According to American Chemistry Council (ACC) Weekly Chemistry & Economic Trends report on October 7, 2022, oil prices rose as OPEC+ announced plans to cut oil production by 2 million bpd (~2% per day) to support prices as the global downturn curbs oil demand. As OPEC is already struggling to produce their production quotas, it’s not clear that this action will actually remove a full 2 million bpd from the global oil market. Natural gas prices edged higher as cooler temperatures are starting to move in and some heating demand kicks in. As of last week, inventories were still building, but remain nearly 8% below average. Typically, natural gas inventories switch from builds to withdrawals at the end of October/early-November.
According to the recent Dallas Fed Energy Survey, activity in the oil and gas sector expanded at a strong pace in Q3. The business activity index remained elevated at 46.0, but below the 57.7 record-breaking reading last quarter, suggesting that the pace of expansion decelerated but remains solid. The combined oil and rig count rose by one to 763 during the week ending 9/30.
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