Active Rig Count - June 3

[dan_s]

The North American active rig count actually increased by 2 last week. The first increase in 18 weeks.

United States:
> Rigs drilling for oil increased by 9 to 325, compares to 1,609 in October, 2014 and 642 a year ago.
> Rigs drilling for gas declined by 5 to 82, compared to 222 a year ago.

Canada: Total rig count declined by 2 to 41, compared to 116 a year ago.

We are still WAY BELOW the number of active rigs necessary to slow down declining production. We are still going to see an acceleration of production declines in the 3rd quarter.

Per EIA here is what U.S. crude oil production has been doing lately
Week ending
4/22/16: 8,938,000 BOPD
4/29/16: 8,825,000 BOPD
5/06/16: 8,802,000 BOPD
5/13/16: 8,791,000 BOPD
5/20/16: 8,767,000 BOPD
5/27/16: 8,735,000 BOPD

I think the U.S. oil production decline will accelerate in Q3, but let's just say we average a decline of 40,000 BOPD each week for the next 52 weeks. Thank means U.S. oil production will drop by another 2 million barrels per day by this time next year. KISS ENERGY INDEPENDENCE GOOD-BY.

Keep in mind that Non-OPEC production outside of the U.S. is falling even faster.

BTW, demand for refined production is expected to increase by more than 1.5 million barrels per day over the next six months.

Now do you think Raymond James oil price forecast of $75/bbl in 2017 is likely?

[dan_s]

To get a better idea, go to: http://www.eia.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm