OPEC requested that Libya and Nigeria present data regarding their oil production at the meeting on July 24.  It’s presumed that OPEC is planning to limit their production now the they are producing more.

Wall Street is financing big oil, but it might be giving too much money to the industry.  More money equals more production equals more supply equals lower prices.

If you’d like to read about the Strategic Petroleum Reserve and its effects on the market, this is the article for you.

Venezuela owns almost 50% of Citgo, a Texas-based oil and gas company.  Venezuela owes Russia $1.5 billion dollars, collateralized by that ownership.  Venezuela is very likely to default on that loan to Russia, in which case Russia would end up owning almost 50% of Citgo.

Lots of people think that electric cars are likely to replace gas cars, and that consequently the demand for oil will go down.  That’s not the way things have happened in Norway.  It’s still early in the process, but it’s interesting to see that “what people think” isn’t necessarily what will happen.

OPEC is overproducing.  A lot of it is from Libya and Nigeria, but some of it is from Saudi Arabia itself.

Coal is expected to produce more energy in 2017 than natural gas, but natural gas will produce more in 2018.

Halliburton says that drilling will not grow much in 2018 because the service sector can’t provide enough services.

July 18, and there’s a rumor that an oil field in Saudi Arabia that produces 900,000 bpd may have some technical problems that could severely limit or entirely shut down its production in the next few weeks.  If that happened, oil prices would skyrocket.  Some investors are already getting in on the action, with oil prices jumping $.40/bbl today so far.  It’s amazing how things can change so fast in the oil patch.  Just yesterday we were thinking that oil and gas prices would probably be stable through the rest of this year.

A Bloomberg article attempts to predict the future, which is always difficult but perhaps even more so when it’s the future of oil and gas you’re attempting to predict.  Natural gas has been thought of as a bridge fuel between oil and renewables.  The article says that the transition period is going to be much shorter than previously thought.  The one thing we think the article didn’t take into account is the fact that as the demand for gas goes down because the price of renewables is going down, the price of gas will also go down.  We’ve seen the industry adapt to low prices.  We’ve seen that this year coal will produce more electricity than gas because the price of coal went down.  This may or may not be the last year that happens.  It’s a fluctuating market and gas will be around longer than environmentalists want to believe, but not as long as oil and gas industry people want to believe.

Mark Zuckerberg, the founder of Facebook, went fracking.  Lots of people think he’s prepping for a Presidential run.

There are twice as many rigs running today than there were this time last year.

Consequently, the price of drilling has gone up about 8%, after declining 34% since March of 2014.

Congress has passed legislation aimed at speeding up the permitting process for interstate and international pipelines.

U.S. News published an article that’s essentially an overview of the need and the safety record of major interstate pipelines.  That still doesn’t make me very comfortable with the idea of living about 1000 feet from a 42-inch high-pressure gas pipeline.

The House Committee on Science, Space and Technology thinks that Russia is funding environmentalist efforts that oppose fracking in the United States.  That would be a wise financial investment for Russia.

Kevin DiGregori hints that there are lots of down-stream projects in the works in West Virginia.  That would be really good for West Virginia’s economy.  Maybe we’ll finally stop shipping our raw natural resources out of the state for other states to turn into greater value products.

Fracking is changing world politics.

Gas and oil production numbers in the U.S. are both increasing.

It’s August 18, 2017 and gas prices are still below $3.00/MMBtu.  As we get close to the end of injection season it will be interesting to see how close we get to filling up our storage facilities again.  If we end up with less in storage than last year we can expect slightly higher prices than last year.  Slightly less is the trend so far this year.

Oil is at about $47/bbl.

I’ve been on vacation and catching up from being on vacation, so this edition is both late and not complete.  Here’s looking forward to the next regularly scheduled edition.

There was a public hearing about the natural gas fired power plant that is proposed for Harrison County, WV.  The projected operation date is sometime in July, 2020.  This would be a good thing for West Virginia royalty owners, and West Virginians as a whole.  Instead of shipping all our gas out of state as a raw material, we can add value here and then ship it out at a higher price.

South Jersey residents will see a reduction in their power bills, in part because of the low cost of Marcellus Shale gas.

The Wall Street Journal is saying that natural gas is finally a global market.  I don’t agree that’s true quite yet, but I think we’re awfully close.

The U.S. is the worlds top producer of petroleum and natural gas, and has been for five years straight.

Mexico is buying up a lot of U.S. natural gas.  Exports to Mexico have quadrupled in recent years.

Volvo is making a push towards building more electric vehicles.  All new models from 2019 on will be either full electric or hybrid.

Shale drillers in Pennsylvania have drilled twice as many wells in the first half of this year as they did in the first half of last year.

Saudi Arabia is warning that there’s not enough investment in oil drilling, and that in the next five years we’re going to see a serious drop in production.  Seems that would be in their best interest, and American shale producers should be licking their chops if that’s really the case.

The cracker plant in Ohio is coming a little closer to reality.  A final decision has not been made, but PTT Global Chemical announced the purchase of land for about $130 million.

Rig counts in the Marcellus-Utica region remain steady after a slow but steady increase in the last few months.

Watching how the oil and gas supply industry is going is a pretty good way of knowing how the oil and gas industry is going.  Recently, suppliers of frac sand have taken a hit by investors, meaning there’s not confidence that demand for frac sand will grow.  That said, demand is up considerably year over year already, so the industry isn’t doing poorly.

China’s national gas developer plans to double natural gas production in the next three years.

The Trump administration has appointed some new commissioners for the FERC, but they have not been approved.  The CEOs of some major pipeline companies are saying that if they aren’t approved by August the investment money for those projects may disappear.

Now that Nigeria and Libya are back to producing large amounts of oil, OPEC is going to force them to curtail their production.

President Trump stumped in Europe for U.S. natural gas.

CNN Money doesn’t think gas powered cars are going away any time soon, in spite of Volvo’s move to electric.

France won’t be developing oil and gas any more.  American fracking companies are happy.

Investors are hesitant to throw more money at the oil and gas industry right now.  That’s good for the time being.  We don’t need more development at the moment.  More investment will be needed when prices start to climb towards $4.00/MMBtu.  That may be a while.

July 17, and gas prices have moved a lot in the last month but they’re back at about $3.00/MMBtu.  Oil prices are at $46/bbl, but have been moving around a lot as well.

Currently, it seems that energy prices are going to be relatively stable for some time.  Natural gas production is about right to put us at about the right amount of gas storage before winter, so we’ll see the usual bump in price this winter.  Oil prices could nosedive if OPEC decided to open the spigots but they appear to be committed to keeping prices up until at least the IPO for Saudi Aramco, and American fracking is not yet producing enough oil to drive prices down.

The price of oil and natural gas have taken hits in the last few weeks.  Oil is down below $45/bbl and natural gas is hanging out around $3.00/MMBtu.  It’ll be interesting to see where things go as the summer progresses.

This article at Energyfuse.org suggests that shale drilling is hitting a ceiling as far as productivity per well is concerned.

Some drillers are ready to slow down activity if prices continue to decline.

Wind and solar electricity generation exceeded 10% of U.S. total for the first time in March, according to the EIA.  We expect that growth trend to continue for the next few years at least.  It seems that renewable power generation has reached a critical mass of sorts, and will continue to grow regardless of the price of fossil fuels.

Russia believes that oil markets will rebalance by the time the current OPEC/Russia production cut agreement is over.

OPEC says rebalancing is happening slower than expected.

Fracking technology has improved significantly over the last few years.  Companies are getting more product from each foot of lateral than they used to.  Now they are going back and using current techniques on older wells and getting increased production.  It’s called refracking, and it’s going to add significant supply at very little additional cost in the way of money, time, and environmental impact.

One reason oil prices are declining is that Libya and Nigeria have begun producing more oil.  They are excluded from the OPEC/Russia production cut agreement because their production has been tiny due to civil war.

West Virginia Senator Capito has introduced a bill that would expedite permitting for a gas storage hub, and Senators Capito and Manchin have introduced a bill that would make it possible for West Virginia to get a loan guarantee from the federal government for the project.

Whew!  Five days later than usual.  I’ll stick with the “business is booming” story for now.

Libya says it has exceeded 800,000 barrels of oil per day recently, with the possibility of hitting 1MM in the near future if they can get some contractual issues ironed out.

The EIA expects the U.S. to produce more gas this year than it previously thought.

A new study suggests that re-fracking can bring so much new production online from an old well that it’s just like drilling a new well.  It doesn’t mention whether re-fracking makes it possible to extract gas that otherwise would remain trapped in the formation, or just speeds up the extraction of gas that would come out anyways.

Sabine Pass continues to increase exports of LNGs.  The plant took in 2.3 Bcf per day in the second week of May, up from 2.1 Bcf per day in the first week.

A recent trade deal will make it possible for the U.S. to export LNGs to China.  Nice.

Some think that OPEC can’t just extend their production cuts, they need to double down on them.  There’s no other way to chew through the surplus.

Mexico has been increasing its reliance on natural gas.  Interestingly, it has a shockingly small number or drilling rigs running.  Good for the U.S., weirdly bad for Mexico.

This article discusses what OPEC is trying to accomplish by cutting production.  It’s pretty interesting, but even more interesting is the fact provided in the article that U.S. oil production is expected to hit 9.3 million barrels per day this year, and 10 million barrels per day next year.  That’s a lot of new production, and all thanks to OPEC and Russia cutting production.  They’re playing a dangerous game, and at some point they’ll probably have to start producing at full speed or they’ll just create a behemoth in the U.S.

This article goes into just how much money OPEC has “lost” since their announcement in November of 2014 that they would flood the market with cheap oil.  It also briefly mentions that Saudi Arabia has explored using fracking in its own oil fields, with little success.

There aren’t enough frack crews.  This was one of the factors that I thought might slow down the growth of the oil and gas industry when the price of oil and gas started to recover.

On top of that, somebody crunched the numbers and decided that the Marcellus/Utica region needs an additional 45 drilling rigs (and corresponding frack crews, of course) to fill the new pipelines that are going to be completed in this area.  There are only about 50 rigs running in this area right now.  There used to be a lot more than those two number combined, back in the boom before 2014, so if the crews could be found the rigs could be run and the gas produced.

Both oil and gas prices are down again.  Oil is down in spite of OPEC and Russia extending the production cuts for another nine months.  This article says the extension is going to have the desired effect and oil prices will go higher again.

Natural gas prices have gone down in part because some power producers are switching back to coal.  This leads me to think that we’ll probably be pushing the limits of natural gas storage at the end of injection season this year, just like last year, with the associated low price of natural gas.

Marcellus drillers aren’t drilling a lot of new wells compared to other oil or natural gas plays.  They’re completing DUCs.  There’s a lot of drilling that needs to be done in the near future, and they’ll have to bring on some new rigs soon.