Speculators and algorithmic traders are betting on higher oil prices due to expected policy changes under Trump and shifts in EV and oil demand.

Trump’s presidency sparks renewed optimism in oil markets

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Last year’s oil market was dominated by algorithmic trading, amplifying every headline about market oversupply and Chinese demand into price swings that kept crude trapped in a narrow, disappointing range—well below OPEC+’s lofty production-cut goals. This year may not see much of a change in oil’s price amplitude, but the peaks and troughs could grow sharper, setting the stage for some dramatic action.

In the second and third week of December last year, speculators in the United States significantly increased their bets on higher oil prices, Bloomberg reported this week. In fact, in the second to last week of the year, long bets on crude reached the highest in four months, the report said, for a total of close to 183,000 lots. That followed an even more significant increase in bullish positioning in the previous week, when the number of lots hit the highest in a year.

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Source: Oil Price

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Researchers used AI to analyze 45 years of USGS maps, uncovering oil and gas wells not listed in state records in California and Oklahoma.

AI helps researchers dig through old maps to find lost oil and gas wells

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Undocumented orphaned wells pose hazards to both the environment and the climate. Scientists are building modern tools to help locate, assess, and pave the way for ultimately plugging these forgotten relics.

Scattered across the United States are remnants from almost 170 years of commercial drilling: hundreds of thousands of forgotten oil and gas wells. These undocumented orphaned wells (UOWs) are not listed in formal records, and they have no known (or financially solvent) operators. They are often out of sight and out of mind – a hazardous combination.

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Source: BERKELEY LAB

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The Permian Basin is pumping a record 6.3 million barrels of oil daily, with projections to hit 6.6 mb/d next year, driven by tech advances and disciplined practices.

Basin’s oil production goes ever higher

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Pumping a record 6.3 million barrels of oil per day and poised to reach 6.6 mb/d next year, the Permian Basin is driven by good prices, technological advances and fact-based optimism that the worldwide demand for oil and natural gas will stay strong for decades to come.

And as much oil and gas as it’s producing, a convergence of factors ensures that the Basin can and will generate even more. The prediction of 6.6 mb/d next year is from the U.S. Energy Information Administration.

Odessa oilman Kirk Edwards, State Rep. Brooks Landgraf and Waco economist Ray Perryman say the region continues to lead the world in energy innovations.

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Source: OA Online

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The Public Utility Commission of Texas (PUCT) approved a plan to meet the future electricity needs of the Permian Basin Region.

Texas commission approves plan for transmission infrastructure to serve Permian Basin

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The Public Utility Commission of Texas (PUCT) approved a plan to meet the future electricity needs of the Permian Basin Region.

The plan incorporates the transmission infrastructure needed to support the expansion and electrification of Texas’ oil and gas industry in West Texas. ERCOT forecasts that electricity demand in the region will grow to approximately 26 GW by 2038, which is equivalent to almost one third of the current summer demand of the entire ERCOT system.

“The Permian Basin is the heartbeat of our state and nation’s energy dominance and economy,” PUCT Commissioner Lori Cobos said. “This plan is a roadmap that will ensure electric reliability in the region for decades to come and facilitate critical transmission infrastructure investment that will ensure the continued success of Texas’ oil and gas industry and support the region’s local communities and our entire state.”

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Source: Daily Energy Insider

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Crude oil prices moved higher today after the US EIA reported an estimated inventory decline of 6.9 million barrels for the week to August 30.

Oil prices rise on large crude inventory draw

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Crude oil prices moved higher today after the U.S. Energy Information Administration reported an estimated inventory decline of 6.9 million barrels for the week to August 30.

A day earlier, the American Petroleum Institute reported its own inventory estimate, which saw these drop by a sizable 7.4 million barrels in the final week of August. Analysts polled by Reuters had expected a draw of around 1 million barrels.

The EIA’s previous report pegged the decline in oil inventories at a modest 800,000 barrels, with mixed changes in fuel inventories.

For the final week of August, gasoline and middle distillate inventories saw more mixed changes.

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Source: Oil Price

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Major companies' recent mergers and acquisitions of independent oil firms have positively reshaped the energy industry in the Permian Basin.

Big oil mergers promise greater stability

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The recent series of mergers and acquisitions of independent oil companies by major companies has reshaped the energy industry for the better in the Permian Basin.

Odessa oilman Kirk Edwards, State Rep. Brooks Landgraf and Waco economist Ray Perryman say one of the big benefits will be more stability in the oil and natural gas markets as the major companies prove much less reactive to price fluctuations than the independents always were.

Starting last fall and continuing through the spring, ExxonMobil bought Pioneer Natural Resources for $60 billion, Chevron merged with the Hess Corp. for $53 billion, Diamondback Energy obtained Endeavor Energy Resources for $26 billion and Occidental Petroleum acquired CrownRock Operating for $12 billion. ConocoPhillips bought Concho Resources for $13.3 billion in 2020.

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Source: OA online

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Over the next 12 months, US Energy plans to invest over $750 million, primarily targeting projects in the Permian region.

US Energy Development Corporation to invest $750 million on Permian projects

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U.S. Energy Development Corporation (U.S. Energy) is expanding its operations in the prolific Permian basin. U.S. Energy is poised for significant growth and development in one of the most productive oil and gas regions in the United States.

Over the next 12 months, the company expects to deploy upwards of $750 million, with the majority of this capital earmarked for projects in the Permian.

Following closely on the heels of its success with the JT Morris pad, U.S. Energy brought its Westway 2122 two-well pad online in mid-June. Similar to JT Morris, the Westway project was completed under budget and ahead of schedule.

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Source: Oil & Gas 360

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The development of gas processing plants and a pipeline opening in the Permian Basin are expected to give crude producers a boost in the second half of 2024.

Expanding gas processing capacity may increase Permian crude

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Crude production is about to pick up in the Permian Basin, analysts say.

Permian players are expanding gas processing and takeaway capacity in the basin—an indication of plans to ramp up crude production over the next two years, according to analysts tracking the region.

Permian crude production has flattened since February, staying within striking distance of 6 MMbbl/d since last fall, according to a study by analytical firm RBN Energy. Consolidation, capital discipline and a lack of natural gas takeaway capacity have led E&Ps to keep production relatively steady.

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Source: Hart Energy

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The oil and gas industry has experienced a number of booms and busts over the past few decades, but for now, it appears to be flush with cash.

Oil and gas companies are swimming in so much cash that they’re cutting back on borrowing at a faster pace

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Last year, the demand for loans from fossil-fuel companies fell 6% year-on-year and that followed a decline of 1% in 2022.

From a climate perspective, this may sound like good news because the drop in bank lending to oil, gas and coal companies should mean less investment and less production over time.

The reality, however, is that oil and gas companies don’t need a lot of loans because they’re generating so much money these days from their underlying businesses, said Andrew John Stevenson, senior analyst at Bloomberg Intelligence. And that trend is likely to continue through the end of the decade, he said.

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Source: Fortune

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US oil is now encroaching on the key markets of the OPEC+ group, which has been restricting supply in an effort to boost oil prices.

US oil is stealing market share from OPEC+

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Surging U.S. oil production and shifting global oil flows amid geopolitical flare-ups have boosted American crude exports to record-high levels in recent months. Now U.S. oil is encroaching on the key markets of the OPEC+ group, which has been restricting supply in an effort to boost oil prices.

From Europe to Asia, buyers are purchasing more U.S. crude as sanctions against Russia and uncertainty over Venezuela’s sanctions relief renewal are making refiners anxious about importing Russian and Venezuelan crude. Europe has also turned to more U.S. oil as shipments from Asia are now taking longer to deliver cargo. Due to the Houthi attacks on commercial shipping, tankers mostly avoid the Red Sea/Suez Canal route – the fastest shipping lane from Asia to Europe – and are heading to the Cape of Good Hope around Africa.

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Source: Oil & Gas 360

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