4th January 2019
Oil Drilling Activity
Onshore US drilling activity decreased 6 with a total active count of 1050 rigs; those targeting oil decreased 8 (down 1%), with the total at 877. Across the three major unconventional oil basins, the oil rig count stands at 614, with Permian up 1, Williston and Eagle Ford flat.
EIA reported last week’s total US domestic crude output at 11.7 million, flat for the past three weeks. EIA’s data indicated inventory was unchanged for the second week; with US production remaining flat and exports robust, the trend to draw from crude stocks should continue.
Growth in energy sector activity slowed significantly in fourth quarter 2018, according to oil and gas executives responding to the Dallas Fed Energy Survey.
US employers added the most workers in 10 months as wage gains accelerated and labor-force participation jumped, reflecting a robust job market that faces mounting risks in 2019. The labor strength spanned most industries, including the biggest gain in construction since February, and the most manufacturing jobs added in a year.
Gas and Oil Commentary returns January 11
Total US rig count (including the Gulf of Mexico) stands at 1075, down 8 this week. The horizontal rig count stands at 945, flat this week. US rig activity continue to show constrained growth for 30 of the last 32 weeks and stands 16% above last year’s total. Onshore drilling has become standardized and rigs are consolidated at the high end; legacy equipment has been replaced by rigs with power and flexibility.
Crude Oil Price
Brent, the global benchmark for oil, increased US$5.11 to US$57.39 a barrel, reflecting a gain of 9.77% on the week.
WTI crude rose US$2.97 to US$48.17 a barrel, up 6.57% on the week.
US Crude Oil Supply and Demand
US crude oil refinery inputs averaged 17.8 million barrels per day, with refineries at 97.2% of their operating capacity last week. This is 410,000 barrels per day more 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 increased by 14.6 million barrels last week.
US crude imports averaged 7.4 million barrels per day last week, down by 264,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged 7.5 million barrels per day, 4.1% less than the same four-week period last year.
US crude exports averaged 2.237 million barrels per day last week, a decrease of 732,000 barrels per day from the previous week. Over the last four weeks, crude oil exports averaged 2.451 million barrels per day, 74.2% 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 0.6 million barrels; total stored is 41.9 million barrels (~47% utilization).
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