per RJ
After revising our oil models and marking to market our recent actual U.S. drilling activity numbers, we are slightly lowering our near-term outlook for U.S. drilling activity while slightly raising our 2013 outlook for U.S. activity. Before you get too excited, please recognize we still are expecting a steep decline in drilling activity, and our 2013 U.S. rig forecast is still MUCH lower than consensus expectations. Our negativity for next year is predicated on the belief that rising U.S. oil production in the face of weaker global oil demand growth will drive oil prices substantially lower in 2013. As a result, we believe that U.S. drilling activity will follow U.S. E&P cash flows lower next year. We now believe that the 2012 rig count will average ~1,930 rigs. This is down 15 rigs (or roughly 0.75% lower) than our old forecast. Perhaps more importantly, we are now expecting the 2013 rig count will average ~1,720 rigs, which is down 11% from our 2012 average rig count assumption but up ~1% from our old forecast.
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it appears RJ is totally ignoring possibility of natty coming back. and of course they are still out there by themselves on crude.
