During a visit to Aramco facilities in Houston, the new Saudi Arabian oil minister confirmed a growing sentiment among market analysts in recent months: the global oil glut that crippled American energy producers is now over.
Khalid Al-Falih gave declarative confirmation while touring various Houston locations this week.
“We are out of it,” Al-Falih told the Houston Chronicle.
The Saudi minister reminded the global market that an incremental upward adjustment in pricing would continue to be seen.
“The oversupply has disappeared. We just have to carry the overhang of inventory for a while until the system works it out.”
This latest pronouncement follows a chain of similar sentiments expressed both at home and abroad. Breitbart Texas recently reported on Florida-based Raymond James & Associates’ bullish forecast that West Texas Intermediate Crude could see market values between $70 to $80 by the end of 2017. The financial firm argued, among other reasons, that domestic producers will not be fast enough to outfit the 3,000-plus drilled uncompleted wells (DUCs) to keep pace with demand, risking a likely price pop in the interim.
A separate Breitbart Texas report noted in late May that OPEC chief Mohammed bin Saleh al-Sada complained that the price of Brent Crude was too low to sustain reasonable profit margins for new exploration.
Man-made and natural disasters alike have already demonstrated how outages in supply anywhere can harm the market everywhere.
Since the 2014 oil glut began, roughly 350,000 American jobs were lost in the energy sector.
Logan Churchwell is a founding member of the Breitbart Texas team. You can follow him on Twitter @LCChurchwell.