U.S. “RIG COUNT” PLUMMENTS … BUT OIL SUPPLY GOES UP?
|| By FITSNEWS || We’ve written previously about how low gas prices has meant a loss of energy jobs … losses which have been curiously under-reported by the federal government.
Do we care? No. We like cheap gas. And while we don’t view it as an economic panacea (which it clearly isn’t), the bottom line is we don’t have an energy job … even though some have argued the hot air emanating from our founding editor’s prodigious word hole could constitute a viable power source.
Anyway, where is all of this Friday afternoon rambling headed? Good question … we almost forget for a moment ourselves.
Our point was … hmmmm …
Oh … right. Oil rigs.
As gas prices have plummeted, so has America’s “rig count” – or the number of oil and gas rigs in service at a given time. This number – a key petroleum industry metric – peaked at 1,609 last October, but it’s been falling off a cliff ever since. According to Baker Hughes, the firm which tracks the metric, last week it slipped to 1,069 – its lowest level since October 2009.
Naturally, that would mean a corresponding reduction in America’s oil supply, right?
Ummm … no.
Courtesy of our friends over at Zero Hedge, here is the most bizarre economic chart we’ve seen in some time.
And for those of you educated in one of the Palmetto State’s government-run schools, the red line is the rig count (down 49 percent from its peak) while the blue line is the amount of oil being produced …
(Click to enlarge)
(Chart: Via)
Crazy huh?
“The hope (because lately that’s all there is) is that since oil rigs are plunging at an annual pace last seen 1986, that sooner or later production will be mothballed,” Zero Hedge noted. “However, as the blue line in the chart shows, quite the contrary is happening as plummeting oil rigs simply means even more record production.”
Ah, the American economy … where up is down and down is up.
Oh well … “Black Bush” will be pleased.
26 comments
do these rigs include fracking and oil shale development? did the deep water horizon spill could as “oil produced”
On shore, fracking is used. Offshore the pressure dynamics are such that fracking is seldom needed.
Fracking is really fracturing of the rocks that hold the oil. Modern methods are to use a mechanical hammer to rapidly drive water into the rocks, the water hammer effect. Older methods involved dropping dynamite down the well … My GrandDaddy and my Dad did that lot in Oklahoma.
I always thought that technique was used to dis-lodge the wax that had build up.
Learn something all the time.
” dropping dynamite down the well … My GrandDaddy and my Dad did that lot in Oklahoma”
—- Eddy, I’m betting that is when you learned to be fast!
A “rig” and a “well” are not the same thing. You could completely eliminate all rigs right now without any immediate impact on oil production.
You got it.
Drilling rigs produce pumping wells. Just because the drilling rigs stop making new wells does not mean that the existing wells get plugged. The newer wells along with the old wells keep producing, while even newer wells just don’ come on line. The precious juice keeps flowing, but in this time frame and this case of new North American drilling of newer wells slows down. Production as of last October, continues, at a rate that is a bit more than North America needs.
So, when will the rigs start drilling new wells? … Good question and the answers will come from the spread sheet jockeys at Big Oil. … Probably in a couple of more years. But the flow of oil will continue at the October levels plus a bit.
Btw: the price point is $35 per barrel, break even, net w/o taxes. It takes another $20 to pay off the governments before it is possible and profitable to drill for more.
You fawn over Zero Hedge “nothing story” about oil rigs but ignore a South Carolina employment story right under your nose.
SC data for January was released on Tuesday by the BLS. The BLS has been collecting this data for 39 years. South Carolina had the highest one month gain in civilian workforce ever at 10,768. The highest previous gain was less than 7,000. These are people who were not looking for work who are now employed or seeking employment. In the same month actual employment rose by the largest amount ever by 10,841. Again the previous record was less than 7,000. There are 149,401 more jobs in SC than when Haley took office.
Fits has done ten articles on the Worker participation rate. In eight he was critical of Haley about the rate declining. In two he was critical of slight improvements. Since last Summer half of all the decline during her tenure (2.6%) has been eliminated (1.3%) and this same January report showed the biggest one month improvement ever of 0.3%.
Now if Fits is going to be critical of Haley for economic declines, he should praise her when there is progress.
… and none of that will change until and unless the poor and middle class get a whooping big permanent tax cut.
How you gonna give the”poor” a tax cut,since,according to Right Wingers like you,they don’t pay any tax?
So, the poor don’t pay no sales taxes on their gasohol and Big Macs?
If there is a whooping big tax break for the middle classes, then McDonalds can Lower Prices! and filling stations can Lower Prices! and the state(s) will not collect such High Sales Taxes … which The Poor pay, always, duh!
That’s the basic difference between the trickle down economy and trickle down poverty = When the Gruberment gets less, the Poor and Middle Classes get more, Oh Bummer.
Yeah sure all these businesses are just itching to
“Lower prices?”
That’s the dumbest damn thingI ever heard.
Uh DUH!
? Slow snooze week ? No Hillary Quakes this week ?
Gowdy asked for Hillary’s server to be examined by Inspector Generals Office. Even if nothing is on it, it makes Hillary look bad. If she refuses to turn it over it looks bad. If she does turn it over then she will have backed down on something she said she wouldn’t do.
Pump it and store it….or ……store it in the ground.. To operate a rig there are base overhead costs so if a rig is operational then it must pump a certain amount to be viable. We have always had an ample supply of oil but we would rather burn through other countries reserves…Throw in the Russian and Venezuelan political equation and you get your answer. Furthermore, it will be much easier to convince the East Coast conservationists that Atlantic coast rigs are necessary using the very data that you provided as long as it is tweaked a touch. It is like putting up a fence around your gold claim that you have no intention of mining at the present time…….Personally, I could give a shit because oil rigs make for killer Grouper fishing.
Cheap gas….you’re a F*#k!ng idiot…gas dipped a little in price lately…but it was exorbitant in cost..for SIX years…
And the F*#k of it is…the little dip comes as Obama care costs are blowing up…
Face it you ignorant F#*k…Obama is a major F*#king failure. ..no mstter how F*#k!#g stupid FITS is…
There seems to be a 60ish resident living on Saints Creek Lane that could stand to reengage society…..make a contribution.
You still don’t get it.. the *refineries*… they just shut them down and start rationing gasoline… lots of money out there to be had from scarce gasoline.. without refineries, it doesn’t matter *how* much oil there is… they can shut down refineries with exactly the same indifference that OPEC pumps oil…
it’s the *refineries*.
just think how much profit you can make when oil is at 20 bucks a barrel, and gas is selling at 4 bucks a gallon! The speculators will start falling out of the sky like birds in a plague of locusts!
We are a long way from shutting down refineries and Gruberment rationing, although Gruberment is trying to artificially manipulate prices … with unnecessary and unneeded taxes.
http://www.latimes.com/local/lanow/la-me-ln-portion-of-refinery-ordered-to-shut-down-20150219-story.html
http://www.chinadaily.com.cn/business/2014-10/21/content_18779619.htm
http://www.reuters.com/article/2015/02/21/us-refineries-labor-strike-idUSKBN0LP06420150221
http://news.yahoo.com/exxon-torrance-refinery-fcc-shut-remain-down-during-204152263–finance.html
http://www.tylerpaper.com/TP-Business/214388/delek-refining-shuts-down-for-674-million-in-improvements
OK …. What’s UR point? That the g’ment/union/industrial complex is a performing theater company, all parties dueling for a bit more of the black gold pie?
Btw: the top physicists at Buzzerkly is right now off in China teaching the Chinese g’ment how to frack wells the modern way. They still have a pricing problem in China. Even with world market prices way down, the ChiComms have not quite figured out how to justify their own heavy oil tax revenue streams in light of the sometimes artificial shortages.
Btw: The Chinese g’ment is right now negotiating with the French, the U.S. and the Germans to build more than 200 nuclear power plants … Now They have a serious coal power problem: not only is China killing their own people with the pollution, the Koreans and the Japanese are really suffering from that.
My point is that the Chinese economy is melting down because of that and the Chinese government being unable without several Central Planning Screw-Ups.
(The rest of your links above seem to be all about the same story.)
Mean while in the reddest of the red startes, nine communities along the coast of South Carolina have joined forces to OPPOSE the drilling offshore!
You just can’t make this SHIT up!
You betcha
I would agree … It is not a good idea to build platforms and drill for oil off of the Carolinas’ coast, in the middle of the Gulf Stream. Some day, maybe, it will be totally safe but even a small spill would be a calamity.
Well then, I will have to ask:
Are there ANY rigs drilled in ocean currents.
BTW, I have spent many days in the Gulf Stream, both above and below.
Mmmmm … Not so you would notice. The currents within the Gulf de Mexico are pretty weak, generally (unless a hurricane shows up.)
Off the coast of west Africa, all of the drilling seems to be in that “cut” part where the currents all slow down. Down on the Venezuela coast, the currents move toward the land, mostly. Way up there in the North Sea off of England and Norway, some of the winter currents get quite fierce, but hey!, those EuroTrash know what they are doing, right? … Over in Asia, the Vietnamese and the Chinese are drilling in the South China Seas (with Conoco’s and UC Berkeley’s help), but there too, the currents are relatively slow moving.
I believe that the Gulf Stream currents are pretty strong, comparatively, and of course the Gulf Stream is where most East Coast sea food derives (as you probably know). Wanna dark brown sand dollar in your sushi?
By the by: That deep water oil field off of the coast of Brazil? Turns out to be nothing but “dry” holes. Too bad for them.
Yeah ,one of them is the Town of James Island whose Mayor is a self proclaimed Libertarian.
Of course he’s typical of those types.Theyre all for “freedom” and “Liberty” until those words interfere with what they want,then?
Screw all that BS
NO NO NO!!!
What confuses me is why gas is so cheap in SC. Sure, low taxes are part of the answer but is that the whole answer? We don’t have any refineries, any oil pipelines. It’s magic, I guess.