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U.S. oil rigs in service rose 2 this week back near a new cycle high as U.S.oil production  remained at all time high of 11.70 million bpd. US Natural gas rigs fell 5. Oil rigs fell 5 in Canada. Bottlenecks remain in the Midland Texas area.




Shale Basins EIA

Total North America rig count Fell 8 to 1275 up 124 year on year

Canada took off 5 oil rigs to 119 in the past week General Electric Co’s Baker Hughes reported.

General Electric Co’s Baker Hughes reported:

United States

  • Oil rigs rose 2 to 887 (888 Cycle High)
  • Natural gas Fell 5 to 189

Canada

  • Oil rigs fell 5 to 119
  • Natural gas rigs UNCH at 80

U.S. oil and gas production continues to rise or sit near all time highs underscoring the efficiency of the drilling rigs. We saw rigs rise per companies plans at their last earnings guidance, with oil prices high based on historical relationship with WTI prices, the move is likely to gain traction in the short term

BHI 11 30 18 

Shale production has been lifted by the smaller niche producer and majors like ExxonMobil. Last year Exxon CEO Darren Woods said $XOM is diverting about one-third of its drilling budget this year to shale fields that will deliver cash flow in as little as three years. The Texas Permian basin is the epicenter of activity. Since CERAWeek in Houston last year added to the drilling positive tone and appears we haven't looked back.  

 BHI 11 30 18.PNG basins

OPEC October MOMR on US Rig Counts

OPEC Oct US Rig Counts

US Rig Count Bottomed at 316 May 2016

Since a six-year low of 316 in May 2016 drillers have added over 150% with the rise in oil prices and record oil and gas production. The total oil and natural gas rig count ended 2016 at 658, down 6 percent from the 698 at the finish of 2015. Baker Hughes North American Rig Summary

In early May analysts at Simmons & Co, the energy unit at U.S. investment bank Piper Jaffray, raised their forecast for the average total oil and natural gas rig count to 1,020 in 2018 and 1,135 in 2019, up from an earlier projection of 1,015 in 2018 and 1,130 in 2019. The total number of oil and gas rigs active in the United States has averaged 983, up sharply from the average of 876 rigs in 2017. This pace forecasts the highest rig count since 2014 when it averaged 1,862 rigs. 

Shale output is forecast to rise to 7.714 mbpd in November, a monthly increase almost 100,000 bpd.  A long way from 2008, shale production in the US has risen by 5.7 mbpd whilst total crude oil output is up by more or less the same extent. Plainly stated  the shale industry is responsible for 100% of the growth.

From 2017-to-date shale production has produced only one monthly decrease, in January 2018 when output was down 64,000 bpd on the month. Current LTO output makes up 70% of the total US output. This compares with 30% 10 years ago.

There are seven main shale oil producing regions in the US. Two of the biggest are Eagle Ford and the Permian Basin. Both of them are in Texas with the latter stretching over to New Mexico. These two are responsible for two-third of the country’s shale output and 45% of the total US production. 

Between March 2015 and December 2016 total US shale production fell more than 800,000 bpd as the industry struggled with the aftermath of the 2014-2016 oil price sell-off. In this period output from the Permian Basin kept going higher relentlessly and rose from 1.89 mbd in March 2015 to 2.12 mbpd 21 months later.

Eagle Ford it is the rate of growth that is very impressive. The production of 54,000 bpd in 2007 jumped almost twenty-fivefold to 1.34 mbpd this year on average. The first signs of contraction from these two regions will serve us with a warning signal that the shale peak might be approaching. Latest data, however, suggests that this danger is far away from being imminent. - PVM

US Field Oil Production Unchanged at 11.700 mbpd (ATH) via RonH @Ronh999  Nov 28

 

Source: Baker Hughes, TradersCommunity, OPEC

From The TradersCommunity News Desk

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