As we ease into the close of the year, the sense is of people holding their breath in hopeful anticipation that the steady increase in the WTI will hold.
Back in the day, before even email was ubiquitous, when phone companies still charged for long distance, I remember approaching my college mailbox with hopeful anticipation that a letter from my girlfriend would be inside.
I knew how the process worked, I had expectations based on experience, but I had no control over the outcome. It feels like that about this. Decreasing (at least temporarily) supply, improving demand, both as we return to normal and accruing to the global energy demand curve as influenced by increasing population and increasing quality of life. These trends should lead to increasing price, thus the hope.
One of the Railroad Commissioners, I’m not sure if it was Wayne Christian or Ryan Sitton, was asked about the 20% increase over the high $30 range that had settled in. He replied that in February the US was producing about 13 million barrels a day, and the current rate had dropped to 10 million b/d (I think we’ll get down near to 8). After the glut created in the first half of the year was consumed by the improving economy, the reduced production was not keeping pace with increasing demand.
The anticipation permeating the Permian, as it holds its breath, hoping the vaccines will ameliorate the duration and impact of any future regulatory restrictions on commerce, is palpable.
I’m told the holiday season is always slow in the patch, as transplants to Midland/Odessa, or wherever their patch is, make their way back to whence they came, or to warmer or more festive climes.
My hope is that you’ll enjoy the respite the holidays offer, and return with hope justified by circumstances.