Energy Prospectus

U.S. crude oil production will decline in 2H 2025 unless WTI moves up to $70 very soon. I do not expect that to happen, unless the situations in Ukraine and Iran are resolved soon, which is highly unlikely. When declining U.S. oil production is confirmed, the global oil market will tighten up and oil prices will move up.
---------------------------------------
Goldman Sachs expects OPEC+ to implement its final oil production increase of roughly 410,000 barrels per day in August 2025, signaling an end to a series of hikes that began as part of a broader strategy to rebalance global oil supply and demand.

This forecast reflects a calculated shift by the oil-producing bloc, which appears intent on avoiding a market oversupply scenario, even as demand remains strong heading into the peak of summer. < U.S petroleum inventories are below normal and likely to decline further in June.

According to Goldman’s analysts, global oil consumption may still outstrip supply by as much as 700,000 barrels per day in the coming months, but the growing production from non-OPEC countries — particularly the United States and Canada — has eased the pressure on OPEC+ to continue boosting output. One of OPEC’s goal in restraining potential output hikes is to maintain price stability, with Goldman holding firm on its Brent crude forecast of $60 per barrel for the remainder of 2025.

For us, the implications of this anticipated move are significant.

A halt in production increases could tighten global oil markets later in the year, potentially lifting prices and benefiting energy-related assets, and the prospect of a more disciplined OPEC+ — combined with continued demand growth and geopolitical risks — may reassert oil’s value as a hedge against broader market uncertainty and inflation.

Alberta Wildfires Disrupt 7% Of Canada's Oil Production

https://www.zerohedge.com/commodities/alberta-wildfires-disrupt-7-canadas-oil-production

What's critical to know:

Affected companies include Cenovus Energy, MEG Energy, and Canadian Natural Resources.

Roughly 470k bpd of production is within 6 miles of active fires.

Cenovus halted its Christina Lake site (238k bpd) last Thursday, expecting to restart soon

MEG Energy delayed restarting part of its 70k bpd site due to power outages.

Canadian Natural shut 36k bpd at its Jackfish 1 site after evacuations.

Important context: Canada produces 4.9 million bpd. It's the largest foreign oil supplier to the U.S., accounting for approximately 60% of total crude imports, with the vast majority of that coming from Alberta's oil sands.

Alberta Premier Danielle Smith said on Monday that some 400,000 hectares have burned across the province, up from about 9,000 as of last week.

Any major disruption to Alberta's oil production will tighten North American supply, push prices higher, and may force U.S. refiners to source costlier supplies elsewhere. It's a risk worth monitoring—something Goldman analyst Adam Wijaya flagged late last week.