December 28, 2018

December 28, 2018

28th December 2018

Oil Drilling Activity

Onshore US drilling activity increased 3 with a total active count of 1056 rigs; those targeting oil increased 2 (up 0.2%), with the total at 885. Across the three major unconventional oil basins, the oil rig count was unchanged and stands at 613, with Permian, Williston, and Eagle Ford flat. 

Sources: EIA Weekly Update and GCA Analysis

EIA reported last week’s total US domestic crude output at 11.7 million, an increase of 100,000 barrels per day.  EIA’s data indicated inventory was unchanged last week; with US production remaining flat and exports robust, the trend to draw from crude stocks should continue.

Volatility in the short term is here until traders see confirmation that prices will rise and that confirmation ultimately comes from inventory in the US trending down.

Stockpiles of crude held in the US began building up in September. They now sit about 7% above the five-year average for inventory levels. Stocks began ticking lower four weeks ago, but the oil market needs to see a stronger downtrend.

Best Wishes for the New Year!

Weekly Recap

Drilling Activity

Source: BHGE Rotary Rig Count

Total US rig count (including the Gulf of Mexico) stands at 1083, up 3 this week. The horizontal rig count stands at 945, up 5 this week. US rig activity continue to show constrained growth for 29 of the last 31 weeks and stands 17% above last year’s total.  

Crude Oil Price

Brent, the global benchmark for oil, decreased US$1.24 to US$52.28 a barrel, reflecting a loss of 2.32% on the week.

WTI crude fell US$0.48 to US$45.20 a barrel, down 1.05% on the week.

US Crude Oil Supply and Demand

Sources: EIA Weekly Update and GCA Analysis

US crude oil refinery inputs averaged 17.4 million barrels per day, with refineries at 95.1% of their operating capacity last week. This is 58,000 barrels per day less than the previous week’s average.

US gasoline demand over the past four weeks was at 9.1 million barrels, down 1.1% from a year ago. Total commercial petroleum inventories decreased by 2.0 million barrels last week.

US crude imports averaged 7.7 million barrels per day last week, up by 233,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged 7.4 million barrels per day, 2.3% less than the same four-week period last year.

US crude exports averaged 2.969 million barrels per day last week, an increase of 644,000 barrels per day from the previous week. Over the last four weeks, crude oil exports averaged 2.693 million barrels per day, 95.4% more than the same four-week period last year.

Crude oil inventories were unchanged from the previous week. The crude stored at Cushing (the main price point for WTI) increased 0.8 million barrels; total stored is 41.3 million barrels (~46% utilization).

   

Authors

December 28, 2018

P. Kevin Galvin

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

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