What You Should Know About Oil And Gas Today
The State of Play
Don’t look now, but the price for WTI is suddenly approaching the $40 level again. Markets reacting to the somewhat amazing jobs report out of Washington today, in which the U.S. economy gained 2.51 million jobs in May as opposed to “expert” expectations of 8 million jobs lost, had pushed WTI up to $38.84 as of this writing early Friday morning. The single-month gain of 2.51 million jobs was the largest ever recorded.
Man, we really need some new “experts.”
Markets were also reacting to good news out of OPEC+, which has agreed to accelerate its meeting from June 11 to this weekend, at which it now seems certain the countries will agree to extend their deep, May/June supply cut levels for several more months. The OPEC+ meeting will convene at 1 p.m. Greenwich time on Saturday, so the details of the deal should be known when Americans awake on Sunday morning.
Tropical Depression Cristobal is expected to begin a fairly rapid journey north to the U.S. Gulf Coast today after several days of wandering around the Bay of Campeche and Yucatan Peninsula. Landfall in the U.S., previously expected late Saturday/early Sunday has now been pushed back a full day to late Sunday night.
The NOAA cone for Cristobal expanded overnight, now stretching from Texas’s Matagorda Bay in the west eastwards to encompass the entire Florida panhandle:
The Houston Chronicle’s Sergio Chapa reports today that natural gas flaring levels are expected to drop to record lows as a result of all the shutting-in of wells that has taken place over the past 3 months. Chapa reports that “The carbon dioxide intensity of oil production in the Permian is expected to fall to a record low of 8.6 pounds of emissions per barrel by November, projections from the Norwegian energy research firm Rystad Energy show.”
This is great, but only temporary. The real tale will be told once all those wells start coming back on-line. Will Texas producers follow through on promises of plans to work hard to really reduce flaring? We will know this time next year.
Haley Zaremba, a Mexico City-based writer, has a strong piece today detailing the reasons why, despite all the hype we see about renewables in the media, oil is still king in the energy space. Go read it.
Along those same lines, David Spigelmyer, President of the Marcellus Shale Coalition, has a terrific piece today detailing many of the ways natural gas drives economic growth in the U.S. and across the globe. David will be the special guest on In The Oil Patch Radio, co-hosted by myself and Shale Magazine Publisher Kym Bolado, when the show airs on June 21 and 22. You can listen to the show on IHeartRadio at 8:00 p.m. on Sunday evenings.
Speaking of the many benefits of natural gas, Sergio Chapa also reports today that BJ Services plans to increase the use of lease-produced natural gas to power many of its frac crews as the industry begins to reactivate itself along with the economy in the coming months. According to the report, “BJ Services and customer Dallas oil company Aethon Energy recently wrapped up a series of successful tests of the Titan at hydraulic fracturing sites in Haynesville Shale of East Texas, the companies said Thursday. BJ Services plans to deploy the natural gas-fired turbine and frac pump combo in the Permian Basin of West Texas and the Eagle Ford Shale of South Texas.”
That’s all for today. Have a great weekend.