Oil steadies near two-month high as U.S. drilling slows down

Category : News

By Grant Smith and Robert Tuttle on 1/21/2019

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Drilling rig in Bakken shale play. Photo: Marathon.

LONDON and CALGARY (Bloomberg) — Oil steadied near a two-month high in New York amid a pullback in U.S. drilling activity, while ongoing U.S.-China trade talks left an uncertain outlook for demand.

Futures rose 0.2% Monday after surging 3.3% on Friday. The number of rigs drilling for oil in the U.S. fell to the lowest since May, according to Baker Hughes data. China and America, the world’s biggest oil consumers, have made little progress in talks on intellectual property, a major sticking point as they pursue a deal to end a tariff battle, according to people familiar with the discussions.

“The price volatility seen over the latter part of last year certainly appears to have made producers hesitant to pick up drilling activity,” said Warren Patterson, senior commodities strategist at ING Bank NV.

Oil is off to its best start to a year since 2001 after plunging almost 40% last quarter on fears of a global supply glut and weaker consumption. To counter those worries, OPEC and its partners have started to cut production to balance the market while the International Energy Agency expects relatively strong demand this year. Still, concerns persist after China’s economy expanded at the slowest annual pace since 1990.

West Texas Intermediate crude for February was at $53.90/bbl, up 10 cents, as of 12:59 p.m. on the New York Mercantile Exchange, when trading halted. U.S. markets were closed for the Martin Luther King holiday, and contracts will only be settled on Tuesday.

Brent for March settlement closed 4 cents higher at $62.74/bbl on the London-based ICE Futures Europe exchange, after advancing $1.52 on Friday.

Even as the U.S. rig count tumbled by 21 to 852, the biggest decline since 2016, Energy Information Administration data last week showed American drillers pumped 11.9 MMbopd. U.S. output is set to expand by 1.1 MMbopd this year and may exceed Saudi Arabia’s maximum level within the next six months, according to the IEA.

The pullback in drilling “is not expected to significantly slow down U.S. crude production growth,” analysts at consultants JBC Energy GmbH in Vienna said in a report.


Oil steadies near two-month high as U.S. drilling slows down

Category : News

By Grant Smith and Robert Tuttle on 1/21/2019

null

Drilling rig in Bakken shale play. Photo: Marathon.

LONDON and CALGARY (Bloomberg) — Oil steadied near a two-month high in New York amid a pullback in U.S. drilling activity, while ongoing U.S.-China trade talks left an uncertain outlook for demand.

Futures rose 0.2% Monday after surging 3.3% on Friday. The number of rigs drilling for oil in the U.S. fell to the lowest since May, according to Baker Hughes data. China and America, the world’s biggest oil consumers, have made little progress in talks on intellectual property, a major sticking point as they pursue a deal to end a tariff battle, according to people familiar with the discussions.

“The price volatility seen over the latter part of last year certainly appears to have made producers hesitant to pick up drilling activity,” said Warren Patterson, senior commodities strategist at ING Bank NV.

Oil is off to its best start to a year since 2001 after plunging almost 40% last quarter on fears of a global supply glut and weaker consumption. To counter those worries, OPEC and its partners have started to cut production to balance the market while the International Energy Agency expects relatively strong demand this year. Still, concerns persist after China’s economy expanded at the slowest annual pace since 1990.

West Texas Intermediate crude for February was at $53.90/bbl, up 10 cents, as of 12:59 p.m. on the New York Mercantile Exchange, when trading halted. U.S. markets were closed for the Martin Luther King holiday, and contracts will only be settled on Tuesday.

Brent for March settlement closed 4 cents higher at $62.74/bbl on the London-based ICE Futures Europe exchange, after advancing $1.52 on Friday.

Even as the U.S. rig count tumbled by 21 to 852, the biggest decline since 2016, Energy Information Administration data last week showed American drillers pumped 11.9 MMbopd. U.S. output is set to expand by 1.1 MMbopd this year and may exceed Saudi Arabia’s maximum level within the next six months, according to the IEA.

The pullback in drilling “is not expected to significantly slow down U.S. crude production growth,” analysts at consultants JBC Energy GmbH in Vienna said in a report.


Texas upstream employment trends indicate talent shortage

Category : News

1/21/2019

AUSTIN, Texas — As reported by TIPRO earlier this month, employment growth for the Texas upstream sector stalled in the fourth quarter of 2018 following many months of consecutive growth. A variety of factors contributed to the slowdown in hiring, including takeaway capacity constraints in West Texas, lower crude oil prices, rising material costs resulting from tariffs, as well as an ongoing shortage of available talent.

TIPRO’s data will illustrate some of the employment trends in the upstream oil and natural gas sector in fourth-quarter 2018 based on job postings, which were collected from various sources and processed or enriched to provide information such as standardized occupation, skills, and geography. This report also uses state data from the Texas Workforce Commission. Individual company data was intentionally excluded.

“TIPRO is pleased to provide unique analysis on many economic factors that impact the oil and natural gas industry and our state,” said Ed Longanecker, president of TIPRO. “This data helps to quantity and reinforce the importance of oil and natural gas development and support ongoing workforce initiatives for our industry,” added Longanecker.

In total, there were 49,929 job postings for the Texas upstream sector between September 2018 to December 2018, of which 7,878 were unique. These numbers provide a Posting Intensity of 6-to-1, meaning that for every 6 postings there is 1 unique job posting. This is higher than the Posting Intensity for all other occupations and companies in the state (5-to-1), indicating that Texas upstream jobs have been more difficult to fill due to a variety of potential factors, including a shortage of available workers and a slowdown in industry activity. Oil and gas jobs in Texas pay on average 132% more than the average private sector job in the state.