• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 12 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 5 hours Visualizing How Much Oil Is In An Electric Vehicle (Hint: a heckuva lot)
  • 4 hours Theresa May to Step Down
  • 6 hours Look at the LONGER TERM bigger picture of international oil & gas. Ignore temporary hiccups.
  • 16 hours Total nonsense in climate debate
  • 16 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 15 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 19 hours Will Canada drop Liberals, vote in Conservatives?
  • 19 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 19 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 15 hours Apple Boycott in China
  • 11 hours Australian Voters Reject 'Climate Change' Politicians
  • 2 hours Why is Strait of Hormuz the World's Most Important Oil Artery

Traders Grow Bearish On Glut, Rising Rig Count

Friday, July 29 2016

In the latest edition of the Numbers Report, we’ll take a look at some of the most interesting figures put out this week in the energy sector. Each week we’ll dig into some data and provide a bit of explanation on what drives the numbers.

Let’s take a look.

1. DUC list flattens out

 

(Click to enlarge)

- The number of drilled but uncompleted wells (DUCs) flattened out in the first quarter of 2016, after a sharp build over much of 2015.
- As of April 1, according to Bloomberg Intelligence, there were 4,230 wells that had been drilled but not completed. That number was more or less the same from January levels.
- While some companies added DUCs to their portfolios in that time period, others began working through their backlog.
- Bloomberg Intelligence estimates that the DUC backlog could disappear in the Permian by the end of 2017 even if oil prices stand at $40 to $50. The Eagle Ford could see its fracklog 70 percent finished over that timeframe as well.
- Estimates vary on how much production the DUCs could add, from the low end of 250,000 barrels per day (Wood Mackenzie) to the most optimistic of around 1 million barrels per day (Citigroup).

2. BP cash flow not covering expenses

 

- BP reported another loss in the second quarter, the third consecutive quarter to do so. The oil major lost $2.25 billion, which is not quite as bad as a year earlier.
- When charges related to the Gulf of Mexico spill are stripped out, BP would have a $720 million profit. Nevertheless, BP is not generating enough cash flow to cover all of its expenses, including its hefty dividend.
- BP insists on not touching its dividend, but that means it will have to cut capex from $17 billion in 2016 to $15-$17 billion in 2017, grow its cash flow, and continue to divest itself of assets. It plans on $3-$5 billion in divestments this year plus $2-$3 billion next year. It is also taking on more debt.
- Net debt increased to $30.9 billion, the highest in four years. But the company doesn’t mind. “Money is so cheap right now,” BP’s CEO Bob Dudley said this week. “It’s a good time and we can actually manage a little bit more on the net debt.”

3. Refining margins falling

 

(Click to enlarge)

- The oil majors are reporting bad figures for the second quarter, with many disappointing…




Oilprice - The No. 1 Source for Oil & Energy News