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Oil and Gas Roundup — Oct. 13

October 13, 2014
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Permian drives gains in weekly, yearly U.S. rig count

The U.S. drilling rig count gained 8 units to reach 1,930 rigs working during the week ended Oct. 10, driven in large part by growth in the Permian basin, Baker Hughes Inc. reported.

Oklahoma edged down a unit to 211.

The rise came on the heels of Raymond James & Associates Inc.’s Oct. 6 industry brief in which analysts noted that U.S. land drilling activity has ramped up significantly over the past year, with the rig count now up 11% compared with the same time last year, despite falling oil prices over the last few months.

The pace of U.S. drilling activity has exceeded RJA’s forecast from 4 months ago. Therefore the analyst is raising by 5% its average 2015 US rig count estimate to 1,965 rigs from 1,862 rigs, as well as its 2015 average horizontal rig year-over-year growth rate forecast to 11% from 6.1%.

This growth will be bolstered by expected exploration and production cash flow growth of 6% at the current futures strip.

The average U.S. rig count for September was 1,930, up 26 units compared with August, and up 170 units compared with September 2013.

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OPEC: U.S. oil imports at historic low

VIENNA — U.S. imports into the Gulf Coast region are at six-year lows because shale output is suppressing the need for foreign oil, OPEC said in a Friday report.

The Organization of Petroleum Exporting Countries published its monthly market report, saying that despite signs of economic stagnation, its growth outlook remained static and with it are stable expectations of global oil demand.

For the United States, OPEC said the market there was becoming more self-reliant because of oil production from inland shale deposits.

"U.S. imports to the Gulf Coast have touched six-year lows in recent months as domestic shale production reduced the need for foreign crude, particularly from West Africa," the monthly market report for October read.

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U.S. gasoline falls to lowest since November

HOUSTON — The average price of regular gasoline at U.S. pumps slid to the lowest level in more than 10 months, dropping 11.64 cents in the three weeks ended on Friday, to $3.2577 a gallon, according to Lundberg Survey Inc.

Prices are 12.52 cents lower than a year ago, according to the survey, which is based on information obtained at about 2,500 filling stations by the Camarillo, Calif.-based company.

The average is the lowest since Nov. 22, and pump prices may fall by a dime or more in the next few days if crude oil prices remain near current lows, according to Trilby Lundberg, the president of Lundberg Survey.

"Crude oil price declines were passed through by refiners and into their wholesale-gasoline prices," Lundberg said in a telephone interview. "World demand growth has been weak. There's certainly a flush supply of barrels hitting the market, chasing world demand."

The highest price for gasoline in the lower 48 states among the markets surveyed was in San Francisco, at $3.66 a gallon, Lundberg said. The lowest price was in Tulsa, Okla., where customers paid an average $2.93 a gallon. Regular gasoline averaged $3.48 a gallon on Long Island, N.Y., and $3.60 in Los Angeles.

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Shameful: Fringe activists attack industry for funding cancer research

Spreading mis- and disinformation about oil and gas development and using vituperative, near-slanderous rhetoric to attack the industry have become hallmarks of the campaign to ban hydraulic fracturing.  But this week, the leaders of this fringe following reached arguably a new low: attacking an oilfield services and technology provider for donating money to a cancer-research charity.

In an op-ed penned for the anti-fracking website EcoWatch, Americans Against Fracking “science advisor” Sandra Steingraber accused Susan G. Komen – one of the most prominent organizations dedicated to raising awareness of and ultimately curing breast cancer – of “pinkwashing” hydraulic fracturing.

Steingraber said Komen had teamed with Baker Hughes to create a “pink, fracking, drill head,” before launching into a tirade about how “cancer hazards are present at every stage of the drilling, fracking, processing, and distribution process.”

First of all, it’s notable that this “science advisor” demonstrates a fundamental misunderstanding of the very industry that she hates. As Nick Sakelaris with the Dallas Business Journal pointed out:

“Astute readers will note that drill bits are used for drilling conventional and unconventional wells. They are not used in hydraulic fracking, a well completion process done after the well is drilled.”

So, right off the bat, we see the rank dishonesty at work in this latest stunt. In her desperate rush to malign fracking, Steingraber is apparently unaware that drilling and hydraulic fracturing are separate processes.

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