1. A light at the end of the tunnel for oil prices.
Energy and Oil companies are eager for a deal to be struck and for OPEC to follow through on its promise to scale back production and increase prices. Last Friday, news broke about a meeting between Russia and OPEC in Doha that the idea of a six-month oil production freeze is under consideration. Additionally, more formal talks between OPEC and non-OPEC producers are tentatively scheduled for the end of the month, just 2 days before OPEC’s formal meeting. Algerian Minister Boutarfa has stated he believes a consensus is taking shape and OPEC could possibly be at a production level of 32.5 million barrels per day soon. This would be slightly over a 1M decrease per day. OPEC production is currently running at 33.6 million barrels per day, according to their latest monthly production report.
2. U.S. oil drillers on the rise.
With increased confidence that crude prices will rise in coming months we are seeing the expansion of oil drilling in the shale patch. According to Baker Hughes Inc., rigs targeting crude rose 19 to 471 this week, the largest increase in 16 months. Shale drillers have also now added 155 rigs since an expansion started back in May. Natural gas rigs rose also by 1 to 116, bringing the total for oil and gas up by 20 to 588.
3. Trump narrowing in on an Energy Secretary.
A list is forming for those thought to be leading contenders for the head of the Energy Department. Under consideration for energy secretary include Harold Hamm, an Oklahoma oil tycoon and leading proponent of fracking, and North Dakota Rep. Kevin Cramer, an early Trump supporter from a major oil drilling state. And last, Venture capitalist Robert Grady, who worked in President George H.W. Bush’s administration, is listed as a contender to lead both the Energy and Interior Departments.
It is still in the initial stages and it’s unclear whether the list has been reviewed by Trump, but these are the names floating to the top at the moment. Trump is in the early stages of setting up his administration, having named only his White House chief of staff and chief strategist.