From the Author Guides: When quoting an article please limit yourself to no more than 20 lines or less than half the article length (which ever is less). OP truncated – NV
With Brent crude at $120 per barrel and WTI close behind it, the fundamentals picture of crude oil globally is not a sight of comfort. It is a sight of worry. Many relied on the U.S. shale patch to alleviate this worry by ramping up production. Yet U.S. shale is not budging. This time, the swing producer is not swinging. “The US oil and gas supply system remains very potent, but at any given price, growth will be smaller and slower,” Raoul LeBlanc, S&P Global vice president for North American upstream oil and gas, told Bloomberg last week. “Without the subsidy that shale shareholders provided, consumers can expect to pay higher prices.”
That’s because U.S. shale drillers have placed a priority on returns to shareholders after years of burning through their cash. Rystad Energy estimated earlier this month that the industry will pocket some $180 billion in free cash flow this year at current oil prices. That will go a long way towards fixing their previously loss-heavy balance sheets, but it won’t change priorities.
What’s different today than the past . . . is that we are allocating capital in a way that maximises returns to shareholders, rather than maximising [production] growth
The industry was built on [oil and gas production] growth expectations, and company stocks were valued on growth expectations. That all had to get broken down
Chief executive of Chesapeake Energy, Nick Dell’Osso
In the back of everyone’s minds is, ‘When is it going to be [production] growth? . . . We have investors saying ‘My gosh, if not now, when?’ But for everyone saying that there’s at least one other if not two others waiting to say, ‘Gotcha! We knew that discipline would be short lived.’ We have learned our lesson before Russia invaded Ukraine.
Rick Muncrief. Devon Energy
Retail gasoline prices could hit $6.20 per gallon by August
According to JP Morgan, U.S. retail gasoline prices could hit $6.20 per gallon by August. The reason: the mismatch between demand and supply. Diesel prices are already above $6 per gallon in the Northeast and are likely to continue up. The situation at the pump is so dire that the Biden administration has mentioned a ban on exports of crude oil as one of the options on their table of tools for fighting fuel price inflation.
Oil Price 7:45am
WTI Crude • 118.5 +3.39
Brent Crude • 123.8 +2.11
Natural Gas • 8.636 -0.091