U.S. Oil Industry | Record Exports and Worst Profits since 1999

Big Oil had a horrible Q2 quarter. So far in Q3, oil prices had averaged lower than in Q2, and refining margins are
much lower too. Exxon has the worst profit since 1999, and the industry cannot survive on current oil prices. “What
we’re seeing is that there’s just no place for the supermajors to hide”, Brian Youngberg, an analyst at Edward Jones
& Co. in St. Louis, said in an interview. “Oil prices, natural gas, refining, it all looks very bad right now.” (HERE)

Global Oil and Gas Exploration and Development | US + CAN in Free Fall

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The Baker Hughes International Rotary Rig Count is a monthly census of active drilling rigs exploring for or developing oil or natural gas outside North America (U.S. and Canada). The count does not include rigs drilling in Russia, the Caspian region, Iran, Sudan, Cuba, North Korea or onshore China. Iraq was excluded from the International Rotary Rig Count for the period September 1990 to May 2012. Syria is currently excluded from the International Rotary Rig Count as of February 2012 due to difficulty obtaining data as a result of continued civil unrest.

The international rig count for April 2016 was 946, down 39 from the 985 counted in March 2016 , and down 256 from the 1,202 counted in April 2015 . The international offshore rig count for April 2016 was 220, up 9 from the 211 counted in March 2016 , and down 80 from the 300 counted in April 2015 .

The average U.S. rig count for April 2016 was 437, down 41 from the 478 counted in March 2016 , and down 539 from the 976 counted in April 2015. In late May only 404 rigs were left in operation in the U.S.. The average Canadian rig count for April 2016 was 41, down 47 from the 88 counted in March 2016 , and down 49 from the 90 counted in April 2015 . The worldwide rig count for April 2016 was 1,424, down 127 from the 1,551 counted in March 2016 , and down 844 from the 2,268 counted in April 2015 .

Is the Crude Oil Rally Doomed?

Frank Holmes - U.S. Global Investors (May 8, 2015) - This week, West Texas Intermediate (WTI) crude oil prices reached a 2015 high, rising above $60 before cooling to just below that. This marks the eighth straight week of gains. Investment banking advisory firm Evercore makes the case that the recent oil recovery is closely following the average trajectory of six previous cycles between 1986 and 2009. Although no one can predict the future with full certainty, this is indeed constructive for prices as well as the industry.

Because oil remains in oversupply, the recent rally owes a lot to currency moves. The U.S. dollar, which has weighed heavily on commodities for around nine months, declined to its lowest point since mid-January. We might be seeing a dollar reset, which should finally give oil—not to mention gold, copper and other important commodities—much-needed breathing room.

The oil rig count continued to drop in April and is now at a five-year low. According to Baker Hughes, 976 rigs were still operating at the end of the month, down 11 percent from 1,100 in March and 47 percent from 1,835 in April 2014. Eleven closed this week alone. This spectacular plunge has had the obvious effect of curbing output and helping oil begin its recovery from a low of $44 per barrel in January. Production appears to have peaked in mid-March at 9.42 million barrels per day and is now showing signs of rolling over. 

A price reversal historically has occurred between six and nine months following a drop in the rig count. The number of rigs operating peaked in October and oil started to bottom in January.

Baker Hughes Oil rig count plunges to the lowest level since October 2010

The Saudis sent the market into a freefall in November when they decided to defend their market share
instead of propping up prices, and they show no sign of changing course.

The U.S. has almost 500 million barrels of crude oil in storage. That's by far the most oil in storage since record-keeping began in 1982.
Supplies have grown because of surging domestic production and restrictions on most crude exports.

"Brent Crude Oil price has most likely bottomed out!"
thinks Tiho of The Short Side Of Long

A sideways consolidation into late June is now likely.
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