an important rule
market vibes
May 19…)
in the news
“Brazil’s oil production hit a record 4.24 million barrels per day in March 2026, driven largely by ultra-deepwater pre-salt developments in the Santos Basin,” according to OilPrice. “Petrobras, Shell, and Equinor are pouring billions into offshore projects that could significantly expand Brazil’s oil and natural gas output through the end of the decade.”
In Alaska the North Slope Pikka Project (Santos/Repsol), funded in 2022, is expected to begin delivery of 80,000 bpd this year. The Willow Project (ConocoPhillips) is one of the largest North Slope developments in decades and is expected to produce hundreds of millions of barrels over its life. The project is on schedule to produce 180,000 bpd by 2029. Fully funded $14 billion additional capex is underway with various projects expected to come online by 2029.
In March of this year, a major federal sale of 5.5 million North Slope acres generated a record $164 million in high bids. It awarded 187 leases covering 1.3 million acres to 11 companies including North Slope Exploration/Armstrong, ExxonMobil, Shell, and Repsol. Alaska is currently producing ca 430,000 bpd, down from 2 mm bpd in 1988.
Growth in Canada, Guyana, the US lower 48 and Gulf of America, and the UAE (now non OPEC) will be competing with restarts in the GCC. Pre-war forecasts showed the market was heavily oversupplied before the conflict (EIA, OPEC, IEA). Global growth was expected to cause a 2/3 mmbd surplus in 2026 and prices were trading under $60 in late February.
Assuming the “war” ends presently, 600 million barrels of futures length is going to have to be managed, sanctioned oil is going to be unsanctioned, trapped oil in floating and onshore storage will become spontaneously available to the markets and…. about 5 mm bpd of new production in all OPEC and NON OPEC producing countries is expected to add another 5 mm bpd in the next 3 years.
If Claud can find lost keys to abandoned crypto accounts and Mythos is already in chains for going rougue, what do you think AI will do for faster cheaper oil production? More on that in the vibe!
in the markets
Despite hair-pulling forecasts of critical shortages June WTI will expire today in typical light volume and mild backwardation. Gasoline is trading wholesale in the NY harbor about where it was trading nominally in July 2008, 18 years ago. Refining margins are off a little, and distillates are subdued but air travel is normal everywhere but the GCC.
The checkdown will be brief this morning although trends are accelerating. lots of charts speaking for themselves…
