Rig Counts: Oil +2 Gas +3 in Last Week of 2016. Counts Are Now Just About Where 2016 Began.

Another rig count to support the 7 month trend upward in the US.  Oil gains 2 rigs to 525,  and gas up 3 to 132.  Both counts bottomed out in May, with oil rigs showing the more pronounced rebound.  Gas rigs are constrained in the Marcellus and Utica by pipeline capacity, so the rig rebound has been confined to Texas/OK/LA and the DJ basin this year:

Dec 30 Baker Hughes Rig Counts:

US Oil Production Growth Stalls for 3rd Week

Perhaps temporary anomalies are to blame for the third week of declining continental US oil production.  The volume declines are not substantial, but they interrupt what was a sharp two-month growth trend that saw output rise from 8.45 million BOPD to 8.8.

This week's decline of 20 thousand barrels per day came on the heels of a 10K and a 1K decline in daily output for the month of December.  Rising rig counts belie the onset of a longer trend, but the potential for other short term confounding effects (winter weather, year end, holidays) may mean that a return to growth (or not) may not be apparent for a few weeks more.

2016 Continental US Oil Production (thousand BOPD):

Western US Hydro Power Generation Remains Above 2015, Offsets Natural Gas Demand

Continued strong precipitation in California and the Pacific Northwest is driving higher electricity output in the BPA and CAISO systems.

Bonneville Power is reporting average hydro output near 10 GW over the last week, that's about 2.5 GW more than the same period last year, which translates to more than 0.5 BCFE of gas equivalent per day.

In California, CAISO hydro output has averaged 2.23 GW this month so far, about 1 GW above last year's 1.25 average for December:

Natural Gas Rapidly Disappearing From MISO Dispatch: Market Share Declines below 20% vs Coal 80%

With holidays suppressing demand, the MISO call on natural gas fired power generation is falling off a cliff.  Coal use continues above 2015 levels, as it has since Dec 1, while gas use has fallen drastically.  For the last 3 days, coal has better than an 80/20 market share against gas:

On an absolute basis, gas use in the last week is down from 4.1 BCFD in 2015 to 2.6 BCFD in 2016, while coal is up from 6.9 to 8.2 BCFED over the same period (based on estimated NG equivalent):  

December Weather in Continental US Near Long Term Average, Jan Forecasts COLD

Assuming near term forecasts prove reliable, December will finish with about 878 Gas Utility Weighted Heating Degree Days, which is 19 above the 20 year average:

January forecasts look cold through week 1: