Sep 28, 2022 at 11:00 AM
VOT Research Desk
Discussion Pointers
Although the price of a barrel of WTI crude remains below $80, the upcoming OPEC+ meeting may produce a positive surprise.
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According to Platts, the price of new oil wells has increased 16% year-over-year due to cost inflation caused by increased drilling demand and supply chain issues.
Prices for steel piping and diesel fuel have increased the most, but operator efficiencies like faster drilling methods have offset nearly half of the negative impact of drilling costs.
– At the same time, new rig production rates continue to decline across all major producing plays in the United States, with good efficiency in the Permian decreasing by 15% annually to 1,078 b/d.
– According to WoodMac, ultra-deepwater wells are expected to suffer the most this year. Average floating rig rate costs are expected to rise by 26% compared to last year, nearly twice as much as onshore cost inflation.
Oil market bulls see OPEC+ as their last line of defense against a weak macroeconomic backdrop and a strengthening dollar. Russia, which is expected to propose a significant reduction in production at the October 5th OPEC+ meeting, is the focus of all attention.
Before Hurricane Ian, Gulf Platforms Are Shut Down.BP, an oil major (NYSE:Chevron and BP (NYSE:Before Hurricane Ian, CVX) shut down their oil platforms in the Gulf of Mexico, including the 250,000 b/d Thunder Horse and 60,000 b/d Petronius. Other facilities are unlikely to be affected.
Majors in trading hijack LNG trade.Small and medium-sized players are being squeezed out of the market to the advantage of trading majors like Vitol or Shell because they are unable to secure adequate credit lines as the price of an average cargo of LNG increased by tenfold year-over-year to 175-200 million.
Emirati LNG Saves the Day.RWE, a German utility (ETR:RWE) and ADNOC have agreed to provide Brunsbuettel with liquefied natural gas. The first cargoes are expected to arrive in late 2022, a first for the UAE, which has never exported LNG to Europe before.
