Newsletter No. 190
Good afternoon subscriber,
Energy markets continue to shift as companies respond to changing demand, new technology, and global supply challenges. This week, U.S. oil inventories declined as demand strengthened, India increased its purchases of American crude, and ExxonMobil highlighted how automated drilling is improving operations in the Permian Basin. We're also covering a proposed 75-year agreement between the U.S. Army and REalloys aimed at reducing America's dependence on China for critical rare earth materials.
At King Operating, we're continuing to bring investors valuable educational opportunities. Our upcoming webinar, "Don't Pay More Than You Have To: Tax Strategies for Business Owners & Investors with Capital Gains," features tax strategist Ed Lyon. He'll discuss year-end tax planning strategies and ways business owners and investors may be able to reduce their tax burden through proactive planning.
Keep reading this week’s The Upside for a closer look at the stories shaping the energy market.
This Week's Headlines
Oil and Gas News
- India Shifts Oil Purchases Toward U.S. Crude
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ExxonMobil Expands Automated Drilling in the Permian
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U.S. Oil Inventories Decline as Demand Rises
What's Happening at King
- Data Centers, LNG, and the Road to S&P 9,300 with Jay Hatfield
- Third Installment in Tax Series with Ed Lyon
Move to Watch
- U.S. Army Eyes 75-Year Rare Earth Deal
Oil and Gas News
India Shifts Oil Purchases Toward U.S. Crude
Indian refiner BPCL has purchased 1 million barrels of U.S. crude oil for delivery in late December or early January. The company also plans to reduce Russian oil imports in November as higher shipping costs make Russian crude less competitive. Lower freight rates are opening more opportunities for Asian refiners to purchase oil from other markets.
ExxonMobil Expands Automated Drilling in the Permian
Oil prices moved higher Wednesday after reports of an attack on a major Saudi Arabian refinery raised concerns about global supply. WTI crude climbed approximately 1.4% to $101.33 per barrel during the trading session. Preliminary industry data also showed U.S. crude inventories falling by roughly two million barrels last week, adding support to prices.
For U.S. producers, stronger oil prices can improve well economics and provide additional cash flow from existing production. However, the market remains sensitive to developments in the Middle East. Operators that maintain disciplined spending and manage costs are better positioned to navigate these price swings while evaluating new drilling opportunities.
U.S. Oil Inventories Decline as Demand Rises
U.S. crude oil inventories fell by 900,000 barrels last week to 409.8 million barrels, according to the EIA. Stockpiles are now 4% below the five-year average, while distillate inventories are 13% below average. U.S. oil demand rose 4.2% from a year earlier, averaging 21.2 million barrels per day over the past four weeks.
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Happening at King
Moves to Watch
U.S. Army Eyes 75-Year Rare Earth Deal
The U.S. Army and REalloys have signed a nonbinding agreement for a rare earth processing facility in Utah. The proposed deal could last up to 75 years and give the military priority access to metals used in defense technology. The project aims to reduce U.S. dependence on China but still requires financing and final approvals.
All the best,
Jay
