Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

December 2, 2015

CRUDE OIL INVENTORY/’000 bbls (Week Ended 11/27/15)

Current: 489,424

Actual Build/(Withdrawal): 1,177
Economist Average Estimate: (679)
Previous: 488,247

Click here for the chart with five year averages.

Stephens Investment Banking - Building Blocks of a Stronger Oil & Gas Industry

*Rig Counts Fall by Double Digits for the Second Week – Oil & Gas 360®

Baker Hughes Industries (ticker: BHI) released its weekly rig counts two days early this week, ahead of the Thanksgiving holiday. The company’s report showed that rigs tumbled by 13 following its previous release on November 20. The total rig count now stands at 744, just 38% of the number of rigs that were operating this time last year. The majority of the lost rigs came from those drilling for oil, a trend that has continued since rig counts began their rapid decline last year. For the week ended November 25, BHI reports that the number of rigs drilling for oil fell to 555, down nine from last week. – Read More

*Oil Glut: How to Tell When It’s Really Time to Worry – The Wall Street Journal

“Fill ’er up,” a refrain that usually makes oilmen smile, is taking on an ominous tone for the energy industry. There is now so much crude oil being pumped world-wide amid such tepid demand that producers are fretting over the possibility of a further sharp downward move in prices. The 93 million barrel question is how much more space there is to put it all and whether storage will be exhausted before the market is balanced. Were that to happen, it could cause the oil-price rout to grow even uglier. – Read More

*Russia claims Turkey’s president buying oil from Islamic State – USA Today

Russia’s deputy defense minister made the explosive claim Wednesday that the Turkish president and his family are directly involved in buying oil from the Islamic State. Anatoly Antonov made the comments in a briefing to reporters in Moscow that was also published on the website of Russia’s ministry of defense. He said that Moscow has evidence showing that President Recep Tayyip Erdogan and his family personally benefit from oil transactions with the militant group, also known as ISIL or ISIS. – Read More

*Charles Cherington, Co-Founder of Intervale Capital, Discusses the Oil Market on CNBC’s Squawk Box – Oil & Gas 360®

Charles Cherington, Co-Founder and Chief Executive Officer of Intervale Capital, speaks to CNBC’s Squawk Box regarding the state of the U.S. and global oil markets. Intervale Capital is a private equity firm investing exclusively in oilfield manufacturing and service companies, and has offices in Boston and Houston. – Read More

*Keystone Rejection Seen Pushing Crude Back Onto Rail Cars – Bloomberg

The first increase in Canadian crude exports by rail in a year is seen continuing after U.S. President Barack Obama rejected the Keystone XL pipeline project earlier this month. Shipments in the third quarter rose 38 percent to about 116,000 barrels a day, the first increase in a year, the National Energy Board said in a report Wednesday. Crude oil transported in western rail cars jumped 22 percent, the biggest gain since 2012, Statistics Canada said in a separate report. Last month’s rejection of TransCanada Corp.’s project to build the Keystone XL crude pipeline to the U.S. will be a “short-term boon” for struggling crude-by-rail shippers, Genscape said in a report Tuesday. – Read More

*Oil falls on U.S. stockpiles, expected unchanged OPEC stance – Reuters

Oil fell below $44 a barrel on Wednesday as an unexpected rise in U.S. inventories added to the global glut and investors discounted the possibility of OPEC cutting output at its policy meeting this week. Brent crude LCOc1 was down 85 cents at $43.59 a barrel by 1430 GMT, falling for a fifth consecutive session. It dropped as low as $43.51, its weakest level since Nov. 18, and was on track for its lowest close in two weeks. U.S. weekly crude stocks rose by 1.18 million barrels, data from the Energy Information Administration showed, compared with analysts’ expectations for a fall of 471,000 barrels. – Read More

*Alberta Drops 22 Places in Study of Attractive Places to Invest – Oil & Gas 360®

Alberta is becoming a less attractive target for oil and gas investment, according to an annual study conducted by the Fraser Institute. The survey of petroleum executives, which ranks jurisdictions around the world based on how much government policy deters investment in oil and gas, listed Alberta as the 38th most attractive place to invest out of 126 jurisdictions, down 22 places from its spot at number 16 last year. “Unfortunately, this was what we expected,” said Ken Green, senior director of natural resource studies at the free-market-oriented Fraser Institute and one of the survey’s authors. – Read More

*The Real Numbers On Energy Subsidies – Forbes

Critics of subsidies for renewable energy are usually met with the retort that the oil industry gets trillions subsidies, as in this article, which claims that these subsidies amount to $5.3 trillion a year. That estimate is based on three major mistakes: it’s the entire energy industry, not oil; the estimate includes externalities, which are not subsidies; and most of the amount tends to benefit consumers, not the industry. Here, I will provide some more accurate numbers. – Read More

*Russian Oil Output Close to Record Level as OPEC Set to Meet – Bloomberg

Russian oil output in November hovered near a post-Soviet record set the previous month, shrugging off a crude-price slump before OPEC gathers for its biannual meeting in Vienna. Production of crude and gas condensate averaged 10.779 million barrels a day during the month, according to data from the Energy Ministry’s CDU-TEK unit. That’s an increase of 1.3 percent from a year earlier. While output was slightly down from October’s record of 10.782 million barrels a day, that mark could be exceeded in December as a new field starts, Alexander Nazarov, an oil and gas analyst at Gazprombank, said by e-mail. – Read More

*Deposits in Saudi Banks Down $13.5 Billion in October – Oil & Gas 360®

Demand for deposits dropped 4.7%, or about $13.5 billion, in Saudi Arabia over the course of October, forcing banks to borrow more from each other. The rate at which banks in Saudi Arabia lend overnight to each other jumped the most in seven years in November, the fifth straight month of increases, following the lower deposits in October, according to information from Bloomberg. “The drop in deposits in October, in absolute amount, is probably the biggest since the 1990s,” Murad Ansari, a bank analyst at EFG-Hermes Holding SAE, said from Riyadh on Monday. – Read More

*California’s top oil regulator quits amid controversy over governor’s land – Associated Press

California’s chief oil regulator announced his resignation after 17 months as head of the embattled agency, including a criticized episode in which he directed state workers to investigate the oil and gas potential of Gov. Jerry Brown’s family ranch. Steve Bohlen, the state’s oil and gas supervisor, is leaving the Division of Oil, Gas and Geothermal Resources to return to the Lawrence Livermore National Laboratory research center, Brown’s office said in a statement. State officials did not give a reason for Bohlen’s resignation, which was announced Monday. – Read More

*Take Two: Halliburton/Baker Hughes Refile Merger Proposal to European Commission – Oil & Gas 360®

Halliburton (ticker: HAL) remains adamant on closing its $35 billion merger with Baker Hughes (ticker: BHI) by year-end, and the two oilservice giants progressed on the antitrust side by resubmitting a regulatory filing to the European Commission (EU) on November 27, 2015. The previous proposal, submitted in July, was denied due to “insufficient data.” The EU has until January 12, 2016 to reach a decision. The highly publicized merger was first announced more than one year ago. – Read More

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