December 27, 2019

December 27, 2019

27th December 2019

Oil Drilling Activity

Onshore US drilling activity decreased by 7 with a total active count of 781 (Y/Y decrease of 275) rigs; those targeting oil down 8, with the total at 677. Across the three major unconventional oil basins, the oilrig count decreased by 8, with Permian down 9, Williston up 1 and Eagle Ford flat. 

Source: Baker Hughes Rig Count

US domestic crude production increased last week by 100,000 barrels; crude production stands at 12.9 million barrels per day, of which ~2.4 million barrels per day is offshore and Alaska production. Crude inventories decreased 5.5 million barrels, compared to expectations for a 3.0 million barrel drop, a significantly bigger-than-expected decline in stockpiles for oil.  

As this decade ends, the world has seen progress on many fronts. The poorest countries have greater access to water, electricity, and sanitation (i.e., a toilet). Poverty and child mortality have fallen. Technology has spread far and wide so that there are now more mobile phones than people. However, we have also broken some of the wrong kinds of records. In 2019, more people were forcibly displaced than any other time in history. Carbon dioxide in the atmosphere hit an all-time high and biodiversity is declining at an accelerating rate.

Weekly Recap

Drilling Activity

Total US rig count (including the Gulf of Mexico) stands at 805, a decrease of 8 from last week. The horizontal rig count stands at 703, down 3. US rig activity continues to show constraint and is 281 rigs below (-26%) last year’s total.

US Crude Oil Supply and Demand

Sources: EIA Weekly Update and GCA Analysis

Crude oil inventories decreased by 5.5 million barrels from the previous week. The crude stored at Cushing (the main price point for WTI) decreased 2.4 million barrels; total stored is 37.4 million barrels (~42% utilization). Total US commercial crude stored stands at 441.4 million barrels (~56% utilization).

US crude oil refinery inputs averaged 17 million barrels per day, with refineries at 93.3% of their operating capacity last week. This was 419,000 barrels per day more than last week’s average.

US gasoline demand over the past four weeks was at 9.2 million barrels, up 0.3% from a year ago. Total commercial petroleum inventories decreased by 10.2 million barrels last week.

US crude net imports averaged 3.4 million barrels per day last week, up by 466,000 barrels per day from the previous week. Over the past four weeks, crude oil net imports averaged 3.2 million barrels per day, 32.9% less than the same four-week period last year.

Authors

December 27, 2019

P. Kevin Galvin

Facilities/Cost Engineer - kevin.galvin@gaffney-cline.com

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