February 3, 2016

CRUDE OIL INVENTORY/’000 bbls (Week Ended 1/29/16)

Current: 502,712
Actual Build/(Withdrawal): 7,792
Economist Average Estimate: 3,745
Previous: 494,920

Click here for the chart with five year averages.

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


*Oil: The 30-Year Anniversary of the 1986 Collapse – Oil & Gas 360®

The 1980s were a mixed up decade. Killer British-driven rock music and groundbreaking R&B artists were giving ground to wimpy, fake artists like Milli Vanilli. The era of glasspack, dual carb, Hurst-shifted Detroit muscle cars had thrown in the towel to embarrassing vehicles like Chrysler’s K-car. The U.S. had only one car in the list of the world’s fastest cars in 1986: the ’86 Ford Mustang, which could go zero-to-60 in 7 seconds and had an MSRP of $14,750.  The winner that year was an ’86 Ferrari that could go zero-to-60 in 4.5 seconds. – Read More

*Harold Hamm Expects $60 Oil, Says America Will Double Output Again – Forbes

Any hope of Russia and Saudi Arabia agreeing to an oil production cut is nothing but a daydream. Industry layoffs are continue. The U.S. rig count has reached a new low, down to 591 from 1,285 at the peak. Even Chevron CVX -1.25% reported a surprise loss for the fourth quarter — when oil prices were at least a little higher than now. More than $60 billion worth of outstanding oil company debt is already in distress or default, with another $50 billion rated B, or well below investment grade. – Read More

*Russia steals Saudi’s crown as China’s top oil supplier – RT

Moscow is gaining momentum as the biggest seller of crude oil to China, with Russian crude supplies overtaking those from Saudi Arabia. According to data from RBC Capital Markets, the Saudi share of Chinese crude imports at the beginning of the decade was about 20 percent, while Russia’s was below 7 percent. The situation has changed. “Russia is the biggest rival to the Saudis in the single-largest oil demand growth country in the world,” Michael Tran, RBC Capital Markets’ commodity strategist told Business Insider. – Read More

*Blackbird Energy Takes a Big Step Towards Acreage Delineation with Successful Montney Well – Oil & Gas 360®

Blackbird Energy (ticker: BBI) is in the early stages of developing its 75 sections (48,000 acres) of the Montney fairway in Alberta, but results from its 2-20-70-7W6 well indicate there may be plenty of running room ahead. In a company release issued on January 28, 2016, Blackbird announced the 2-20 produced 1,768 BOEPD (36% liquids) in a 24-hour test, beating its gas and BOE type curves by 109% and 80%, respectively. – Read More

*Oil Slump Pressures Exxon, BP Results – The Wall Street Journal

Exxon Mobil Corp. posted its weakest annual results in more than a decade and BP PLC suffered a loss as big as that booked in the aftermath of the worst offshore oil spill in its history, showing the extent of the damage that the 20-month crude-price slump can inflict on even the biggest and most secure oil companies. BP posted a loss of $5.2 billion for 2015—on par with 2010. And Exxon’s annual earnings were cut in half to $16.2 billion, forcing the Irving, Texas, company to put its share-buyback plan on hold to preserve cash. – Read More

*Oil could double despite OPEC supply flood – Yahoo! Finance

Plunging oil prices — down more than 30% in the past year — have been the primary contributing factor to the S&P 500’s worst start of the year since 2009, with January clocking in a 5.1% decline. And with crude plunging below $30 again Tuesday, investors are still looking for clues as to when we’ll see a bottom. – Read More

*Protests in Iran over New Petroleum Contracts – Oil & Gas 360®

International sanctions have been lifted from Iran following the country’s successful implementation of all measures required to start the Joint Comprehensive Plan of Action (JCPOA), but an internal struggle continues in Iran between conservative factions and President Hassan Rouhani’s administration. On Saturday, student protestors aligned with the Basij, a hard-line militia formed to uphold the principles of the Islamic Republic, protested outside Iran’s oil ministry. – Read More

*Eagle Ford counties top Permian Basin in barrels produced – San Antonio Express-News

Despite falling prices, Texas oil production continues to rise, and counties in the Eagle Ford Shale continue to top the state’s list of the biggest producers. The state in November produced an average of 2.37 million barrels daily, up from 2.25 million daily barrels in November 2014, according to preliminary data released by the Texas Railroad Commission. Karnes County is still pumping more crude oil than any other county, with 6 million barrels produced in November. – Read More

*A Guide to Oil Producers’ Scramble for Money as Crude Tumbles – Bloomberg

Nigeria’s bid for concessionary loans from the World Bank and African Development Bank is just the latest example of the havoc wreaked on oil-producing nations by the slump in crude prices. From Saudi Arabia to Venezuela, governments are abandoning largess and risking political unrest with measures that include lowering energy subsidies and cuts to public-sector wages. With prices still falling, attempts to diversify from oil have taken on greater urgency. – Read More

*Callon Petroleum Boosts Type Curves, Spells Out 2016 Permian Program – Oil & Gas 360®

In an operational update on February 1, 2016, Callon Petroleum (ticker: CPE, callon.com) maintained its goal for cash flow neutrality by mid-2016 while announcing advancements in both production and its reserve base. For fiscal 2016, Callon expects average production of 11,500 to 12,000 BOEPD, representing a midpoint year-over-year increase of 23%, based on estimates from Q3’15. – Read More

*Oil imports: Congress needs to start debating the next logical step in energy policy – Houston Chronicle

You may not see any gold-plated Ferraris on the Southwest Freeway, and the Chase Tower doesn’t even reach halfway up the Burj Khalifa, but Houston has eclipsed Dubai and Abu Dhabi in another hallmark measurement: cheap gasoline. According to data compiled by GasBuddy.com, the least expensive fill-up in the United Arab Emirates for January came in at $1.55 per gallon. In Houston it was $1.32 per gallon. Weak oil prices have forced the UAE, which has the seventh-largest oil reserves in the world, to cut government fuel subsidies. – Read More

*Oil Rig Count Falls Below 500 – Oil & Gas 360®

The U.S. rig count continued its trend downward in the week ended January 29, according to information from Baker Hughes (ticker: BHI, BakerHughes.com). The U.S. total rig count landed at 619, down 18 from last week, and 45 from the first Baker Hughes report of the year. Both oil and gas focused rigs saw declines this week, with oil falling below 500 to 498 this week. – Read More

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