1. Two streaks. Prices are down and rigs are up.
As of last week, we reached two significant milestones in the energy industry that are worth noting. Oil prices declined again over the last week, settling at $43.10 per barrel. This is a 5-week decline, the longest run of weekly declines since August of 2015. Even with OPEC cutting supply, the US, Libya, and Nigeria are continuing to increase output – which brings us to our second streak. According to data from Baker Hughes, the US rig count increased again last week, making it the 23rd consecutive week that rig counts have increased.
2. Tropical Storm Cindy disrupts production in the Gulf of Mexico.
Tropical Storm Cindy hit Southwest Louisiana on Thursday causing the suspension of operations, evacuation of personnel and power outages across the state. Although the storm was downgraded to a tropical depression once it hit land, it still disrupted production and shipping and will create delays in imports and exports from the region for the next week or two. The National Oceanic and Atmospheric Administration (NOAA) warned that 2017 could be an “above-normal” year for large hurricanes, so this may be just the beginning.
3. Greece approves exploration for offshore oil.
ExxonMobil, France’s Total SA and Greece-based Hellenic Petroleum received the green light from the Greek Energy Ministry to drill for oil and gas off the island of Crete. Greece has been dealing with a severe debt crisis over the last few years and is hoping the exploration and extraction of hydrocarbons, both onshore and offshore will lessen their dependence on energy imports and help them sure up their economy for the future.