Best Weekly Summary Of US Fossil Fuel Energy -- Focus On Fracking -- January 16, 2023

Disclaimer: All my posts are done quickly. There will be content and typographical errors. If anything on any of my posts is important to you, go to the source. If/when I find typographical / content errors, I will correct them. 

Long notes like these are particularly prone to having errors. If this is important to you, go to the source. I'm less interested in individual well production as I am in understanding the Bakken. 

This week's "issue."

I'm going to post some of the best from that very, very long update.

Commercial supplies of crude oil in storage (with these data points, gasoline at the pump should be well below $1.99 / gallon). From the linked update, last week:

• crude oil supplies rose for the tenth time in twenty-two weeks;
• crude oil supplies rose by the most since February, 2021; that's two years ago -- is anyone paying attention?
• look at this: in general, supplies rise and fall about four million bbls / week;
• this last week? supplies rose almost 20 million bbls -- almost 20 million bbls;
• that was on top of 1.7 million bbls the week before;

And then look at this, it's a long paragraph but it's amazing -- is anyone paying attention?

• commercial crude oil inventories rose to around 4% above the most recent five-year average of crude oil supplies for this time of year, and
  
• were more than 33% above the average of our crude oil stocks as of the first weekend of January over the 5 years at the beginning of the past decade, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first topped 400 million barrels.
  
• And after our commercial crude oil inventories had jumped to record highs during the Covid lockdowns of the Spring of 2020, and then jumped again after February 2021's winter storm Uri froze off US Gulf Coast refining, our commercial crude supplies as of this January 6th were 6.4% more than the 413,298,000 barrels of oil we had in commercial storage on January 7th of 2022, but 8.8% less than the 482,211,000 barrels of oil that we had in storage on January 8th of 2021, and 2.0% more than the 431,060,000 barrels of oil we had in commercial storage on January 3rd of 2020
  
• Finally, with our inventories of crude oil and our supplies of all products made from oil near multi-year lows over the most recent months, we are also continuing to watch the total of all U.S. Stocks of Crude Oil and Petroleum Products, including those in the SPR
  
• After the commercial crude and gasoline inventory increases we've already noted for this week, the total of our oil and oil product inventories, including those in the Strategic Petroleum Reserve and those held by the oil industry, and thus including everything from gasoline and jet fuel to propane/propylene and residual fuel oil, rose by 21,602,000 barrels this week barrels this week,

And this is at a time when SPR releases are decreasing, and US operators are cutting back on CAPEX, rigs, and production in favor of returning more cash to their investors.

And the writer doesn't even mention the word "recession." 

For this discussion, I don't care about investing, and I don't care about the politics, but the fact is the US is the global leader in energy. Period dot.  And as #1, the US is far and away well ahead of whomever is #2. 

Whomever is #2. LOL. There used to be a discussion: Russia vs Saudia Arabia. Who is #2. Well, that discussion is over. 

Norway: replaces Russia as Europe's number one supplier of natural gas. 

Now, next item. Touched on it earlier. Rigs. Is anyone paying attention?

• The number of drilling rigs active in the US increased for the 13th time over the prior 24 weeks during the week ending January 14th and for the 94th time in 120 weeks and/but is still only 2.3% below the prepandemic level
  
• Baker Hughes reported that the total count of rotary rigs drilling in the US rose by 3 to 775 rigs over the past week, which was also 174 more rigs than the 601 rigs that were in use as of the January 7th report of 2022, but was 1,154 fewer rigs than the shale era high of 1,929 drilling rigs that were deployed on November 21st of 2014, a week before OPEC began to flood the global market with oil in an attempt to put US shale out of business.

Wow, I'm glad someone remembers OPEC's "trillion-dollar mistake." No one else does.

"Miscellaneous rigs": this is new --

• Other than those rigs targeting oil and natural gas, Baker Hughes reports that two "miscellaneous" rigs continued drilling this week
  
• one of those was a directional rig drilling to between 5,000 and 10,000 feet on the big island of Hawaii,
  
• while the other was a directional rig drilling to between 5,000 and 10,000 feet into a formation in Lake county California that Baker Hughes doesn't track
  
• While we haven't seen any details on either of those wells, in the past we've identified various "miscellaneous" rig activity as being for exploration, for carbon dioxide storage, and for utility scale geothermal projects
  
• a year ago, there were were no such "miscellaneous" rigs running...

Is there any question the gulf coast is the US off-shore federal energy policy?

• since there aren't any rigs drilling off our other coasts, the Gulf rig count equals the national offshore count.
• one wonders if anyone else caught that bit of cocktail trivia 
• the rigs may be in federal fields, but the production is all handled by Texas and Louisiana commercial operators. Whoo-hoo!

So much more at that link. But it just dawned on me --- in the old days I would balance my checkbook at the end of each month, comparing it against the monthly bank statement -- my checkbook register never agreed with the bank statement. After hours of work I might have been able to find the discrepancy but it wasn't worth the effort, so now I simply "reconcile" the data points by adding / subtracting whatever it takes. 

Likewise, the EIA notes a disparity between the apparent supply of oil and thee apparent disposition of it, but instead of trying to find the reason, the EIA simply inserts a "fudge factor" to reconcile the disparity, The fudge factor, in round numbers, runs about one million bopd.

Be sure to read what the state of Ohio is proposing. It will drive Greta nuts.