Oil Prices Top $100, Yet US Drillers Remain Cautious
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- Brent crude topped $100 per barrel while WTI rose above $90 per barrel, marking a sharp price rally.
- Dallas Fed Energy Survey found only 21% of respondents plan to significantly increase drilling this year, despite profitable price thresholds of $62–$70 per barrel for various shale and oil types.
- Mark Viviano, managing partner at Kimmeridge, said daily tweets driving market volatility make intelligent decision‑making difficult for oil executives.
- Mike Wirth, CEO of Chevron, warned at CERAWeek that the closure of the Strait of Hormuz is not fully priced in and is already causing fuel shortages in parts of Asia and Australia.
- Freeport LNG CEO called the recent jump in LNG prices “scary” and noted that some Asian importers are switching to coal because of the higher cost.
- Eurasia Group observed that the global gas market, previously expected to be oversupplied and cheap, is now becoming undersupplied and expensive, with spot LNG at $24 per mmBtu in Pakistan versus $9 per mmBtu under long‑term Qatar contracts.
- CERAWeek participants expressed frustration with Washington’s upbeat messaging, citing uncertainty over the Middle‑East conflict’s impact on energy security.
Why it matters: The rally lifts cash‑flow for debt‑laden producers, yet Middle‑East volatility and the threat of a Strait of Hormuz closure deter new drilling and already spark fuel shortages in Asia and Australia, while soaring LNG prices push some Asian importers toward coal.
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