The Jun’25 Brent futures contract saw prices fall off from $67.00/bbl at 07:02 BST down to $65.92/bbl at 11:38 BST (time of writing). In the news, the US Interior Department has introduced new rules allowing greater pressure differences in offshore drilling in the Wilcox formation of the Gulf of Mexico. The move, led by Trump’s Energy Dominance Council, aims to boost oil output and reduce regulatory burdens. The updated downhole commingling guidelines increase the allowable pressure differential from 200 psi to 1,500 psi, potentially adding 100kb/d in output over the next decade. Russia is accelerating new oil well drilling at its fastest pace in five years, despite falling oil prices, according to Bloomberg. Activity is now 30% higher than before the Ukraine war, showing the oil sector’s resilience to Western sanctions, which aimed to cripple the industry by cutting off access to Western tech and services. Production capacity has returned to 2016 levels—between 11mb/d and 11.5 mb/d. In other news, some small US shale producers are cutting back on drilling as oil prices fall to multi-year lows and tariffs raise costs, threatening future output growth. US production is still expected to hit a record 13.7mb/d in 2025, but growth forecasts have been cut by both the EIA and IEA. Producers like Blackridge Resources and Arena Resources are delaying drilling plans due to weak prices and high costs, with some saying $60/bbl isn’t profitable in many regions. Finally the front month Jun/Jul and 6-month Jun/Dec spreads are at $0.91/bbl and $2.17/bbl respectively.
