Not On My Bingo Card This Morning -- Cushing At Minimums -- September 27, 2023

Locator: 45589B.

Cushing lows. Links everywhere; stories everywhere. 

UK: approves a controversial $3.8-billion oil and gas project -- development plan for the Rosebank project, North Sea, Equinor. Link here.

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Back to the Bakken

WTI: $91.87. Up 1.64%; up $1.48. Oil prices climb as Cushing oil stocks near historic lows. Generally stories on Cushing are posted by the B-team but this story was a headline story posted by Charles Kennedy -- so you know it's important.

Thursday, September 28, 2023: 117 for the month; 319 for the quarter, 564 for the year
38988, conf, Hess, RS-Harstad-155-91-0433H-8,

Wednesday, September 27, 2023: 116 for the month; 318 for the quarter, 563 for the year
39564, conf, Kraken, Blaine 33-28 3H,
38987, conf, Hess, RS-Harstad-LE-155-91-0433H-1,

RBN Energy: E&Ps slow CAPEX growth amid talk of cost deflation in 2024.

Rapidly rising prices for goods and services have plagued the economy since the onset of the pandemic — and led the Federal Reserve to ratchet up interest rates to help cool things off. Despite strong signs that overall inflation is receding, the negative impacts are far from over. Like every other sector, the U.S. E&P industry faced soaring costs as it struggled to restore production after widespread shut-ins in the spring of 2020. However, in recent Q2 2023 earnings calls E&P executives provided guidance that suggested that costs had not only plateaued but might actually decline in 2024 and beyond. In today’s RBN blog, we discuss updated 2023 capital spending guidance for U.S. oil and gas producers and their early outlook for 2024 investment.

After the pandemic-induced plunge in crude oil prices in early 2020, the 42 E&P companies we monitor — every publicly held U.S. E&P with a market cap of over $500 million — slashed capital investment by 50% to just $34 billion to conserve cash. Despite an oil-price recovery, E&P spending inched up only 6% in 2021 to $39.1 billion. However, 10% to 20% inflation in oilfield goods and services combined with the need to boost the inventory of drilled but uncompleted wells (DUCs) after a steep pandemic drawdown drove a 24% increase in initial 2022 investment guidance to nearly $50 billion. As we said in our blog Take It Easy, sustained high commodity prices allowed producers to increase drilling to offset steep shale decline rates, sending their capex guidance up 4% in both Q2 2022 and Q3 2022, then accelerate another 12% in Q4 2022. The result was total 2022 expenditures of $60.1 billion, up 54% from the previous year and the largest year-over-year growth rate in over a decade.