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U.S. Oil Rig

US Oil Rig Count Jumps Along With Crude Prices

The number of active drilling rigs in the United States last week rose by 7, bringing the total to 586 as oil prices remain relatively strong despite the fresh wave of Covid-19 cases brought by the new variant of the coronavirus. Let’s talk more about the US oil rig here.

Last week’s count compared with a rig count rise of 3 for the previous week, which brought the total to 579.

Baker Hughes reported the total active rig figure was 238 rigs higher than the rig count this time last year when the oil industry was just beginning to recover from the worst blows of the pandemic. Yet it was still far from the rig count numbers from before the pandemic.

Oil production in the U.S. last week stood at 11.6 million bpd, according to the Energy Information Administration. That was down from 11.7 million bpd for the previous week but up from 11 million bpd a year ago. The four-week average production was estimated at 11.65 million bpd.

In 2020, the U.S. oil industry saw the biggest drop in production on record, with output slumping from 12.2 million bpd in 2019 to an average of 11.3 million bpd, according to the EIA.

Following the crash in oil prices in March 2020 due to the pandemic, U.S. operators curtailed production and brought fewer wells online. By May 2020, American crude oil production had slumped to a monthly average 10 million bpd from a peak of 12.8 million bpd in January 2020.

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Source: Oil Price

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Oil and Natural Gas Employment

Texas Oil and Natural Gas Employment Posts 6th Consecutive Month of Growth

Texas oil and natural gas job growth grew by 15.4% this November compared to last November. It brought 2,400 upstream jobs last month. This is the data from the Current Employment Statistics report from the Bureau of Labor Statistics show.

What happened in the past 6 months?

  • Employment gains in the Texas oil and natural gas industry have exceeded 2,000 jobs every month.
  • There is an average monthly gain being 2,633, Texas Workforce Commission data show.

With 185,800 upstream jobs in November, jobs in the industry were up by 24,800, or 15.4%, from last November. Since the low employment point in September 2020, growth months have outnumbered decline months 12 to 2, with the industry adding 28,300 Texas upstream jobs.

“The Texas economy continues to rebound and the upstream sector’s addition of two thousand-plus jobs every month for the past six months is a prime example of how critical this industry is to the state’s recovery,” Todd Staples, president of the Texas Oil and Gas Association, said in a statement. “These jobs pay among the highest wages in Texas and the activity of this industry supports communities across the state, whether you live in the oil patch or not. These positive job numbers are good news for all Texans and Americans.”

The upstream sector includes oil and natural gas extraction as well as the industry sectors of refining, petrochemicals, fuels wholesaling, oilfield equipment manufacturing, pipelines, and gas utilities, which support hundreds of thousands of additional jobs in Texas. It also includes some types of mining.

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Source: in Forney

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Oil Prices Are Rising

Oil Prices Are Rising. Look For Bigger Returns in 2022

The average energy stock is on track to gain more than 50% this year, a stunning result for a sector that has lagged far behind the market for most of the past decade. Prospects are looking good for 2022, too, particularly in oil. Oil prices are indeed rising and will continue to rise.

International crude prices have risen 43% in 2021, and U.S. crude is up 46%, climbing out of the hole created during the worst of Covid-19.

But the latest oil bonanza is different from many of the booms and busts that have characterized a century of wildcatting. Companies are bringing production back slowly, both in the States and abroad, as investors demand better returns. Credit research firm Fitch Solutions doesn’t expect oil and gas capital expenditure to return to pre-pandemic levels until 2025.

Sending Back to Investors

So what will energy companies do with all of that money they’re making from higher oil prices if they don’t spend it on drilling wells? They’re going to send much more of it back to investors.

Morgan Stanley analyst Devin McDermott expects oil companies to offer a 6% buyback and dividend yield next year, with the big integrated names offering an 8% yield. He expects the stocks to outperform the broad market, given that they’re trading at a 65% discount to the S&P 500 index, twice their historical discount.

Several other analysts are bullish, too. RBC Capital Markets’ Michael Tran sees Brent crude averaging $79.50 a barrel next year and $86.50 in 2023.

Two big questions are still looming. The first is whether Covid will wane in 2022, leading to a full travel rebound. The other is whether oil companies and the Organization of Petroleum Exporting Countries will really stick to their plans to increase capital expenditure slowly.

Historically, boom cycles end when producers get greedy, plowing money into projects just as prices start to peak. In those cases, the next step can be a wave of bankruptcies. Most analysts aren’t betting on that cycle to repeat.

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Source: BARRON’S

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Demand for Oil

Demand for Oil, Gas to Remain Robust for Years, Energy Leaders Say

The demand for the products they make will remain robust for years to come. Moreover, demand will continue even as the world attempts to transition to lower-carbon energy sources. This is what the leaders of the world’s largest oil companies said on Monday.

At the World Petroleum Congress in Houston, they said that while the world needs to address the risks posed by climate change, global economies cannot function without fossil fuels. The chief executives of Exxon Mobil Corp., Chevron Corp., and Saudi Arabian Oil Co., speaking.

“Oil and gas continue to play a central role in meeting the world’s energy needs, and we play an essential role in delivering them in a lower carbon way,” Chevron CEO Mike Wirth said Monday. “Our products make the world run.”

The conference, one of the industry’s largest, is convening this week as the oil and gas business remains mired in uncertainty because of the pandemic.

Attendees of the World Petroleum Congress in Houston expressed confidence in their industry. This is even as the new Covid-19 variant added to uncertainty about the global economy.

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Source: The Wall Street Journal

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gas and oil industry

Gas and Oil Industry | Where Will The Oil Industry Spend Its Money In 2022?

Gas and oil industry companies have recovered from the 2020 crisis with bumper cash flows in 2021. For example, they are looking towards 2022 with more cash on hand. This is to increase shareholder distributions and prepare for the energy transition.

In 2022, the oil and gas industry could be up for a transformational year. This is in terms of both preparedness to continue the decarbonization drive. In addition, , it involves rewarding the shareholders of the sector. Moreover, they have had poor returns since the previous crisis in 2015-2016.

Strategic choices in investment in clean energy solutions, responding to the pressure to decarbonize, and portfolio repositioning will be next year’s key themes for all oil and gas companies—from the supermajors and the national oil companies (NOCs) to the U.S. independent oil and gas producers, Tom Ellacott, Senior Vice President, Corporate Research, at Wood Mackenzie, wrote in a recent report with an outlook of what to expect in 2022.

Massive cash flows, in many cases at record levels, will likely be used for both increasing shareholder payouts and repositioning for the energy transition, according to WoodMac’s vice president, corporate analysis, David Clark.

Oil firms can no longer turn a blind eye to the investor and societal pressure to cut emissions and actively participate in the decarbonization of their own operations and of other energy-intensive industries.

“It’s clear that sitting on the decarbonization sidelines isn’t an option. As stakeholder pressure intensifies, it’s time for big strategic decisions. However, these choices will set trajectories for the energy transition that will only gather momentum. Wood Mackenzie expects an exciting 12 months,” Ellacott said.

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Source: Oil Price

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Oil companies profits

Oil Companies Profits Soared to $174bn This Year as US Gas Prices Rose

The largest oil and gas companies made a combined $174bn in profits in the first nine months of the year as gasoline prices climbed in the US, according to a new report.

The bumper profit totals, provided exclusively to the Guardian, show that in the third quarter of 2021 alone, 24 top oil and gas companies made more than $74bn in net income. From January to September, the net income of the group, which includes Exxon, Chevron, Shell, and BP, was $174bn.

Exxon alone posted a net income of $6.75bn in the third quarter, its highest profit since 2017, and has seen its revenue jump by 60% on the same period last year. The company credited the rising cost of oil for bolstering these profits, as did BP, which made $3.3bn in third-quarter profit. “Rising commodity prices certainly helped,” Bernard Looney, chief executive of BP, told investors at the latest earnings report.

Gasoline prices have hit a seven-year high in the US due to the rising cost of oil, with Americans now paying about $3.40 for a gallon of fuel compared with around $2.10 a year ago.

The Biden administration has warned the price hikes are hurting low-income people, even as it attempts to implement a climate agenda that would see America move away from fossil fuels, and has released 50m barrels of oil from the national strategic reserve to help dampen costs.

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Source: The Guardian

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saudis raise oil orices

Saudis Raise Oil Prices for Asia, U.S. Despite Omicron’s Spread

Saudis raise oil prices for buyers in Asia and the U.S. This signaling sees demand staying strong despite the spread of the omicron variant of the coronavirus.

The move comes days after the Organization of Petroleum Exporting Countries and its allies. It is a 23-nation group led by Saudi Arabia and Russia — surprised traders with a decision to boost crude output.

Saudi Aramco increased January’s prices for all crude grades that will be shipped to Asia and to the U.S., according to a statement from the state producer. The company raised its key Arab Light grade for customers in Asia by 60 cents from December to $3.30 a barrel above a benchmark. That’s the most expensive it’s been since February 2020, around when the pandemic first struck.

Prices for the U.S. will go up by between 40 and 60 cents.

OPEC+ opted on Thursday to proceed with a production increase for next month, even as new Covid-19 cases threaten to sap demand and with the alliance predicting the oil market will flip from a supply deficit to a surplus in early 2022.

 

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Source: Bloomberg

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new mexico gas and oil industry

Oil and Gas ‘the future’ of Carlsbad and New Mexico

Oil and gas rose to prominence in New Mexico. It started when energy companies were able to tap into massive reservoirs of crude oil. This also includes natural gas thousands of feet beneath the Permian Basin and cities like Carlsbad.

The industry quickly began generating record-breaking revenue from the rural southeast corner of the state. This provides funds for schools and other public services across the state.

Last year, data from the New Mexico Oil and Gas Association (NMOGA) showed the industry improvement. It contributed $2.8 billion to the state’s budget. Even as the COVID-19 pandemic reduced fuel demand and production slowed.

2020’s revenue marked a slight dip from the year before, records show, as oil and gas produced about $3.1 billion for New Mexico in 2019.

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Source: Carlsbad Current-Argus

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oil prices projection

Oil Prices Projection To Hit $125 In 2022

Crude oil could soar to $125 per barrel next year and $150 in 2023. This is due to OPEC’s limited capacity to boost production, JP Morgan analysts said in a new report. This is just some of the oil prices projection.

“OPEC+ is not immune to the impacts of underinvestment…. We estimate ‘true’ OPEC spare capacity in 2022 will be about 2 million barrels per day (43%) below consensus estimates of 4.8 million,” the team, led by Christyan Malek, wrote, as quoted by TheStreet.

“While we believe a three-month pause to 400,000 barrel-per-day monthly increments is needed during the first half of 2022 to balance the market (and potentially a cut pending impact of new COVID variants), the group will struggle to deliver monthly growth of more than 250,000 barrels per day once reinstated,” the analysts also said.

According to a CNN report, this rise in the price of crude could push U.S. gasoline prices to over $5.

“They don’t have the barrels. It’s a mirage,” Malek, head of JP Morgan’s EMEA oil and gas research, told the news outlet. “Look back at history. When we’re in a scenario where the market goes, ‘Oh, s***, we don’t have spare capacity,’ that’s where you see overshoots,” he also said.

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Source: Oil Price

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Oil And Gas Extraction

An Undisputable Truth: The World Still Needs Oil And Gas

The reality of the world’s energy needs and consumption shows that oil and gas extraction isn’t going anywhere. It will be part of the global energy mix for decades to come. The world will continue to need oil even if it somehow manages to put itself on track. Even it achieve net-zero emissions by 2050, we still need oil.

Renewable energy could replace more and more fossil fuels in power generation and transportation, but these are not the only industries using oil and gas. From medicines to cosmetics, clothing, and technology, the world will still need oil. The only future in which the world will not need oil is if all consumers, globally, suddenly give up all the comforts of modern life they are so used to.

As long as there is demand for oil and products originally derived from crude oil, there will always be someone to supply it. If the oil and gas industry were to ‘keep it in the ground’ as many climate activists want, energy shortages would be inevitable. Just look at what has happened with the natural gas crunch in recent months – sky-high prices for a commodity that is still vital for keeping the lights and heating on.

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Source: OilPrice.com

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