Tuesday, October 27, 2015 -- Americans Loving Low Gsoline Prices

Active rigs:

	10/27/2015	10/27/2014	10/27/2013	10/27/2012	10/27/2011
Active Rigs	68	195	182	186	200

RBN Energy: Part 4 -- How Flow Data Provides Transparency Into Natural Gas Production.

The availability of pipeline flow data makes the U.S. natural gas market uniquely positioned to grasp with reasonable accuracy where it stands with regional or national supply and demand on a daily basis. If you understand how to wrangle and finesse this robust data source, you can make a pretty good estimate of where the supply is, where it is headed, how it’s being consumed, and ultimately, what that all means for prices. Today we wrap up our series on natural gas production estimates and how the industry uses pipeline flow data to track gas production trends in real time.

Recap

In Part 1 of this series, we compared the pros and cons of the U.S. gas production data from the Energy Information Administration (EIA): the Natural Gas Monthly (NGM), and two forward-looking reports, the Short-Term Energy Outlook (STEO) and the Drilling Productivity Report (DPR).

In Part 2 we showed how daily pipeline flow data helps fill in the lag in EIA final estimates. We won’t know final EIA estimates for the current month (October 2015) until January, for example, but in the meantime pipeline flow data provides an objective view through the current day. So while the latest (October) DPR is projecting declines in Appalachian gas production (Marcellus and Utica combined) after July 2015, for instance, daily, flow data from our friends at Genscape indicates that production from the region continuing at or near record volumes.

In Part 3, we provided a brief primer on flow data that derives from FERC mandated gas shipper website postings of scheduled gas volumes entering or leaving thousands of interstate pipeline meter points. Querying meter flow volumes by geography and other attributes, and aggregating them up to regional levels can provide a good estimate of market supply or demand on any given day. We showed an example of flow data aggregation for Appalachia production.

We start back today with that same example aggregating production data for the states and counties the DPR use to define the Appalachian region. For easy reference, we reproduce the map from Part 3 again in Figure 1 that shows how meters have physical locations (represented by the black dots) and flow data captures volumes that are scheduled at these points along pipelines. Today we’ll show how the data can be used to follow Appalachia production trends, using Genscape’s real-time natural gas database.

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From Rigzone: is the MLP mojo gaining momentum?

Maybe it was a recent crude rally, a pleasant surprise when distributions began to pick up or investors deciding to adjust to a new normal. Whatever the case, master limited partnerships (MLP) – the most successful of which are typically in the midstream sector – have turned a corner that makes some analysts hopeful the worst is behind the structure Following crude’s collapse last year that ricocheted between upstream and oilfield service revenue for months, many MLPs had subsequently floundered.

But during the week of Oct. 9, the MLP Index posted a 6.1 percent gain – its best week since 2013. And the Alerian MLP Index had a yield of 9 percent Sept. 29, a figure not seen in six years. Shortly thereafter, the U.S. benchmark WTI settled at an 11-week high and worldwide Brent topped $53 per barrel.

From Bloomberg/Rigzone:  Oil at $50 Is 'Gift to World' as Abu Dhabi Sees Higher Prices.

Oil at $50. a barrel is a “gift to the world” as prices should be low enough to spur economic growth, according to the head of Abu Dhabi’s Department of Economic Development.

Prices will probably be at $60 next year, after hitting bottom at $45, Ali Al Mansoori, the department’s chairman, said in an interview Sunday in the capital of the United Arab Emirates, the fourth-largest oil producer in the Organization of Petroleum Exporting Countries. Benchmark Brent crude has dropped 16 percent this year amid a global oversupply and was trading Monday at $47.98 a barrel at 11:55 a.m. London time.

“It is a gift to the world that oil has dropped to $50,” Al Mansoori said. “Would we like for oil to stay at $50? Absolutely not. We would like oil to go to $70, $80, but beyond that I think it would hurt the economic growth.”

Oil demand growth will climb to a five-year high of 1.8 million barrels a day this year before slowing next year amid a weaker outlook for the world economy, the International Energy Agency forecast in its October market report. The market will probably remain oversupplied through 2016 as Iran exports more crude, should international sanctions be eased, it said.

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Americans Love Low Gasoline Prices

Ford misses on earnings (by one whole penny) but the third quarter was its best ever in North America. Business Insider is reporting:

Ford posted its best-ever quarter in North America, driven by sales of the F-150 full-size pickup, which was redesigned to use more lightweight aluminum in its construction.

There were issues with supply of the new truck that weighed on Ford sales earlier in the year. But in the third quarter, the car maker delivered over 207,000 pickups.

Compare the 207,000 pickups delivered in the past quarter to 2,500 Teslas delivered over same period. Speaks volumes.

By the way, GM is having such a great year, the company announced it is raising wages for its employees.

General Motors Co. , which has been delivering some of the richest operating profits in its 107-year history, has decided to do something it hasn’t done in nearly a decade: give its veteran American factory workers a raise.

The No. 1 U.S. auto maker by sales accepted a new four-year wage agreement with the United Auto Workers union late Sunday, just ahead of a strike deadline. Details weren’t immediately disclosed but UAW officials called the proposed GM deal “transformative,” and said it promises “long-term significant wage gains” to factory employees.

If approved, it would be the first time since 2007 that a Detroit labor contract has been considered transformative. Eight years ago, GM, Ford Motor Co. and Chrysler trimmed their labor costs significantly with a new two-tier pay structure and retiree health-care obligations.

Today, GM and its Detroit rivals are flourishing amid the strongest U.S. auto sales in more than a decade and buyers’ appetite for lucrative trucks and sport-utility vehicles. GM last week reported a record third-quarter North American operating profit, and said the region’s operating margin will exceed 10% of sales in 2015, rivaling European luxury brands.

More on Ford, from the AP, data points:

• record third quarter results; best third quarter ever
• profit almost doubles from a year ago (up 89%)
• record set mostly due to higher sales of its new F-150 pickup truck
• reached full production at its two US factories this past June
• customers "paying up" for these aluminum trucks; Ford making $2,000 more per F-Series truck compared to a year ago
• net income rose 129% to $1.9 billion; profit of 48 cents/share vs 27 cents in 3Q14
• it appears Ford missed by a penny because analysts forecast a 32% tax rate, but Ford's 3rd quarter rate was 33%