US oil output at a record high, oil rigs at a 31 month low; global oil shortage at 1.6 million barrels per day despite a 1.7 mbpd supply increase

oil prices ended a bit higher this week, after seesawing on conflicting China-US trade deal and crude inventory reports…after rising $1.04, or 1.9% to $57.24 a barrel last week on repeated rumors that a US-China trade deal was imminent, prices of US light sweet crude for December delivery fell early on Monday after Trump denied reports from last week that the two sides had agreed to roll back existing tariffs on each others’ goods and finished the day 38 cents lower at $56.86 a barrel, as lack of progress in U.S.-China trade negotiations pressured prices, even as bullish Cushing inventory data offered some support…prices climbed more than 1% early on Tuesday amid hopes that a Trump speech later in the day would indicate progress on the trade war, but pared those gains following a Trump speech that offered few new details and ended 6 cents lower at $56.80 a barrel…oil prices then edged up on Wednesday after an OPEC report and comments from Fed Chair Jerome Powell both forecast a robust economy going forward, and extended those gains when the API reported a surprise draw from US crude supplies to finish the day 32 cents higher at $57.12 a barrel….however, those gains were reversed on Thursday when the EIA reported a larger than expected build of domestic oil inventories and record crude production, as oil prices fell 35 cents, or 0.6%, to settle at $56.77 a barrel….but despite those concerns about rising crude supplies oil prices rallied on Friday after Commerce Secretary Ross said trade talks with China were down to the last details and after Baker Hughes reported the fourth straight weekly decline in the number of US rigs drilling for oil and went on to finish 95 cents, or 1.7 percent, higher to close at $57.72 per barrel, a two month high…oil prices thus ended the week with a gain of 48 cents, or 0.8%, even as competing and conflicting signals kept the market prices volatile

natural gas prices, on the other hand, finished lower for the first time in 3 weeks, as temperature forecasts moderated in the face of record natural gas production…after rising 2.8% to $2.789 per mmBTU last week amid warnings of a historically severe outbreak of cold across the eastern US, the price of natural gas for December delivery gapped down over the weekend and opened 7.3 cent lower on Monday on a major change in the temperature output and a report of record gas well production, and then continued falling throughout the day to end down 15.2 cents at 2.637 per mmBTU…prices drifted 1.6 cents lower on Tuesday and 2.1 cents lower on Wednesday even as the heating demand forecast moved higher over the period and didn’t turn higher until the natural gas storage report indicated a smaller addition to storage than natural gas traders had expected…that bullish storage report pushed prices up 4.8 cents on Thursday and another 4.1 cents on Friday to end the week at $2.688 per mmBTU, which was still down 3.6% from where it had ended the prior week..

the natural gas storage report for the week ending November 8th from the EIA indicated that the quantity of natural gas held in storage in the US increased by 3 billion cubic feet to 3,732 billion cubic feet by the end of the week, which meant our gas supplies were 491 billion cubic feet, or 15.1% more than the 3,199 billion cubic feet that were in storage on November 8th of last year, and 2 billion cubic feet, or less than 0.1% above the five-year average of 3,730 billion cubic feet of natural gas that have been in storage as of the 8th of November in recent years….we thus start the official heating season with natural gas supplies 3.1% above the average seasonal normal in the East, 1.9% above normal in the Midwest, 0.3% below normal in the South Central region, 2.8% below normal in the Mountain region, and 11.6% below normal in the Pacific region…

while we had expected this report to show a gas withdrawal, the 3 billion cubic feet injection into US natural gas storage this week was 4 billion cubic feet less than the average forecast for a 7 billion cubic feet injection from analysts surveyed by S&P Global Platts, and well below the average 30 billion cubic feet of natural gas that have been added to gas storage after the first week of November over the past 5 years, the 2nd below average storage build in a row but only the 4th below average increase over the past 35 weeks…the 2,572 billion cubic feet of natural gas that have been added to storage over this year’s injection season were still near a modern record, eclipsed only by the record 2767 billion cubic feet of natural gas that were injected into storage during the 2014 natural gas injection season…

The Latest US Oil Supply and Disposition Data from the EIA

US oil data from the US Energy Information Administration for the week ending November 8th showed that because our oil production rose to a record level, we managed to have a surplus of oil to add to our stored supplies for the eighth time in the past nine weeks…our imports of crude oil fell by an average of 327,000 barrels per day to an average of 5,750,000 barrels per day, after falling by an average of 620,000 barrels per day during the prior week, while our exports of crude oil rose by an average of 262,000 barrels per day to an average of 2,633,000 barrels per day during the week, which meant that our effective trade in oil worked out to a net import average of 3,117,000 barrels of per day during the week ending November 1st, 589,000 fewer barrels per day than the net of our imports minus our exports during the prior week…over the same period, the production of crude oil from US wells was reported to be 200,000 barrels per day higher at a record 12,800,000 barrels per day, so our daily supply of oil from the net of our trade in oil and from well production totaled an average of 15,917,000 barrels per day during this reporting week..

meanwhile, US oil refineries were reportedly processing 15,916,000 barrels of crude per day during the week ending November 8th, 154,000 more barrels per day than the amount of oil they used during the prior week, while over the same period the EIA reported that a net average of 111,000 barrels of oil per day were being added to the supplies of oil stored in the US….hence, this week’s crude oil figures from the EIA appear to indicate that our total working supply of oil from net imports and from oilfield production was 109,000 barrels per day less than what was reportedly added to storage plus what our oil refineries reported they used during the week….to account for that disparity between the apparent supply of oil and the apparent disposition of it, the EIA inserted a (+109,000) barrel per day figure onto line 13 of the weekly U.S. Petroleum Balance Sheet to make the reported data for the daily supply of oil and the consumption of it balance out, essentially a fudge factor that they label in their footnotes as “unaccounted for crude oil”….(for more on how this weekly oil data is gathered, and the possible reasons for that “unaccounted for” oil, see this EIA explainer)…. 

further details from the weekly Petroleum Status Report (pdf) indicated that the 4 week average of our oil imports fell to an average of 6,095,000 barrels per day last week, now 18.8% less than the 7,503,000 barrel per day average that we were importing over the same four-week period last year….the 111,000 barrel per day net addition to our total crude inventories was despite a withdrawal of 206,000 barrels per day from our Strategic Petroleum Reserve, which means that a total of 317,000 barrels per day were being added to our commercially available stocks of crude oil….this week’s crude oil production was reported to be 200,000 barrels per day higher at a record 12,800,000 barrels per day because the rounded estimate of the output from wells in the lower 48 states rose by 200,000 barrels per day to a record 12,300,000 barrels per day, while a 8,000 barrel per day increase to 491,000 barrels per day in Alaska’s oil production was not enough to impact the final rounded total…last year’s US crude oil production for the week ending November 9th was rounded to 11,700,000 barrels per day, so this reporting week’s rounded oil production figure was 9.4% above that of a year ago, and 51.9% more than the interim low of 8,428,000 barrels per day that US oil production fell to during the last week of June of 2016…   

with the weekly data now showing our estimated weekly oil production is at a record high, we’ll include a graph of what that production looks like compared to its recent history and to the EIA’s confirmed oil production totals…

November 16 2019 US crude production to November 8

the above graph was taken from this week’s OilPrice Intelligence Report, and it shows the history of confirmed oil production data monthly from January 2016 to August 2019 in blue, and then the weekly estimates of US oil production up until the current week in yellow after that period, with both metrics in thousands of barrels per day…above the graph, OilPrice also gives us the rounded weekly estimates of oil production in thousands of barrels per day for the weeks ending October 4th through November 8th, as was reported by the EIA….as you see, those weekly production estimates had been stuck at 12,600,000 barrels per day for 5 weeks, as apparently the EIA did not get any new information to justify increasing their estimate…however, on the Thursday before last, the EIA released their confirmed monthly data for August, which showed that US oil production had risen to 12,365,000 barrels per day, up from 11,766,000 barrels per day in July…that increase strongly suggested to the EIA that their currently weekly estimates for November had been too low, so they increased that estimate this week…however, despite the fact that the prior weekly totals were more than likely higher than 12,600,000 barrels per day, the EIA will not change their earlier inaccurate weekly estimates to reflect that….nonetheless, we still follow this less than accurate weekly data because it’s what the oil traders follow, and hence it moves oil prices and ultimately the decisions on the part of exploitation companies to start drilling for oil…

meanwhile, US oil refineries were operating at 87.8% of their capacity in using 15,916,000 barrels of crude per day during the week ending November 8th, up from 86.0% of capacity the prior week, but still below normal for early November…as a result, the 15,916,000 barrels per day of oil that were refined this week was 3.1% below the 16,432,000 barrels of crude per day that were being processed during the week ending November 9th, 2018, when US refineries were operating at 90.1% of capacity….

with the increase in the amount of oil being refined, gasoline output from our refineries was also higher, increasing by 137,000 barrels per day to 10,173,000 barrels per day during the week ending November 8th, after our refineries’ gasoline output had decreased by 148,000 barrels per day the prior week….with this week’s increase in gasoline output, our gasoline production was 1.2% higher than the 10,056,000 barrels of gasoline that were being produced daily over the same week of last year….at the same time, our refineries’ production of distillate fuels (diesel fuel and heat oil) rose by 164,000 barrels per day to 5,039,000 barrels per day, after our distillates output had decreased by 95,000 barrels per day over the prior week…with this week’s increase in distillates output, our distillates’ production for the week was 0.9% above the 4,993,000 barrels of distillates per day that were being produced during the week ending November 9th, 2018….

with the increase in our gasoline production, our supply of gasoline in storage at the end of the week increased for the 1st time in seven weeks and for the 7th time in 21 weeks, rising by 1,861,000 barrels to 217,229,000 barrels during the week to November 8th, after our gasoline supplies had decreased by 2,828,000 barrels over the prior week….our gasoline supplies finally increased this week because our imports of gasoline rose by 186,000 barrels per day to 679,000 barrels per day and because our exports of gasoline fell by 195,000 barrels per day to 814,000 barrels per day, while the amount of gasoline supplied to US markets increased by 176,000 barrels per day to 9,321,000 barrels per day….after this week’s increase, our gasoline supplies were 4.7% lower than last November 9th’s inventory level of 228,021,000 barrels, but remained roughly 1% above the five year average of our gasoline supplies for this time of the year…

however, even with the increase in our distillates production, our supplies of distillate fuels fell for the 23rd time in the past 33 weeks, decreasing by 2,477,000 barrels to 116,655,000 barrels during the week ending November 8th, after our distillates supplies had decreased by 622,000 barrels over the prior week…our distillates supplies fell by more this week than last because the amount of distillates supplied to US markets, an indicator of our domestic demand, increased by 238,000 barrels per day to 4,534,000 barrels per day, and because our imports of distillates fell by 70,000 barrels per day to 236,000 barrels per day and because our exports of distillates rose by 121,000 barrels per day to 1,095,000 barrels per day…after this week’s inventory decrease, our distillate supplies were down by 2.2% from the 119,268,000 barrels of distillates that we had stored on November 9th, 2018, and fell back to around 10% below the five year average of distillates stocks for this time of the year​…

finally, ​despite ​this week’s drop in oil ​imports​ ​​and the increase in refinery throughput​, our record oil production ​meant our commercial supplies of crude oil in storage rose for the tenth time in twenty-two weeks and for the​ twenty-fifth​ time in 42 weeks, increasing by 2,219,000 barrels, from 446,782,000 barrels on November 1st to 449,001,000 barrels on November 8th…that increase meant our crude oil inventories were 2% above the five-year average of crude oil supplies for this time of year, and roughly 32% higher than the prior 5 year (2009 – 2013) average of crude oil stocks after a full week of November, with the disparity between those comparisons arising because it wasn’t until early 2015 that our oil inventories first rose above 400 million barrels…since our crude oil inventories had generally been rising over the year up until July, after generally falling until then through most of the prior year and a half, our oil supplies as of November 8th were 1.6% above the 442,057,000 barrels of oil we had stored on November 9th of 2018, but at the same time were 2.2% below the 458,997,000 barrels of oil that we had in storage on November 10th of 2017, and 8.4% below the 490,284,010,000 barrels of oil we had in commercial storage on November 11th of 2016…   

OPEC’s Monthly Oil Market Report

Thursday of this past week saw the release of OPEC’s November Oil Market Report, which covers October OPEC & global oil data, and hence ​it ​shows a big rebound in Saudi production as it recovered from the September 14th drone attack on their oil infrastructure…but even with that ​bounce in Saudi output, and a big jump in non-OPEC production, this report still shows there was again a large shortfall in the amount of oil produced globally in October, albeit less than half of the large shortfall seen in September…

the first table from this monthly report that we’ll look at is from the page numbered 60 of that report (pdf page 70), and it shows oil production in thousands of barrels per day for each of the current OPEC members over the recent years, quarters and months, as the column headings indicate…for all their official production measurements, OPEC uses an average of estimates from six “secondary sources”, namely the International Energy Agency (IEA), the oil-pricing agencies Platts and Argus, ‎the U.S. Energy Information Administration (EIA), the oil consultancy Cambridge Energy Research Associates (CERA) and the industry newsletter Petroleum Intelligence Weekly, as a means of impartially adjudicating whether their output quotas and production cuts are being met, to thus avert any potential disputes that could arise if each member reported their own figures…

October 2019 OPEC crude output via secondary sources

as we can see from the above table of oil production data, OPEC’s oil output jumped by 943,000 barrels per day to 29,650,000 barrels per day in October, from their revised September production total of 28,707,000 barrels per day…however that September output figure was originally reported as 28,491,000 barrels per day, which means that September’s production was revised 216,000 barrels per day higher​,​ and hence October’s production was, in effect, a 1,159,000 barrel per day increase from the previously reported ​OPEC ​production figures (for your reference, here is the table of the official September OPEC output figures as reported a month ago, before this month’s revisions)…

we can also see that the 1,094,000 barrel per day increase in production by the Saudis, largely a rebound after the September attack on their facilities, was the reason for OPEC’s September output jump, as decreases of 100,000 barrels per day in output from Ecuador, of 43,000 barrels per day in output from Angola, of 42,000 barrels per day in output from Iraq, and of 37,000 barrels per day in the output from Nigeria were only partially offset by the 42,000 barrel per day increase in output from Venezuela and the 23,000 barrel per day increase from the Emirates, while the oil output from most other OPEC members was comparatively little changed….

even with the jump in Saudi output, their production​,​ and production from most other OPEC members other than Iraq and Nigeria, remains below the output allocation as originally determined for each OPEC member after their December 7th, 2018 meeting, when OPEC agreed to cut 800,000 barrels per day as part of a 1.2 million barrel per day cut agreed to with Russia and other oil producers, and which were extended at their July 1st meeting a little over four months ago…this can be seen in the table of OPEC production allocations we’ve included below:

February 6 2019 Platts on OPEC allocations

the above table came from a February 6th post on Saudi cuts and OPEC allocations at S&P Global Platts, and it shows average daily production quota in millions of barrels of oil per day for each of the OPEC members as was agreed to at their December 2018 meeting and has ​since been extended through March 2020 as of their ​June meeting….note that Venezuela and Iran, whose oil exports are being sanctioned by the Trump administration, and Libya, which has been beset by a civil war, are exempt from any production quotas, and that only Libya among those exempt countries is producing more than they did in the 1st quarter of this year, which you can see in the third column of the first, official OPEC production table above…note that a month ago there ​were media reports that OPEC had agreed to raise the quota for Nigeria to 1.774 million barrels per day, but there was no official policy statement to that effect…

the next graphic from the report that we’ll include shows us both OPEC and world oil production monthly on the same graph, over the period from November 2017 to October 2019, and it comes from page 61 (pdf page 71) of the November OPEC Monthly Oil Market Report….on this graph, the cerulean blue bars represent OPEC oil production in millions of barrels per day as shown on the left scale, while the purple graph represents global oil production in millions of barrels per day, with the metrics for global output shown on the right scale…  

October 2019 OPEC report global oil supply

including the 943,000 barrel per day increase in their production from what they produced a month ago, OPEC’s​ ​preliminary estimate now indicates that total global oil production increased by 1.67 million barrels per day to 99.34 million barrels per day in October, and that reported increase came after September’s total global output figure was revised up by 350,000 barrels per day from the 97.32 million barrels per day of global oil output that was reported a month ago, as non-OPEC oil production rose by a rounded 730,000 barrels per day in October after that revision, with higher oil production from ​the ​US, Canada, Norway, the UK, Australia, Kazakhstan, and China the major reasons for the non-OPEC output increase in October…despite that jump in October’s output, the 99.34 million barrels of oil ​per day produced globally in October were still 0.80 million barrels per day, or 0.8% lower than the revised 100.14 million barrels of oil per day that were being produced globally in October a year ago (see the November 2018 OPEC report (online pdf) for the originally reported October 2018 details)…with this month’s increase in OPEC’s output, their October oil production of 29,650,000 barrels per day rose to 29.8% of what was produced globally during the month, up from the 29.3% share they contributed in September….OPEC’s October 2018 production was reported at 32,900,000 barrels per day, which means that the 13 OPEC members who were part of OPEC last year, excluding Qatar from last year’s total and new member Congo from this year’s, produced 2,966,000 fewer barrels per day of oil than​ what​ they produced a year ago, when they accounted for 33.0% of global output, with a 1,150,000 barrel per day ​drop ​in the output from Iran, a 740,000 barrel per day decrease in output from Saudi Arabia, and a 448,000 barrel per day decrease in the output from Venezuela from that time more than offsetting the small year over year production increases of 60,000 barrels per day by Nigeria, 53,000 barrels per day by Libya, 54,000 barrels per day by the United Arab Emirates and 37,000 barrels per day by Iraq… 

even with the 1,670,000 barrels per day increase in global oil output that was seen during October, there was a substantial shortfall in the amount of oil being produced globally during the month, as this next table from the OPEC report will show us…     

October 2019 OPEC report global oil demand

the table above came from page 34 of the November OPEC Monthly Oil Market Report (pdf page 44), and it shows regional and total oil demand in millions of barrels per day for 2018 in the first column, and OPEC’s estimate of oil demand by region and globally quarterly over 2019 over the rest of the table…on the “Total world” line in the fifth column, we’ve circled in blue the figure that’s relevant for October, which is their revised estimate of global oil demand during the fourth quarter of 2019…

OPEC has estimated that during the 4th quarter of this year, all oil consuming regions of the globe will be using 100.95 million barrels of oil per day, which was revised from their estimate of 100.89 million barrels of oil per day for the 4th quarter a month ago….meanwhile, as OPEC showed us in the oil supply section of this report and the summary supply graph above, OPEC and the rest of the world’s oil producers were only producing 99.34 million barrels per day during October, which means that there was a shortage of around 1,610,000 barrels per day in global oil production when compared to the demand estimated for the month… 

meanwhile, the upward revision of 350,000 barrels per day to September’s global output that’s implied in this report means that the 3,380,000 barrel per day shortfall that we had originally figured for September based on last month’s figures would now have to be revised to a deficit of 3,030,000 barrels per day…but since data for July and August was unrevised, July’s shortfall would be unchanged at a deficit of 2,290,000 barrels per day, and August’s shortfall would remain at a deficit of 1,670,000 barrels per day….hence the 3rd quarter​’s​ ​oil shortage averaged 2,330,000 barrels per day…

however, demand figures for both the first quarter and 2nd quarter were revised with this report, as you can see encircled by the green ellipse on the table above…the 160,000 barrels per day downward revision to 2nd quarter demand would mean that we’d have to revise our global oil deficit for June from 470,000 barrels per day to 310,000, that we’d have to revise our May deficit from 840,000 barrels per day to 680,000 barrels per day, and that we’d have to revise our global oil deficit for April from 860,000 barrels per day to 710,000 barrels per day…hence, for the 2nd quarter as a whole, even after those downward revision to demand, the world’s oil producers were still producing 457,000 barrels per day less than what was needed…

also encircled in green is an upward revision of 100,000 barrels per day to first quarter demand, a period when​ oil​ suppl​ies exceeded demand….that revision means that the global oil surplus of 290,000 barrels per day we had last figured for March would have to be revised to a global oil surplus of 190,000 barrels per day…similarly, the 740,000 barrel per day global oil output surplus we had for February would now be a 640,000 barrel per day global oil output surplus, and the 650,000 barrel per day global oil output surplus we had for January would be revised to a 550,000 barrel per day oil output surplus..

so as you can see, we have gone from a global oil surplus averaging over 450,000 barrels per day in the first quarter to an oil shortage of 2,330,000 barrels per day by the third quarter, and thence to an oil shortage of around 1,610,000 barrels per day in October….however, most of the media, including industry websites, are still reporting on supplies as if we still have a global glut of oil, because that has become the established narrative and becaus​e ​no one makes the effort to look at the actual data…… 

This Week’s Rig Count

the US rig count fell for the 12th time in 13 weeks and for the 35th time in 39 weeks over the week ending November 15th, and is now down by 25.6% since the end of last year….Baker Hughes reported that the total count of rotary rigs running in the US fell by 11 rigs to a 32 month low of 806 rigs this past week, which was also down by 276 rigs from the 1082 rigs that were in use as of the November 16th report of 2018, and 1123 fewer rigs than the shale era high of 1929 drilling rigs that were deployed on November 21st of 2014, the week before OPEC began their attempt to flood the global oil market…

the number of rigs drilling for oil decreased by 10 to a 31 month low of 674 oil rigs this week, which was also 214 fewer oil rigs than were running a year ago, and quite a bit below the recent high of 1609 rigs that were drilling for oil on October 10th, 2014…at the same time, the number of drilling rigs targeting natural gas bearing formations fell by 1 rig to a 34 month low of 129 natural gas rigs, down by 65 rigs from the 194 natural gas rigs that were drilling a year ago, and way down from the modern era high of 1,606 rigs targeting natural gas that were deployed on September 7th, 2008…in addition to those drilling for oil & gas, three rigs classified as miscellaneous continued to drill this week; one on the big island of Hawaii, one in Washoe ​County Nevada, and one in Lake ​County California, in contrast to a year ago, when there were no such “miscellaneous” rigs deployed..

offshore drilling activity in the Gulf of Mexico was unchanged at 22 rigs this week, with all of those drilling offshore from Louisiana…that’s now equal to the the Gulf of Mexico rig count of 22 a year ago, when 20 rigs were drilling in Louisiana waters and two were drilling offshore from Texas…meanwhile, the rig that had been drilling offshore from the Kenai Peninsula in Alaska was shut down this week, so the Gulf of Mexico count is now equal to the national count, and equal to the 22 rigs that were deployed offshore a year ago…however, the last platform that had been set up to drill through an inland body of water in southern Louisiana was shut down this week, and with none of those left nationally, is down from the “inland waters’ count of two ​rigs ​a year ago…

the count of active horizontal drilling rigs was down by 8 rigs to 702 horizontal rigs this week, which was the least horizontal rigs deployed since April 7th, 2017 and hence is a new 31 month low for horizontal drilling…that was also 237 fewer horizontal rigs than the 939 horizontal rigs that were in use in the US on November 16th of last year, and also well down from the record of 1372 horizontal rigs that were deployed on November 21st of 2014…..in addition, the vertical rig count decreased by 1 to 50 vertical rigs this week, and those were down by 22 from the 72 vertical rigs that were operating during the same week of last year….at the same time, the directional rig count decreased by 2 rigs to 54 directional rigs this week, and those were down by 17 from the 71 directional rigs that were in use on November 16th of 2018…

the details on this week’s changes in drilling activity by state and by major shale basin are shown in our screenshot below of that part of the rig count summary pdf from Baker Hughes that gives us those changes…the first table below shows weekly and year over year rig count changes for the major oil & gas producing states, and the table below that shows the weekly and year over year rig count changes for the major US geological oil and gas basins…in both tables, the first column shows the active rig count as of November 15th, the second column shows the change in the number of working rigs between last week’s count (November 8th) and this week’s (November 15th) count, the third column shows last week’s November 8th active rig count, the 4th column shows the change between the number of rigs running on Friday and the number running before the same weekend of a year ago, and the 5th column shows the number of rigs that were drilling at the end of that reporting week a year ago, which in this week’s case was the 16th of November, 2018…  

November 15 2019 rig count summary

in the Permian basin of western Texas and New Mexico, 6 rigs were pulled out of Texas Oil District 8, or the core Permian Delaware, while the rig counts in Texas Oil District 7C, or the southern Permian Midland and in Texas Oil District 8A, or the northern Permian Midland, were unchanged…that suggests that a rig added in Texas Oil District 7B, east of the Permian Midland on most maps, had been in fact a rig​ targeting the Permian, while the rig added in New Mexico was placed in the far western reaches of the Permian Delaware….at the same time, ​however, ​drilling activity in all other Texas districts & basins remained unchanged…meanwhile, even though Oklahoma rigs were shut down in the Cana Woodford and in the Ardmore Woodford, the state still shows a one rig increase, which means 3 rigs were added in Oklahoma basins not tracked by Baker Hughes…conversely, while just one rig was pulled out of the Denver-Julesburg Niobrara, Colorado saw a one rig decrease while Wyoming was down 2 rigs, meaning 2 of the rigs pulled from those states had also been running in basins not tracked by Baker Hughes…all those aforementioned rig changes, plus the one rig pulled out of North Dakota’s Williston basin, had been targeting oil​, while all of the natural gas rig changes this week were in the Appalachian basins, where 3 rigs were pulled out of the Marcellus, two in West Virginia and one from Pennsylvania, while two rigs were added in Ohio’s Utica..



NB: the following is an excerpt from an email i sent to a few environmental journalists this week, ​and included here as i ​believe it ​should be of general interest:

​…​in the Permian basin of west Texas, they are now burning off or venting 752 million cubic feet of natural gas per day, which i figure to be 10 times more natural gas than what West Virginia’s households consume over a year  (here’s the annual data on WVa’s consumption, divide by 365 to get their daily use; https://www.eia.gov/dnav/ng/hist/n3010wv2a.htm)….the burned gas all goes into the atmosphere as CO2, while what’s vented is released as methane, which i’m sure you know is much worse…they’re doing this because they’re after the oil, and the natural gas that comes up with it is an inexpensive byproduct they don’t want…

Rystad Energy: Permian gas flaring reaches another high | Oil & Gas Journal – Flaring and venting of natural gas in the Permian basin in Texas and New Mexico reached an all-time high in this year’s third quarter, averaging more than 750 MMcfd, according to a preliminary analysis conducted by Rystad Energy.

191105 Rystad Permian Flare Chart



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note: there’s more here

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