Friday, October 9, 2015

Active rigs:

	10/9/2015	10/09/2014	10/09/2013	10/09/2012	10/09/2011
Active Rigs	68	192	185	191	194

RBN Energy: searching for signs of a natural gas production slowdown.

The CME/NYMEX Henry Hub natural gas futures price averaged $2.64/MMBtu in September, the lowest level for any September since 2001, and it continues to hover at a similar low for October so far. Rig counts are down nearly 60% since December 2014. The market is on high alert for the first sign of production declines that might encourage higher prices – believing this to be a matter of sooner or later. Yet natural gas production has been hitting all-time records. Today we look at monthly natural gas production data from the Energy Information Administration (EIA).

Last week  we outlined reports from the EIA tracking crude oil production. Each of these reports provides value in terms of market data but do not provide a clear, unambiguous picture of what is happening to supply. Rather we use the data in combination to fill the knowledge gaps, taking care to understand the methodology and risks associated with each dataset. We found that lagged wellhead production data from each state presented a risk to EIA estimates of crude volumes that the agency is now overcoming with direct surveys of producers. We have also noted the increasingly indirect relationship between production and drilling activity that is blurred by productivity improvements as well as the number of wells that are drilled but not completed, and the wells previously drilled that are now being completed. Today we'll look at comparative EIA data for natural gas production.

*********************************

Global Crude Oil Break-Even Prices 

Yesterday, this graphic popped up a couple of times --

Two abbreviations:

• Onshore Row (should be RoW): onshore rest of world (excludes NAM shale)
• NAM shale: North American shale

***********************************
Best News Today

SecState John Kerry and his Iranian counterpart did not win the Nobel Peace Prize for their success in bringing peace to the region. 

****************************************

Compared to What?

This is a tough one. I read a lot but I prefer not to read "new" fiction. There is so little time and so many great books that need to be read, I am afraid of wasting time on a book that is not worth the effort.

There is a new book that has received much promotion, City on Fire by Garth Risk Hallberg. It's a detective story, of sorts, I guess, that takes place in NYC in the 1970's -- with the climax of the novel taking place on July 13, 1977, the date of "the blackout."

The book sounds very, very interesting, but early reviews by "everyday" people who got advance copies all said the same thing: way too long. Most of those who started the book did not complete the book. The book is 944 pages long. One individual had read 600 pages, and was not sure if she/he could read another 200 pages and still have 150 pages left to read.

There is a great review of the book in this week's issue of The New Yorker.

From that review:

Hallberg is also a romantic about the nineteen-seventies. That may seem a strange species of nostalgia. The decade between 1972 and 1982 was the worst extended economic period since the nineteen-thirties.

There were two oil crises, the first in 1973, when the price of a barrel nearly quadrupled, and the second in 1978 - 79, when it tripled. The stock market crashed in grim slow motion. Between 1972  and 1974, the Dow Jones Industrial Average lost almost half its value, and the market di dnot get back to 1972 levels until 1982.

In 1975, unemployment jumped to 8.5 percent. The inflation rate exceeded ten percent. By late 1980, the year Ronald Reagan was elected President, the prime rate was twenty per cent.

When folks tell me today's economy is doing poorly, I generally reply, "compared to what?"