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OPEC+ Pumps Up Output, but Can They Make the New Quotas?
In a bold move that caught markets off guard, OPEC+ announced a hefty production increase of 548,000 barrels per day (bpd) for August 2025 during a virtual meeting on July 5, surpassing expectations of a […]
The OBBBA Resets the Energy Policy Playing Field: A New Era for Oil, Gas, and Nuclear
On July 3, 2025, President Donald Trump signed the One Big Beautiful Bill Act (OBBBA) into law, marking a pivotal shift in U.S. energy policy. This landmark legislation, passed with thin Republican majorities in Congress, […]
Dallas Fed Energy Survey
Current Report Oil and gas activity contracts slightly as uncertainty remains elevated What’s New This Quarter Special questions this quarter focus on changes to 2025 drilling plans, the impact of import tariffs on drilling plans […]
Highlights of the Podcast
00:00 – Intro
01:13 – OPEC+ Pumps Up Output, but Can They Make the New Quotas?
04:14 – The OBBBA Resets the Energy Policy Playing Field: A New Era for Oil, Gas, and Nuclear
11:12 – Markets Update
12:34 – Rig Count Update
12:43 – Frac Count Update
12:49 – Dallas Fed Energy Survey
20:23 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Michael Tanner: [00:00:00] Low oil prices are affecting E&P and oil and gas service companies, or so says the Dallas Fed Energy Survey, next on the Energy Newsbeat Daily Standup. [00:00:08][8.0]
Michael Tanner: [00:00:16] What’s going on everybody? Welcome into the Monday, July 7th, 2025 edition of the Daily Energy Newsbeat. Stand up, here are today’s top headlines. First up, OPEC pumps up quota, but can they maintain the new quotas? One of the biggest stories that happened this weekend. Next, the one big beautiful bill. Resets energy policy playing field a new era for oil gas and nuclear will do a little bit of a deep dive specifically on What this one big beautiful bill actually means? I will then jump over quickly cover what happened the oil and gas markets covers oil price movements on Friday I will Thursday rather with with Friday being July 4th. Hope everybody had a great holiday I will quickly lightly touch on rig count frat crown spring and finally one of my favorite times of the quarter the Dallas Fed energy survey for the second quarter, 2025, we will dive into some very interesting nuggets that we’re seeing. Stu is out on assignment today. So I am here in Colorado rocking a solo show. Let’s go ahead and kick it off. [00:01:12][56.4]
Michael Tanner: [00:01:13] OPEC plus pumps up quota, but can they make these new quotas? So this is very interesting. So we all know that on Saturday, OPEP plus was meeting to continue their production increases. And the thought was 411,000 barrels. That was what are per day adding every single month. That’s what everybody thought. But what they did in a virtual meeting is actually announced a heftier production increase of around 548,000 barrels per day for August 2025. And this decision was really led by what we were kind of considering the voluntary aid Saudi Arabia, Russia, Iraq. UAE, Kuwait, Kazakhstan, Algerian, Oman. Super interesting, I mean, I think. I think people had a feeling this was a possibility in one of the months. I don’t necessarily think people were expecting it this month, but I think there’s a few things they’re looking at. One they point out in this article is low global inventories. Global inventories are low, and it’s interesting because even being in an oversupplied market, we find ourselves in the scenario where global inventors are at near two- to three-year lows, which is interesting. I think that has the majority to do with it. Again, I’ve said this from day one. I don’t think that this move by OPEC plus is necessarily to regain market share from the United States, Brazil, or any other country that they feel like is gaining too much power. It really has more to do with. Either punishing their own internal members, specifically Kazakhstan. I mean, as this article points out here, that in June, Kazakhstan output surged about 7.5% to 1.8 million barrels per day, which is well above its quota of 1.5 million barrels, while Iraq has also done the same thing, continued to blow up their cuts. And so I think, I really think this is more about trying to punish their internal members. And on a secondly deal with what is actually a slightly undersupplied or low global inventory demand. Now, obviously, that’s going to change. We’re in an oversupplied market and have been, they say, for the past six months, those global interest will begin to rise. So the question is what sort of goes from here? So this hike in August brings OPEC a lot closer to fulfilling its 2.2 million barrel per day voluntary cut. Now remember that’s on top of a cut of already 3.66, you know, barrels, 3.6 million barrels per day. So there’s in total about 5.8 million barrels off the market. They’re just bringing back the 2.2, which was these voluntary cuts. You know, they’ll probably do that and be able to get it done a little bit closer, but I think it kind of goes to show you how at least the rest of the world is thinking about. This. They’re not necessarily as worried about lower oil price. I think what they’re worried about is the low global inventories. And if anything, with this Russia-Ukraine war has shown us, it’s that access to energy is critical. And I think with some of the stuff that you’ve then seen in the Gulf going on right now between Israel and Iran, I think a lot of these countries are saying, we got to solve this low global inventory thing, tap into this oversupplied market. And, I that’s what we’re seeing here. [00:04:14][181.1]
Michael Tanner: [00:04:14] Let’s jump over now, big beautiful bill. Represents the energy policy playing field, a new era for oil, gas, and nuclear. I mean, we’ve been following this now for two weeks. It was made official July 3rd, 2025. President Donald Trump went ahead and signed the One Big Beautiful Bill, which was literally actually called One Big, Beautiful Bill Act, the OBBBA, which is unbelievable. You know, a lot of this analysis we’re pulling out is from good, good friend of the show, David Blackman and his writings with the Daily Caller. For one, I think there’s some fragility in this beautiful from a high level. A lot of House Republicans weren’t necessarily happy with a lot of the amendments that made it into the Senate. Vice President J.D. Vance had to come back to the Senate and cast a tie breaking vote, which is interesting. I think There’s two things in here to point out. You know, there’s mainly from an oil and gas perspective, the main thing to point out is the regulatory reform that comes in here. So Basically, the idea is that now we’re going to be able to streamline the permitting process for a huge amount of energy. And remember, it’s not just. The drilling of the wells that matters in the whole energy production process. We have to talk about how is this oil and this energy actually being created to electricity. And that’s where a lot of this regulatory change comes in. If you’re in the data center business, if you’re in the power business, this is a huge, huge bill for you because it’s going to allow you to more rapidly permit these things. The quote out of API CEO Mike Summers or the American controlling mid-shoot. He called the OB-BBA, quote, a historic legislation that ushers in a new era of energy dominance. He’s going to say that regardless. It also, you know, this follows up on Trump’s attempting to become You know, Drill Baby drills what he thinks. So the OB baby really follows what we did with the net, what he did with the national petroleum reserve in Alaska, which opened up about 13 million acres for leasing. You know? I do think there, there is this, as we’ll get to in the Dallas fed survey, I think there’s this, you know, what, what the white house and administration are saying versus I think what some of the boots in the ground saying, but there was a big win for nuclear in this, you know the FTI consulting and oil and energy consulting firm. Called basically one of the biggest winners in this whole bill from an energy perspective, nuclear power, and basically it comes down to regulation. It supports also, this legislation has language in there that supports the development of next generation nuclear technology, specifically stuff that Stu talks about, which are these small modular reactors, which, I mean, again, are critical if you are going to create these, if you’re gonna create, so if you need a data center, you’re probably gonna need at some point nuclear on this because there’s so much power associated with it. Coal was mentioned a little bit. They really didn’t put anything specifically in it for coal, I think in the press conference that followed, you saw a lot of people. Talking specifically about where, how we’re going to end the war on coal. Chris Wright, Secretary Wright said that. So, you know, the real argument is it’ll bought everything, a smorgasbord from an energy mix. Obviously, if you’re in the wind and solar business, you saw that those subsidies were stripped out. Now, this was a interesting, interesting thing. So I’ll kind of just read you a little bit of what David Blackman wrote. A deal brokered by Senate Majority Leader John Thune and Alaska Senator Lisa Murkowski Often. Softened the original timeline for the rollback of those wind and solar subsidies from the IRA, allowing for projects that commence construction by July 4, 2026 to retain incentives. Rather than requiring them to be operational by 2027. So what you can imagine is there’s gonna be this huge rush between now and 2027 to start a project so that you can maintain those subsidies. I think obviously this will dampen long-term wind growth, but I think you’re gonna see a lot of projects get quote-unquote kicked off, have a little bit of money spent so they still qualify for these subsidies. I think all in all, you know, I think this is what David Blackman says, and I would echo this sentiment. This is a bold reset for American energy. Here’s his quote, second chances like this do not come often. If these great industries fail to grab this brass ring and run with it, it may never come again. For oil, gas, nuclear, the OBBA is not just a policy reason. It’s a mandate to lead American into the new era of energy dominance. It’s really incredible. You know, again, reset and opportunity. Stu mentions here in this article, he’s going to be lining up some nuclear. Interviews on the podcast. So if you’re interested to see, but a highly controversial bill, I think it, again, with the IRA wind and solar subsidies, I would have maybe liked to see them phase out completely by 2027. I think this compromise has a lot more legal room. It’ll be interesting to see how it all plays out. [00:08:54][279.7]
[00:08:55] Let’s jump over and quickly cover oil and gas prices before we do that. Guys, we have quickly paid the bills. As always, thank you for checking us out here. World’s greatest website, www.energynewsbeat.com. Stu and the team do a tremendous job keeping that website up to speed. Everything you need to know to be in the tip of the spear when it comes to the energy and the oil and gas business. Go ahead and hit the description below for all links to the timestamps, links to the articles. You can also hit the link to our Substack, theenergynewsbeat.substack.com. It’s really the best place to support the show. We drop new articles every single day that you can only find on Substack, which is really an analysis of what we’re seeing in the broader industry ecosystem. Obviously, Newspeed is gonna have, our website is gonna all of the real-time news. It’s a great place to stay up to speed. But if you want to know what this means to you, our Substack theenergynewsfeed.substack is a great please subscribe. It’s one of the best ways to support this show. Feel free to sign up for a paid subscription We don’t have access to our entire. Archive of articles, as well as getting some custom stuff from students. I highly recommend checking that out. Shout out to Reese Energy Consulting for supporting the show. We really appreciate their support and we love Reese Energy consulting. They do one of the best jobs in the midstream space in terms of consulting around it. They’ve got clients that range from two guys in a garage all the way up to the largest publicly traded company. So if you’re wondering if they’re a right fit for you, the answer is yes. If you’re in the upstream space and you’re not working with a marketing company. Call up Reese Energy Consulting. They’re going to save you money on your first purchaser contracts. If you’re in the midstream space and need some outside support on any projects you’re doing, they have the other resources, the talent, and the know-how to get it done. ReeseEnergyConsulting.com. Tell them Energy News will be sent to you and they’ll give you a massive 3000% discount. That’s a joke, but they might give you a little sum. We appreciate their support. And finally, guys, if you’re wondering if it’s right to add oil and gas to your portfolio. We have a survey, investinoil.energynewsb.com, our oil and gas portfolio survey. Fill it out. Based upon your answers, we’ll send you a bunch of information on what it looks like to invest in oil and the gas, the differences between oil, gas, minerals. And if you qualify, we will send you and point you in the right direction of some other people that you can talk to. So investinoil.energynewsbeat.com if you are thinking of adding oil and to your portfolio. [00:11:11][136.9]
Michael Tanner: [00:11:12] Let’s go ahead and and then run down to blind indices here. S&P 500 was up about 8 tenths of a percentage point. NASDAQ was up a full percentage point, two and 10 year yields spiked tremendously, two year yields up 2.5 percentage points, 10 year yield up 1.5 points. A dollar index continues to fall down about a tenth of a percent point, which is just continue to fall to astronomical lows relative to where it’s always been. Bitcoin’s sitting at about $109,000. Crude oil lost about three-tenths or seven-tiths of a percentage point on Friday, $66.50 for WTI. Brent oil was basically flat, $6805. Natural gas down to $3.38. That’s about two cents off that index. XOP, which is our EMP securities contract, basically flat. You’re looking at $129.17. So, basically flat and I think the big reason why there was some softening on oil prices, I think has a lot to do with the perspective. Which on Friday, which was the prospective cuts that were coming from OPEC. I don’t, you know, there was a little bit of a wind on Friday that we might see something bigger than 411. I think people were skeptical of that, but I think the market slightly reacted a little bit to that, or at least priced in that sentiment a little. So it would be interesting to see here when prices open this afternoon as I record this, you know mid-afternoon here on Sunday the 6th, what happens from a pricing perspective. [00:12:33][80.8]
Michael Tanner: [00:12:34] You know, I think the other thing that was interesting to see we saw rate counts, We saw recounts dropped by eight. Down to 534, so rig counts begin to fall off the map. [00:12:42][8.9]
Michael Tanner: [00:12:43] We saw frac count spread drop by another three, so now we’re down to 176 frac regs moving. But really, one of my favorite times of the year, the Dallas Fed Energy Survey, it dropped for the second quarter, which is basically a look at what’s the oil and gas. They basically do an interview of over 75 different oil and gass companies, both big and small, and then aggregate the data and have a bunch of comments. We’ll go ahead and I’ll kind of read some of the headlines and we’ll dive into some interesting stuff I saw. You know, the oil production index, I think that’s the big thing that people talk about, fell from 5.6 to negative 8.9. So an unbelievable swing in the second quarter. Natural gas production index also did turn negative declining from 4.8 to negative 4.5. This is another big one. The oil field services input cost index rose from 30.9 to 40.0. Pretty unbelievable. For EMP, the finding, and this is interesting, the find and development cost actually fell from 17.1 to 11.4, which is actually great. We saw lease operating. Expense index dropped from 38.7 to 28.1, which is fairly good relative to where we see. I love this top line. Overfield services reported a modest deterioration in nearly all indicators. Equipment utilization remained unchanged at about negative 4.6. The operating margin increased decent negative 21.5 to negative 33.4, indicating that the margins continue to compress at an extremely fast rate. Prices received for services turned negative. They were at 7.1 last quarter and now they’re at negative 17.7. Some other interesting things here. We’ve got the average WTI crude. Okay. So basically the average, basically most people thought that a WTI was going to average $68 per barrel at the end of 2025 and that range was between about 50 to 85. When you increase to a little longer term of a timeframe, on average, people were saying about $72 a barrel and about $77 five years from now. On the gas side, $3.66 by the end of 25. Two years from, now $4.12 and in five years, $4 and 50 cents. I’m not sure if I necessarily believe that. You know to give for a sort of a reference point WTI averaged about 69.81 per barrel during the survey collected and Henry Hubb was about $3.30. Yeah, most people you kind of see that nice bell curve. I’d highly recommend going and checking out these charts here. We also did see, I love this, there was a bunch of special questions that they asked E&P firms. One of them being how many, how’s the number of wells your firm expected to drill in 2025 changed since the start of the year? Basically, the highest bucket was no change at 35%. A significantly decrease was actually the Second highest at 25%. Slightly decreased was at 20% and then at 15 it was slightly increased and about two and a half percent slightly increased So our increase significantly, which is unbelievable. There’s a bunch of stuff on tariffs You know tariffs have affected all different operators differently I think if you’re a large operator, you’re able to get away with it a little bit more if you were smaller operator You’re not you can kind of look at that of the response of changes. So small EMPs were basically scattered between no change and above 10% with 13 of the EMPs or 13 small operators reporting a 10% increase, which is unbelievable. Basically 23, you know, which unbelievable. And large EMP saw nobody reported no increases above 6%. So all of the large EMS, whatever you call large E&P, a firm that produced 10,000 barrels a more a day, they saw no more than 6% increase which again goes to show you. Economics of scale, you know there’s a bunch of questions on WTI. I want to get down specifically and cover some of the E&P. So now these are comments from survey respondents. So I’ll read you what they say here. Survey participants are given the opportunity to submit comments on current issues that may be affecting their businesses. Some comments have been edited for grammar and clarity. Comments from the special questions can be found blah blah blah. All right so here’s a couple of what I found of the interesting quotes. Deliberation Day. Chaos and tariff antics have harmed the domestic energy industry, drill baby drill will not happen with this level of volatility. Companies will continue to lay down rigs and frack spreads will rise. There is constant noise coming from the administration saying $50 per barrel is the target. Everyone should understand that 50 oil is not sustainable. It needs to be mid-60s. There was too much uncertainty in the market right now. And I just have to jump in there. I mean, trust me, I’m a Trump supporter myself. I think it’s very clear when I stand on that. But I think if. Trump was saying he was going to drive oil prices down to $50, $55 a barrel while he was in the election circuit, before he was elected, while he was campaigning. So to think that this is a shock of where Trump stands when it comes to oil prices, I think you’re kidding yourself. Yes, the regulatory environment I think is a lot better, but the regulatory environment really wasn’t affecting the upstream E&P business. What really affects them is prices, and if really prices are going to get down to the $50 rate as this. Comment points out, it’s not going to be sustainable. It’s got to be in that $65 range, at least, to be able to get that. Political turmoil is not beneficial. We are dealing with war and bureaucracies, each trying to exert their specific agendas and effectively prevent progress. So this is interesting. Here’s from a smaller operator. Service costs are low and wells are very economic, but there are inventory challenges for small operators like us. And now I think we get into a to a podcast that I did a couple weeks ago with Bennett Williams that we’re in the process of finishing up where when you actually look at the challenges that EMPs are facing, he makes a great argument in the piece that we talked about, which was it’s actually geologic. It’s inventory problems. If the rock quality is not good, well, it doesn’t matter where prices are. It does matter where prices are, I guess, but geology drives the economics of a well. And so if you’re a small operator and you don’t have much inventory, it It can be a real hard… I think there’s this other interesting quote, we are spending way too much time and resources on trying to predict the price of oil. We dropped our rig count 50%. Also suppliers are being squeezed and there is concern that some of our vendors will not survive. Interesting. [00:18:52][369.5]
Michael Tanner: [00:18:53] Another interesting comment here, if the Federal Reserve would lower interest rates, the oil paths would see a jump as the economy recovers to a higher level. Interest rates are holding the oil industry and the economy as a whole back. Interesting. Here’s some oil and gas service firms quotes. EMP customers are delaying activity due to steel tariffs. Our biggest issues are the steel tariffs we are absorbing as an oil food service company. Our customers are refusing to help absorb these costs. E&Ps continue to speak out of both sides of their mouth. They talk about partnerships for treating their vendors like second-caste citizens, pushing OFS to unsustainable margins. This is a very very interesting quote, and I have to agree with this service company. I mean, there is huge talk in the business about, oh, we’re partners with our vendors, we are partners with them, but it’s always the EMPs going to the vendors, asking for discounts, rather than helping absorb some of the costs themselves. I think it’s really interesting, this sentiment, and I think this is a very, very interesting quote, you know, which, you now, I think this is another interesting quote. While the overall break count has dropped, we are seeing. More of that drop coming from the larger operators and with that, a chance for smaller operators to pick up rigs at better prices. In our market, smaller operators, we feel like this environment provides opportunity and we’re hopeful that more carve-outs from last year’s M&A Bonanza will continue to create deals for the smaller and more nimble operators to prove up non-core divestitures. Very interesting. One, to quote, the price boil is an issue affecting our business. Well, I could have told you that. So very, very interesting. I love the Dallas Fed survey. Go ahead and it’s, gosh, it’s like nine pages. So I’d highly recommend going, hitting the link in the description below to check it out. [00:20:23][89.8]
Michael Tanner: [00:20:23] But that’s really all I’ve got, guys. Stu was out on assignment today, so thank you for sticking with me on a solo show. We will be back in the chair tomorrow night. We appreciate everybody checking us out here on the world’s greatest daily show, Energy News Beat Daily. Stand up for Stuart Turley, I’m Michael Tanner. We’ll see you tomorrow, folks. [00:20:23][0.0][1211.1]
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