Yesterday, according to Reuters, the oil price rose by 1%. This price hike was likely caused by a major Saudi oil producer taking the stance that there was no need for extra OPEC+ supplies. This, combined with the International Energy Agency (IEA) stating that more oil stocks could be consumed for electricity generation due to rising gas prices, to produce a bullish market.
Oil Prices Rising
Trading in Brent crude futures ended at $84 per barrel, which was a net gain of %1 on the day. Furthermore, this is the highest rise in barrel price for oil since late 2018. Market forecasts predict that the demand for oil will continue to increase by some 500,000 Barrels Per Day (BPD). This is driven by industrial use of energy switching to oil, as other energy sources become more expensive.
Increased Oil Consumption Driving Oil Price
The IEA produces a monthly report. And the current report indicates that the growth of oil sales for 2022 could be as high as an additional 210k BPD. This would put the total demand for oil at almost 100 million BPD. Which would actually be higher than pre-COVID consumption.
Oil Price a Worry for U.S. Consumers
In the U.S., the Government has instigated a round of talks with oil producers, due to worry over the increasing price of gasoline in the retail sector. Gasoline prices in the U.S. are currently higher than they have been at any time in the last seven years. Furthermore, with winter approaching, the demand for oil-based fuels will become higher. Therefore, the U.S. has asked OPEC+ to increase the production of oil.
Shale producers in the U.S. are still not ploughing in any more investment to increase production, so the total production of the U.S. oil industry is still far lower than it was in 2019. Stagnating at around 11.4 million BPD.
Rig Equipment – A Time To Buy
It is blatantly apparent that the oil industry is going through a somewhat bullish growth stage. With the current oil price proving this. We will be posting something relevant to this next week. But for now, we want to remind visitors to this site that we offer a very cost-effective option for procuring new and used rig equipment. With so many rigs reopening lately, some types of drilling equipment could end up in short supply.
Whatever your rig equipment needs, we can likely help you. You can use our contact form to get in touch with us. Alternatively, you can email our sales team at email@example.com or call them directly on +971 6 526 2556. Our team have spent decades working in the oil and gas industry, and have the experience and knowledge to help you source the drilling equipment you need, at the right price.