As U.S. oil rises toward $100 a barrel, producers in some high-cost shale basins are buying properties and adding rigs and frack crews in places that fell silent when prices crashed early in the pandemic two years ago.
Benchmark U.S. prices last week topped $93 a barrel, up around 65% in the last 52 weeks and the highest since 2014. U.S. producers are cranking up spending at double-digit rates as fuel demand has soared and fears have waned that OPEC will again punish them by flooding the market with crude that is cheaper to produce.
If Russia pulls back from invasion of Ukraine, then IOM the oil bubble will burst.
It is already bursting. Nothing much to do with Russia.
Down $2 plus today.
The high was $93.
We do not know at this time what the follow through will be.
The global economy is looking bleak as central banks are stopping stimulus. Particularly true in the US going forward. Demand for oil is changing.
Also while wtic is high in price and the admin wants to supply Europe, US oil and NG output is cranking up. This is a major factor among a few important factors.
We are seeing a slow down in China that will get worse as well. Long term future demand is at risk. That is different than in the US where it is more 1H22 as far as I can tell that GDP growth is at risk of modifying.