January 6, 2016

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

Current: 482,324
Actual Build/(Withdrawal): (5,085)
Economist Average Estimate: 654
Previous: 487,409

Click here for the chart with five year averages.

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


*We’re Still Importing Crude Oil from OPEC. Why? – Oil & Gas 360®

It’s Thursday morning, December 31, 2015. I’m not going to sugar coat it – it’s been a tough year.  There have been family deaths, cancer scares, a heart attack, a huge Category 4 tornado that was too close for comfort, and a new granddaughter, but she’s going to need heart surgery in January to fix a heart valve.  Like I said, it’s been a tough year. So, let’s talk about something more light-hearted.  Like the price of a barrel of crude oil. – Read More

*Investors Beware: U.S. Tight Oil Is Not The Swing Producer of The World – Forbes

Daniel Yergin and other experts say that U.S. tight oil is the swing oil producer of the world. They are wrong. It is preposterous to say that the world’s largest oil importer is also its swing producer. There are two types of oil producers in the world: those who have the will and the means to affect market prices, and those who react to them. In other words, the swing producer and everyone else. A swing producer must meet the following criteria: – Read More

*Don’t Blame Oil for Global Chaos – The Wall Street Journal

Since 1918 and the full flowering of the automobile age, the average U.S. domestic price of gasoline has rarely fallen below $2 or risen above $4 as measured in 2015 dollars. At today’s price of $1.99, gasoline is approaching its all-time low in inflation-adjusted terms. In 1965, gasoline sold for 30 cents. In 1965 dollars, today’s price is 26 cents. So, yes, the current oil price depression is not ordinary. Those who see a price recovery coming soon note that expensive projects to wring oil from Arctic waters or Canadian oil sands or the deepest Gulf of Mexico are being halted. – Read More

*Free Fallin’: U.S. Rig Count Drops Below 700, Canada Loses 34% of Fleet – Oil & Gas 360®

United States rig counts closed out 2015 with 698 in operation, according to the latest information provided by Baker Hughes (ticker: BHI). The total is just two less on a week-over-week basis, and both were oil-focused rigs. The updated number is the lowest since 1999. Taking basins into consideration, the Williston lost two rigs and now has only 53 in operation – down a staggering 70% compared to year-end 2014. The Barnett, Cana Woodford and Utica each reduced their fleet by one rig, while the Haynesville added one to the field. – Read More

*Oil-Producing States Battered as Tax-Gushing Wells Are Shut Down – Bloomberg

In Kern County, California, one of the nation’s biggest oil producers, tumbling energy prices have wiped more than $8 billion from its property-tax base, forcing officials to tap into reserves and cut every department’s budget. It’s only getting worse. The county of 875,000 in the arid Central Valley north of Los Angeles may face another blow in January, when it reassess the oil-rich fields that line the landscape. Last year’s tax bills were based on crude selling for $54 a barrel. It finished Monday at less than $37. – Read More

*U.S. oil ‘strippers’ maneuver to keep pumping amid crude slump – Reuters

U.S. “stripper well” operators, the nation’s smallest oil producers seen as most likely to succumb to the crude price slump, are hanging in tough, reducing the chances of near-term production cuts needed to rebalance the domestic oil market. The conventional wisdom is that “strippers” would be the first to fold in the face of oil’s slide below $40 given their tiny size – some may pump as little as few hundred dollars’ worth of oil a day – limited access to capital and high costs compared with bigger, more efficient shale producers. – Read More

*No Change in Oil Exports Expected in the Coming Months from the World’s Largest Producers – Oil & Gas 360®

Oil exports are expected to remain static in the world’s 20 largest exporters according to the latest release of the PRIX global index. The PRIX index forecasts political developments that can affect oil exports from the world’s 20 largest exports based on a scale of 0 to 100, with 0 representing a maximum decrease in exports, 100 representing a maximum increase in exports, and 50 representing no change. The PRIX index score for the first three months of the year is 50.06 based on input from 290 country analysts, indicating there will be little change in exports for the first quarter. – Read More

*Saudi Arabia has a giant mess on its hands – The Washington Post

The next casualty in Saudi Arabia’s oil price war might be its own economy. That’s because, with oil revenues drying up, Saudi Arabia is about to make the same mistake that Europe has over and over and over again. What’s that? Well, trying to cut its budget without cutting interest rates or otherwise softening the economic blow. Now, it’s true that Saudi Arabia has to do something. You can’t have an economy based on redistributing oil money when there isn’t that much oil money to redistribute. – Read More

*How the Saudi-Iranian spat could roil the oil market – The Globe and Mail

Rising tensions between Iran and Saudi Arabia have caught the world’s attention. It’s not just that two of the world’s most important Muslim countries, one Shia and one Sunni, are in a row in a region that’s increasingly divided among sectarian lines. But any time there are high tensions between two major oil producers, people will wonder what this means for global oil markets. There are several scenarios in which these tensions could escalate in a way that would affect global oil markets more seriously. – Read More

*United States Crude Exports: Setting Sail in 2016 – Oil & Gas 360®

The United States crude export ban was lifted less than two weeks ago, and domestic companies are wasting no time transporting American oil abroad. On December 30, 2015, ConocoPhillips (ticker: COP) and NuStar Energy (ticker: NS) announced its first cargo is expected to complete the loading phase by December 31. The shipment is expected to be the first U.S. crude export since the oil embargo was enacted in 1975. – Read More

*Do Houston’s oil troubles spell danger for the Texas economy? – CNBC

More than half of the publicly traded companies in Houston are oil and gas related. Nearly three-fourths of them have dipped lower in the past 12 months. Brian Busch, director of oil markets and business development at Genscape, said not just Houston, but the entire world is facing an oil supply-demand imbalance. “We are oversupplied with crude production right now, given what the world demand is, and until the economy picks up, it’s going to continue,” he told CNBC’s “Power Lunch” on Tuesday. – Read More

*The Oil Industry’s Lumpy Year – Oil & Gas 360®

If you look at the number of jobs lost, company market value lost, and the growing numbers of oil patch bankruptcies, 2015’s continued commodities price fall led to a lot of bangs and bruises in the oil and gas industry. 2015 was also a year in which readers of Oil & Gas 360® kept up with industry developments, company news and geopolitical trends in record numbers. Our weekly readership in December is up by 79% compared to the pageviews per week in January of 2015. – Read More

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable.  This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note.  This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results.  EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services.  In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies.  As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note.

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