Oil and Gas Producers Maintain Focus

Oil and Gas Producers Maintain Focus
Rigzone panelists look back at oil and gas market hits and misses for the week ending July 16, 2021.

(The views and opinions expressed in this article are those of the attributed sources and do not necessarily reflect the position of Rigzone or the author.)

Amid a dramatic improvement in commodity prices this year and signs of an overall recovery in the oil and gas industry, many producers are primarily focused on one thing, observes one of Rigzone’s regular market-watchers. Find out what the object of their attention is, along with other insights, in the latest installment of hits and misses in the oil and gas markets from the past week.

Rigzone: What were some market expectations that actually occurred during the past week – and which expectations did not?

Michael Osina, Partner in Charge, Energy – Tax, Grant Thornton LLP: Rig counts continue to inch up as positive forecasts come with slowly increasing oil prices. However, many producers are still tempering their capex programs and are focused on getting and remaining cashflow-positive in order to pay down debt and return some cash to investors. The impact of COVID is still weighing heavily on the markets and the renewed concern over new variants seems to still be holding the economy back. 

Rigzone: What were some market surprises?

Mark Le Dain, vice president of strategy with the oil and gas data firm Validere: The next round of talks on Iranian sanctions are not until August now, and additional risks from this delay are not currently factored into bearish narratives. OPEC was noisier than the Iran updates but the way the original OPEC deal was structured keeps OPEC in control in the near-term. 

Osina: I’m not sure we know what market surprises are out there just yet. With many companies releasing earnings in the next couple weeks, we will get much more insight into how companies are seeing the remainder of 2021 play out. However, it seems the Delta variant could be the wildcard. Many have seen the lifting of restrictions coupled with low case numbers as a sign of normalcy returning; however, many states are seeing upticks in cases and the Delta variant seems to be the driving factor.

To contact the author, email mveazey@rigzone.com.


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