Experts’ oil price expectations are that it could rise to $100 per barrel by the fourth quarter.

The price per barrel currently sits at $74.

The demand for oil is high right now and more production is needed to meet it. This is according to Judy Stark, the president of Panhandle Producers and Royalty Owners Association.

“There’s a lot of factors involved in that and the majority of it is what’s taking place in the world,” Stark said.

The $100 prediction is based on a variety of factors. Stark says global events, like China’s reopening after COVID and the war in Ukraine affect the price, as well as a global reduction in production and the Biden administration’s deterrence in production.

Mostly, it comes down to supply and demand, said Michael Lozano, government affairs and communications at the Permian Basin Petroleum Association.

“[It’s] not terribly surprising. We’ve seen declining inventories of crude in production in other places around the world,” Lozano said. “And [when] we have higher demand and less supply of anything, you’re gonna see prices rise.”

The price increase has benefits and costs. More production could mean more jobs in the Permian Basin. Since oil is a product of gas production, prices at the pump could rise.

“For as much as operators produce oil and gas in the Permian Basin, we’re also customers of the product we produce as well,” Lozano said. “So this does create some of those challenges when it comes to price.”

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As oil and gas production companies look for efficient and cost-effective methods of increasing their output. With that, the well-intervention market is set to get a healthy boost. Spending on interventions is a way to extract additional resources from an existing well. This is instead of drilling a new one. The projection is for it to jump by almost 20% this year and total $58 billion. Rystad Energy’s modeling shows this is just the start of a surge in the coming years. It is as the focus on efficiency intensifies.

The intervention rate

How many oil and gas wells go through the intervention process? The forecast is that it will reach 17% in 2027. This would total about 260,000 wells globally.

More than $11 billion of the total expenditure will be directed to the wireline & perforating segment. Intervention units and oilfield chemicals sectors will represent 35%. In addition, the sum of the investments in coiled tubing, water management, and intervention tools is expected to close in 2023 surpassing $20 billion.

To boost production rather than drill new wells, operators are more likely to undertake intervention into mature assets that have been producing for more than five years, with relatively high production rates which are starting to show signs of decline. Onshore interventions in Asia, South America, and Africa will lead the 9% growth in activities related to intervention during 2024, a year expected to be significant for the good intervention market. North America is projected to account for 64% of the total oil and gas wells ready for intervention in 2027, whereas Asia and South America will reach their maximum in 2026, with respectively 41,413 and 9,703 wells.

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Source: Markets Insider

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Oil and gas companies are reinvesting record profits from the fossil fuel price surge driven by the Ukraine war to intensify the hunt for new deposits despite repeated calls by the United Nations to phase out hydrocarbons to avoid a climate crisis. What will these oil giants do?

Data and industry executives found the exploration revival responds to pressure from a majority of investors to maximize their oil and gas profits rather than invest in lower-margin renewable energy businesses.

The International Energy Agency forecasts global upstream oil and gas investments to increase by about 11 percent to $528bn in 2023, the highest level since 2015.

Barclays said it expected the number of offshore projects to get approval this year to reach a 10-year high.

The renewed appetite for oil and gas reserves and production – among European majors in particular – comes after Shell and BP slowed down plans to shift away from their legacy business and invest in renewables as part of the energy transition.

Upstream oil and gas have historically had returns of 15 to 20 percent while most renewables projects have delivered up to 8 percent.

An analysis of data from oil services firm Baker Hughes showed the number of offshore drilling vessels used to explore and produce oil and gas recovered in May to pre-pandemic levels, rising by 45 percent from October 2020 lows.

Wood Mackenzie analysts predicted a continued increase in activity, forecasting offshore exploration and drilling activity to grow by 20 percent by 2025.

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Source: ALJAZEERA

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Crude oil prices began trade with a gain today as supply worries returned to the table amid the rebellion news from Russia and expectations of demand growth during peak driving season in the United States.

In midday trade in Asia Brent crude was moving toward $75 per barrel with West Texas Intermediate climbing above $70 per barrel.

News about a rebellion in Russia by private military contractor Wagner added fuel to oil prices at the start of the week. The group was quick to agree to a deal ending the rebellion, basically ending it before it really started, but concern has lingered as the market watches what happens next.

“There’s a possibility of supply disruption any time you get a serious geopolitical event in a major oil supplier,” Stephen Innes, managing partner at SPI Asset Management, told the Financial Times. “It opens up a can of worms and we’re going to have to see how that plays out.”

There is also the production cut that Saudi Arabia will implement from the start of next month and that will tighten supply globally.

“An additional 1 million barrels per day (bpd) unilateral cut by Saudi Arabia, set to take effect in July, coupled with seasonally stronger demand, should help to physically tighten the market in Q3,” BIM Research said in a note cited by Reuters.

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Source: Oil Price

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The global oil & gas fabrication market size was worth USD 4.86 billion in 2021. The market value is slated to rise from USD 5.03 billion in 2022 to USD 6.93 billion by 2029 at 4.7% CAGR during the forecast period. The infrastructure of the oil & gas industry is complex. An oil rig or platform is a large structure with facilities for drilling wells and extracting and processing oil and natural gas. Some of these oil platforms even have facilities to house workers. There are different oil platforms such as fixed platforms, semi-submersible platforms, compliant towers, and others. All of these structures are built on steel legs. Fortune Business Insights presents this information in their report titled “Oil & Gas Fabrication Market, 2022-2029.”

Growing Demand and Consumption of Oil & Gas to Foster Market Growth

The rising oil & gas production & exploration activities, along with increasing investments in the services market, surges the demand for oil & gas fabrication. The necessity to enhance the efficiency of established and fresh reserves is increasing. Rising investments in ultra-deepwater and deepwater projects and growing emphasis on emerging unconventional hydrocarbons propel the global oil & gas fabrication market growth during the forecast period.

However, the oil & gas industry production results in rising pollution levels and increasing global warming threats. Governments have imposed regulations on oil & gas companies.

Global Market Experienced a Downward Trend Due to Decreased Oil & Gas Demand

In March 2020, oil prices plunged due to geopolitical events along with the global impact of the COVID-19 pandemic. As a result, in 2020, the average number of the U.S. rigs fell 52% from 2019. The U.S. rig count hit a low of 244 in mid-August since then it has risen to 397 as of February 19, 2021. In 2020, industrial participants’ business was impacted by the COVID-19 pandemic as customers delayed purchases and planned projects, citing COVID-19-related market uncertainties, permitting delays and logistical constraints.

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Source: GlobeNewswire

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