Thursday, April 18, 2019.
Three movements, in total.
Nothing spectacular but movements nonetheless.
Two UP trades, simple and easy to manage and one DOWN trade in between,
harder and more tricky, as is often the case when US Oil moves lower.
Details on the next pages.
Here are the actual movements.
Indicator #1 gives us each phase clearly, with the mention of the DOWN move,
its upswing, as is often the case, and the DOWN move, continuing.
The market then retraces back up, to its highest point seen earlier.
Indicator #2 shows us where the market had more momentum.
Finally, Indicator #3, Volume, shows how we never reached a volume above the critical threshold, seen here as the blue horizontal line.
US Crude Oil market analysis
by Francois Normandeau.
Thursday, April 18, 2019..pdf
Wednesday, April 17, 2019.
Today, Wednesday, news affecting the US oil market.
And yet, many hours before, there was a signal for a short trade.
Trade lasted most of the day.
From 64.40 to 63.70, or 70 pips.
Indicator #1, with the same levels and requirements for entry, which is:
A crossover from positive to negative territory.
The indicator line stayed in negative territory the entire day, and the entry in negative territory was many hours
before the news affecting the oil market.
Well, the SEC will never totally monitor and regulate the oil market, as it is a worldwide market.
Also, we see many times each month, the market moving in a definite direction well before the news,
as if the major players are well aware of what the news will be.
How can this be?
I do not have definitive answers but I can only confirm that insider knowledge is a certainty in the US oil market,
and therefore, this leads to insider trading.
Indicator #2 confirms the sell trade.
The entire day, the indicator line remains well inside the sell zone, below the red horizontal line, on the indicator window.
Furthermore, the trailing line on Indicator #2 highlights each down phase of this sell trade.
On most days, the market will not travel in a straight line.
The process of price discovery will always appear complicated, as price moves away from your entry, and comes back,
sometimes going in the opposite way, incurring losses and forcing the market participants to lose money.
There is no secret recipe or failsafe solution.
Each trade is risky and can only be taken as a play on probabilities.
Market analysis by Francois Normandeau.
Wednesday, April 17, 2019..pdf
These interactive presentations contain the latest oil & gas production data, from all 10,287 horizontal wells that started production in Colorado and Wyoming since 2009/2010, through January.
Originally I planned to do a post on the latest data for North Dakota (through February). Unfortunately, not all data that we rely on has been published yet, which is why I decided to do a post on Colorado & Wyoming instead. The update on North Dakota should follow early next week.
Visit ShaleProfile blog to explore the full interactive dashboards
Oil production in these 2 states started the year at record production (after revisions), at over 620 thousand bo/d. Both states contributed to growth in the past 12 months; Colorado with ~20%, and Wyoming even at almost 50% (although from a lower base). Production in the Powder River Basin has been mostly responsible for the latter, and is now over 120 thousand bo/d.
As is shown in the bottom plot on the ‘Well quality’ tab, well productivity made a big jump in 2017, but has not further increased in 2018, based on preliminary data.
The big news in the past week was that Chevron bought Anadarko for 32 billion dollar, which is the biggest producer in this area (see “Top operators”). With ~100 thousand bo/d production here, this area represents about 40% of its total oil production from horizontal wells in the US, with almost all of it coming out of Weld County (CO).
The following dashboard, from our analytics service (Professional), shows the location and performance of the ~1,300 horizontal wells that Anadarko currently operates in Weld County, which came online between 2013 and 2017 (click the image to see the high-resolution version).
In the top-right corner you will find the performance of these wells, by year, in the familiar flow-rate versus cumulative production plot. The 2014 vintage may end up with the best average recovery, as its newer wells appear to decline more rapidly. This area is very gassy, as you can see on the map, and in the gas oil ratio plot on the bottom-right.
The ‘Advanced Insights’ presentation is displayed below:
In this “Ultimate Recovery” graph, the average cumulative production is plotted against the production rate. Wells are grouped by the quarter in which production started.
Also here you can see that well performance appears to have peaked (at least temporarily) in early 2017, with newer wells on a slightly lower ultimate recovery trajectory.
I performed a comparison of well productivity in the DJ Basin versus the Powder River Basin. The result is presented here in the following screenshot (again from our analytics service), where I’ve selected all the wells in these 2 areas, that began production between 2015 and 2017.
In both basins did well productivity increase over these 3 years, but the wells in the Powder River Basin are clearly on a path to a larger oil recovery. More gas is recovered in the DJ Basin.
We were again happy to find the WSJ using our subscription service to get insights into tight oil & gas production trends: Frackers, Chasing Fast Oil Output, Are on a Treadmill.
As mentioned, we should have a new post on North Dakota early next week.
Production data is subject to revisions.
For this presentation, I used data gathered from the following sources:
Colorado Oil & Gas Conservation Commission
Wyoming Oil & Gas Conservation Commission
Visit our blog to read the full post and use the interactive dashboards to gain more insight http://bit.ly/2G9Hf9S
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