Art Berman
Oil-price discovery excursions often last for weeks or even months before exuberant expectations of counter-parties intersect with market fundamentals.
U.S. LNG exports increased 600 mmcf/d to 12.3 bcf/d and Mexico exports rose 500 mmcf/d to 5.4 bcf/d.
Oil-price volatility moved from a weekly average of 37% to 25% more than the the pre-pandemic average.
The sooner we stop expecting a miracle of technology or a quick transition to renewable energy, the better we will be able to cope with a more difficult energy future.
LNG exports have returned to levels before the Freeport LNG outage so analysts can’t blame that for more-than-adequate supply.
This week’s increase in oil comparative inventory was the among largest of the last year. The SPR release of 0.8 mmb was the smallest
Markets are signaling natural gas producers to slow their drilling because supply is more than adequate.
The WTI future strip moved from 3- to 7-month contango reflecting limited supply urgency.
High oil prices are a failing grade for the system. The oil bulls either do not understand this or are so selfishly motivated that they don’t care if the world is in trouble as long as they are making money.
The market is pricing in the more-likely case that China’s long period as a driver of oil growth is near its end.
Magical thinking about the possibility of nuclear fusion in the future does nothing to address our bad energy behavior today.
Oil prices are not returning to $100 nor is the economy returning to normal.