Tag Archive for: crudeoil

Growing well productivity suggests that operators in the Permian are successfully implementing more advanced drilling & completion techniques

Permian production forecast growth driven by well productivity, pipeline capacity

In our latest Short-Term Energy Outlook (STEO), we forecast that crude oil production in the United States. It will grow to an average of 13.7 million barrels per day (b/d). The market for natural gas production will grow to an average of 114.3 billion cubic feet per day (Bcf/d) in 2025. Most of the forecast growth in oil and natural gas production comes from the Permian region of western Texas and eastern New Mexico. It is where we expect productivity gains, new and expanded infrastructure, and high crude oil prices will support rising production.

In order to better capture drilling activity in several onshore U.S. regions, our STEO now makes use of multiple drilling productivity metrics. The number of active rigs is the first in a sequence of metrics that affects regional production; currently more rigs are active in the Permian region than in the rest of the Lower 48 states combined. We also capture and report the number of new wells that those rigs have drilled each month.

Drilled but uncompleted wells (DUCs) have been drilled but have not yet undergone well completion activities to start producing hydrocarbons. The well completion process involves casing, cementing, perforating, hydraulic fracturing, and other procedures required to produce crude oil or natural gas. Ultimately, when these wells are completed, they begin producing crude oil, natural gas, or both.

Producers make decisions on drilling and completion operations based on market conditions, prices, and infrastructure. A downward trend in the DUC count means producers are completing more wells than they are drilling.

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Source: EIA

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US crude oil rallies

US crude oil rallies more than 4%, tops $80 as Pentagon sends more forces to Middle East

US crude oil rallies Monday to top $80 per barrel as the Pentagon dispatched more forces to the Middle East in anticipation of an Iranian attack on Israel.

Defense Secretary Lloyd Austin ordered a carrier strike group, including F-35 warplanes, to accelerate its deployment to the region. Austin also ordered a guided-missile submarine to the Middle East.

Israel has put its military on high alert, a person familiar with the matter told The Wall Street Journal.

“We see allocations to oil and gold as the main means to add some protection to portfolios. It is  against a further escalation in geopolitical tensions,” UBS analysts told clients in a Monday research note.

U.S. crude oil is trading higher even as OPEC lowered its global demand growth forecast by 135,000 barrels per day.  This is citing softening consumption in China.

“The oil markets reacted strongly to the increased geopolitical risk even as OPEC has shown some concern about its demand growth”. This is what Phil Flynn said. Hi is the senior market analyst at the Price Futures Group. He said the market is still on track for a deficit as inventories fall.

U.S. crude oil finished last week more than 4% higher, snapping a 4-week decline, as the stock market recovered most of its losses from a flash sell-off caused by mounting fear of a recession and after the Bank of Japan lifted interest rates a fraction.

Don’t miss the

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Source: CNBC

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Oil Prices Rise Amid Growing Fears of a War in the Middle East

Oil Prices Rise Amid Growing Fears of a War in the Middle East

Crude oil prices saw an upward trend today, building on a significant rise the previous day following reports of Israel’s targeted killings of Hamas political leader Ismail Haniyeh in Iran and a high-ranking Hezbollah official in Lebanon.

The assassination of Haniyeh in Iran particularly heightened market concerns, prompting Tehran to issue threats of retaliation that analysts suggest could push Brent crude prices into triple-digit levels.

“We are concerned that the region may be teetering on the edge of full-scale war,” remarked Japan’s deputy representative to the United Nations, as the Security Council urged member states to intensify diplomatic efforts to resolve the escalating conflict between Israel and its neighboring countries.

China’s UN ambassador emphasized the need for influential nations to exert greater pressure and act decisively to quell the ongoing violence in Gaza.

Iran’s representative condemned the assassination of Haniyeh as an act of terrorism, as reported by Reuters amid the unfolding situation.

The Tensions in the Middle East Due to Oil Prices Rise

With tensions in the Middle East remaining elevated, Brent crude prices exceeded $81 per barrel before slightly retracting earlier today, while West Texas Intermediate approached $79 per barrel.

In further positive news for the oil market, the Energy Information Administration (EIA) disclosed that U.S. oil demand reached a seasonal high of 20.80 million barrels per day in May, a noteworthy upward revision from earlier estimates of 20 million barrels per day.

Moreover, global oil inventories are currently in decline, reflecting a significant deficit compared to historical averages, according to Eric Nuttall, senior portfolio manager at Ninepoint Partners, who spoke to Bloomberg this week. Nuttall also highlighted improvements in OPEC+ production cut compliance as a contributing factor to the optimistic outlook for oil prices.

Should diplomatic efforts fail to alleviate tensions in the Middle East, oil prices may continue to rise, driven by fundamental market dynamics and geopolitical risk factors.

Source: Oil Price

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Oil prices rise

Oil prices rise as inflation eases, bolstering market hopes for Fed rate cut later this year

KEY POINTS ON OIL PRICES RISE:
-Crude oil futures climbed on Thursday, getting a lift from cooling inflation data.
-The consumer price index fell 0.1% in June from the prior month, bringing the 12-month rate to 3%.
-The inflation data bolstered hopes for interest rate cuts from the Federal Reserve in September. Lower rates stimulate economic growth, which can boost demand for oil.

Crude oil futures rose Thursday as inflation eased. It is bolstering hopes that the Federal Reserve will cut interest rates later this year.

Inflation as measured by the consumer price index dropped 0.1% from May to June. It is putting the 12-month rate at 3%, near the lowest level in more than three years, according to the U.S. Department of Labor.

The market is expecting the Federal Reserve to start cutting interest rates in September. Lower interest rates typically stimulate economic growth, which can bolster crude oil demand.

The inflation and interest rate outlook overshadowed mixed signals on oil demand for this year. The Paris-based International Energy Agency said global demand growth eased to 710,000 barrels per day year on year in the second quarter, the slowest increase since the fourth quarter of 2022, as consumption in China contracted.

The IEA is forecasting global oil demand growth will average just under one million barrels per day in 2024 due to subpar economic growth, greater energy efficiency and electric vehicle adoption.

OPEC, on the other hand, is much more bullish, forecasting demand growth of 2.2 million barrels per day as the cartel sees solid economic growth of 2.9% this year.

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Source: CNBC – Trusted Resource

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The EIA forecasts that crude production from the Permian Basin will average about 6.3M barrels per day this year, an increase of 8% over 2023

EIA: Permian oil output to surge 8% in 2024

Once again, the Permian Basin is expected to lead growth in the nation’s overall oil production as per EIA.

The Energy Information Administration forecasts that crude production from the Permian Basin will average about 6.3 million barrels per day this year. This is an increase of 8% over 2023 and accounting for nearly half of all crude production.

Permian production will contribute about two thirds of all US oil production through the end of 2025. This is according to the EIA’s June Short-Term Energy Outlook. The EIA expects increased production from the Permian. It also affect regions since it will drive US production to record highs in both 2024 and 2025.

“The Permian region’s proximity to crude oil refine and export terminals on the Gulf Coast. It established takeaway capacity and improved new well productivity to support crude oil production growth in the region,” the EIA wrote in its June 2024 Short-Term Energy Outlook.

“Without a doubt, the mighty Permian Basin is the major factor. It makes Texas the 8th largest economy in the world”. This is what Todd Staples, president of the Texas Oil & Gas Association, commented to the Reporter-Telegram by email.

“The Permian Basin leads US energy production. It single-handedly contributing nearly 45% of domestic oil production, thanks to its phenomenal reserves, private sector investment in infrastructure, and Texas’ welcoming business climate that includes a stable regulatory environment,” he continued.

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Source: mrt

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Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May.

US crude oil recovers losses after surprise stockpile decline

Crude oil futures rose Wednesday, recovering losses from earlier in the session as U.S. crude inventories fell.

Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May, according to official data from the Energy Information Administration. The decline was a surprise compared to industry data that indicated a 509,000 barrel buildup.

Prices have come under pressure as of late on rising inventories with U.S. stockpiles surging in the last week of April.

“Oil market indicators have turned softer in recent weeks, and prices have declined from recent peaks,” Morgan Stanley analysts said in a research note. “The oil market is not tight now, but we see seasonal strength ahead in coming months.”

Here are Wednesday’s closing energy prices:

  • West Texas Intermediate – June contract: $78.99 a barrel, up 61 cents, or 0.78%. Year to date, U.S. crude oil has risen 10%.
  • Brent July contract: $83.58 a barrel, up 42 cents, or 0.51%. Year to date, the global benchmark has risen 8.5%.
  • RBOB Gasoline – June contract: $2.53 per gallon, down 0.46%. Year to date, gasoline futures are up about 20%.
  • Natural Gas-  June contract: $2.19 per thousand cubic feet, down 0.91%. Year to date, gas is down 13%.

Oil prices have fallen more than 7% since reaching their April highs when traders bid up prices on fears that Iran and Israel would go to war. Investors have largely sold off the war premium since then, with Morgan Stanley removing $4 per barrel of risk from its oil price forecast for the year.

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Source: CNBC

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Crude oil production in the Permian Basin is expected to rise by nearly 8% this year. It accounts for nearly half of US crude oil production.

EIA: Permian Basin to help drive record oil production levels in 2024, 2025

According to the U.S. Energy Information Administration (EIA), crude oil production in the Permian Basin, which spans western Texas and southeastern New Mexico, is expected to rise by nearly 8% this year. The basin accounts for nearly half of U.S. crude oil production.

On Tuesday (June 11), the EIA released the June Short-Term Energy Outlook that shows crude oil production in the Permian Basin will average about 6.3 million barrels per day in 2024, up almost 8% from 2023. The increased production in this and other regions will contribute to successive crude oil production records in the United States in 2024 and 2025.

The Energy Information Administration (EIA) has recently introduced an enhancement to its Short-Term Energy Outlook reports by incorporating detailed regional forecasts for the primary oil and natural gas production areas in the United States. This development reflects the agency’s commitment to providing a comprehensive and granular analysis of energy trends across the country. By specifically focusing on key regions such as Appalachia, Bakken, Eagle Ford, Haynesville, and Permian, the EIA aims to offer stakeholders, policymakers, and industry experts a more nuanced understanding of the dynamics shaping the energy landscape at a local level.

Inclusion of Regional Forecasts

The inclusion of these regional forecasts not only enables a more detailed assessment of production trends. Moreovre, it also facilitates a deeper exploration of factors influencing supply and demand dynamics in specific geographic areas. This new approach underscores the EIA’s dedication to delivering insights that support informed decision-making. The strategic planning within the energy sector is also seen. This sheds light on regional variations in oil and gas production. Also, the EIA’s expanded Short-Term Energy Outlook reports serve as a valuable resource for industry professionals. More are now seeking to navigate the complexities of the US energy market with greater precision and foresight.

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Source: TB&P

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For now, gas prices are right around where they were last year, at $3.49 per gallon

OPEC+ oil cuts probably won’t move gas prices — but this wild card could

Thousands of miles away from Americans budgeting for their summer road trips. OPEC+ leaders decided Sunday to stick with crude-oil production cuts lasting through 2025. This is while laying out a plan to begin phasing out another tier of output curbs beginning in the fourth quarter.

Though crude-oil prices are easily the top cost inside a gallon of gas. Drivers at the pump shouldn’t expect big price moves as a direct result of the OPEC+ decision, gas experts say.

Gas-price increases could hinge on what type of hurricane season comes to the Gulf Coast. Its oil refineries later this summer they note. Weather forecasters have been bracing for a very active hurricane season.

Americans have been holding their breath on upcoming expenses, with many looking to road trips as affordable summer fun.

But first, put it in reverse to see what the Organization of the Petroleum Exporting Countries and its allies decided at its Sunday meeting.

OPEC+ agreed to extend two different production cuts totaling 3.66 million barrels day through 2025. These curbs were supposed to conclude at the end of this year but were widely expected to be rolled over into next year.

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Source: Market Watch

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US natural gas prices are set for structural upside over the next 20 years as incremental demand from data centres and AI has prompted a gas generation renaissance.

High demand sends LNG prices climbing around the world

Mexican Crude Production Collapses Ahead of Elections – High demand sends LNG prices climbing around the world!

– Providing a somber reflection on Mexico’s upstream industry before the June 2 general election, crude production by Mexico’s state oil company Pemex fell below 1.5 million b/d for the first time in over 40 years.

– April’s crude output of 1.474 million b/d represents an almost 200,000 b/d year-over-year drop. It marks a new trough for the country! This is the lowest point since Mexico started producing from the giant Cantarell field and tapped into its prolific offshore waters in the late 1970s.

– The Lopez Obrador government forbade new hydrocarbon bidding rounds. It has instructed Pemex to focus on onshore and shallow-water fields rather than investing into higher-risk projects.

– Higher condensate production from onshore assets such as Ixachi or Quesqui offset some of the declines in total supply figures, however not enough to halt the tide of legacy declines.

Could AI Gas Demand Lift US Natural Gas Prices

– US natural gas prices are set for structural upside over the next 20 years as incremental demand from data centres and AI has prompted a gas generation renaissance.

– According to WoodMackenzie, the growth in US natural gas demand could amount to as much as 30 BCf/d, pushing Henry Hub futures above $4 per mmBtu by 2035 and closer to $6 per mmBtu by 2045.

– Electricity demand from data centers currently adds up to 11 GW of generation, but this should…

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Source: Oil Price

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Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May.

US crude oil recovers losses after surprise stockpile decline

Crude oil futures rose Wednesday, recovering losses from earlier in the session as U.S. crude inventories fell.

Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May, according to official data from the Energy Information Administration. The decline was a surprise compared to industry data that indicated a 509,000 barrel buildup.

Prices have come under pressure as of late on rising inventories with U.S. stockpiles surging in the last week of April.

“Oil market indicators have turned softer in recent weeks, and prices have declined from recent peaks,” Morgan Stanley analysts said in a research note. “The oil market is not tight now, but we see seasonal strength ahead in coming months.”

Here are Wednesday’s closing energy prices:

  • West Texas Intermediate – June contract: $78.99 a barrel, up 61 cents, or 0.78%. Year to date, U.S. crude oil has risen 10%.
  • Brent July contract: $83.58 a barrel, up 42 cents, or 0.51%. Year to date, the global benchmark has risen 8.5%.
  • RBOB Gasoline – June contract: $2.53 per gallon, down 0.46%. Year to date, gasoline futures are up about 20%.
  • Natural Gas-  June contract: $2.19 per thousand cubic feet, down 0.91%. Year to date, gas is down 13%.

Oil prices have fallen more than 7% since reaching their April highs when traders bid up prices on fears that Iran and Israel would go to war. Investors have largely sold off the war premium since then, with Morgan Stanley removing $4 per barrel of risk from its oil price forecast for the year.

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Source: CNBC

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