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This Week’s Market Buzz

• As much as 10 percent of U.S. fracking work could be delayed after Hurricane Harvey ripped through south Texas, Raymond James analysts said. More than half of the rigs running in the Eagle Ford shale – the only major U.S. shale formation affected by Harvey – suspended drilling because of the storm, according to the firm. “Given that much of oil and gas activity occurs in areas only accessible via dirt roads, the heavy rainfall usually makes the movement of trucks and supplies much more difficult,” Raymond James' Marshall Adkins wrote. “The trucking and rail of sand, chemicals and personnel to the well site will all take more time given the likely nasty condition of many Eagle Ford access roads."

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This Week’s Market Buzz

• Demand for raw frac sand is forecast to increase more than 4 percent per year to nearly 100 billion lb. in 2021, according to “Proppants Market in North America,” a new study from The Freedonia Group, a Cleveland-based industry research firm. In value terms, raw frac sand is expected to grow 10 percent per year to more than $3 billion in 2021, reflecting substantial gains in average prices as well as volume growth. Healthy growth is forecast for all types of raw frac sand, although both Northern White and Brady sand will see competition from new mines coming online in West Texas. Growth will be driven by robust gains for this other raw sand, which is expected to show increases of 12 percent per year through 2021. While both Canada and the United States will see demand gains through 2021, the United States is by far the larger user of the material. According to analyst Dan Debelius, "In 2016, the United States accounted for 88 percent of raw frac sand demand."

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This Week’s Market Buzz

• A recent note released by Credit Suisse outlines the current development in frac sand supply and demand. Total U.S. demand for frac sand was highest in 2014, when the country consumed 56 million tons. Demand fell off during the downturn, and in 2015 and 2016 the U.S. consumed 48 and 34 million tons of sand, respectively. Increased activity has meant demand for sand is likely to break records in 2017, with 73 million tons of demand projected. More and more wells are being completed, according to the EIA. In 2016, an average of 590 wells were completed each month. In 2017, completions have been growing steadily, and 872 wells were completed in June.

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This Week’s Market Buzz

• Oil prices have slipped recently, pulling back from recent gains as exports from key OPEC producers rose and despite news of lower crude shipments from Saudi Arabia. The oil market has been in consolidation mode after a sharp rally between mid-June and late July pushed U.S. crude futures above $50 a barrel for the first time in several weeks. The price slipped back below $50 and has traded around that number as world supply has been slow to draw down. "It's just unable to break above $50," said Kyle Cooper, consultant for ION Energy in Houston. "It's boring, but there's a fundamental justification for prices being stuck between $45 and $55 without a significant geopolitical event."

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This Week’s Market Buzz

• Recent oil price gains have eased after government data indicated that U.S. crude stocks have plunged more than expected as imports have declined and drillers pumped more product. Crude inventories fell by 7.6 million barrels in the last week, compared with analysts' expectations for a decrease of 2.9 million barrels. Brent crude, the global benchmark, was down 9 cents, or 1 percent, at $47.43 a barrel. U.S. crude gained 17 cents to $45.21.

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