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U.S. Rig Productivity More Than Doubled Over the Past Few Years

Rig

Friday January 20, 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. Speculative activity and oil prices

(Click to enlarge)

- Hedge funds and other money managers built up a record high net-long position at the end of December, corresponding with a sharp increase in oil prices.
- Net length in speculative bets surged 63 percent in the month after the Nov. 30 OPEC deal.
- Although there is a chicken-and-egg argument about which causes which, as the chart above shows, speculative activity corresponds with movements in oil prices.
- Early signs of changes in investor sentiment can be interpreted as signals for coming price changes.
- The more recent plateau and slight decrease in net-length could be a warning sign that the optimism over oil prices might have overshot the market. Oil has slipped back towards $50 per barrel in the first few weeks of 2017.

2. Mexico a fast-growing market for U.S. natural gas

(Click to enlarge)

- Natural gas accounts for 54 percent of Mexico’s electricity generation, a sharp increase from the 34 percent share in 2005, according to EIA data.
- Natural gas will be the fuel of choice going forward for this emerging economy:…

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