Fed Cuts Rates; Oil Steady, Gas Prices Rise

Newsletter No. 140

Good afternoon,

Let's jump right in this week and take a look at what’s happening in the oil and gas industry.

This Week's Headlines

• Fed Cuts Rates; Oil Holds Steady, Natural Gas Prices Climb
• Wood Mackenzie Delays Peak Oil Demand to 2032
• Exxon, Occidental Still Rule the Permian Rig Count
• Expand Energy Buys Big in Texas Gas Play
  
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Oil and Gas News

Fed Cuts Rates; Oil Holds Steady, Natural Gas Prices Climb
The Federal Reserve cut interest rates by a quarter point on Wednesday to help support the slowing job market. Fed Chair Jerome Powell said officials don’t all agree on what to do next, so another rate cut in December isn’t guaranteed. Oil prices stayed about the same, with WTI crude around $60 a barrel, as a stronger dollar balanced out hopes for better demand. Natural gas futures rose to over $4, helped by expectations that cheaper borrowing and stronger industrial activity could boost energy use. Overall, energy markets were steady as traders weighed slower growth against the benefits of lower rates.

Wood Mackenzie Delays Peak Oil Demand to 2032
A new report from Wood Mackenzie says global oil demand will now peak in 2032, two years later than expected. The main reasons are slower electric vehicle sales in the U.S. and Europe and strong demand for petrochemicals used in plastics and other products.

The report also says natural gas demand will stay strong because of growing AI and power needs. Even though clean energy like solar and wind is expanding fast, it’s adding to supply rather than fully replacing oil and gas.

Overall, energy use will keep rising through 2050 as the world’s population and economies grow. Other forecasts vary: the IEA expects oil demand to peak before 2030, while OPEC thinks it will keep climbing until 2050.

Exxon, Occidental Still Rule the Permian Rig Count
ExxonMobil and Occidental Petroleum continue to lead drilling activity in the Permian Basin, according to Enverus. As of mid-October, Exxon averaged about 35 rigs in the region, followed by Occidental with 20. Other active players include Mewbourne Oil, EOG, Diamondback, ConocoPhillips, Permian Resources, and Devon. Nationwide, the number of frac crews and drilled-but-uncompleted wells (DUCs) has declined over the past year, though the Permian still leads with over 2,000 DUCs. Exxon also tops the U.S. rig count overall, averaging nearly 37 rigs, which is 9% more than last year, making it the only top operator to increase activity year-over-year.