In a strategic move to seize the burgeoning opportunities presented by surging oil prices, Great Plains Oil & Gas is thrilled to announce its intention to drill an additional well this year on its current lease. This announcement comes as gas prices are once again on the rise, and the company's CEO, Jason Gilbert, forecasts that oil prices could soar to as high as $110 per barrel in the coming months.
The recent surge in oil prices has been remarkable, with the market witnessing a nearly 1% increase to a nine-month high. This uptrend has been primarily attributed to the extended supply cuts announced by oil giants Saudi Arabia and Russia, signifying a tightening of global oil supplies.
Notably, oil prices have been on an upward trajectory, driven by production cuts from Saudi Arabia and the Organization of the Petroleum Exporting Countries (OPEC) and its allies. Additionally, soaring demand has played a pivotal role in this remarkable ascent. August saw record world oil demand, buoyed by robust summer air travel, increased oil utilization in power generation, and a surge in Chinese petrochemical activity, as highlighted by the International Energy Agency in a recent report.
Extreme heatwaves have also impacted the oil industry's operational capacities. In fact, AAA estimates that extreme heat during the summer has led to the shutdown of approximately 500,000 barrels per day of refining capacity. Tom Kloza, Global Head of Energy Analysis at Oil Price Information Service, noted that "ambient temperatures in the 100-degree neighborhood" make it challenging for refineries to operate at maximum levels.
The ongoing hurricane season has further intensified concerns within the oil and gas industry and the National Oceanic and Atmospheric Administration (NOAA) has increased the likelihood of an above-normal Atlantic hurricane season to 60%. This elevates the risk of a storm impacting areas vital to the oil industry, particularly between Corpus Christi, Texas, and the Beaumont-Port Arthur, Texas, coastline, which is home to a cluster of refineries.
Weather remains a wildcard in the oil market, and analysts emphasize that looming weather concerns could deter falling pump prices. Andrew Gross, spokesperson for AAA, remarked, "These looming weather concerns are a roadblock to falling pump prices."
Jason Gilbert, CEO of Great Plains Oil & Gas, expressed confidence in the company's strategic decision. "Our team is excited about the potential opportunities in the current market. We believe that our upcoming well project aligns perfectly with the upward trajectory of oil prices. It's a momentous time for us, and we look forward to exploring these prospects further."
As Great Plains Oil & Gas gears up for the potential drilling of another well this year, the company remains committed to contributing to the American oil industry's vitality and offering valuable opportunities to its clients.