Oil Daily | OPEC Boosts Production, Trump Comments; US Shale Faces Decline and Spending Cuts

【Latest Oil Policies】

The House Natural Resources Committee plans to overhaul oil and gas drilling legislation to increase drilling on federal lands, including lease sales in key regions. The proposal aims to boost domestic energy supply, countering delays experienced under the Biden administration. This bill, part of the budget reconciliation, avoids Democratic opposition.

OPEC surprised markets by announcing significant production boosts, impacting oil prices. The organization’s sudden strategy shift confused analysts, who note the price rebound is technical rather than fundamental. Meanwhile, U.S. economic data and the PMI index offer some optimism, although tariff-related risks persist.

US President Trump commented on OPEC’s decision to unwind production cuts unexpectedly. Analysts speculate it's part of a strategy to pressure Russia by reducing oil revenues. This geopolitical maneuver may influence global oil prices, affecting producers worldwide, including OPEC members.

【Industry News】

Diamondback Energy reported that U.S. onshore oil production has peaked and is expected to decline unless oil prices recover. The company noted a 15% decline in fracking crews and plans to reduce spending due to low oil prices, which are influenced by U.S. trade policies and tariffs.

Morgan Stanley revised its oil price forecasts downward, expecting a larger market surplus due to increased OPEC output. The bank anticipates a significant supply increase, influencing market balances and prices. Goldman Sachs also adjusted its price outlook, reflecting a potential market glut.

【Company News】

Coterra Energy announced spending and production cuts amid macroeconomic uncertainty and oil price headwinds. The company plans to reduce Permian investment, lowering rig counts in response to recent price developments. Other shale operators are expected to implement similar protective measures.

【Others】

Former Guyanese Minister of Finance Winston Jordan suggested Guyana hedge its oil production against falling prices. The country’s booming oil revenues from Exxon-led projects face challenges with lower prices, potentially affecting economic growth and profit sharing.

Saudi Arabia and India agreed to enhance energy cooperation, but discussions hit a snag over crude pricing and volumes. Saudi Arabia seeks to supply half the crude for Indian refineries at its official selling price, while India insists on diversified and discounted supplies.

Saudi Arabia increased the price of its Arab Light crude for Asia in June as OPEC continues easing production cuts. The decision indicates expected strong demand in Asia and reflects healthy market fundamentals, following a previous price cut in May.