Friday, December 28, 2018

The Number Of Active Rigs Trending Down -- December 28, 2018


January 2, 2019: see the natural gas "withdrawal" data below. A reader who knows much, much more about this than I do, provided this analysis ... his entire analysis was way too long for the blog, but here are the data points I thought important --
  • the natural gas storage report for the week ending December 21st from the EIA showed that the quantity of natural gas in storage in the US fell by 48 billion cubic feet to 2,725 billion cubic feet over the week, which left our gas supplies 623 billion cubic feet, or 18.6% below the 3,348 billion cubic feet that were in storage on December 22nd of last year, and 647 billion cubic feet, or 19.2% below the five-year average of 3,372 billion cubic feet of natural gas that are typically in storage after the third week of December
  • this week's 48 billion cubic feet withdrawal from US natural gas supplies was just about what most analysts had been expecting, but it was well below the average of 121 billion cubic feet of natural gas that have been withdrawn from US gas storage during the third week of December in recent years
  • natural gas storage facilities in the Eastern US saw a 16 billion cubic feet draw from their supplies over the week, half of their average withdrawal over the past five years, as the region's gas supply deficit was reduced to 14.4% below normal for this time of year, while natural gas supplies in the Midwest fell by 23 billion cubic feet, in contrast to the normal 40 billion cubic feet pull, as their supply deficit was reduced to 12.2% below the normal for the third weekend of December
  • the South Central region only saw a 2 billion cubic feet drop in their supplies, in contrast to their normal 30 billion cubic foot withdrawal, as their natural gas storage deficit was reduced to 25.5% below their five-year average for this time of year
  • at the same time, 3 billion cubic feet were pulled out of natural gas supplies in the sparsely populated Mountain region, which normally pulls out 7 billion cubic feet for the week, as their deficit from normal fell to 21.9%, while 4 billion cubic feet were withdrawn from storage in the Pacific region, vs 12 billion cubic feet normally withdrawn, and their natural gas supply deficit fell to 27.4% below normal for this time of year
  • so, we've just seen our weekly withdrawal drop from 141 billion cubic feet during the week ending December 14th to just 48 billion cubic feet during the current reporting week ending December 21st
  • as we've mentioned several times, natural gas demand and hence withdrawal of gas from storage is largely driven by changes in temperature, relatively steady industrial and export demand notwithstanding 
  • temperatures for the heavily populated East, Midwest and South Central regions were generally below normal over the period from December 8th thru December 14th, with the temperatures in the East, which accounts more than a third of the population, consistently averaging in the mid-30s, while temperatures in the Midwest saw average temperatures in the 20s for four days to start the period
  • that colder than normal period, which included 3 days that were 5 to 9 degrees colder than normal for each of those regions, is what resulted in the 141 billion cubic feet withdrawal from our natural gas supplies over the week ending December 14th, just modestly above the 5 year average withdrawal of 136 billion cubic feet
  • but the period from December 15th thru December 21st, representing the dates of this week's report; not only were the temperatures in the East, Midwest and South Central regions above normal for each day during the period, but temperatures for all 5 regions were above normal for every day during the period, with temperatures in the East averaging in the mid-40s, and temperatures in the Midwest averaging in the upper 30s over the period
  • in fact, except for a few counties on the Gulf Coast, the entire US saw above normal temperatures during the week, with the broad area from the northern Rockies to the Great Lakes all more than 10 degrees above normal, as you can see on the map below, also from the natural gas storage dashboard
  • overall, we can estimate that temperatures for the lower 48 averaged at least 7 degrees warmer during the week ending December 21st than they were during the week ending December 14th 
  • as a result, the daily production of 87.2 billion cubic feet was nearly adequate to meet the country's needs, and hence only 48 billion cubic feet, or about 7 billion cubic feet per day, needed to be withdrawn from storage during the week 
  • furthermore, if we look at the daily regional average temperatures over the 6 days beginning December 22, they too are all above normal, with the small exception of the 30 degree average on December 27th for the mountain states
  • that means that the coming week's report for the week ending December 28th will again show a withdrawal from storage much below normal, also serving to alleviate the natural gas deficit which had been running 20% below normal nationally in recent weeks

Original Post

Holiday sales: see link --
  • last year (2017)
    • a record $598 billion dollars — up $33 billion from last year; up 6%
  • this year (2018)
    • a record $850 billion dollars — up $252 billion from last year; up 42%.
Bull moose, Mohall, North Dakota, link here.


Weekly Energy Picture

Gasoline demand, link here:

EIA weekly petroleum report
, link here:

  • weekly crude oil inventories: unchanged
  • weekly crude oil inventories: 441.4 million bbls
  • weekly crude oil inventories: still 75 above the five-year average for this time of the year
  • refineries operating at 95% of capacity
  • gasoline supplied about the same as this time last year
  • distillate fuel was up almost 8% from same period last year 
  • time to re-balance -- at this rate, never --
    Change w-o-w
    In Storage
    Weeks to RB to 350 Million Bbls
    Week 0
    November 21, 2018
    Week 1
    November 28, 2018
    Week 2
    December 6, 2018
    Week 3
    December 12, 2018
    Week 4
    December 19, 2018
    Never at this rate
    Week 5
    December 28, 2018
    Never at this rate
Natural gas drawdown, link here:

Back to the Bakken
Active rigs:

Active Rigs66503861173

Three new permits
  • Operator: Slawson
  • Field: Big Bend (McKenzie)
  • Comments: Slawson has three permits for a Slasher Federal pad in 34-152-92;
Five permits renewed
  • BR (3): two Boxcar permits and one Audubon permit, all in Dunn County
  • Petro Harvester Operating Company (2), two FLX2 permits, both in Burke County
Four producing wells (DUCs) reported as completed (more on these later)
  • 12337, 302, Foundation Energy Management, Lynne 43-2, Madison well;
  • 12233, 382, Foundation Energy Management, Lynne 34-2, Madison well;
  • 12391, 244, Foundation Energy Management, Lynne 32-2, Madison well;
  • 12354, 196, Foundation Energy Management, Fjeldahl 23-2, a Madison well,

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