Oil Prices Are Likely to Stay Steady This Year…With a Couple of Big Ifs
January 31, 2023
Most everyone asks this question: What’s the price of oil going to be? Indeed, there is an avalanche of articles that purport to cover this topic, but this article from the WSJ on January 16th was one of the best renditions of what “the market” will look like this year – https://www.wsj.com/articles/oil-prices-likely-stay-steady-this-year-11673555621. We recommend especially careful reading of the section on U.S. output. It provides statistical back-up to the points we have been making on this Blog for many months now that the U.S. shale industry has lagged in responding to the worldwide geopolitical situation and to the market itself. In fact, during the course of 2022, the U.S. shale sector came up well short of the EIA forecast for U.S. growth. And the reasons are exactly what we have been bemoaning: Senior management is fixated on shareholder payouts.
It is really a shame that an industry that has a predilection to wrapping itself in the flag seems to be oblivious to the tragic situation going on in Eastern Europe. If they participated in a genuine wartime national effort, as was the case in the early 1940s, this industry would be galvanized into action instead of congratulating itself on record shareholder payouts. And the financial tragedy of their approach is that with Russian oil production appreciably reduced, any kind of upward production would translate into windfall profits for the industry. Anyway, we could go on and on, but this article is a must read!
Finally, First Keystone Pecos Industrial Park is doing its small part to support the “war effort” by staying out front and constructing new warehouses for lease that will support light industrial activities necessary for the oil & gas industry to function competitively.
The opinions expressed above reflect only those of the author and do not represent those of the First Keystone Pecos Industrial Park organization. First Keystone welcomes responsible fact-based discourses on these topics.