Post-Boom Bakken Active Rig Count Hits New Low; Thursday, July 9, 2015

Active rigs:

	7/9/2015	07/09/2014	07/09/2013	07/09/2012	07/09/2011
Active Rigs	74	189	185	213	170

I probably missed it but I think I saw official reports state the post-boom low in active rigs in North Dakota was 72, my data base shows 75 as the previous low. The "74" today represents, at least for me, a new record low for the post-boom Bakken.

RBN Energy: natural gas demand response is emerging.

CME/NYMEX Henry Hub natural gas futures prices for August delivery continue to trail $1.50/MMBtu behind year-ago levels and natural gas production volumes show little sign of softening. Gas demand is rallying to record-setting levels and the balance is tightening. But there is still a long way to go before the storage inventory surplus is reined in. Today we revisit supply/demand balance and its impact on storage this summer.

This is our latest update on the fundamental factors influencing the natural gas market – especially the supply/demand balance. At the end of April in My Sweet Hoard we recapped the storage picture going into the start of summer 2015, which indicated the possibility of an end-of-season inventory balance substantially above last year.  From the vantage point of April, the looming questions presented by this year-over-year surplus  were whether production would slow, how big would the demand response be to the supply glut and resulting lower prices, and how would the weather wild-card factor in.  

In the previous episode of Tightening Up in Mid-May we reviewed supply/demand balance data from PointLogic Energy’s Daily Market Report to highlight fundamentals contributing to the storage inventory situation as of mid-May. NYMEX Henry Hub price activity at the time signaled some level of confidence in the market that a production slowdown and demand response from the power and industrial sectors would eventually resolve a potential year-over-year storage surplus. Now with June, one of the hotter months, under our belt, we revisit that data to see whether changes in supply or demand have moved the needle.

It will be interesting to see the natural gas fill rate later this morning.