Friday, January 29, 2016

Hours After Hitting Another Post-Boom Low, Active Rigs Drop Again -- To 45 -- January 29, 2016

Transcript, CVX 4Q15 earnings: SeekingAlpha

Active rigs:

Active Rigs45146190187204

One can track the rig count over time at this post

RBN Energy: The “Great Divide” Between Crude and Natural Gas Is Shuttered By Low Prices.
West Texas Intermediate (WTI) CME NYMEX crude futures settled up 92 cents/Bbl yesterday (January 28, 2016) at $33.22/Bbl and NYMEX Henry Hub natural gas futures settled up slightly at $2.182/MMBtu.
The crude-to-gas ratio - meaning the crude price in $/Bbl divided by the gas price in $/MMBtu - was 15.22 X.
For most of this year so far the ratio has been less than 15X On January 20, 2016 it dipped to 12.5 X – its lowest point since March 2009. Over the 5 years between 2010 and 2014 the ratio averaged 27X - reaching a high of 54X in April 2012.
That lofty five year run for the crude-to-gas ratio was arguably responsible for much of the crude and natural gas liquids production boom since 2011 and a “Golden Age” of natural gas processing. Today we begin a two-part series discussing the ratio and the market implications if it stays low. -- first in a two-part series. Archived.
Fast and furious becomes slow and costly. OPEC (i.e., Saudi Arabia) says no meeting is scheduled. If at all interested, here's a long article over at Reuters/Rigzone.
Russia's oil industry has argued for years that it cannot cut output to support falling global prices for purely technical reasons; in reality it can - as long as it has the political will.

The days that oligarchs decided production levels according to their own private interests are long gone. Today the state directly controls roughly half of output, with most of the rest in the hands of business figures who are loyal to President Vladimir Putin, or at least will not oppose his wishes.

Moscow has long ruled out an output cut coordinated with other producers, even during the collapse in crude prices since the middle of 2014. However, Energy Minister Alexander Novak said on Thursday Saudi Arabia had proposed that all exporters should reduce their production by up to 5 percent, adding that Russia was ready to discuss the idea.

Russia's oil industry has a chequered record on carrying out requests to cut production.

On previous occasions when the Kremlin said it would consider cooperating with OPEC, exports kept flowing or even increased. In some cases oil companies shifted their cargoes from the pipeline system to the railways or tankers where there was less state oversight.

The only time Russia implemented a brief cut was in early 2002 when Moscow reacted to Brent crude prices that were below $20 per barrel - about $15/bbl below Thursday's level.

Since then the picture has changed. The Kremlin has consolidated its control over of Russian oil production since the demise of the giant Yukos energy company following the arrest of its head, Mikhail Khodorkovsky, in 2003.

An industry source noted this consolidation and the increased power of Putin, who oversees all major energy deals in Russia, saying that oil companies are now much more likely to fall into line with a production cut if needed.
Ping-pong. This is nice. The other day I mentioned/linked The Coyote Blog with regard to public transportation -- this was the link. Today, I see The Coyote Blog provided an update:  Phoenix Light Rail (Continued) Fail. At the linked blog, public transportation ridership has dropped for the past three years, and is now (2015) lower than what it was in 2013). It appears that light rail cannibalized bus services and over time both light rail and bus have failed. I bet the dots connect: light rail and bus routes do not connect physically where most needed.

By the way, a lot of Willistonite snowbirds fly into Phoenix every October. Many have made Phoenix their new home, or their second home. 

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