Oil prices may increase as Converse County rig count jumps to 10
DOUGLAS — Is $80-plus a barrel the new normal for oil prices in the country right now? How about $100 per barrel by mid-2022?
It’s hard to say with any certainty what oil prices will bring in the future, however, oil prices are holding higher, for longer, than they have since 2014, according to industry insider watchdog Oilprice.com.
On Monday, Oilprice.com writer Tsvetana Paraskova reported food and energy magnate John Catsimatidis told Fox Business News: “With oil nearly at $84 this morning, we are going to see $100 oil, it looks like, there’s no sign of it stopping.”
Catsimatidis is chief executive of United Refining Company, and president and CEO of Gristedes, D’Agostino Foods, and the Red Apple Group, Paraskova wrote. Catsimatidis said food prices are going up tremendously, too, by as much as 10 percent in the next two months, as no one wants to be behind the curve. Inflation isn’t going to go away any time soon and supply-chain issues are likely to persist through mid-2022, she said.
Paraskova said Catsimatidis is not alone in his predictions of $100 per barrel.
“Oil could hit $100 in case of a colder winter, some analysts and investment banks have said in recent weeks. Record-high natural gas prices are forcing some utilities to switch to oil derivatives instead, boosting demand for crude. Surging natural gas prices, a cold winter and the reopening of international airline travel could push oil prices to $100 per barrel and trigger the next economic crisis,” she said, citing the information from Bank of America this month.
“Recovering global oil demand could send oil prices to $100 a barrel at some point at the end of 2022, despite COVID challenges to demand this coming winter, according to one of the world’s largest independent oil traders, Trafigura. It is ‘quite possible’ that the WTI Crude oil prices may reach $100 per barrel in light of the growing global demand for energy commodities, Russian President Vladimir Putin said last week,” according to Paraskova.
This is great news not only for Wyoming, but Converse County, which has the most standing rigs in-county in the state.
BOOM BOOM ENVERUS’ Maria Sanchez confirmed Wyoming had 17 rigs standing as of Oct. 18, although there were 19 rigs standing on Oct. 13, she said. (WyoFile.com reported Tuesday 18 rigs in the state.)
Ten of those rigs are in Converse County, with four located in Campbell County just to our north, according to the Wyoming Oil & Gas Conservation Commission’s (WOGCC) October supervisor report.
Of those 10 rigs, two belong to Continental Resources and two belong to Anchutz Exploration Corporation.
The ownership of the remaining six rigs has not been confirmed; however, Devon Energy, Chesapeake and EOG Resources, among others, have assets in the basin.
Campbell County has the next highest number of rigs at four; then Sublette with two; and Johnson, Sweetwater and Laramie Counties with one each.
At one point last year, the Cowboy State was down to no rigs to be seen anywhere and at this time last year the state had one rig.
This was due in part to COVID-19 and the lack of air travel, but predominantly because of Saudi Arabia’s fight with Russia for dominance in OPEC and the resulting low price of oil. Having to pay people to take your oil, which several companies were faced with doing, wasn’t conducive to an oil boom.
For a time, the state was silent on the western oil front and all was not well.
On a national level, rig count has increased by 261 rigs from Oct. 15 over the same time last year, according to Baker Hughes.
Data shows 543 rigs standing in the U.S., an increase of 10 from the prior week.
Energy data analytics company ENVERUS reports the most active operators in the U.S. are Pioneer Natural Resources with 23 rigs, Mewbourne Oil Co. with 18, Continental Resources and EOG Resources with 17 each, and Devon Energy and ConocoPhillips with 16 apiece.
Chesapeake Energy and Continental had the largest increase week over week, with each company adding two rigs. Chesapeake added both rigs in the Gulf Coast, while Continental added one rig each in the Powder River and Williston basins.
Oilprice.com reported WTI (West Texas Intermediate) at $82.42 per barrel of oil, while Brent topped that amount with $84.31 barrel; OPEC Basket showed $83.54 (Oct. 18, oilprice.com price ticker). However, Oilprice.com editor Juliann Geiger wrote on the company’s website that the American Petroleum Institute (API) reported another week of crude oil inventory builds.
“The build is extra large, at 5.213 million barrels for the week ending October 8, as U.S. crude inventories sit 66 million barrels below beginning of the year levels,” she reported.
According to EIA’s website data, total U.S. crude oil production averaged 11.3 million barrels per day in July – the most recent monthly historical data point.
“We estimate that domestic production fell to 10.6 million b/d (barrels per day) in September because of disruptions from Hurricane Ida. We forecast production will be 11.0 million b/d in October and rise to 11.3 million b/d in December. We forecast 2021 production will average 11.0 million b/d, increasing to 11.7 million b/d in 2022 as tight oil production rises in the United States.
“Growth will come as a result of operators increasing rig counts, which we expect will offset production decline rates,” EIA officials said.