Energy Brief Today: Shale production could help bring oil prices down

By Timothy S. Snyder, Matador Economics

Markets are still eyeing tariffs cautiously, which is bringing the equity side of the markets lower this morning. Crude oil is trending slightly higher early, but beginning to lean lower. Natural gas is running in bullish territory.

In a story from Tsvetana Paraskova in Oilprice.com titled “U.S. Energy Secretary: Shale Could Boost Production Even at $50 Oil” U.S. Energy Secretary Chris Wright said “U.S. shale producers could increase production even if oil prices fell to $50 per barrel as the sector continues to innovate and boost efficiency gains.”

Remember Wright is the former CEO of Liberty Energy, the nation’s second largest hydraulic fracturing company.

He went on to say “new supply is going to drive prices down. Companies are going to innovate, drive their prices down and consumers and suppliers will bounce back and forth.”

The Energy Secretary is confident that this sector of energy production will be resilient. Also remember that the average price for crude oil during the first Trump administration was around the $53 per barrel level, that’s not that far away, especially as OPEC+ begins to consider adding back crude oil production a little at a time.

Charles Kennedy reported in Oilprice.com that Russian troops walked 10 miles inside an idle natural gas pipeline to attack Ukrainian forces currently holding portions of the Russian Kursk region. This would be an impossible tactic any other time of the year. Apparently it took several days to reach their target.

According to Kennedy, this desperate attempt shows that Russia is losing the battle in this section of the war between Russia and Ukraine. 

Friday’s Baker Hughes Rig Count showed a minus one in Total rigs, bringing the total number of rigs active in the U.S. to 592. Crude oil was unchanged at 486 and natural gas rigs lost one rig, bringing that total to 101. Miscellaneous rigs were unchanged with 5 total rigs and offshore rigs added one rig, bringing that total to 14

U.S. winter weather

This weekend’s near blizzard conditions from Amarillo, Texas, north caused traffic snarl-ups and one death. Winter is fighting to stay put, but conditions should start to welcome in spring over the next couple weeks. One wonders what spring will look like after such a wild winter. Tornado season is here, beware!