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ENERGY NEWS
US
ENERGY REVIEW
Slow increase in US oil and gas production, rising cost inflation pressuring companies, high petrol and energy prices, and the industry calling on the Biden Administration to start supporting American energy instead of pleading for more oil from OPEC+ were the key developments in US oil and gas over the past weeks. By Tsvetana Paraskova
The US oil and gas industry continued to expand activity in the third quarter of 2021, according to the Dallas Fed Energy Survey of E&P and oilfield services companies in the Eleventh Federal Reserve District, which comprises Texas, southern New Mexico, and northern Louisiana.
Oil & Gas Costs Rise Sharply Oil production rose, but at a slower pace than in the previous quarter, while costs jumped for a second consecutive quarter, company executives said in the survey.
Petrol prices in the United States stayed in October at their highest level since 2014, due to high crude oil prices.
“We are encouraged by the restraint shown by U.S. upstream operators. By restricting capital expenditure, we are healing historic overproduction of both oil and natural gas. We believe investors will be attracted back into the E&P space if, as an industry, we continue on this path for at least a year or two more to deleverage balance sheets and return capital to investors.”
Among oil and gas support services firms, one executive commented:
“Among oilfield services firms, the index for input costs increased to 60.8, a record high and indicative of significant cost pressures. Only one of the 47 responding oilfield services firms reported lower input costs this quarter,” the survey found.
“We are finding it difficult to increase prices to match our increase in costs.”
Restraint in the US shale patch continued in the third quarter, despite the higher oil prices.
Petrol prices in the United States stayed in October at their highest level since 2014, due to high crude oil prices, recovering US economy and demand for fuel, and continued declines in US petrol stocks.
An E&P company executive said in comments to the survey:
www.ogv.energy I November 2021
US Petrol Prices Hit Highest Level in 7 Years
“Sorry folks, but the cost of gasoline is still going up,” AAA said on October 18, and its spokesperson Andrew Gross noted that “unfortunately, it doesn’t look like drivers will be finding relief at the pump any time soon.”
“API’s primary data on U.S. petroleum markets for September reinforced a combination of developments that has been recurrent so far in 2021 – that is, demand outpaced supply, inventories fell, and consequently imports and prices rose,” the American Petroleum Institute said in its Monthly Statistical Report on 15 October. As per the API data, US petroleum demand set a record high for the month of September of 20.6 million barrels per day (bpd), including the highest refining and petrochemical demand for other oils – intermediate products in refining and petrochemicals – ever for the month. On the other hand, US crude oil production was constrained by the storms in the Gulf Coast, the API noted.
