Friday, February 2, 2018 -- Solid Unemployment Report

Monthly jobs report: pending.

• Forecast: 177,000 added
• unemployment rate: 4.1%
• actual: 200,000 jobs added
• unemployment rate: 4.1%
• U6: 8.2%
• African-American unemployment: 7.7%, up from 6.7%
• average hourly earnings: up 0.3% -- it's been a long time since hourly wages "popped" this much
• market reaction: Dow futures down 228 points
• market reaction: 10-yr-T-note: 2.83%  (up 0.059)
• December payrolls increased to 160,000 from original report of 148,000 jobs added
• "a very solid unemployment report" -- CNBC  
• most important number: labor force participation -- 62.7%
• second most important number: the jump in hourly wages

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Back to the Bakken

Black gold: Goldman says oil to surpass $80 with market likely balanced.

Goldman Sachs Group Inc. hiked its short-term crude oil price forecast by as much as 33 percent, saying the market is now likely balanced. 

The bank now estimates Brent will reach $75 a barrel over the next three months and will climb to $82.50 within six months, analysts including Damien Courvalin wrote in an emailed report. Their previous estimate for both time periods was $62 a barrel.

“The rebalancing of the oil market has likely been achieved, six months sooner than we had expected,” Goldman’s analysts wrote. “The decline in excess inventories was fast-forwarded in late 2017 by stellar demand growth, high OPEC compliance, heavy maintenance as well as collapsing Venezuela production.”

Goldman joins other Wall Street banks including Morgan Stanley and JPMorgan Chase & Co. in ratcheting up its outlook, as economic growth and output cuts led by the Organization of Petroleum Exporting Countries have helped to boost prices. Morgan Stanley recently said Brent will reach $75 a barrel this year, while JPMorgan said it could rise to near $78 as oil markets tighten more rapidly than expected.

Bloomberg on the Bakken: link here, February 1, 2018.

Minneapolis Fed on the Bakken: link here, February 1, 2018.

Active rigs:

$65.73↓	2/2/2018	02/02/2017	02/02/2016	02/02/2015	02/02/2014
Active Rigs	58	40	44	145	192

RBN Energy: streamlining Permian water delivery and produced water takeaway, part 3.

The Permian is experiencing the build-out of a wide variety of midstream infrastructure: crude oil and natural gas gathering systems, gas processing plants and crude, gas and NGL takeaway pipelines.

Lately, there’s also been a rush to develop pipelines to deliver water to wells for use in hydraulic fracturing, as well as pipes to transport produced water from the lease to disposal wells and produced-water recycling plants. By installing and expanding these water and produced-water pipeline systems — some of them hundreds of miles long — Permian producers and third-party water-logistics providers are reducing the need for trucks on the Permian’s congested roads and significantly reducing per-barrel water transportation costs. Today, we continue our blog series on water-related pipeline, storage and treatment infrastructure in the Permian’s Delaware and Midland basins.

RBN’s middle-of-the-road Growth Scenario shows Permian crude oil production rising by about 500 Mb/d a year through the early 2020s — topping 3 MMb/d late this year, 4 MMb/d in late 2020 and 5 MMb/d in late 2022 — and recent increases in oil prices could accelerate the pace of that growth.

The Permian’s expansion is driven by what you might call the supersizing and “assembly-lining” of production in the play. Producers are piecing together ever-larger leaseholds in the parts of the Delaware and Midland basins they have determined to be the most promising, and filling in gaps so their holdings are contiguous and are not interspersed with leases held by other producers. That is enabling producers to drill longer horizontal wells or laterals (now often 7,500 to 10,000 feet, and sometimes longer). And they are intensifying their well completions with the use of more pressure, more water, more frac sand per linear foot of lateral and more frac stages.