WTI crude futures didn’t move higher today after the Energy Information Administration confirmed the substantial inventory draw estimated by the American Petroleum Institute on Tuesday.
Despite record U.S. oil production last year, output this year is set to decline, with the oil rig count dropping over the last three months. The U.S. saw increased activity in its oil and gas fields last year following the Russian invasion of Ukraine and low OPEC oil output, which led President Biden to plead with domestic producers to boost their output, to tackle shortages and rising prices.
Nearly two years ago, British oil and gas supermajor BP Plc (NYS:BP) announced that the North Sea crude price Dated Brent, the company’s most important pricing benchmark, was experiencing “regular dislocations.”
A panel of OPEC+ is unlikely to change the current oil production policy of the alliance at the Friday meeting, several sources in the group told Reuters on Wednesday, as prices rallied to more than a three-month high.
Western oil majors reported drops in second-quarter earnings of about 50% compared to the same period last year, when Russia’s invasion of Ukraine sent oil and gas prices soaring and pushed profits to record levels. Even with profits remaining high by historical standards, the sharp drop could reshape the companies’ renewable energy production plans.
Oil major BP on Tuesday reported a nearly 70% year-on-year drop in second-quarter profits on the back of weaker fossil fuel prices, echoing a trend observed across the energy industry.
Israel’s energy minister said on Wednesday that more of the country’s natural gas reserves should be earmarked for export, amid renewed interest in offshore exploration and debate on whether the gas should be kept for domestic use.
The Department of Energy has canceled its offer for the purchase of 6 million barrels for the strategic petroleum reserve amid the latest surge in oil prices.
Spending on conventional oil and gas exploration is rebounding and expected to top $50 billion this year, the highest since 2019, but operators are still waiting for the results they had hoped for. Rystad Energy research shows that despite the rising investments, discovered volumes are falling to new lows.
Happily for Saudi Arabia, it does not take a genius to work out that persuading its OPEC+ brothers to cut their oil production to ramp up prices and then quietly selling additional oil over and above its official quota is a major money spinner.