Data released by the EIA in the last week of September gave American oil drillers reason for optimism – it showed that global crude production is falling, even going below numbers previously predicted. As might be expected, prices gained almost immediately.
Light, sweet crude planned for delivery around Thanksgiving was at $51.60 a barrel on NYMEX in September, up 5 cents. Brent, the petroleum grade seen around the world as a barometer of sorts for the state of the crude market, made modest gains as well.
The Effects Have Been Immediate
American crude drillers were already raising production when the news arrived. Oil output in July was at 9.2 million barrels a day, a step up from the month of June.
Analysts have been voicing their concerns – they wonder if ramping up production as quickly as drillers have done, could actually limit how high prices go. There have been concerns about whether a market flooded with U.S. oil could begin to reverse the gains in pricing made.
American Drillers Quick Off the Mark
U.S. producers have not been believers in moderation. There has been confidence across the board, chiefly arising out of the way in which OPEC member-states have cut production to promised levels. There has been optimism concerning future drops in production, as well – the Kurdish referendum and other political disruptions in the region are likely to ensure that production does not recover to earlier levels for a while (freedom granted to the Kurds in any one country could lead to considerable unrest in others).
The president of Turkey has even threatened to keep Kurdish oil exports from passing through Turkish territory for transit purposes. These difficulties have put as much as a half-million bpd under uncertainty.
Better Times
According to Sigma Drilling Technologies, these developments have boosted confidence among American drillers. Investments in high-tech drilling technologies such as pulsation control systems and in projects such as preventive dampener maintenance work, have picked up considerably. All signs point to a healthier market for drillers. To learn more about improving drilling efficiency, contact Sigma at (281) 656-9298 to schedule a free demonstration.
