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Oil Prices up to date

Oil Prices on the March Again in Tight Market; U.S. Crude at 7-yr high

Oil prices up to date rose on Monday, extending pre-weekend gains, with U.S. crude hitting a seven-year high as global supply remained tight amid strong demand worldwide as economies recover from coronavirus pandemic-induced slumps.

Brent crude futures settled 0.54% higher at $85.99 per barrel, following on from last Friday’s 1.1% gain. The contract was near a three-year high of $86.10, hit last Thursday.

U.S. West Texas Intermediate (WTI) crude futures settled flat at $83.76 per barrel, after climbing 1.5% on Friday. It touched its highest since October 2014 — $84.28 — earlier in the session.

“Bullish sentiment continues to support oil prices as global supply remains tight at a time when demand is recovering from the pandemic,” said Toshitaka Tazawa, an analyst at Fujitomi Securities.

“But immediate gains for the WTI’s nearest-term contract may be limited given steepening backwardation,” Tazawa said.

WTI futures contracts are currently in steep backwardation, meaning later-dated contracts trade are at a lower price than the current contract. Normally later months trade at a higher price, reflecting the costs of storing oil.

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Source: CNBC

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Oil and Gas West Virginia

New report highlights importance of oil and gas to West Virginia economy

West Virginia increased natural gas and oil production 14% and 10%, respectively. This is from 2019-2020, according to a new report from The Gas and Oil Association of West Virginia.

Producers operating in the state have contributed $3 billion in state severance and property tax revenue. This is from a 2008 report.

“The natural gas and oil industry continues to be an economic cornerstone in West Virginia. The potential for further growth is enormous,” said Charlie Burd, GO-WV executive director. “Natural gas is the state’s top-paying sector, supporting more than 82,000 jobs. Contributing roughly $5.2 billion in wages each year. Clean, abundant natural gas will continue to drive economic growth. Opportunities for generations of West Virginians.”

Additionally, the report notes natural gas users have saved $1.1 trillion since 2008. Users include families, small businesses, and manufacturers. This is due to shale production increases in the Appalachian Basin. It helped to lower costs across the board.

The report emphasizes the fact that the industry must continue to leverage the state’s abundance of natural resources. This is for long-term growth and encourages its use locally to invest and create additional good-paying jobs.

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Source: WVNews

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crude oil us price

Crude Oil Price Remain High as Gas Prices Continue To Increase

The average cost of a gallon of gas continues to increase as crude oil US price remain high.

Triple-A Reports that the statewide average cost of a gallon of gas went up eight cents over the last seven days to $3.52 a gallon.  That is also a 19 cent increase from last month at this time.  The national average went up five cents to $3.32 a gallon.  The main reason for the surge in prices is due to the price of crude oil, which has consistently stayed at over $80 a barrel.  By comparison, the cost for crude oil in August was $60 a barrel.  Comparing prices to last year, it’s costing consumers roughly $17 extra dollars to fill up your tank.

Indiana County’s average is $3.47 a gallon, and much like last week, it is the second-lowest average in the region.  Westmoreland County’s average of $3.45 a gallon is the lowest, followed by Indiana, then Armstrong at $3.48 a gallon.  Cambria county’s average follows at $3.50 a gallon, then Clearfield at $3.53 a gallon, then Jefferson at $3.55 a gallon.

Westmoreland County also has the lowest average in the state right now.  The highest average is in Warren at $3.65 a gallon.

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Source: WCCS

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saudis raise oil orices

This Key Indicator Is Pointing To Higher Oil Prices

Wild spikes in the prompt time spread for oil product futures in the United States. This suggested that crude oil supply is set to tighten further, adding upward pressure to prices, Bloomberg has reported. Basically, high price of oil is expected to continue moving.

According to the report, the time spread, which is the price difference between oil derivative futures for immediate delivery and those for delivery during the next month, has logged intraday differences of as much as $0.54.

It normally moves by just a few cents a day.

According to some observers, this means that the government may soon start releasing oil from its strategic reserve—something there have been reports about as Washington struggles to keep prices at the pump under control.

“Cushing is the only place where there’s surplus crude and that’s going to start being pulled quickly,” according to hedge fund manager Gary Ross, who spoke to Bloomberg. “That sets the stage for an explosive move on WTI structure. It has doubled in the last two days and it could double again quite quickly.”

Some are already talking about three-digit prices for oil before this year’s end.

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Source: Oil Price

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Crude Oil Price History

Crude Oil Price History Pushed to Seven-Year High | OPEC Opts Against Big Output Boost

OPEC and a Russia-led group of oil producers agreed to continue increasing production in measured steps, delegates said Monday, deciding against opening the taps more widely and driving U.S. crude prices to their highest levels since 2014. Crude oil price history is indeed at an all-time high.

Short insights: We all know where do crude oil come from or what crude oil is used for. Crude oil is a naturally occurring petroleum product composed of hydrocarbon deposits and other organic materials.

To continue, West Texas Intermediate, the main U.S. oil price, rose 2.3% to close at $77.62 a barrel. Brent, the international gauge, added 2.5% to end at $81.26, its highest settling price in three years. Climbing oil prices recently had analysts and economists expecting OPEC and its Russia-led allies to lift production more significantly.

Instead, the Organization of the Petroleum Exporting Countries and Russia said the group, which calls itself OPEC+, would lift its collective output by 400,000 barrels a day in monthly installments, part of a previously agreed plan to return output to pre-Covid-19 levels.

In the U.S., oil drilling and output have been ticking higher, though they are yet to return to pre-pandemic levels. The last time that domestic crude prices were so high, there were roughly 1,100 more rigs drilling for oil than the 428 at work last week, according to oil-field-services firm Baker Hughes Inc.

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Source: THE WALL STREET JOURNAL

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Oil and Gas rigs

U.S. Drillers Add Oil and Gas Rigs for Fifth Week in a Row – Baker Hughes

U.S. energy firms this week added oil and natural gas rigs for a fifth week in a row as oil prices soared to their highest since 2014 prompting some drillers to return to the wellpad.

The combined oil and gas rig count, an early indicator of future output, rose five to 533 in the week to Oct. 8, its highest since April 2020, energy services firm Baker Hughes Co said in its closely followed report on Friday.

The total rig count was up 264 rigs, or 98%, over this time last year.

U.S. oil rigs rose five to 433 this week, also their since April 2020, while gas rigs were steady at 99 for a third week in a row.

U.S. crude futures rose to their highest since 2014 in intraday trade this week and were currently trading above $79 a barrel on Friday, buoyed by a global energy crunch that has helped natural gas prices to record highs and prompted China to demand increased coal production.

Amazingly those higher natural gas prices have not yet prompted drillers to start looking for more gas. U.S. gas prices rose to their highest since 2008 earlier this week, up over 120% so far this year, but the gas rig count was still lower than it was in July.

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Source: REUTERS

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Oil Demand and Supply

Oil Demand and Supply Changes: Oil Settles Up 1.5% – Hits Multi-year Highs on Surging Demand

What’s happening with the oil demand and supply? Oil prices jumped on Monday to the highest levels in years, fueled by rebounding global demand that has contributed to power and gas shortages in key economies like China.

Brent crude rose $1.26, or 1.5%, to settle at $83.65 a barrel. The session high was $84.60, its highest since October 2018.

U.S. West Texas Intermediate (WTI) crude gained $1.17, or 1.5%, to settle at $80.52, after touching its highest since late 2014 at $82.18.

The pace of economic recovery from the pandemic has supercharged energy demand at a time when oil output has slowed due to cutbacks from producing nations during the pandemic, focus on dividends by oil companies, and pressure on governments to transition to cleaner energy.

A U.S. administration official on Monday said the White House stands by its calls for oil-producing countries to “do more” and they are closely monitoring the cost of oil and gasoline.
The Organization of the Petroleum Exporting Countries and allies, together known as OPEC+, have held back from boosting supply even as prices have risen.

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SOURCE: REUTERS

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us-shale-gas

U.S. Shale Is Finally Ready To Drill

U.S. shale producers have behaved in an exemplary way in the past year. It wasn’t something the industry wanted to do. It was something it was forced to do by the pandemic and by its shareholders, who after years of waiting for windfalls put their foot down and demanded higher returns. But it just might be time for a change.

U.S. shale may now be useable to the price shocks. Even so, the pandemic-driven destruction of demand for crude must have hurt. On top of that pain, the large public shale producers had many unhappy shareholders to deal with. They dealt with them by cutting spending, slashing production, and focusing on cash flow generation.

They largely did it with some help from OPEC+, which cut an unprecedented 7.7 million bpd from its combined production, and some non-OPEC producers that stepped in to shoulder part of the burden. Since then, demand has recovered, and so have prices. All eyes have been on U.S. shale for months now, expecting drillers to start ramping up drilling in a major way. So far, the industry has defied expectations. But it seems this won’t continue for much longer.

U.S Crude Oil Production

U.S. crude oil production is set to rise by 800,000 bpd next year, the Financial Times reported this week. This is hardly surprising given that U.S. oil prices are around $70 per barrel now, making most shale wells profitable again, the report notes. But there is one interesting thing that is different this time. According to an IHS Markit analyst, it would be private independent drillers that will lead the charge this time.

As interesting as this forecast is, it is hardly surprising. Even before the pandemic struck, disgruntled shareholders were the talk of the town in shale oil.

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Source: Oil Price

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Oil Pipelines repurposing

Could Oil Pipelines Solve America’s Water Crisis?

Big oil could help tackle the water shortage in the western United States. Oil pipelines repurposing existing infrastructure to help transport clean water to the areas most in need. Innovations such as this highlight how oil and gas majors are relevant. This includes their infrastructure and knowledge. It will always be relevant even in a country continually pushing for decarbonization and renewables.

Severe weather events appear to be happening on a more regular basis. This hitting the same areas of the U.S. year after year with flooding and drought. It is not the only thing that the western United States needs to be concerned about. At present, Louisiana is facing severe water shortages. Groundwater levels in the state are decreasing more rapidly. Sadly, other areas across the country and underground aquifers are at an all-time low.

This is largely due to decades of heavy use, the lack of regulation in water use. This is by the industrial and the agricultural sectors, and little action by legislative bodies.

Environmental Concerns

In addition, following the devastating effects of Hurricane Ida, much of Louisiana has been left without power and clean water for weeks. This reflects the poor resilience of the existing utility infrastructure in the wake of a severe weather event, an issue that Louisiana has been facing continually over the last decade. This also adds to the existing scarcity issue, as a greater investment is needed to strengthen the West’s water system.

The reason for the current water crisis, following Ida, is largely down to the destruction of power lines needed to provide water systems with the electricity to pump groundwater and run treatment parts. While the state mandates that all water systems must have backup generators, this rule has been largely ignored, and those that do exist have failed due to ongoing power cuts following the storm.

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Source: Oil Price

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Oil Demand

Oil Demand Set To Grow Even After 2050, Energy Expert Says

Even after 2050, global oil demand is set to continue to rise. It is because renewables cannot entirely replace fossil fuels. Energy markets expert Anas Alhajji said during a recent energy conference hosted by Nigeria.

“The impact of climate change policies on oil demand is highly exaggerated. The impact is mostly on-demand growth, not on-demand itself,”

This is what Alhajji said during a keynote speech. This is at the event mainly focusing on the impact of the energy transition on oil-dependent economies. This was carried by Nigerian outlet Energy Frontier.

The world will need all energy sources even in three decades, the expert said. While technology will be a key enabler of the energy transition, it has its limits, Alhajji noted.

“African countries can reduce their carbon footprint by focusing on energy efficiency and the low hanging fruits, save oil & gas for exports or value-added industries and place solar and wind projects strategically.”

Many analysts and forecasters expect global demand to peak at some point in the 2030s, or even earlier.

Last year, even OPEC put a timeline to peak oil demand. OPEC said it expects global oil demand to exceed the pre-pandemic levels in 2022. In addition to that, they mentioned growing steadily until the late 2030s. It will begin to plateau in a major shift in its forecast that put a timeline to peak demand.

This year, the energy transition and the fight against climate change have become even more topical than during last year’s crisis. Analysts and forecasters are trying to understand and predict how the world’s still significant need for oil would reconcile with the net-zero targets that many countries have already set for 2050, or 2060 in China’s case.

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Source: Oil Price

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