course of the Covid-19 pandemic still remains uncertain in most countries around the globe, 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 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 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...

May 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 390,000 barrels per day to 25,463,000 barrels per day during May, up from their revised April production total of 25,073,000 barrels per day...however, that April output figure was originally reported as 25,083,000 barrels per day, which therefore means that OPEC's April production was revised 10,000 barrels per day lower with this report, and hence OPEC's May production was, in effect, a 380,000 barrel per day increase from the previously reported OPEC production figure (for your reference, here is the table of the official April OPEC output figures as reported a month ago, before this month's revision)...

From the above table, we can see that a production increase of 345,000 barrels per day from the Saudis was the major factor in OPEC's May output increase; the reason for that increase is that the Saudis unilaterally committed to cut their own production by a million barrels per day during February, March and then later during April of this year, and that they are now gradually unwinding that voluntary output decrease... 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 of last year, 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 and then April'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...then, during a difficult meeting on April 1st of this year, OPEC and the other oil producers that are aligned with them agreed to incrimentally adjust their oil production higher over the next three months, which is the agreement which governed OPEC's May's production that you see above...

Hence, to see if all the OPEC members continued to adhere to the production cuts they had committed to during May, we'll include a copy of the production adjustments table that was provided as a downloadable attachment with the OPEC press release following their April 1st meeting with other oil producers...

May 2021 OPEC production quotas

the above table was included with the press release following the 15th OPEC and non-OPEC Ministerial Meeting on April 1st of this year, and it includes the reference production and expected production levels for the 10 members of OPEC that are expected to make cuts, as well as the same information 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 oil 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, that each is expected to make from that reference production level, and then the oil output allowed for each producer under the April agreement for the months of May, June and July...

OPEC arrived at these figures by repeatedly adjusting the original 23%, or 9.7 million barrel per day cut from the October 2018 baseline first agreed to for May and June 2020, first to a 7.7 million barrel per day reduction from the baseline for the remainder of 2020, then to a 7.2 million barrel per day production cut from the baseline for the first four months of this year, which was actually raised to an 8.2 million barrel per day reduction after the Saudis unilaterally committed to cut their own production by a million barrels per day during February, March, and then later during April of this year....under the prior agreement, OPEC's production cut in April was at 4,564,000 barrels per day from the October 2018 baseline; as you see above, their cut for May was lowered to 4,287,000 barrels per day from the baseline with the latest agreement...

the next graphic from this month's report that we'll highlight shows us both OPEC's and worldwide oil production monthly on the same graph, over the period from June 2019 to May 2021, and it comes from page 48 (pdf page 58) of OPEC's June 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.... 

May 2021 OPEC report global oil supply

Including this month's reported 390,000 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 630,000 barrels per day to average 93.67 million barrels per day in May, a reported increase which apparently came after April's total global output figure was revised down by 20,000 barrels per day from the 93.06 million barrels per day of global oil output that was reported for April a month ago, as non-OPEC oil production rose by a rounded 240,000 barrels per day in May after that revision, with with increases in the oil output from the US, the UK, Brazil and Guyana accounting for most of the non-OPEC production increase in May... 

After that increase in May's global output, the 93.67 million barrels of oil per day that were produced globally during the month were 4.30 million barrels per day, or 4.8% more than the revised 89.37 million barrels of oil per day that were being produced globally in May a year ago, which was first month of the OPEC + agreement to cut global output by 9.7 million barrels per day (see the June 2020 OPEC report (online pdf) for the originally reported May 2020 details)...with this month's increase in OPEC's output, their May oil production of 25,463,000 barrels per day was at 27.2% of what was produced globally during the month, an increase of 0.2% from their 27.0% share of the global total in April....OPEC's May 2020 production was reported at 24,195,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year produced 1,268,000, or 5.2% more barrels per day of oil this May than what they produced a year earlier, when they accounted for 26.9% of global output...  

However, even after the sizable increase in global oil output that we've seen in this report, the amount of oil being produced globally during the month again fell short of the expected demand, as this next table from the OPEC report will show us...   

May 2021 OPEC report global oil demand

the above table came from page 27 of the OPEC June 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 third column, we've circled in blue the figure that's relevant for May, which is their estimate of global oil demand during the second quarter of 2021... OPEC is estimating that during the 2nd quarter of this year, all oil consuming regions of the globe will be using an average of 95.26 million barrels of oil per day, which is a rounded 470,000 barrels per day upward revision from the 94.79 million barrels of oil per day of demand they were estimating for the second 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 93.67 million barrels million barrels per day during May, which would imply that there was a shortage of around 1,590,000 barrels per day in global oil production in May when compared to the demand estimated for the month...

In addition to figuring May's global oil supply shortfall that's evident in this report, the upward revision of 470,000 barrels per day to second quarter demand that's shown above, combined with the 20,000 barrel per day downward revision to April's global oil supplies that's implied in this report, means that the 1,730,000 barrels per day global oil output shortage we had previously figured for April would now be revised to a shortage of 2,220,000 barrels per day...

note that in green we have also circled a downward revision of 360,000 barrels per day to OPEC's previous estimates of first quarter demand...for March, that means that the 80,000 barrels per day global oil output shortage we had previously figured for March would be revised to a surplus of 280,000 barrels per day... similarly, the downward revision to first quarter demand means that the 1,290,000 barrels per day global oil output shortage we had previously figured for February would now be revised to a shortage of 930,000 barrels per day, and that the 70,000 barrels per day global oil output shortage we had previously figured for January would now be revised to a surplus of 290,000 barrels per day, in light of that 360,000 barrel per day downward revision to first quarter demand...

also note in our green ellipse on the table above that we have circled an upward revision of 120,000 barrels per day to global demand for 2020...on a separate table on page 26 of the OPEC June Oil Market Report (pdf page 36) we can see this includes upward revisions of 190,000 barrels per day, 230,000 barrels per day, and 80,000 barrels per day for 2020's 2nd, 3rd and 4th quarters respectively, and a downward revision of 20,000 barrels per day to first quarter 2020 demand...while we're not inclined to go back and recompute the figures for each month of last year in light of those revisions, suffice it to say that the quantities of oil produced globally during the pandemic of 2020 averaged over 3 million barrels per day more than anyone wanted, and that an average 120,000 barrels per day upward revision to global demand is a drop in the bucket in comparison...

This Week's Rig Count

The US rig count rose for the 34th time over the past 39 weeks during the week ending June 11th, but it's still down by 41.8% from the pre-pandemic rig count....Baker Hughes reported that the total count of rotary rigs running in the US was up by 5 to 461 rigs this past week, which was also up by 182 rigs from the pandemic hit 279 rigs that were in use as of the June 12th report of 2020, but was still 1,468 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 an attempt to put US shale out of business....

The number of rigs drilling for oil was up by 6 to 365 oil rigs this week, after being unchanged  the prior week, and​ that's now 166 more oil rigs than were running a year ago, but is still just 22.7% 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 down by 1 to 96 natural gas rigs, which was still up by 18 natural gas rigs from the 78 natural gas rigs that were drilling a year ago, and still just 6.0% of the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008....

The Gulf of Mexico rig count was unchanged at 13 rigs this week, with all 13 of those rigs drilling for oil in Louisiana's offshore waters....that was the same number of Gulf of Mexico rigs that were drilling in the Gulf a year ago, when again all 13 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 count... however, in addition to those rigs offshore, a rig continued to drill through an inland lake in St Mary parish, Louisiana this week, whereas there were no such "inland waters" rigs running a year ago...

The count of active horizontal drilling rigs was uup by 5 to 420 horizontal rigs this week, which was also up by 174 rigs from the 246 horizontal rigs that were in use in the US on June 12th of last year, but less than a third of the record of 1372 horizontal rigs that were deployed on November 21st of 2014....in addition, the vertical rig count was up by one to 17 vertical rigs this week, and those were also up by 6 from the 11 vertical rigs that were operating during the same week a year ago....on the other hand, the directional rig count was down by 1 to 24 directional rigs this week, which was still up by 2 from the 22 directional rigs that were in use on June 12th 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 June 11th, the second column shows the change in the number of working rigs between last week's count (June 4th) and this week's (June 11th) count, the third column shows last week's June 4th 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 12th of June, 2020..    

June 11 2021 rig count summary

in addition to the usual​ spate of​ oil rig ​re​deployments, we also have a number of natural gas rig changes 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 two oil rigs were added in Texas Oil District 8, which is the core Permian Delaware, and another oil rig was added in Texas Oil District 7B, which includes the farthest east counties of the Permian Midland, while a rig was pulled out from Texas Oil District 7C, which encompasses the southern counties of the Permian Midland, which thus gives us a net increase of two rigs in the Texas Permian....since the Permian basin saw a four rig increase nationally, that means that the two rigs that were added in New Mexico had to have been set up to drill in the far west reaches of the Permian Delaware, to account for the national Permian basin increase...elsewhere in Texas, we find that a rig was added in Texas Oil District 6, which accounts for this week's Haynesville shale natural gas rig increase, and that rig counts in all other Texas districts were unchanged...elsewhere, all three rigs added in Wyoming were apparently targeting oil in a basin that Baker Hughes doesn't track, while an oil rig was pulled out from Alaska, also from an unnamed basin...in addition, we have two natural gas rigs pulled out of Ohio's Utica shale, and a natural gas rig pulled out of Pennsylvania's Marcellus, while a natural gas rig added in West Virginia's Marcellus, thus leaving the Marcellus rig count unchanged and the national natural gas rig count down by one..

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note: there's more here...

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