Rig Counts: Oil +8 Gas +1

This week's Baker Hughes Rig Counts show a gain of 8 oil rigs and one gas rig.

Rig Count Summary
Rig Count by Basin
Rig Count by State
Canada Rig Counts

Notable changes  in this week's counts include:

Williston Basin down 6 horizontal  oil rigs

Granite Wash gained one horizontal oil and three horizontal gas rigs

Haynesville lost two horizontals and one vertical

EIA Natural Gas Storage: 114 BCF Injection Overwhelms

Today's 114 BCF natural gas storage injection was more than expected and sent gas down 6 cents immediately.  It partially recovered but does indicate that production may be overwhelming the areas of demand growth.

Natural Gas Weekly Storage Report

The large injection reduced the storage deficit to last year and the 5 year average:

The largest storage shortfall continues to be in the Producing Region:

But within the Producing Region, Salt Dome Storage has recovered to within the historical range, and may be absorbing the oversupply due to its high injectability rates:

The West Consuming Region has also recovered the most among the three EIA regions:

Natural Gas Exports to Mexico Rising with Warm Weather

Exports to Mexico are expected to rise by 200-300 MMCFD in 2014, though they've been flat with 2013 through April.  Recently, sample border flows have begun increasing meaningfully:

Texas Wind Generation Lags in May Despite Capacity Increases

Texas wind generation has lagged 2013 since January 2014.  This month, output will likely do so again.  With 4.5 days remaining, the forecast for today and tomorrow indicates output will not exceed 4 GW.  

Nuclear Power Output Rising, Similar to 2013

The reactor refueling cycle is gradually ending for the season, with output rising slowly.  Today's output is about 2,100 GWh, which is 200-250 GWh below levels that should be reached by the peak of summer.  Output should be back near 2,300 GWh by mid-June if no unplanned outages occur.

Nuclear Power Report

US Cooling Demand Up 88% This Week: 45 CDD expected vs 32 Normal

Cooling demand takes a large step up this week, from last week's near-normal 24 CC to an expected 45 CDD.

Cooling Degree Day Report

All the major natural gas consuming states are expected to be above normal, though not exceptionally so.  The large increase in the national total comes from heat in more small states (Nebraska, Nevada, Missouri, Arizona) where CDDs are more than doubling.

The major states:

DOT Traffic Volume: Slightly Up Year on Year in Weather-affected March

DOT Federal Highway Administration released its Traffic Volume Report for March 2014.  It shows a very slight increase in total miles vs March '13, though this year was likely to be impacted by severe weather, so growth is anticipated in April.  This is confirmed by the EIA weekly reports of gasoline supplied, which have shown solid growth in each of the last 11 weeks, save one.  Combined with the long term trend in improving fuel efficiency, this suggests traffic is generally growing.


DOT Traffic Volume:

EIA Gasoline Supplied:

PEMEX: Mexico Oil and Gas Production in April Little Changed

Pemex reported operating statistics for April yesterday, and total liquids production was down slightly from March (7K barrels per day), with oil up 9K barrels per day and natural gas liquids down 16K.

PEMEX Mexico Oil Production

Natural gas production was off 0.01 BCFD from March, as hydrocarbon-associated NG production fell while nitrogen-associated and non-associated NG production rose slightly.

PEMEX Mexico Natural Gas Production

FERC Electricity Infrastructure Report

FERC reports on the US electricity infrastructure monthly here, identifying new power capacity by type, and total operational capacity by type.  It does not delineate decommissioned capacity.  

It is particularly helpful in tracking renewable capacity.  FERC reports for April 2014 the following capacity.  Notice the steady growth in Solar, the recent increase in wind, and the declines in both coal and natural gas.  Coal capacity should be dropping precipitously in the next 24 months.

Baker Hughes Rig Counts: Oil Rigs Stall (-3) and Gas Rigs Steady (-1)

Rig counts were broadly steady, both oil and gas, US and Canada, this week.  The slight decline in US oil rigs (-3) was stronger than the headline because horizontals were down -8, the first solid decline in a long string of relentless increases.  Gas rigs were stable, -1 overall but horizontals +3.  

Rig Count Summary
Rig Count by Basin
Rig Count by State
Canada Rig Counts

Canada
Canadian rig counts are in the seasonal trough, though the larger trends continue to differ from the US, with Gas rig activity in a long term growth trend, while oil rigs are flat year on year:

Alberta specifically:

US Shale Basins
The trends within the larger shale basins were mixed.  The Permian, while had been attracting rigs like bees to honey, stalled this week:

The Eagle Ford also dropped three horizontal oil rigs and another gas rig.  Hardly a gas classified rig remains in the EF:

The Niobrara and Utica both have been trending upwards this year:

EIA Electric Power Monthly: Coal Gains on Gas in March

EIA released its electricity report for March 2014, and it shows a slight year-on-year increase in total generation, and a notable loss in natural gas market share, in favor of coal.
Electric Power Monthly

Output comports roughly with the weather, which was notably cold in March.  Last march was also colder than normal, but 2012 was very warm:

Natural gas prices were spiking regionally in March to unprecedented levels, which likely accounts for the loss in generation market share.  Coal is up about 5% over last March, while gas consumption fell 8.6%.

Intermittent renewables continued to nip at the heels of fossil fuels, with wind and solar both setting new March records.  Hydro was also up over last year but below historical norms.

Western Canada Natural Gas Production and Storage

The strong production trend in western Canada has not helped rebuild storage deficits thus far in shoulder season.  The production has been moving east and south, leaving Alberta with a growing deficit to the historical norm.  Since April, NOVA (Alberta) has only injected 36 BCF back into storage, less than last year at this time (42 BCF injected), leaving storage more than 200 BCF below normal.  It is very unlikely that exports will be maintained at these elevated levels for many more days.

TransCanada Alberta Storage and Field Receipts

Daily storage injections need to rise above 1 BCF consistently, but they've been below that so far:

Production has been strong,averaging more than 200 MMCFD above last year, though expected to fall seasonally.

Alberta natural gas rig counts continue their strong trend, and should begin their seasonal recovery right about now.

EIA Natural Gas Inventory: +106 BCF

The market was unhappy with the 106 BCF injection this morning, and sent natural gas prices down almost 10 cents, to about $4.37 for the '14 summer contracts.
Natural Gas Weekly Storage Report

Nevertheless, the storage deficit to 2013 and the 5 year average did not make meaningful reductions, standing now at -943 vs historical average, and -774 to 2013.

We are nearing the end of the spring shoulder season, and injections typically begin to fall as summer heat draws electricity.  This is the historical 5 year pattern of injections:

Western US Hydro Power Outlook

The seasonal outlook for western US hydropower output this summer is little changed.  Continued expectations for above average stream flow and generation from the northwest outweighs the lost output due to the drought in the Sierras, and the Colorado river basin is expecting runoff near normal though reservoir levels are well below normal:

Hydro output has been robust thus far in the Northwest:

And the streamflow outlook for the Columbia River is 108% of normal as of yesterday:

Meanwhile drought in the Sierras has snowpack at just 4% of normal for this date:

But California hydro output has not fallen much below last year so far.  But it should begin to decline soon, at a faster rate than last year.

And the snowpack graph for the Colorado river shows a near normal peak and a slightly earlier than normal melt off:

Nuclear Power Plant Refueling Outages Decrease as Summer Approaches

The spring refueling outages in 2014 are comparable to 2013, and plants are returning to active status without any significant surprises.  However, the daily differences in output between '13 and '14 have recently resulted in some anomalies that are large enough to affect the EIA Natural Gas Storage Report.  In the last ten days, 2014 nuclear output has exceeded '13 by a natural gas equivalent of around 0.5 BCFD, or 3.5 BCF per week.

Nuclear Power Report

Seasonal Weather Outlook: Cooling Requirements Near Normal This Week

The weather outlook from NOAA CPC is near normal this week, with 28 CDDs projected vs 26 normal.
Cooling Degree Day Report

The largest natural gas consuming states are all near normal this week, and the warm spell in California is over.

Rig Counts: Oil +3 Gas +3

This week's Baker Hughes Rig Count report shows slight gains, as both oil and gas rigs increased by +3.  That is a new record for oil. Canadian rig counts were stable as melt season draws to a close, and should begin recovering rapidly now.

Among the major basins, notable changes were few.  The Eagle Ford added 4 to its horizontal oil rigs, while losing one horizontal gas rig.  This dropped the gas rig count to a multiyear low of 8, after a 2012 high of almost 90 gas rigs.

The Utica also made gains, adding 2 horizontal oil rigs and 3 horizontal gas rigs.