• Will There Be Another Oil Price War?
    on May 28, 2020

    Two months ago, Russia said no to Saudi Arabia’s proposal for deeper oil production cuts. It was enough to start a price war that, coinciding with the Covid-19 pandemic, wiped out billions in oil revenues for both Russia and Saudi Arabia while forcing them to enact even deeper cuts than previously discussed. Some say the price war was never about Saudi Arabia and Russia. They say it was about U.S. shale. If that is accurate, what happens when the U.S. shale patch regains enough strength to start ramping up production again?  It might sound…

  • Have Oil Traders Abandoned Fundamentals?
    on May 27, 2020

    Oil prices are back at levels last seen in mid-March, and while fundamentals for crude have improved somewhat, markets have become too optimistic Market euphoria continues to push financial markets and commodities higher, and oil prices have climbed back to levels not seen since lockdown orders in the U.S. began in March. By a variety of metrics, markets have recently made up a lot of lost ground over the past two and a half months. The Dow Jones Industrial Average surged past 25,000 points on Tuesday, and the S&P 500 jumped above 3,000. Both…

  • North American crude oil prices are closely, but not perfectly, connected
    on May 27, 2020

    The New York Mercantile Exchange (NYMEX) front-month futures contract for West Texas Intermediate (WTI), the most heavily used crude oil price benchmark in North America, saw its largest and swiftest decline ever on April 20, 2020, dropping as low as -$40.32 per barrel (b) during intraday trading before closing at -$37.63/b. Prices have since recovered, and even though the market event proved short-lived, the incident is useful for highlighting the interconnectedness of the wider North American crude oil market.

  • EIA forecasts lower U.S. natural gas consumption in 2020
    on May 26, 2020

    In the latest Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) forecasts that decreases in natural gas consumption in the United States in 2020 will be driven by declines in natural gas used in the industrial, commercial, and residential sectors. In the U.S. electric power sector, EIA forecasts natural gas consumption to decline in the second half of 2020 after growing in the first half of the year.

  • DNO ASA has implemented a target 35% reduction across all spend categories to shrink its 2020 budget by $350 million to $640 million in response to turbulence and uncertainty in global oil and financial markets triggered by the coronavirus pandemic.
  • The US drilling rig count dropped 21 units to reach 318 rigs working for the week ended May 22, according to Baker Hughes data. The count is down 665 units from the 983 rigs working this time a year ago.