U.S. OIL - 2015: UP & DOWN
The Texas Petro Index (TPI), a composite index based on a comprehensive group of upstream economic indicators released by the Texas Alliance of Energy Producers (TAEP), set well-permitting and employment records in October, resulting in another record high score overall.
A score of 312.9—up 5.8% from October 2013 and 0.6% from September was achieved in spite of falling oil prices, which continued their dive in November.
West Texas Intermediate crude on the Plains Pipeline system fell to a posted price of $62.50/bbl following the decision by the Organization of Petroleum Exporting Countries to maintain current production quotas.
"At this point a contraction is unavoidable," said Karr Ingham, economist and TPI creator. "But other than the direct impact on the value of Texas crude oil production, lower wellhead prices in October did not appear to affect other upstream oil and gas indicators."
Ingham said upstream oil and gas activity in Texas, as reflected by the TPI, likely would peak later this year or very early in 2015 and enter into a state of decline for some period of time, depending on what happens to crude prices. However, he isn't forecasting total doom and gloom.
"Regardless of the depth or duration of an economic decline, producers in Texas might be better positioned to weather that storm than most might think as a result of declining tight-oil production costs.
"Production costs can be expected to moderate as lower oil prices undermine demand for many wellsite supplies and services, and service companies and suppliers compete for dwindling business opportunities by lowering fees and prices," Ingham predicted.
Crude oil production in Texas totaled an estimated 98.2 million bbl, 22.1% more than in October 2013. With crude oil prices in October averaging $80.94/bbl, the value of Texas-produced crude oil totaled $7.95 billion, 1.7% less than in October 2013.
Estimated Texas natural gas output was 702.1 bcf, a meager year-over-year monthly increase of 0.3%. With natural gas prices in October averaging $3.87/Mcf, the value of Texas-produced gas increased 12.7% to $2.7 billion.
Baker Hughes Inc.'s Texas rig count averaged 899, increasing 9.6% from 820 active rigs in October 2013.
The number of Texans on oil and gas industry payrolls averaged a record 312,200, 10.3% more than in October 2013, according to statistical methods based upon Texas Workforce Commission estimates.
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GAZPROM - The parties discussed relevant issues related to bilateral cooperation, including the Baltic LNG project. Emphasis was placed on the priority measures aimed at developing a joint design concept (pre-FEED).
BHGE - U.S. Rig Count is up 11 rigs from last week to 1,063, with oil rigs up 8 to 869, gas rigs up 4 to 193, and miscellaneous rigs down 1 to 1. Canada Rig Count is up 13 rigs from last week to 195, with oil rigs up 8 to 127 and gas rigs up 5 to 68.
REUTERS - Brent crude futures had risen $1.02 cents, or 1.3 percent, to $81.28 a barrel by 0637 GMT. The contract dropped 3.4 percent on Thursday following sharp falls in equity markets and indications that supply concerns have been overblown. U.S. West Texas Intermediate (WTI) crude futures were up 80 cents, or 1.1 percent, at $71.77 a barrel, after a 3 percent fall in the previous session. WTI is on track for a 3.5 percent drop this week.
EIA - Brent crude oil spot prices averaged $79 per barrel (b) in September, up $6/b from August. EIA expects Brent spot prices will average $74/b in 2018 and $75/b in 2019. EIA expects West Texas Intermediate (WTI) crude oil prices will average about $6/b lower than Brent prices in 2018 and in 2019.