First Time Unemployment Claims Drop To 268,000; Continuing Claims At 15-Year Low; EIA's Monthly Crude Production -- Largest Month-On-Month Decline Since 2011 In March -- April 2, 2015

Active rigs:

	4/2/2015	04/02/2014	04/02/2013	04/02/2012	04/02/2011
Active Rigs	96	190	184	207	170

RBN Energy:

The Energy Information Administration’s (EIA) latest U.S. monthly crude production statistics published March 30^th show January production down 135 Mb/d versus December 2014, the largest month-on-month decline since June 2011.  There was an earlier warning sign from EIA.  The agency’s Drilling Productivity Report published March 9^th predicted that production would decline in April in three major U.S. oil production regions – Bakken, Eagle Ford and Niobrara. Since oil and NGL prices crashed last fall, the market has been watching with bated breath for the first signs of a production slowdown. Certainly rig counts have nosedived amid producer budget cuts in 2015. But are we really seeing the beginnings of a long-term slowdown just yet?  Was the DPR a harbinger of the January production decline? The clues lie within the DPR report.  Today’s blog parses DPR methodology, assumptions and risks as well as contributing market factors to get to the bottom of what is driving those reported production declines.

We first described the EIA’s DPR report – a new measure of production drilling efficiencies – shortly after it was launched in November 2013. Since then the report has become something of a bellwether for production trends in seven major U.S. oil and gas producing regions: Bakken, Eagle Ford, Niobrara, Permian, Haynesville, Marcellus and Utica. The report estimates the increase or decrease in rig productivity and the resulting production gain/loss for the current and next month. These are topics that RBN has also covered in detail in the past few months. The latest report predicted the first month-on-month oil and gas declines in DPR data in over a year (since late 2013). Table 1 below shows forecasts in  the March 2015 DPR  for each of the seven regions indicating that Bakken production is projected to drop by 8 Mb/d of oil and 8 MMcf/d of gas in April versus March. Eagle Ford production is projected to be down 10 Mb/d in oil but up 14 MMcf/d in natural gas. Niobrara is expected to fall 5 Mb/d in oil and 15 MMcf/d in gas.

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Jobs

Tweeting now:  US applications for unemployment benefits fall to 268,000 in sign of strong job market - @AP

Business Insider: continuing claims at 15-year low.

Another great report on the labor market.

Initial jobless claims fell to 268,000 last week, blowing away expectations for initial claims to totaled 286,000. 

Continuing jobless claims, also called insured unemployment, fell to a 15-year low. 

Continuing claims declined to 2,325,000, the lowest since December 2000 when this figure was at 2,322,000. 

Last week's initial claims figure was also revised up slightly, to 288,000, an the four-week moving average of claims is now down to 285,500. This is the lowest 4-week average for initial claims since October.

I like the lede: "another great report." LOL.

On another note, all that talk about 100,000 jobs being lost in the oil and gas industry -- must be just that: talk. The folks working the oil and gas industry are very talented; they will find jobs anywhere. Speaking of which, I see a lot of "Hiring CDL Drivers" here in the DFW metroplex area. Expensive area to live but really inexpensive locations within easy commute.