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This Week’s Market Buzz


• Oil prices turned positive again after government data showed a surprise drop in gasoline in storage that offset a huge rise in U.S. crude stockpiles. International Brent crude futures were trading at $55.54 per barrel up 49 cents, or 0.9 percent, from their previous close. U.S. West Texas Intermediate crude was at $52.55 a barrel, up 38 cents, or 0.7 percent. U.S. commercial crude inventories rose by 13.8 million barrels in the week through Feb. 3 to 508.6 million. That compared with analysts' expectations for a 2.5 million barrels increase.

• A judge has delayed ruling on whether Jackson County, Wis., landowners can stop a proposed frac sand operation on the grounds it would be a nuisance, according to the Lacrosse Tribune. Terracor Resources received conditional-use permits for a combined mine, processing and loading facility on about 945 acres between Black River Falls and Alma Center that could produce about 3 million tpy of sand. The Canadian company has since been purchased out of bankruptcy by OmniTRAX, a Colorado shipping logistics firm. Three families sued to block the project, which has yet to break ground or to receive state and federal permits to fill wetlands under the proposed rail terminal.

• While 2017 may not be a stellar year for oilfield services in general, the sand proppant those companies use in hydraulic fracturing may enjoy its best time yet, analysts at Raymond James said in a January note to investors. With crude oil prices appearing stable at more than $50 per barrel, exploration and production (E&P) companies are gaining confidence and spending more money on capital expenditures. Increasingly, analysts and investors are bullish on the future prospects for proppant as rig counts climb and E&P companies pour ever more sand downhole to accelerate production. This phenomenon has been the single biggest driver of improved well production in the United States. “We expect to see U.S. proppant demand this year set all-time highs despite fewer than half the rigs running, relative to the previous 2014 sand demand peak,” analysts said. “Furthermore, with our expectations for an increasing U.S. rig count over the next few years, U.S. sand demand in 2018 should be at least 150 percent higher than 2016 – up to a whopping 80 million tons.”