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The oil market has already been tightened due to ongoing OPEC plus supply cuts. There is a production decline from Iran and Venezuela, and a Russian outage due to the Urals contamination. Is there an ongoing Trade War?

Heightened tensions in the Middle East are keeping oil prices firm. The US WTI crude and the Asian benchmark Brent have gained about three percent so far during this week.

Increasing trade war tensions between the US and China are a threat to global economic growth and demand for oil. And oil traders are now more worried about supply tightness than the slumping demand.

The group will meet in June to decide whether to extend the pact. It is expected that if OPEC sticks on with its April output numbers it would lead to an oil undersupply in the world market this year.

In the meantime, the output from the other top producers outside OPEC, like the US would keep the market well supplied. As per IEA, the booming oil output from the US would offset the shortage of exports from Iran and Venezuela.

In the first half of the year, US output was halted due to reduced rig counts and maintenance in the Gulf of Mexico but the agency expects higher output this year due to the uptick in drilling activity.

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Source: moneycontrol.com

If you have further questions related to any oil trade war, feel free to reach out to us here.

 

Natural gas prices whipsawed initially moving lower and then rebounding and settling the session up slightly more than 1%. This came on the heels of the Department of Energy’s inventory report which basically came out in line with expectations. Let’s read more about natural gas price prediction below.

The trajectory of the gains continues to point to higher inventories. This is as the current levels attempt to get back to the 5-year average level. The 5-year average price of natural gas is $3 per mmbtu. It provides about 50 cents per mmbtu of upside if demand started to pick up. The weather is expected to remain near normal for the next 8-14 days. This will keep demand for residential consumption steady. The next big events are supply disruptions from storms. This is a trade deal that would begin to accelerate LNG exports back to China without a 25% tariff would also likely give prices a pop.

Technical Analysis

Natural gas prices rebounded after testing the 10-day moving average which is seen as short-term support near 2.60. Resistance is seen near the 50-day moving average at 2.73. Short-term momentum turned positive as the fast stochastic generated a crossover sell signal. This indicator has whipsawed along with prices. The current reading of 78 is just below the overbought trigger level of 80. Medium-term momentum is neutral to positive as the MACD (moving average convergence divergence) histogram is printing in the black with a gradually increasing trajectory which points to consolidating to higher prices.

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Source: fxempire.com

If you have further questions related to natural gas price prediction, feel free to reach out to us here. 

Focus on Permian production would generate $64 billion in net economic benefits. The scope of benefits is for the state and local communities for the next 40 years. These are the findings from the study by Impact Data Source.

The study said the state government would receive $44 billion from new leases and royalties. To sum up, this includes $8.5 billion from state oil and gas severance taxes. Lastly, it is with an assumed oil price of $40 per barrel.

“The Permian Basin is the engine of America’s energy renaissance and New Mexico residents will see direct economic benefits and opportunities from our planned investments,” Exxon CEO Darren Woods said in a company statement.

“The benefit to this state’s bottom line, as represented by investments from companies like ExxonMobil, has been enormous,” said New Mexico governor Lujan Grisham. “My administration has been and will continue to be responsive to changes in the energy sector and the need for meaningful regulation and diversification as a means of ensuring a sustainable future – for our children, their education, the infrastructure that will support our collective future and more.”

In March, Exxon revealed its plans to increase Permian production. Likewise, the estimate is to more than 1 million barrels of oil equivalent per day by 2024.

The southeastern New Mexico communities where ExxonMobil o

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Source: Rigzone.com

If you have further questions about the Permian production, feel free to reach out to us here. 

The Permian Basin has become a massive growth engine for the U.S. oil industry over the last few years. The driving force has been the discovery of new techniques that have unlocked the treasure trove of oil and gas trapped in the region’s tight underground rock formations. That has unleashed a wave of drilling that’s sent output soaring. Oil companies are now producing an ever-increasing gusher of cash flow thanks to the region’s low drilling costs, higher oil prices, and efficiency gains.

While the industry had been plowing that money into drilling more wells and acquiring additional land, it has recently reached an inflection point; many drillers no longer need to invest as much money to maintain a healthy growth rate. That has freed them up to allocate that cash to other activities. For the most part, they’re returning their growing windfalls to shareholders through higher dividends and stock buybacks.

Expect more money to continue flowing to investors

Oil companies are starting to reap the rewards of their investments in the Permian Basin. Many are now hauling in more cash than they need to fund growth, which is allowing them to send that money back to shareholders through rapidly rising dividends and significant share repurchase programs. That trend appears poised to continue as the industry turns this low-cost, oil-rich region into an ATM for investors.

 

 

 

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Source: The Motley Fool LLC.

May 14 (Reuters) – U.S. energy company Sempra Energy said on Tuesday the first liquefaction train at its $10 billion Cameron LNG (Liquified Natural Gas) export terminal in Louisiana started producing LNG.

Cameron is the fourth big LNG export facility to enter service in the Lower 48 U.S. state. It is keeping the United States on track to become the third-biggest LNG exporter in the world in 2019. They are behind Qatar and Australia.

Demand for natural gas, the cleanest of fossil fuels, is growing fast around the world. This is as more countries use it to meet increasing energy consumption.

The Target

The first three trains at Cameron will produce about 12 million tonnes per annum (MTPA) of LNG. This is roughly 1.7 billion cubic feet per day (bcfd) of natural gas. One billion cubic feet of gas is enough to fuel about five million U.S. homes for a day.

Sempra has said it expects Cameron 2 and 3 to enter service in the first and second quarters of 2020. Cameron is jointly owned by affiliates of Sempra, Total SA, Mitsui, and Japan LNG Investment LLC, a company jointly owned by Mitsubishi Corp and Nippon Yusen Kabushiki Kaisha (NYK). Sempra indirectly owns 50.2% of Cameron. McDermott International Inc and Chiyoda Corp are the lead contractors at Cameron.

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Source: gcaptain.com

Moreover, if you have further questions about LNG, feel free to reach out to us here.

Obviously, there’s a lot more than just three, but let me hit on the triad of pillars. Let’s learn more about the U.S Oil and Natural gas Industry here.

Producing at All-Time Record

Over this time, U.S. crude oil production has surged 140% to 12.2 million b/d, while gas output is up 55% to 88 Bcf/d.

The U.S. is now easily the world’s largest oil and gas producer, yielding 20% more oil and 25% more gas than Russia.

Will Still Supply the Bulk of Our Energy

Today, oil and gas are our two most important sources of energy, meeting 65% of total U.S. energy demand.

We lean on oil for 97% of our transportation needs, and increasingly, natural gas leads by generating 35% of all U.S. electricity.

This will be a cornerstone of meeting our climate change and environmental goals: “Thanks to Natural Gas, US CO2 Emissions Lowest Since 1985.”

Going Global

Not just being the largest oil and gas producer, The U.S. could also become the largest global seller of these essential fuels within five years.

Our total LNG export capacity stands to reach nearly 8 Bcf/d, or nearly 20% of the total global demand market.

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Source: Forbes.com

If you have further questions about the Oil and Natural Gas Industry , feel free to reach out to us here.

On Wednesday, U.S. president Donald Trump crushed any hopes of a trade deal with China when he announced that China “broke the deal” and that, as a consequence, the U.S. will enforce even higher tariffs on some imports from China starting on Friday, May 10.

According to some experts, however, the dip in crude prices is just temporary. With global crude supply tightening thanks to sanctions on Iran and Venezuela, as well as a surprise decline in U.S. crude production, long-term price projections are looking up. In fact, West Texas Intermediate and Brent futures are up by 30 percent or more year to date, and MarketWatch reports that analysts at Barclays are extremely optimistic, already increasing their third-quarter forecasts by $4 each for both benchmarks.

The United States has become one of the most important energy producers–and currently the fastest growing producer of “global energy supplies” — thanks to the shale oil boom in the West Texas Permian Basin. At the exact same time, China has become the fastest-growing energy consumer, especially when it comes to oil and liquefied natural gas–both of which the U.S. has in spades. “So while the dispute around tariffs goes far beyond trade balances,” argues Sheppard, “energy is one area where the two countries have a mutual interest in finding common ground.”

 

 

 

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Source: oilprice.com

Crude explorers deployed fewer rigs in U.S. fields this week amid an escalating U.S.-China trade war that weighed on oil prices.

Pressed by investors to show more austerity and return profits to shareholders, explorers spent the first five months of this year idling almost 10 percent of the onshore U.S. rig fleet. The outlook for oil demand has soured amid a protracted trade dispute between the U.S. and China, the world’s largest economies.

China Talks May Get Worse Before They Get Better, Asia Society’s Stone Fish Says.

 

 

 

Read & Listen: Full article here
Source: Bloomberg.com

 

U.S. shale oil—which just four years ago was the world’s second most expensive oil resource—is now the second cheapest source of new oil supply globally, just behind the giant onshore oil fields in the Middle East, Rystad Energy said on Thursday.

Rystad Energy estimates in its latest cost of supply curve update that the average Brent Crude breakeven price for tight oil is now US$46 a barrel, just four dollars above the average $42 per barrel breakeven oil price for the giant onshore fields in Saudi Arabia and other Middle Eastern countries.

According to the Q1 Dallas Fed Energy Survey, with executives from 82 E&P firms chiming in, average breakeven prices to profitably drill a new well in the U.S. range from $48 to $54 per barrel, depending on the region. Drillers need $50 a barrel on average to profitably drill a new well, down from $52 per barrel when the same question was asked last year. Average breakeven prices in Midland in the Permian were $48, the lowest-cost in the U.S., and the lowest-cost region in the past three years.

 

 

 

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Source: oilprice.com

 

Vicki Hollub won a bidding war for Anadarko Petroleum Corp. She is the chief executive of Houston oil company Occidental Petroleum. It was against oil giant Chevron Corp. And everything about the deal is why the center of gravity for the oil universe has moved to Texas.

She has confidence in her company’s ability to operate the Anadarko assets at a lower cost. She believe she can pull together a team to negotiate a $38 billion offer that includes two big partners. It is with the french petroleum company Total SA and Nebraska investment giant Warren Buffett. That is how she Occidental Petroleum took on the Chevron Giant.

Thanks to fracking and horizontal drilling technology developed here in North Texas and applied to the Permian Basin, Texas has become a major oil producer and the U.S. has become an oil exporter.

Houston oil executives no longer have to look to the furthest reaches of the world to boost production; a short flight to Midland brings them to one of the richest boom regions on the globe. Nobody has to negotiate with a Saudi or a Russian for access; in West Texas, the fiercest barriers to drilling are money, tumbleweeds, and, in the case of Chevron, Hollub.

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Source: Dallasnews.com

If you have further questions related to how Occidental Petroleum took on Chevron, reach out to us here.