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Oil prices broadly stable

Oil prices broadly stable with uncertainty around Middle East and US election

On Thursday, oil prices broadly stable amid ongoing uncertainties related to conflicts in the Middle East and reports indicating that North Korean troops may be poised to assist Russia in Ukraine, keeping traders cautious as the U.S. presidential election approaches.

By 1318 GMT, Brent crude futures had increased by 46 cents, or 0.6%, reaching $75.42 per barrel, while U.S. West Texas Intermediate crude futures rose by 39 cents, also a 0.6% gain, to settle at $71.16.

This week, oil prices have risen approximately 3% following a decline of over 7% the previous week, attributed to a perceived de-escalation of tensions in the Middle East, alongside concerns regarding oversupply and sluggish demand.

Tamas Varga, an analyst at oil brokerage PVM, noted, “The interplay of economic uncertainty, a loose oil supply landscape, and potential disruptions related to conflict will likely prevent a definitive trend in oil prices in the near term, with medium-term risks leaning towards a downward trajectory.”

On Wednesday, the U.S. government reported evidence suggesting that North Korea has dispatched 3,000 troops to Russia, potentially for deployment in Ukraine, a development that could significantly intensify Russia’s conflict with Ukraine.

Intensifying Hostilities

In the Middle East, intensified hostilities between Israel and Hezbollah raised concerns regarding supply disruptions, while airstrikes carried out by Israel reportedly targeted the Syrian capital, Damascus, early Thursday.

Simultaneously, Washington is actively advocating for a resolution between Israel and Iranian-backed factions, including Hezbollah and Hamas, ahead of the U.S. presidential election on November 5, an event that could influence American foreign policy in the region as well as oil market dynamics.

Kelvin Wong, a senior market analyst at OANDA, observed, “Current betting market data indicates that Trump is leading over Kamala Harris, with Trump suggesting the U.S. could become a significant oil supplier. Such a policy shift could exert downward pressure on prices.” While betting markets favor Trump, alternative polling indicates that the election results remain highly competitive and uncertain.

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Source: Oil & Gas 360

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Chevron

Chevron targets 1 million boe/d Permian production by 2025

Chevron Corporation has set an ambitious goal to achieve production of 1 million barrels of oil equivalent per day (boe/d) from the Permian Basin by the year 2025. The company’s strategic focus is primarily directed towards the Delaware Basin segment of the Permian, located in New Mexico. This region has been identified as particularly advantageous due to its geological characteristics, which include high-quality source rock that is both thick and deep.

According to Duncan Healey, the asset manager for Chevron’s New Mexico operations, the geological attributes of the Delaware Basin allow for greater efficiency in extracting hydrocarbons. The high pressure present in the subsurface formations facilitates the extraction of oil and gas, making this area a more productive option compared to other regions within the Permian Basin.

In addition to its production goals, Chevron is actively seeking to minimize its environmental impact by implementing innovative technologies and practices. The company has prioritized the use of electrical compressors for its operations wherever feasible, as opposed to relying on traditional natural gas-fueled compressors. This transition not only enhances operational efficiency but also contributes to a reduction in carbon emissions associated with production activities.

Hydraulic fracturing operations of Chevron

Furthermore, Chevron has reported a notable decrease in the carbon intensity of its hydraulic fracturing operations in the region, a development that underscores the company’s commitment to implementing sustainable practices within its extraction processes. This reduction in carbon intensity is a significant achievement, reflecting Chevron’s ongoing investment in innovative technologies and methodologies that enhance operational efficiency while minimizing environmental impact. By adopting advanced techniques and optimizing resource management, Chevron is not only improving its operational performance but also demonstrating a proactive approach to addressing the pressing environmental challenges of our time. These efforts are indicative of the company’s broader strategy to integrate sustainability into its core operations, ensuring that environmental considerations are at the forefront of its business decisions.

Through these initiatives, Chevron aims to strike a balance between its production objectives and its responsibilities as a steward of the environment. The company recognizes the importance of addressing the growing concerns related to climate change and resource sustainability, especially in an era where public and regulatory scrutiny is intensifying. By reinforcing its position as a leader in the energy industry, Chevron is taking meaningful steps towards reducing its carbon footprint and promoting a more sustainable energy landscape. This commitment not only enhances the company’s reputation but also aligns with the global shift towards cleaner energy solutions. As Chevron continues to innovate and embrace sustainable practices, it sets a benchmark for others in the industry, illustrating that it is possible to achieve economic growth while prioritizing the health of our planet for future generations.

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Source: Oil & Gas Journal

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Fossil fuels

Fossil fuels could become cheaper and more abundant, says IEA

Fossil fuels could soon become significantly cheaper and more abundant as governments accelerate the transition to clean energy towards the end of the decade, according to the International Energy Agency.

The world’s energy watchdog has signalled a new energy era in which countries have access to more oil, gas and coal than needed to fuel their economic growth, leading to lower prices for households and businesses.

The Paris-based agency’s influential annual outlook report found that energy consumers could expect some “breathing space” from recent spikes in global oil and gas prices triggered by geopolitical upheavals because investment in new fossil fuel projects has outpaced the world’s demand.

Fatih Birol, the executive director of the IEA, said the report confirms its prediction that the world’s fossil fuel consumption will peak before 2030 and fall into permanent decline as climate policies take effect. But continuing investment in fossil fuel projects will spell falling market prices for oil and gas, the IEA added.

“I can’t say whether or not we will see [oil prices of] $100 a barrel again, but what I can say is that despite the ongoing conflict in the Middle East we are still seeing oil prices in the $70s,” he said.

Oil prices dipped below $74 on Tuesday amid growing concern about weak Chinese demand.

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Source: The Guardian

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The total number of active drilling rigs for oil and gas in the US rose this week, according to new data from Baker Hughes.

US Oil Drilling Activity Inches Up

The total number of active drilling rigs for oil and gas in the United States rose this week, according to new data that Baker Hughes published on Friday. Ready to learn more about US Oil Drilling Activity?

The total rig count rose by 1 this week to 586, compared to 622 rigs this same time last year.

The number of oil rigs rose by 2 this week to 481—down by 20 compared to this time last year. The number of gas rigs fell by 1 this week to 101, a loss of 16 active gas rigs from this time last year. Miscellaneous rigs stayed the same at 4.

Meanwhile, U.S. crude oil production rose in the week ending October 4, according to weekly estimates published by the Energy Information Administration (EIA). Current weekly oil production in the United States, according to the EIA, has resumed its all-time high at 13.4 million bpd.

Primary Vision’s Frac Spread Count, an estimate of the number of crews completing wells that are unfinished, fell in the week ending October 4, from 238 back to 236.

Drilling activity in the Permian stayed the same this week at 304—a figure that is just 7 fewer than this same time last year. The count in the Eagle Ford rose by 1 this week to 49. Rigs in the Eagle Ford are now 2 below where they were this time last year.

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Source: Oil Price

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Atlantic Hurricane Season

Atlantic Hurricane Season 2024: Oil & Gas Impact

With Hurricane Milton making landfall in the early hours of Thursday 10th October (EST). These are the two most significant hurricanes to make landfall so far. Francine and Helene have already impacted oil and gas operations in the Gulf of Mexico. Now, the inland United States. So what are the impacts of Atlantic Hurricane Season?

As analysts were gauging the many ways in which these hurricanes will affect oil and gas. Three different aspects of this can be considered. Tracking storm paths, shut-ins in production, and assessment of recovery timelines.

As of Tuesday evening (8th October), Hurricane Milton has strengthened once again. With that, agencies across the US, including a direct message from the White House itself, have said the hurricane could be the worst to hit Florida. President Biden addressed the issue by stating “evacuations are a matter of life and death”. It is in a stark warning to the residents of Florida. There are also official reports suggesting it has the potential to be the worst hurricane in a century to hit the US. The state agencies also say, “some areas”, of the storm surges will be “not survivable”.

The Closures

Further closures have been made to oil and gas facilities including Kinder Morgan’s Central Florida Pipeline systems. This carry gasoline and diesel between Orlando and Tampa. In addition to this, due to Tampa’s coastal position, Kinder Morgan have closed all bulk-fuel delivery terminals. Refiner Citgo has also followed suit and shut down its Tampa terminal, along with Buckeye, who have suspended Orlando based operations.

As of now there is not much that can be said until landfall takes place, and impact assessments can be made. For now, wind speeds will reach 160 mph at their peak, and storm surges are expected to be around 12-15 feet. With business insider already reporting US natural gas futures have fallen by 8% in recent days, this serves as an indicator of how serious hurricanes have become, not just bringing natural catastrophe and humanitarian disaster, but also increased economic shock felt domestically, and globally.

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Source: Energy Monitor

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Rising oil prices

Rising oil prices after Iran strike could increase US gas prices, experts say

Rising oil prices climbed more than 3% on Tuesday in the immediate aftermath of an Iranian missile attack on Israel. The spike in prices is expected to push up the price of U.S. gasoline, experts told ABC News.

Drivers could face a price increase of between 10 and 15 cents per gallon, experts estimated. The national average price of a gallon of gas currently stands at $3.20, AAA data showed.

A further escalation of the conflict between Israel and Iran could send oil and gas prices significantly higher, said Ramanan Krishnamoorti, a professor of petroleum engineering at the University of Houston.

“Clearly this will have a huge impact on gas prices,” Krishnamoorti told ABC News. “There’s no doubt about that.”

Iran said the attack on Tuesday was retaliation for a wave of assassinations carried out by Israel over the last several weeks targeting Hezbollah leaders. Israel will have a “significant response” to Iran’s attack, an Israeli official told ABC News.

While sanctions have constrained Iranian oil output in recent years, the nation asserts control over the passage of tankers through the Strait of Hormuz, a trading route that facilitates the transport of about 15% of global oil supply.

Important shipping route

Passage through the Suez Canal, another important shipping route for crude oil, could be impacted by further attacks. This is what happened with Yemen-based Houthi attacks on freight ships earlier in the war, Krishnamoorti said.

Despite a recent uptick, the price of oil stands well below a 2022 peak reached when the blazing-hot economic rebound from the pandemic collided with a supply shortage imposed by the Russia-Ukraine war. Gas prices, meanwhile, have plummeted in recent months.

The U.S. set a record for crude oil production in 2023, averaging 12.9 million barrels per day, according to the U.S. Energy Information Administration, a federal agency.

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Source: ABC News

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OPEC+ made no changes to plans to start gradually reviving oil production towards the end of the year, despite signs of an impending surplus.

OPEC+ remains committed to reviving production despite possible surplus

A statement from 23-nation the group after an online monitoring meeting on Wednesday didn’t announce any alterations. Led by Saudi Arabia and Russia, OPEC+ plans a series of monthly increases beginning with a 180,000 bpd hike in December — two months later than originally scheduled because of fragile market sentiment.

Oil prices have rallied more than 5% in the past two days after Iran, an OPEC member, launched strikes against Israel in an escalation of the Middle East’s year-long conflict. But at around $75 a barrel, prices remain 14% down from July as traders focus on weak demand in China and swelling supplies from the Americas.

While the retreat offers relief to consumers after years of rampant inflation — and for central banks as they pivot to lowering interest rates — it poses a financial threat to the Organization of Petroleum Exporting Countries and its allies.

Saudi Arabia slashed growth forecasts this week and projected deeper budget deficits than previously estimated as the cost of efforts to overhaul the kingdom’s economy outpaces revenue. Russia, meanwhile, relies on energy income to finance President Vladimir Putin’s war against Ukraine.

JMMC meeting

The JMMC meeting on Wednesday mainly focused on the failure of Iraq, Kazakhstan and Russia. It is for the implementation of their agreed cutbacks, according to delegates who asked not to be identified.

While the countries “reiterated their strong commitment” to the agreement, they mostly continue to pump above their output quotas. They haven’t yet started extra cutbacks pledged as compensation for cheating. The countries held individual workshops to discuss output levels in September.

OPEC+ plans to restore roughly 2.2 MMbpd in monthly tranches between December and late 2025, and allow the United Arab Emirates to make an extra hike in recognition of its increased production capacity.

The alliance has several more weeks to decide whether to go ahead with the December increase. Ministers are scheduled to gather on Dec. 1 to review policy for next year.

With oil markets poised to deteriorate further, analysts including JPMorgan Chase & Co. and Citigroup Inc. have expressed skepticism. It is that OPEC+ will press on with its scheduled supply increases.

Consumption is due to grow by less than 1 MMbpd in 2025. Supplies are set to swell by 50% more. It wil be leaving a glut even if OPEC+ continues to restrain output. This is according to estimates from the International Energy Agency.

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Source: Oil & Gas 360

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Upstream oil and gas employment in Texas rose by 1,000 jobs month/month in August, marking a third straight month of sequential gains

Texas upstream employment swells amid soaring natural gas, oil production

Upstream oil and gas employment in Texas rose by 1,000 jobs month/month in August. It marks the third straight month of sequential gains. The Texas Oil & Gas Association (TXOGA) said and cited data from the Texas Workforce Commission.

“Month after month, Texas continues to demonstrate its strength as a production powerhouse. It is rising to meet the growing energy needs of our state, nation, and allies around the world”. This is what TXOGA President Todd Staples. says

“Upstream job growth reflects the sustained demand for these indispensable resources. It underscores the industry’s unwavering commitment to energy leadership. Morover, it is keeping Texas at the forefront of the global energy landscape.”

The group highlighted that since the pandemic-induced low point of September 2020, the industry has added 37,400 upstream jobs in the state, averaging growth of 791 jobs/month.

“Since the Covid low point, months with upstream oil and gas employment increases have outnumbered those with [decreases] by 36 to 11,” TXOGA researchers said. “These jobs pay among the highest wages in Texas, with employers in oil and natural gas paying an average salary of approximately $124,000 in 2023.”

The Texas Independent Producers and Royalty Owners Association (TIPRO) touted the job growth as well, noting that it was driven by the oilfield services segment.

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Source: NGI

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The United States is exporting gasoline more than any other nation in the world, supplying more than 16% of all exports of the fuel globally

The US Is the world’s top gasoline exporter

Last year, U.S. motor gasoline exports (finished gasoline plus gasoline blending components) averaged 900,000 barrels per day (bpd). This is equivalent to about 10% of domestic consumption and enough to fill up the tanks of over 1.5 million SUVs per day, assuming an average tank size of 24 gallons, the EIA noted.

Although China and India are boosting their refining capacity and have raised their exports, the U.S. is the undisputed leader in gasoline exports.

Even large exporters of gasoline such as Singapore and the Netherlands have never exceeded 700,000 bpd in gasoline exports, the U.S. administration said.

The U.S. has been a net exporter of gasoline since 2016. Between 1961 and 2015, America was a net importer of gasoline for more than half a century.

Over the past decade, the U.S. has become a net exporter of gasoline as U.S. exports of refined petroleum products have grown, reaching records in both 2022 and 2023, the EIA said.

Higher refinery utilization and increasing refining capacity have been key factors in growing U.S. petroleum products exports, including of gasoline.

Even as U.S. refining capacity has increased, domestic gasoline consumption has not, which has made more gasoline available for export, the EIA noted. U.S. motor gasoline consumption in 2023 was flat compared with 2010, and 400,000 bpd lower than its peak in 2018.

Last year, U.S. petroleum product exports averaged a record 6.1 million bpd, up by 2.5% compared to 2022, EIA data showed earlier this year.

In 2020, the United States became a net exporter of petroleum for the first time since at least 1949.

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Source: Oil & Gas 360

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US oil and gas production

US oil and gas production boom gets “surprising” endorsement from Biden’s top climate advisor

America’s oil and gas boom received an unexpected endorsement from John Podesta, the president’s top climate adviser, who praised the surge in domestic production as an economic benefit for the nation. This increase in production has positioned the United States as the world’s largest oil producer, with daily output nearly 50% higher than that of Saudi Arabia. Podesta emphasized that this growth has not only been advantageous for American consumers, but it has also bolstered national security. By enhancing the nation’s energy independence, the U.S. has been able to mitigate some of the geopolitical risks associated with foreign oil supplies, particularly in light of global tensions and rising energy demands.

Addressing the energy crisis

Furthermore, Podesta pointed to the significant role of U.S. gas production in addressing the energy crisis in Europe following Russia’s invasion of Ukraine, as American exports have effectively filled the supply gaps left by disrupted Russian sources. He noted that the increase in domestic crude output has contributed to a reduction in inflationary pressures, with current gas prices reflecting a 20% decrease compared to the previous year. These remarks align with the broader strategic messaging from Vice President Kamala Harris, who is actively promoting both increased oil production and the development of clean energy jobs.

The dual approach being employed by the administration is strategically designed to resonate with a wide array of voter bases, especially in regions abundant in natural resources such as Pennsylvania. This state, known for its significant reserves of natural gas, presents a unique landscape where economic interests and environmental concerns often intersect. By emphasizing policies that advocate for energy production and job creation in the fossil fuel sector, the administration seeks to win the support of workers and local communities that depend on these industries for their livelihoods. Simultaneously, the administration is committed to implementing initiatives that promote environmental sustainability, thereby ensuring that economic growth does not come at the expense of ecological integrity. This balancing act is crucial in fostering a sense of trust and collaboration among constituents who may have differing priorities regarding energy policy.

Understanding of the complexities of US oil and gas production

Moreover, this approach reflects an understanding of the complexities inherent in energy politics, particularly in a state like Pennsylvania, where the energy sector plays a pivotal role in the economy. By leveraging the advantages of gas production—such as job creation, energy independence, and regional economic stability—the administration can appeal to voters who prioritize immediate economic benefits. At the same time, by promoting renewable energy initiatives and stricter environmental regulations, it addresses the concerns of constituents who are increasingly aware of climate change and its implications. This comprehensive strategy not only aims to unite diverse political factions but also positions the administration as a forward-thinking leader capable of navigating the intricate dynamics of energy policy in a way that is both economically viable and environmentally responsible. Such a nuanced approach is essential for fostering long-term support and ensuring sustainable development in gas-rich regions.

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Source: World Oil

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