Tuesday, January 10, 2016; Unable To Reach NDIC Server

Unable to reach the NDIC server at 8:22 a.m. Central Time, January 19, 2016.  

Twitter is also down. NY Times story. 

Active rigs:

	1/19/2016	01/19/2015	01/19/2014	01/19/2013	01/19/2012
Active Rigs	49	161	187	187	200

RBN Energy: Crude Price Rout Continues In Face of Stark Fundamentals.

Crude prices have fallen 21% since the start of 2016 and may fall further with the end to Iranian sanctions threatening to release yet more supplies into a saturated market. The U.S. benchmark West Texas Intermediate (WTI) closed at $29.42/Bbl Friday (January 15, 2016) and is now down 78% since the price rout began in June 2014. What has changed in the past two months to make crude prices fall so fast this year? Today we begin a two-part discussion of the fundamental factors underlying current weakness in the crude market.

The latest short-term energy outlook (STEO) published this month (January 2016) by the Energy Information Administration (EIA) lays out the oversupply story underling current crude oil price weakness in its forecast out to the end of 2017. The data shows world crude production (supply) in Q1 2016 is still greater than demand – to the tune of about 0.9 MMb/d – meaning that surplus crude is adding to inventory stockpiles every day.

During the period between 2011 and the start of 2014 demand kept ahead of supply (both growing about 4% a year) keeping world oil prices above $100/Bbl. Since 2014 the supply/demand balance has reversed with supply exceeding demand – leading to the price collapse in the second half of 2014 and continuing through today. The surplus of production over demand reached 2.4 MMb/d in Q2 2015. 

EIA expects the imbalance of production over demand to last until mid-2017. The STEO predicts that world crude demand will once again exceed supply during the second half of 2017.

Assuming the EIA forecast turns out to be accurate (and like every forecast - there are plenty of assumptions built in) ...  no end to the surplus until 2017.

Global supply of oil - WSJ: world could "drown" in oversupply of oil; Iran could add 300,000 bopd by the end of 1Q16.

The oil markets could be left with a surplus of 1.5 million barrels a day in the first half of 2016, and “unless something changes, the oil market could drown in oversupply,”  according to the EIA. 

Tweeting now:  Health care conglomerate Johnson & Johnson to cut 3,000 jobs in medical devices division over next 2 years.

Tweeting now:  Tiffany & Co. reports 9% worldwide decline in jewelry sales during holiday period.