ARC's Take on Oil | Russell T. Rudy Energy LLC
In my opinion, ARC Financial offers some of the most insightful analysis of what is going on in the oil and gas markets. To make it even better, they periodically publish a wealth of information in easy to understand charts with annotated observations. Recently I perused their August 30 issue and gleaned the following observations:
Oil Futures-The good news is that futures prices for the rest of this year are on an upward trend which continues through the end of 2018. The bad news is that the highest price by then will still only be about $55 per barrel.
Oil Production-OPEC production is high and might be even higher now that the Niger Delta Avengers have indicated that they are willing to discuss ending attacks on the crude oil infrastructure in Nigeria. Conversely, U. S. production is falling, but not as rapidly as many had predicted. Of course, even at recent levels we are far above where we were in 2012.
Imports-As domestic supplies of oil increase imports decrease. This is especially true in the case of light crude, as shale oil tends to be light.
Stocks-Crude inventories in the U. S. are high, as is the case in most developed countries. This is in spite of falling domestic production. This in turn continues to exert downward pressure on prices.
Exports-Crude exports are a good news story. As domestic production increased, so did exports. We have shipped oil to 16 countries with more than half destined for nations other than Canada. Lifting the crude oil export ban at the end of last year is paying off for us.
Refinery utilization rates are down compared to last year, but supply is up, due to increased refining capacity. Domestic gasoline consumption is down, so production of refined products is exceeding domestic demand. Consequently, exports are rising. This has been a significant trend since2006.
Horizontal Drilling-While overall activity is down domestically, growth has been significant in the Permian Basin of West Texas and Southeast New Mexico this year. However, activity in the Bakken shale of North Dakota, the Niobrara of Colorado, and the Eagle Ford of South Texas has fallen off.
To follow’s ARC Financial Charts, please go to http://arcfinancial.com/research/energy-charts/forecast-more-energy-rain-or-shine/ .
Russell T. Rudy Energy, LLC buys oil, gas and mineral interests nationwide. Please call (800-880-0940), or write (info@rudyenergy.com ) to let us know if you agree, disagree or would just like to comment on this, or any of our posts.
