January 27, 2016

CRUDE OIL INVENTORY/’000 bbls (Week Ended 1/22/16)

Current: 494,920
Actual Build/(Withdrawal): 8,383
Economist Average Estimate: 4,270
Previous: 486,537

Click here for the chart with five year averages.

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


*Bam! It’s Earnings Season Again – Q4’15 Estimates – Oil & Gas 360®

EnerCom, Inc. compiled fourth quarter earnings per share, revenue, EBITDA and cash flow per share analyst consensus estimates on 217 E&P and OilService companies in our database. The median OilServices company earnings estimate for the quarter ending December 31, 2015, is ($0.05) per share compared to actual earnings per share of ($0.14) and ($0.03) for Q3’15 and Q2’15, respectively. In Q4’14, the median OilServices company earnings were $0.02. – Read More

*Oil, Stocks at Tightest Correlation in 26 Years – The Wall Street Journal

Oil and stock markets have moved in lockstep this year, a rare coupling that highlights fears about global economic growth. As oil prices tumbled early in 2016, global equities recorded one of their worst-ever starts for a new year. On Monday, oil and stocks were lower again. The S&P 500 index was down 0.7% in midday New York trading, and Brent crude futures, the global benchmark, were down $1.37 a barrel, or 4.3%, to $30.81. That followed a joint rebound on Friday. – Read More

*Once in high demand, North Dakota oil-by-rail shunned on East Coast – Reuters

In 2012, Plains All American bought a shuttered Virginia refinery for $300 million to use as a terminal and storage hub, betting that East Coast refiners would need to look beyond their own rail yards to satisfy their thirst for cut-price inland crude in coming years. Instead, shale production from North Dakota has been shrinking and those refiners have resumed buying imported crude. – Read More

*Oil Climbs Above $32 as Markets Hope for a Saudi/Russia Deal – Oil & Gas 360®

Both U.S. benchmark WTI and international benchmark Brent crude oils rose above the $32 mark today as new hope for a supply deal emerged. Iraqi Oil Minister Adel Abdel Mahdi said he saw “some flexibility” from Saudi Arabia and Russia for a deal to reduce output amid a global glut. “This flexibility should be finalized, and we should hear some solid suggestions coming from all parties,” said Abdul Mahdi at a conference in Kuwait City. – Read More

*Texas comptroller Glenn Hegar says of plunging oil prices: “At some point … there ain’t no more jobs to shed” – The Dallas Morning News

The biggest hit to Texas’ revenue and budget outlook resulting from recent economic jitters has come and gone, state Comptroller Glenn Hegar said Thursday. Hegar, the state’s chief tax collector and revenue prognosticator, projected an air of calm as stock markets slid and oil prices tanked this week. Despite oil’s plunge to less than $27 a barrel Wednesday, Hegar said his October revenue estimate revision still looks good because the Texas economy has already absorbed most of the negative effects of an oilfield slowdown. – Read More

*Four Ways To Invest In The Eventual Rise In Oil Prices – Forbes

As pertains to oil prices, I do not think we are at the bottom of the barrel just yet. In fact I firmly believe that crude oil prices are going to remain depressed for the foreseeable future. Saudi Arabia and Iran continue to pump oil at a fast pace, and I see only a small chance that other OPEC members will agree to cut production. That being said, I think now is the time to start getting your plan together for how you are going to capitalize on the eventual price stabilization and increase in this commodity’s price. – Read More

*Schlumberger: “Significant Recovery” will not occur Until 2017 – Oil & Gas 360®

Fourth quarter earnings season is officially underway, and, expectedly, Schlumberger (ticker: SLB) opened up the forum with a not-so-pleasant outlook on the oil and gas market. Paal Kibsgaard, Chairman and Chief Executive Officer of the world’s largest oilservice company, essentially echoed all of the problems that have plagued the market throughout the commodity downturn. – Read More

*Don’t trust the oil rally: RBC analyst – CNBC

Oil crossed back above $31 a barrel this week. Despite the signs of strength, one of Wall Street’s top commodities analysts warns investors should not trust the rally. On CNBC’s “Futures Now,” Helima Croft said the recent jump in oil prices is more of a technical rebound rather than a reversal in trend. “When we hit $26.20, there was a widespread sense that sell-off was overdone and that the market was too intensely bearish,” said the global head of commodities strategy at RBC Capital Markets and a CNBC contributor. – Read More

*Hess Leads U.S. Oil Explorers Showing $14 Billion in 2015 Losses – Bloomberg

During the next eight days, independent U.S. oil explorers are expected to report 2015 losses totaling almost $14 billion, the result of the steepest price collapse in a generation. Hess Corp. kicked off earnings season for the companies on Wednesday, reporting a net loss of $1.82 billion for the quarter and $3.06 billion for the year, its first annual loss since 2002. The company also reduced its estimate of proved oil and gas reserves by 24 percent, because of lower crude prices and reduced drilling plans. –Read More

*$25 WTI in March a Popular Bet – Oil & Gas 360®

Bets that crude oil prices would fall below $25 per barrel in March reached an all-time high today. It is impossible to say exactly where oil prices will be two months from now, but if the open interest, or the amount of total contracts outstanding, for puts on West Texas Intermediate is any indication, the answer is somewhere below $25 per barrel. – Read More

*Climate Deal’s First Big Hurdle: The Draw of Cheap Oil – The New York Times

Barely a month after world leaders signed a sweeping agreement to reduce carbon emissions, the global commitment to renewable energy sources faces its first big test as the price of oil collapses. Buoyed by low gas prices, Americans are largely eschewing electric cars in favor of lower-mileage trucks and sport utility vehicles. Yet the Obama administration has shown no signs of backing off its requirement that automakers nearly double the fuel economy of their vehicles by 2025. – Read More

*PDC Energy Builds on Reserve Base in Year-End Update – Oil & Gas 360®

Operational execution was the primary takeaway from PDC Energy’s (ticker: PDCE) Q3’15 results, and the progressing development of the company’s Wattenberg assets carried over into its 2015 year-end reserves update. The news release, issued on January 20, 2016, reported proved reserves of 272.8 MMBOE and total 2015 production of 15.4 MMBOE, representing year-over-year increases of 9% and 65%, respectively. – 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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