Rig count and weekly inventory numbers

http://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf

No signs of an end to the glut from the weekly EIA data for the USA.  Gasoline stocks are also on the high side.   Distillates (diesel, heating oil, and jet fuel) are on the low end of the 5 year range, but we have been exporting very large quantities.   I don’t feel competent to infer any major conclusions from this, but certainly we have not seen anything that suggests we are approaching the end of the glut.

Rig Count is dropping like its 2009:

Data from Baker Hughes http://www.bakerhughes.com/rig-count

We dropped 12 rigs in the Bakken, down to 153.  Permian only lost 6, down to 430, and this represents a deceleration in the rate of decline in that basin vs the past two weeks.  Eagleford lost 4, down to 181, that is also a deceleration in the rate of decline there.  The gas basins held up.

One other observation that I would make is that we have reached something of a milestone in that ¾ of the drilling rigs on land in the USA are now horizontal rigs.   Vertical and directional rigs have been dropped more rapidly, increasing the percentage of horizontal rigs in the total.  “Directional rigs” are basically like vertical rigs but drilled at an angle.  They are also called “Slant Drilling” rigs.  Horizontal rigs drill strait down then make a right turn and drill along a formation for a mile or so, and are a more modern technology than the other two types.

If we continue to drop at the current rate it will take 3-4 months to get to the 2009 lows.