Dec 31st Weekly Rig Count

Holiday season. 

Hopefully those hard working people in operations get a break and enjoy with their families, friends and loved ones.

US Change +0

Canada Change -43

Reference:

https://rigcount.bakerhughes.com/

Dec 31st - WTI Settlement price - Q1 22 over 48.9% complete

Oil above $75....

Every day above $70 is a great day!

We are 48.9% done Q1-2022 pricing so getting closer to Q2 and we know what that will mean...just waiting on production volumes now.

2021 WTI contracts have settled we are on 2022!

December 31st WTI settled at $75.21 (Front month Feb 2022)

February 2022 contracts expire January 19th, 2022.

February 2022 contracts 47.1% complete

Q1 2022 contracts 48.9% complete 

2022

Q1 2022 BTE Cash Flow AFF Q1 = $TBD avg $72.21 (PRIOR YEAR $52.09)

2021

Q1 2021 BTE Cash Flow AFF Q1 = $157M avg WTI $52.09

Q2 2021 BTE Cash Flow AFF Q2 = $176M avg WTI $62.71

Q3 2021 BTE Cash Flow AFF Q3 = $198M avg WTI $70.57

Q4 2021 BTE Cash Flow AFF Q4 = $TBD avg WTI $76.04

Full Year 2021 WTI $65.34 FINAL!

SP Global Dec 30 - US Oil rig count falls

Data on rig count.

Good drop in oil rigs

https://www.spglobal.com/platts/en/market-insights/latest-news/oil/123021-us-oil-gas-rig-count-drops-13-to-706-on-week-as-permian-basin-losses-mount-enverus?utm_campaign=oktopost-global-oil-news&utm_content=oktopost-twitter&utm_medium=social&utm_source=twitter

"US oil, gas rig count drops 13 to 706 on week, as Permian Basin losses mount: Enverus"

"The US oil and gas rig count fell by 13 to 706 on the week, energy analytics and software company Enverus said Dec. 30, as the Permian Basin recorded by far the biggest decline — and biggest move — of any of the eight largest domestic plays.

Overall, the drop in the total rig count came from crude plays where rigs fell by 14 on the week to 552. Rigs working in gas plays rose by one to 168."

Reuters - Dec 30 - OPEC+ likely to stick to existing policy at Jan. 4 meeting

Leaving the December meeting "in session" was brilliant. Always easy to say after the fact but it seems the OPEC decision to proceed in December worked out. The market confidence in OPEC grows. WTI around $77 right now

Reference:

https://www.reuters.com/article/oil-opec/opec-likely-to-stick-to-existing-policy-at-jan-4-meeting-sources-idUSL8N2TF1RI

"OPEC+ likely to stick to existing policy at Jan. 4 meeting - sources

LONDON/MOSCOW (Reuters) - OPEC and its allies will probably stick to their existing policy of modest monthly increases in oil output at a meeting next week, four sources said, as demand concerns raised by the Omicron coronavirus variant ease and oil prices recover.

The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is set to decide on Jan. 4 whether to proceed with a 400,000 barrels per day output hike for February, the latest in a steady unwinding of record cuts made last year.

“At the moment, I have not heard of any moves to change course,” said an OPEC+ source. A Russian oil source and two other OPEC+ sources also said no changes to the deal were expected next week."

Energy supply by source - China

This is an interesting chart for a few reasons;

1. of course energy continues to climb

2. Coal is still a major supply regardless of COP talk

3. The timeline to shift to other sources takes a LONG time.

 Total energy supply (TES) by source, People's Republic of China

Dec 29 - U.S. refinery ramp impact - see updates in yellow

U.S. refinery January impact on crude...think historically we would see builds Sep-Dec...will be interesting to track January...

KEEP DRAINING THAT SPR!!

For perspective

2021 Dec 1st week 15,785 (Ramping...excluding the SPR this week EIA was a draw!!)

2021 Dec 2nd week 15,670 (Holding...excluding the SPR this week EIA was a draw!!)

UPDATED 

2021 Dec 3rd week 15,818 (Ramping...excluding the SPR this week EIA was a draw!!)

2021 Dec 4th week 15,703 (Holding...excluding the SPR this week EIA was a draw!!)

Pre-covid (December we ramp up even more historically)

2019 Jan 1st week 17,566 (Declining)

2019 Jan 2nd week 17,223 (Declining)

2019 Jan 3rd week 17,049 (Declining)

2019 Jan 4th week 16,463 (Declining)

Also.....

Weekly U.S> Percent Utilization of Refinery Operable Capacity

2021 Dec 1st week 89.8 (Ramping...excluding the SPR this week EIA was a draw!!)

2021 Dec 2nd week 89.8 (Holding...excluding the SPR this week EIA was a draw!!)

UPDATED

2021 Dec 3rd week 89.6 (Holding...excluding the SPR this week EIA was a draw!!)

2021 Dec 4th week 89.7 (Holding...excluding the SPR this week EIA was a draw!!)

Pre-covid (January refinery decline rate historically)

2019 Jan 1st week 96.1 (Declining)

2019 Jan 2nd week 94.6 (Declining)

2019 Jan 3rd week 92.9 (Declining)

2019 Jan 4th week 90.1 (Declining)

TSA Data. After Christmas data

Looks like some good numbers after the holiday season.

Given all the media attention with flight cancellations...2021 the last couple days not far behind 2019.

Dec 29nd ...EIA Report. Massive Oil draw. Net overall draw

Massive draw AND SPR draw!!

Great news heading into 2022!

KEEP DRAWING DOWN THE SPR!!!!

Crude -3.576M 

SPR -1.353M

Gas -1.458M 

Dist -1.726M 

Cush +1.055M

ITEMS BELOW TO BE UPDATED LATER IN BLUE

WHITE IS UPDATED

BLUE FROM LAST WEEK

Other info

Domestic production up slightly 11.8 vs 11.6 last week

Imports 6.759

Exports 2.929

US crude inventories fell by 4.929 mb last week (commercial -3.576mb, SPR -1.353mb)

Updated Dec 29nd

Crude Stock 92.0% of 5 yr average

Gas stock 94.8% of 5 yr average

Dis stock 87.9% of 5 yr average

Updated Dec 29nd

Updated Dec 15th

SPR below 600!!

SPR down again. 1.4m from last week

US SPR crude inventories fell by ~1.4mb w/w to 595.0mb last week

Keep draining!

Cushing data leak driving oil prices?? Wait for EIA...will be an interesting week.

Dec 22nd ...EIA Report. Massive Oil draw. Net overall draw

 Massive draw AND SPR draw!!

Great news heading into 2022!

KEEP DRAWING DOWN THE SPR!!!!

Crude -4.715M 

SPR -2.500M

Gas +5.533M 

Dist +0.396M 

Cush +1.463M

ITEMS BELOW TO BE UPDATED LATER IN BLUE

WHITE IS UPDATED

BLUE FROM LAST WEEK

Other info

Domestic production DROPPED 11.6 vs 11.7 last week

EIA: US Crude Stocks In SPR Fell To Lowest Since Nov 2002 Last Week

Imports 6.194

Exports 2.879

US crude inventories fell by 9.525mb last week (commercial -4.715mb, SPR -2.536mb)

Updated Dec 22nd

Crude Stock 91.9% of 5 yr average

Gas stock 96.0% of 5 yr average

Dis stock 91.9% of 5 yr average

Updated Dec 22nd

Updated Dec 15th

SPR below 600!!

Gas Demand - 2nd highest Tuesday of 2021...supply/demand covid what?

 What Omicron....follow the data...gas demand! 

"According to GasBuddy data, Tuesday US gasoline demand reached its second highest tally for a Tuesday in 2021, barely missing the Tuesday ahead of Thanksgiving. Demand was up 5.8% from the prior Tuesday and was 3.1% higher than the average of the last four Tuesdays."

TSA Data. Yesterday close to exceeding 2019 pre-covid

Along with the gas demand...air travel continues to show strength....US population ignoring the Omi"con"??

3 of the last 4 days over 2+ million TSA data. Yesterday (busy for a Tuesday) nearly pre-covid levels

Economy to watch continues to be the US....and travel still over double prior year

Long June 30, 2023 and sticking with the data...

US population tired with COVID and moving on....

Reuters Dec 22 - Shell confirms exports of Nigeria's Forcados oil under force majeure

 More supply issues....seems everyday there is something on the supply side.

Eventually the market will get up to speed and recognize the issues in value.

https://www.reuters.com/article/nigeria-oil-idAFL8N2PN1N0

Shell confirms exports of Nigeria's Forcados oil under force majeure

LAGOS, Aug 16 (Reuters) - Shell Petroleum Development Co of Nigeria Ltd (SPDC) said exports of Forcados crude oil were under force majeure, confirming what a trade source told Reuters on Sunday.

Forcados oil exports were planned at 246,000 barrels per day (bpd) in August, roughly 16% of Nigeria’s July exports of 1.5 million bpd.

In an email, an SPDC spokesman said the company declared force majeure after curtailing production and suspending exports having noticed sheen on the water around the loading buoy.

Nigeria relies on oil exports for some 90% of its foreign exchange and more than half its budget. 

Rystad Energy Dec 21 - 2021 have peak discoveries passed?

2021 discoveries lowest in 75yrs. Have peak discoveries passed?

More data to support a coming supply crunch. It isn't just about drilling Capex...but exploration expense which has been slashed over the years.

All the talk about peak demand...BUT...what about peak discovery? I'm not sure anyone has discussed this.

https://oilprice.com/Energy/Crude-Oil/Global-Oil-And-Gas-Discoveries-Set-To-Hit-75-Year-Low-In-2021.html

"Global Oil And Gas Discoveries Set To Hit 75-Year Low In 2021"

"Global oil and gas discoveries in 2021 are on track to hit their lowest full-year level in 75 years should the remainder of December fail to yield any significant finds, Rystad Energy analysis shows."

"As of the end of November, total global discovered volumes this year are calculated at 4.7 billion barrels of oil equivalent (boe) and, with no major finds announced so far this month, the industry is on course for its worst discoveries toll since 1946." 

"This would also represent a considerable drop from the 12.5 billion boe unearthed in 2020."