From the depths of despair in the first quarter when WTI crude collapsed to $26.21/bbl on February 11 and Henry Hub gas crashed to $1.64/MMbtu on March 3, we are back, sort of. Growth in the rig count has been nothing short of spectacular, up 249 or 62% from the low point in late May. Crude oil, natural gas and NGL prices have all more than doubled since the lows of Q1. Yes, 2016 has been quite a roller coaster ride for energy markets. Here in the RBN blogosphere, we’ve documented this saga every step of the way. Now at the end of the year, as we’ve done for the past five years, it is time to look back. Back over the past 12 months––to see which blogs have generated the most interest from you, our readers. We track the hit rate for each of our daily blogs, and the number of hits tells you a lot about what is going on in energy markets. So once again we look into the rearview mirror at the top blogs of 2016 based on numbers of website hits in “The 2016 Hydrocarbon Top 10 RBN Blogs”.
What we really saw in 2016 was an industry adapting to a world of low prices. Granted, prices now are double what they were in Q1, and that has certainly improved drilling economics for all producers. But today’s prices are still only half what they were in 2014, and yet exploration and production firms (E&Ps) are adding rigs at a weekly rate faster than the heydays of 2011-12. The real driver here is that E&Ps––at least those operating in a few prolific basins––have figured out how to make drilling and completion economics work at these prices, and in some cases, work quite well. Of course, everything is not all rosy. There was a lot of infrastructure built in anticipation of big growth in production volumes that today is not in the cards. There were a lot of companies that built their balance sheets in anticipation of much higher prices that did not materialize, and today these companies are either bankrupt or substantially restructured. Let’s see what the top blogs of 2016 can tell us about how these events impacted the market, and what we might expect in the coming year.
Here are the top 10 blogs of 2016 (in reverse order, by date posted):
#10 – 7/5/2016 – Natural Gas: What's Going On? - Supply/Demand Factors Driving Natural Gas Price Volatility
If you like volatile gas markets, 2016 was the year for you. The average Henry Hub gas price was $1.98/MMbtu in Q1, averaged $3.15/MMbtu in Q4 and peaked at $3.93/MMbtu in the last week of the year. In this blog we examined the transition gas markets when through during the mid-year timeframe from a massive oversupply to an increasingly balanced market with slightly lower supply and growing exports from Cheniere Energy’s Sabine Pass LNG terminal plus increasing pipeline exports to Mexico.