{"id":2056555,"date":"2023-10-05T13:42:02","date_gmt":"2023-10-05T17:42:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/oil-supply-fears-grow-as-us-drilling-activity-slows-opec-to-keep-cuts-intact\/"},"modified":"2023-10-05T13:46:53","modified_gmt":"2023-10-05T17:46:53","slug":"oil-supply-fears-grow-as-us-drilling-activity-slows-opec-to-keep-cuts-intact","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/oil-supply-fears-grow-as-us-drilling-activity-slows-opec-to-keep-cuts-intact\/","title":{"rendered":"US drilling activity slowdown raises concerns over oil supply; OPEC maintains production cuts."},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">26<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Foil-supply-fears-grow-as-us-drilling-activity-slows-opec-to-keep-cuts-intact%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2056555&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<p>Global \u2062energy markets could face\u2062 tighter inventories heading into 2024 and beyond \u200bas U.S. \u2064shale \u2062companies are not keen to expand drilling activity, and the world&#8217;s largest oil cartel is not bolstering production.<\/p>\n<p>U.S. crude\u200d oil prices have slumped\u2064 about 7 percent since hitting a \u20642023 high of about $95 per barrel on the New York Mercantile Exchange. Brent, the international benchmark for oil prices, \u2063has also trended down after flirting with $95 a barrel on London&#8217;s ICE Futures exchange.<\/p>\n<p>But while the march toward $100 has stalled amid rising-rate concerns, industry experts believe that crude prices will continue to hover at around $90 on tighter supplies. However, \u2062even if the energy commodity touches the\u200d triple-digit market, global financial markets should not anticipate that companies will take advantage of the situation by increasing output.<\/p>\n<\/blockquote>\n<h2>Related Stories<\/h2>\n<ul>\n<li>\n<h3><a href=\"http:\/\/www.theepochtimes.com\/article\/opec-head-warns-dangerous-underinvestment-in-oil-could-push-up-prices-to-100-post-5503388?ea_src=author_manual&#038;ea_med=related_stories\">OPEC Head Warns \u2018Dangerous\u2019 Underinvestment\u2064 in Oil Could Push Up Prices to $100<\/a><\/h3>\n<p>10\/3\/2023<\/p>\n<\/li>\n<li>\n<h3><a href=\"http:\/\/www.theepochtimes.com\/us\/biden-announces-plan-to-sell-fewest-oil-and-gas-lease-sales-in-history-5501210?ea_src=author_manual&#038;ea_med=related_stories\">Biden Announces Plan to Sell \u2018Fewest Oil and Gas Lease Sales \u200cin History\u2019<\/a><\/h3>\n<p>9\/29\/2023<\/p>\n<\/li>\n<\/ul>\n<p>Rick Muncrief, chief executive of Devon Energy, recently <a href=\"https:\/\/www.ft.com\/content\/056217fb-7e80-4da1-b6b8-489f8b20510e\" target=\"_blank\" rel=\"noopener\">told<\/a> the Financial Times that the industry \u200dis \u2063unlikely to bolster drilling to pump more oil based on near<a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/bitcoin-drops-below-18k\/\" title=\"Bitcoin Drops Below k\">-term price action<\/a>.<\/p>\n<p>&#8220;I think we\u200d are going\u200d to see continued [price] volatility,&#8221; Mr. Muncrief said in an interview with the newspaper. &#8220;By \u2063nature, most of us will just say, \u2018Let&#8217;s stay disciplined.\u200c Let\u2019s keep our production flat.'&#8221;<\/p>\n<div class=\"my-5\">\n<p>  He cited the current administration&#8217;s energy policies and Wall\u2064 Street&#8217;s attempts to direct capital away from fossil fuel projects.\n<\/p><\/div>\n<h2>Anti-Carbon\u2063 Policies<\/h2>\n<p>Despite domestic production volumes growing over the last two months, domestic\u2063 drilling \u200bactivity has slowed since the end of last year.<\/p>\n<p>The Baker Hughes Oil Rig\u2062 Count, which measures the number of active drilling\u200c rigs in the United States and is seen as an early indicator of future production, declined to 502 for the \u2062week ending Sept. 29\u2014down from 507\u200b in the previous week. This is the lowest reading since\u2064 February 2022 and represents the tenth consecutive monthly drop.<\/p>\n<div class=\"my-5\">\n<p>  Last month, the White House <a href=\"https:\/\/www.whitehouse.gov\/briefing-room\/statements-releases\/2023\/09\/06\/statement-from-president-joe-biden-on-protecting-arctic-lands-and-wildlife-in-alaska\/\" target=\"_blank\" rel=\"noopener\">canceled<\/a> seven remaining oil and gas leases on hundreds of thousands of acres in Alaska&#8217;s Arctic National Wildlife Refuge. The administration also expanded protections against future\u200c development and drilling.\n<\/div>\n<div class=\"my-5\">\n<p>  The American Petroleum Institute (API) <a href=\"https:\/\/www.api.org\/-\/media\/Files\/Policy\/Exploration\/2020\/federal-leasing-and-development-ban-study.pdf\" target=\"_blank\" rel=\"noopener\">noted<\/a> that these \u2063energy production bans on federal lands\u2062 and\u2063 waters could threaten \u2062America&#8217;s energy security, the U.S. economy, and the environment.\n<\/div>\n<p>Meanwhile, the pandemic-era crude oil price crash has\u200c scarred the energy industry.<\/p>\n<p>In April 2020, due \u2063to collapsing global demand, the May futures contract for West Texas \u2063Intermediate (WTI) crashed below zero for the first time on record. Brent had also slumped to around $9 per barrel.<\/p>\n<div class=\"my-5\">\n<p>  \u200c Crude prices took several months to rebound, reaching about $50 by the end of 2020. But it was not enough to prevent scores of shale producers from closing \u200ctheir doors, reversing investment plans, \u200cor\u200b declaring bankruptcy.\n<\/p><\/div>\n<h2>OPEC+ Leaves Policy Alone<\/h2>\n<div class=\"my-5\">\n<p>  The Organization of the Petroleum Exporting Countries\u2063 (OPEC) and its allies, \u200dOPEC+, left its oil output reduction intact to\u2064 support oil prices.\n<\/p><\/div>\n<div class=\"my-5\">\n<p>  \u2062 Following a <a href=\"https:\/\/www.opec.org\/opec_web\/en\/press_room\/7223.htm\" target=\"_blank\" rel=\"noopener\">virtual meeting<\/a> on Oct. 4,\u200c the Joint Ministerial Monitoring Committee (JMMC) &#8220;reaffirmed\u200d the commitment of its member \u2062countries&#8221; to keep its production reduction strategy intact until the end of 2024, adding that it is &#8220;ready to take additional measures at any time&#8221; as &#8220;the committee will continue to closely assess market \u2063conditions.&#8221;\n<\/div>\n<p>Saudi\u2063 Arabia confirmed that it would maintain its voluntary production \u2063cut of 1 million barrels \u2064per day (bpd) until the year&#8217;s end. \u200bRussia also stated that it will continue with\u2064 its 300,000-bpd voluntary export drop for\u2064 the rest of 2023\u200d while also fulfilling its obligations.<\/p>\n<div class=\"my-5\">\n<p>  These decisions were in addition to Riyadh and Moscow&#8217;s \u2063supply cuts announced late last year.\n<\/p><\/div>\n<h2>Undersupply Warnings<\/h2>\n<p>With energy prices easing this week, it \u2064would not be surprising if Saudi Arabia and Russia expanded their voluntary cuts until \u2062March 2024, says\u2064 Rob Thummel, the portfolio manager at Tortoise.<\/p>\n<p>&#8220;The global oil \u200bmarkets will remain undersupplied for the foreseeable future, which will result in <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/oil-supply-fears-grow-as-us-drilling-activity-slows-opec-to-keep-cuts-intact\/\" title=\"US drilling activity slowdown raises concerns over oil supply; OPEC maintains production cuts.\">lower \u2062inventories assuming\u200d global oil demand meets projections<\/a>,&#8221; Mr. Thummel said in a note. &#8220;Global\u200d oil demand\u200d is \u200ba bit seasonal, with\u200d the first quarter being the weakest \u200dquarter in terms of demand. So I wouldn\u2019t be surprised if Saudia Arabia and Russia extended their voluntary\u200b cuts until 3\/31\/24.\u2062 Oil\u200b is \u200ctrading lower \u2063on concerns that the volumes cuts are a \u2063signal of lower \u200bdemand for oil globally due to a \u2062weak global economy.&#8221;<\/p>\n<p>He added that he does not expect oil prices to reach $100 a barrel.<\/p>\n<p>Looking ahead, the OPEC chief warned that a &#8220;dangerous&#8221; lack of investment\u200d in crude oil could increase the risk of \u200dhigher energy prices.<\/p>\n<div class=\"my-5\">\n<p>  &#8220;By underinvesting, we \u200bare actually endangering energy security. Without this, \u2064I think there\u2062 are serious possibilities that prices, the \u2064volatility, will be\u200b increasing as demand grows,&#8221; OPEC Secretary-General Hatham \u2063Al \u200cGhais <a href=\"https:\/\/www.cnn.com\/2023\/10\/02\/energy\/opec-dangerous-lack-oil-investment-oil-prices\/index.html\" target=\"_blank\" rel=\"noopener\">told<\/a> CNN on Oct. 2. \u2063&#8221;I believe \u2063it is critical that the\u2063 world gets this right. By underinvesting, we are actually endangering energy security\u2014the world\u2064 will\u200d require at \u200bleast \u200c$12 trillion of investments globally for the oil industry\u2062 from now to the year \u200d2045.&#8221;\n<\/div>\n<h2>US Inventories<\/h2>\n<p>According \u200bto the <a href=\"https:\/\/ir.eia.gov\/wpsr\/wpsrsummary.pdf\" target=\"_blank\" rel=\"noopener\">Energy Information Administration<\/a>,\u200c <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/biden-taps-strategic-oil-reserves-for-50-million-barrels-to-address-high-pump-prices\/\" title=\"Biden Taps Strategic Oil Reserves For 50 Million Barrels To Address High Pump Prices\">crude oil inventories fell 2<\/a>.224 million barrels for the week ending Sept. 29. This is \u2063down from the previous week&#8217;s drawdown of\u2062 2.17 million barrels and worse than the consensus estimate of 446,000 barrels.<\/p>\n<p>Gasoline supplies rose by 6.481 million barrels, distillate stockpiles tumbled by 1.269 million barrels, and heating \u2064oil inventories declined by 303,000 barrels. In addition, for the first time since the beginning\u200d of August, Cushing storage supplies rose 132,000 barrels, up from the previous \u200cweek&#8217;s withdrawal of 943,000 barrels.<\/p>\n<div class=\"my-5\">\n<p>  \u200b  \u200cOverall crude oil <a href=\"https:\/\/www.eia.gov\/petroleum\/supply\/weekly\/pdf\/table1.pdf\" target=\"_blank\" rel=\"noopener\">inventories<\/a> stand at 767.3 million barrels, down by more than 10 percent a year ago.\u2062 The Strategic Petroleum Reserve (SPR) has fallen nearly 17 percent from a year ago to 351 million barrels, while commercial stocks have slipped \u20623.3 percent to 416.3 million barrels.\n<\/div>\n<p> <\/p>\n<h2>Future. They attribute this to the slow recovery of \u2064investment in new oil projects and the focus on renewable\u2063 energy. <\/h2>\n<p><span>  Ces to reach $100 \u2064per barrel in the near future, but\u200c rather to hover around $90 \u200cdue to tighter supplies. He also noted that even if prices were to reach the triple-digit mark, companies are unlikely to increase their output.<\/p>\n<p>The article highlights the reasons for the reluctance in expanding drilling activity, including the current administration&#8217;s energy policies and Wall Street&#8217;s efforts to divert capital away from fossil\u200d fuel projects. It mentions how domestic drilling activity\u2062 has \u2062slowed despite growing production \u2063volumes, citing the decline in the Baker Hughes\u2064 Oil Rig Count as an indicator.<\/p>\n<p>The article also mentions the impact of the pandemic-era oil price crash on the industry, with many shale producers closing down or declaring bankruptcy. It discusses the actions of OPEC \u200cand OPEC+ to support oil \u200dprices through production reduction \u2064strategies, noting that they have maintained their cuts and are ready to take additional \u2064measures if necessary.<\/p>\n<p>The article includes comments from industry experts, who forecast that the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/buttigieg-passing-spending-bills-important-to-reduce-inflation\/\" title=\"Buttigieg: Passing Spending Bills 'Important' to Reduce Inflation\">global oil markets<\/a> will remain undersupplied in the foreseeable<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Global energy markets may experience tighter inventories in the coming years as U.S. shale firms show little interest in increasing drilling, and the world&#8217;s largest oil cartel refrains from boosting production. Since reaching a 2023 peak of around $95 per barrel in New York, U.S. crude oil prices have dropped by approximately 7%.<\/p>\n","protected":false},"author":278,"featured_media":2056556,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2056555","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2056555","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/278"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2056555"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2056555\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2056556"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2056555"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2056555"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2056555"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}