U.S. oil output from seven major shale formations is set to rise by about 38,000 barrels per day (BPD). This is set in July to about 7.8 million BPD. The highest since November, the U.S. Energy Information Administration said in a monthly forecast on Monday.

The biggest increase is set to come from the Permian. They are the top-producing basin in the country. The output will rise by 56,000 bpd to about 4.66 million bpd, the highest since March 2020.

The forecast increase in total output was attributable to the Permian and Appalachia basins. There are expectations for the other five basins to decline or remain flat.

Expectations are for it to register declines of 4,000 BPD. The Eagle Ford basin in South Texas and the Bakken basin in North Dakota and Montana.

Output in the Bakken will be sliding to about 1.1 million BPD, the lowest since July 2020.

U.S. producers have increased drilling activity as oil prices have rebounded to about $70 a barrel.

Natural gas production from the major shale basins will be increasing for the first time in four months. This is according to EIA’s drilling productivity report going back to 2007.

Total gas output will increase less than 0.1 billion cubic feet per day (bcfd) to 84.3 bcfd in July. That compares with a monthly record high of 86.6 bcfd in December 2019.

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Source: Reuters

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Growing demand in Asia means that the age of oil isn’t over yet, although consumption in developed western economies has trended lower over the past decade, according to Karin Kneissl, a newly appointed director on the board of Russia’s oil giant Rosneft.

“I’ve always underlined that it’s the East that plays the decisive role, not the West. And the energy market is more dynamically developing in the East. And you shouldn’t also discount the African continent,” said Kneissl, who was Austria’s foreign minister between 2017 and 2019.

Continued growth in oil demand in Asia, due to increased economic prosperity and rising population, will shape the global trend in oil demand, Kneissl said at the St. Petersburg International Economic Forum, as quoted by Sputnik.

According to the new independent board member of Russia’s largest oil company, the current global push toward green energy and the stigmatization of fossil fuels and fossil fuel funding could result in a new supercycle for oil.

“Any type of energy has its implications for the environment. But political persecution of a certain industry leads to reduced investments. There will be a freeze of production, leading to the deficit. This marks the beginning of a new supercycle,” said Kneissl, as carried by Sputnik.

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Source: Oil Price

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Oil demand is recovering faster than previously expected, and unless OPEC+ puts additional barrels on the market on top of the plans to restore 2 million barrels per day (bpd) by July, oil prices will be heading higher as the gap will widen, the Executive Director of the International Energy Agency, Fatih Birol, told Bloomberg Television in an interview on Tuesday.

According to Birol, global oil demand could return to the pre-crisis levels of 2019 as soon as in a year’s time.

“Demand in one year or so may well come back to the levels of before the crisis,” Birol told Bloomberg, noting the strong demand in the United States, Europe, and China.

This most recent proclamation regarding oil demand is in stark contrast to its forecast three months ago, when the IEA said in its annual Oil 2021 report with projections through 2026 that global oil demand would take until 2023 to return to the pre-pandemic levels of 100 million bpd. Back then, the Paris-based agency warned that COVID-19 would change parts of consumer behavior forever, with global gasoline demand likely past its peak already.

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Source: Oil Price

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A number of peculiar things have happened in the Middle East in the past few weeks involving the U.S., Saudi Arabia, and the UAE, all with some sort of focus on Iran. To begin with, at the end of April, the U.S’s designated main man in Saudi Arabia – Crown Prince Mohammed bin Salman – stated very publically that he seeks “a good and special relationship with Iran…We do not want Iran’s situation to be difficult, on the contrary, we want Iran to grow… and to push the region and the world towards prosperity.”

Such sentiments are in direct contrast to what might be expected from the effective ruler of Saudi Arabia, the historical archenemy of which is Iran. Bin Salman has previously launched numerous tirades against Iran accusing it of being the prime mover of instability and terrorism across the region. Stranger still, though, is the fact that these comments followed a secret meeting in Baghdad between senior figures from the Saudi and Iranian regimes, brokered by Iraq Prime Minister, Mustafa al-Kadhimi. These talks were subsequently confirmed by an Iraqi government official through various news services, although neither Riyadh nor Tehran formally acknowledged them.

The positive comments towards Iran from bin Salman came at around the same time as Saudi Arabia’s flagship oil and gas company, Aramco, let it be known that it is in the process of broadening and deepening its relationship with China, which is not only Iran’s chief sponsor via the 25-year deal signed back in 2019 but also the country most intent on replacing the U.S. as the key superpower in the Middle East.

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Source: Oil Price

For years, people are searching for potentially rewarding oil and gas stocks. The ongoing energy crisis has pretty much felt like dumpster diving. The energy sector has been deeply out of favor over the past few years. Take note that the Covid-19 pandemic only serves to make an already bad situation much worse.

The worst appears to be in the rearview mirror as the energy sector continues to stage an impressive rebound. This is as the global economy recovers from the ravages of the pandemic.

The energy sector is just coming off a bumper earnings season whereby it posted the biggest earnings beat of all 11 sectors of the U.S. economy.

With impressive bottom-line growth, many top energy names are returning more capital to shareholders in the form of share buybacks and dividends. Companies usually repurchase shares when they believe they are undervalued, a big positive for oil and gas bulls.

Meanwhile, Crude oil futures have rallied to their highest finish in months, with WTI price climbing above $65 for the first time in two months after OPEC+ stuck with plans to gradually ease production curbs, signaling confidence in the demand outlook.

With summertime fast approaching, here are 3 energy picks, with two being natural gas/LNG stocks bearing in mind that natural gas demand in the United States peaks in the wintertime, with a lesser peak during the summer.

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Source: Oil Price

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