March STEO
Mike
This week the STEO issued its updated US March production forecast out to December 2027. When compared with the February issue, they have upwardly revised December 2027 production by 633 kb/d and production reaches a new high in early 2027. In comparison, the February report was showing production falling steadily from October 2025 to December 2027, 13,864 kb/d to 13,211 kb/d.
I was stunned by the change. I wondered what could have changed over one month. WTI was up but the STEO was showing the same price for WTI in December 2027 as December 2025.
I found this article below which says the Permian needs more gas pipelines before oil production can increase. Maybe the March STEO knows that new gas pipelines will be operational in the Permian later this year.
This is a quote: "Analysts have long said negative prices, which force some energy firms to pay others to take gas associated with their oil production, were a sure sign that the Permian region, which spans West Texas and eastern New Mexico, needs more gas pipes.
More pipes are on the way this year, but not soon enough to handle all the gas currently coming out of the ground.”
I would interested on hearing your thoughts on the article and whether you are aware of new gas pipelines being added in the Permian.
Ovi
