The EIA expects natural gas to produce more electricity this summer by way of burning natural gas than by any other means.
North Sea oil output is expected to begin to fall in 2018. This is probably one of those factors that the Saudis have been saying would happen because of decreased capital expenditures in traditional oil drilling project.
Iran is ready to join OPEC’s production cut. This news ought to drive oil prices up. Iran had previously expressed interest in producing well over 4 million barrels per day, but has not reached that point. Perhaps Iran has more infrastructure issues than it had previously realized, and is willing to take a higher price for its oil in exchange for a larger share of the market.
Speaking of production cuts, Russia reduced its daily oil production by 1.6% by mid-April.
The scuttlebutt is that OPEC will extend production cuts and even cut more in an effort to offset U.S. production increases.
Citi expects OPEC to extend production cuts and predicts that consequently oil prices will push $65/bbl by the end of the year.
The U.S. Geological Survey has “discovered” the latest largest continuous natural gas deposit in the country. It stretches across Texas and Louisiana. It includes the Haynesville and Bossier shale formations. The word discovered is in quotes above because this reserve was already known, it’s just that new technologies have made a lot more of it recoverable. It’s also just the most recent; as continued exploration and technological innovation occur, others will be “found”. Not meaning to downplay it–it’s still an awful lot of natural gas. Here’s to being energy independent!
Energy demand will grow in 2017, but not as much as it has previously. That will probably keep the price of oil down a bit.
The Washington Post sees a murky future for oil prices. However, the murkiness is focused on a way up to $60/bbl oil, not doom and gloom.
India’s economy is growing like mad, and India’s government wants to make natural gas a larger percentage of the energy used in the country. Most of that gas will be imported. Most of that gas will come from the U.S.
Production of both oil and gas is expected to increase in May due to healthy prices for both products. That will drive the price of both products down.
A survey of oil and gas borrowers and lenders shows that there’s going to be more money flowing around the oil patch this year. Confidence in oil and gas is back. Lets just hope it’s not over-confidence. Too much spending will lead to too much drilling will lead to too much gas/oil will lead to low prices again.
The 2016-17 heating season is over and we have almost 15% more gas in storage than the five year average. This cold snap we’ve had the last few days will not be enough to make a big dent in that number. We still have quite a bit less gas in storage than last year so we should see reasonable natural gas prices through the rest of the year. Those prices will hopefully not be reasonable enough to encourage over-drilling.
Coal executives have warned the natural gas industry that it’s next on the environmentalist’s hit list. As long as natural gas is ridiculously inexpensive compared to renewables, it’s safe. But once renewables become competitive with natural gas we’ll see a shift to renewables. That could be a long way down the line.
May 1, 2017: Oil prices are at $48.74 per barrel, and natural gas prices are at $3.23/MMBtu. Not bad for natural gas, not great for oil. Those are good prices to keep us out of a boom but in reasonable drilling activity.
And some people are saying that OPEC will extend its agreement to cut production. The next meeting is May 25th.