Energy Sector Commentary for Monday, July 24, 2023
The energy sector is trading higher...
The energy sector is trading higher in the pre-market, tracking gains in both crude oil and the major market futures. U.S equities are expected to begin the session higher ahead of various central bank interest rate announcements, heavy earnings and a slew of macroeconomic data to be released this week.
WTI and Brent crude oil are extending their gains, setting the stage for five weeks of consecutive increases, on supply concerns and hopes China will stimulate their economy. Tightening conditions due to Saudi oil output cuts and summer demand being somewhat stronger for gasoline and jet fuel has paved the way for oil futures to trend higher, despite expectations of more rate hikes in the near future.
Natural gas futures edged higher on forecasts for hotter weather across the U.S. mainland, with record-setting temperatures expected in a number of states, especially over the Central Great Plains and the Middle Mississippi Valley.
Drilling, Completion Activity to Fall in Back Half of ‘23
Liberty Energy Inc. reported a reduction in frac activity during...
Liberty Energy Inc. reported a reduction in frac activity during the second quarter—a trend that’s expected to continue for the rest of this year.
As customers changed their development schedules, delayed drilling plays and redeployed frac fleets from gassy to oilier basins, Denver-based Liberty Energy saw increased white space in its calendar during the second quarter, the company reported in earnings on July 19.
Liberty anticipates its North American drilling and completion activity in the second half of 2023to be slightly lower than the first half.
Israeli Parliament Passes Law to Limit Judicial Power
The Israeli Parliament passed a law Monday that...
The Israeli Parliament passed a law Monday that limits the Supreme Court’s ability to overturn decisions made by government ministers, completing the first stage of a wider and deeply contentious effort to curb the influence of the judiciary.
The court is now barred from overruling the national government using the legal standard of “reasonableness,” a concept that judges previously used to block ministerial appointments and contest planning decisions, among other government measures.
Goldman Sachs expects ‘all time high’ oil demand to spur large deficits, boosting prices
Goldman Sachs expects record demand in oil markets to drive crude...
Goldman Sachs expects record demand in oil markets to drive crude prices higher in the near term.
“We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Goldman’s head of oil research Daan Struyven told CNBC’s “Squawk Box Asia” on Monday.
He added that the bank forecasts Brent crude to rise from just above $80 per barrel now to $86 per barrel by year-end.
A 10-year rally in U.S. home prices could be coming to an end
A decade-long rally in U.S. home prices could finally come to...
A decade-long rally in U.S. home prices could finally come to an end once the Federal Reserve stops its rate-hiking cycle, said Robert Shiller, professor of economics at Yale University.
Home prices have made steady gains since 2012, according to the S&P Case-Shiller U.S. National Home Price Index.
“The fear of interest rate increases has influenced people’s thinking — it’s not just the homeowners, it’s new buyers who wanted to get in before the interest rates went up even more,” Shiller said.
“They wanted to lock in. So that’s been a positive influence on the market. But it’s coming to an end,” he added.
