For the week ending November 26, 2014, the number of horizontal rigs decreased by one from the previous week’s count. Currently, there are 1,371 horizontal rigs.
Offshore rigs increased by one to 54, up from 53 the previous week. This continues the offshore rig count’s trend since reaching a high of 66 in August.
During the week ending November 26, the US onshore rig count decreased by 13 from the previous week’s count. There were 1,863 land-based rigs.
According to the U.S. Energy Information Administration (or EIA), the Permian Basin is the largest crude oil–producing region in the US.
Natural gas rig counts have been on a downward trend for about three years. However, the gas-targeted rig count seems to be stabilizing.
Baker Hughes’ major basin oil rig count decreased by two—from 1,574 to 1,572. The main reductions were in “Other” basins, where oil rigs fell by 14 counts.
According to Baker Hughes, an oilfield service company, the rig count totaled 1,917 active oil and gas rigs in the US during the week ending November 26.
Despite record high production levels inventories are still 0.24 Tcf or 6% lower than last year’s inventory levels, and 0.26 Tcf or 7% lower than the five-year average (2009-13), according to the STEO.
Propane is a natural gas liquid (or NGL). NGLs are hydrocarbons in the same family of molecules as natural gas and crude oil. Other NGLs include ethane, butane, and pentane.
Natural gas prices started the week by falling almost 3% as an arctic blast, which boosted prices last week, gave way to warmer temperatures. Prices closed at $4.15 MMBtu on Monday.
On November 26, the US Energy Information Administration (or EIA) reported a 162 billion cubic feet (or bcf) natural gas inventory draw for the week ending November 21. Inventories decreased to 3,432 bcf.
The US Energy Information Administration (or EIA) reports natural gas inventory figures every week. Natural gas is an important fuel worldwide with uses spanning from power generation to plastics.
On November 27, oil prices slumped further after OPEC decided not to cut production. Brent fell to a four-year low, trading at levels under $75 a barrel. WTI prices also plummeted to fresh four-year lows and traded close to $70.81.
Cushing, Oklahoma, is the delivery point for NYMEX crude futures contracts. It’s where a lot of supply sources of crude meet a lot of demand sources for that crude.
Distillate demand and stock levels—like gasoline—drive crude demand and crude prices. Energy investors can benefit from watching distillate inventories.
Last week, gasoline inventories increased by 1.8 MMbbls (million barrels) to 206.4 MMbbls. The actual increase in inventories was close to analysts’ expectations of a 1.5 MMbbls increase.
Refining input is the main source of demand for crude oil. So refining throughputs will affect inventory levels not just for crude oil but also its refined products, like gasoline and distillates.
On November 26, the US Energy Information Administration (or EIA) released inventory data for the week ended November 21. Inventories increased by 1.95 million barrels.
Analysts had expected an increase of 250,000 barrels in crude inventories last week. We’ll discuss actual changes in inventories in this series.
Arch Coal has over 70% more debt on its books than revenues expected in 2014. That’s a lot when you consider that most coal producers aren’t making money.