US Oil And Gas Production expanded at a faster pace during the third quarter of the year despite still rising costs, the latest Dallas Fed Energy Survey has shown.

Costs have now been on the rise for 11 quarters in a row, the Dallas Fed said, with the situation particularly difficult for oilfield service providers.

Even with rising costs, optimism in the industry increased over the third quarter, likely thanks to rising oil prices, which also probably motivated the increase in production. The optimism was evident in respondents’ input despite expectations of still higher costs next year.

Speaking of prices, the respondents in the Dallas Fed survey forecast a WTI price of $87.91 per barrel on average for the final quarter of the year. This compares with an average price forecast of $77.48 in the previous quarter’s survey edition.

The Energy Transition Affecting US Oil and Gas Production

Asked about what the effects of the energy transition would be on the industry, about a third of respondents said they expected the transition to push the price of oil higher. Another third predicted the transition will push the price of oil significantly higher. Just 9% expect the transition to make oil cheaper.

These expectations suggest highly resilient oil demand in the face of EVs and other electrification efforts that are part of the transition push.

Another interesting take from the survey concerned oil consumption now and in 2050. Some 28% of respondents saw oil consumption in 2050 slightly higher than current levels while 25% saw it as substantially higher. Another 25% saw 2050 oil consumption as slightly lower than current levels and only 8% expected it to be significantly lower than current levels.

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Source: Oil Price

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The Texas upstream oil and natural gas industry has added 12,100 jobs in 2023, Texas Oil and Gas Association (TXOGA) noted in a media release, citing newly-released data from the Texas Workforce Commission (TWC). In August alone, employment in the sector rose by 1,200 jobs, TXOGA highlighted.

“The oil and natural gas industry serves as a major driver of the Lone Star State’s robust economy,” said Todd Staples, president of TXOGA.

“The 1,200 jobs reported in August add to already strong job growth numbers for this year, continued evidence of the strong demand for these irreplaceable resources both at home and abroad,” he added.

In its review of the August Current Employment Statistics (CES) report from the U.S. Bureau of Labor Statistics (BLS), the Texas Independent Producers and Royalty Owners Association (TIPRO) said that Texas upstream employment for August 2023 totaled 208,500 jobs.

Texas Oil and Gas: The Industry has Added 51,500 Texas Upstream Jobs

Since the COVID-low point of September of 2020, the industry has added 51,500 Texas upstream jobs, averaging growth of 1,479 jobs a month, TXOGA pointed out. At 208,500 upstream jobs, compared to the same month in the prior year, August 2023 jobs were up by 18,200, or 9.6 percent, over August of 2022, TXOGA said.

Months with an increase in upstream oil and natural gas employment have outnumbered months with a decrease by 30 to five, according to TXOGA. Oil and natural gas jobs pay among the highest wages in Texas with employers paying an average salary of approximately $115,000 in 2022, the association said.

The upstream sector involves oil and natural gas extraction and excludes other industry sectors such as refining, petrochemicals, fuels wholesaling, oilfield equipment manufacturing, pipelines, and gas utilities, which support hundreds of thousands of additional jobs in Texas, TXOGA outlined.

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Source: Rig Zone

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Despite lingering concerns about China’s economy, global oil demand hit a record high in June. It could be on track for another form of tighter oil market move in August. This is what the International Energy Agency (IEA) said in its latest monthly report.

The cuts from OPEC+ and Saudi Arabia are coupled with expected continued strength in demand. They are set to result in inventory draws for the rest of the year, supporting oil prices, analysts and forecasting agencies say.

China, of course, will be the key driver of price moves either up or down, depending on how its economy fares and how much stimulus authorities are ready to unroll to help a much-awaited rebound after the reopening early this year.

So far into 2023, weaker-than-expected Chinese economic data have stopped price rallies in their tracks. U.S. economic prospects have turned somewhat brighter, with the Fed and investment banks no longer expecting a recession.

But persistent worries about China are holding oil prices back.

Just this week, following seven consecutive weeks of gains, oil prices dipped on three consecutive days after China reported another set of weak economic data. Concerns about the property and credit markets in the world’s second-largest economy also weighed on market sentiment.

The Central Bank of China pledged on Thursday to keep its policy “precise and forceful”. This is to help the economy struggling to lift off.

The bank vowed to “better leverage the dual functions of aggregate and structural monetary policy tools and firmly support the recovery and development of the real economy.”

The oil market continues to be cautious about China’s economy. This is until market participants see additional measures to prop up the economy in the world’s top crude oil importer. Moreove the results of these measures are the concerns about China will not abate.

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Source: Oil Price

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Denver-based PDC Energy in acquisition by Chevron Corporation, creating Colorado’s largest oil and gas company. The deal comes three years after Chevron acquired Noble Energy.

The new company will now hold 600,000 acres statewide. It is about half of that in the Denver-Julseburg Basin adjacent to Chevron’s existing operations. This will produce 400,000 barrels of oil per day on average. It will be one of Chevron’s top five production units in the world.

“We have an inventory that has permission and we see possibilities here,” Chevron’s Regional Vice President, Kim McHugh told CBS News Colorado.

“Both companies have the commitment to lowering their carbon footprint.”

McHugh also said, “These two companies have similar cultures both safe and reliable benefitting the communities where they operate.”

Chevron is based in California. it is also looking to expand its renewable fuel business in Colorado to include hydrogen, geothermal and carbon sequestration.

McHugh says the company has not made decisions yet regarding possible layoffs at PDC Energy.

No decision on possible layoffs after Denver-based PDC Energy was acquired by Chevron

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Source: CBS News

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A surge in United States crude gains made oil exports change the face of the global market and how oil is priced. This is with the price of U.S. crude gaining weight against other benchmarks.

This is what traders and analysts have observed this year. Now, as Europe became a major destination for U.S. oil as it sought to replace sanctioned Russian barrels. But Asia has been receiving more U.S. oil, too, because of its competitive pricing, Reuters reported, citing trade industry insiders.

Earlier this year, in February, the number of oil swaps linked to oil produced in Texas hit a record. As of early 2023, the number of such swaps in total also sat at a record. It has likely increased further since.

These developments were made possible by the shale revolution that turned the United States into the world’s biggest oil producer and a major exporter, especially since last year when the European Union embargoed Russian crude oil and fuels. And because U.S. crude is so competitive, it is probably going to gain further ground on international markets.

“As Midland becomes more and more important in the dated Brent assessment, it has a knock-on effect on other grades having to price themselves lower to compete with WTI Midland,” Reuters quoted Vortexa market analyst Rohit Rathod as saying.

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Source: Oil Price

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