Energy Update - August 2017

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August 1, 2017

The number of drilling rigs at work in Texas rose to a count of 463, significantly higher than last year but only up slightly from June's count, according to oilfield services firm Baker Hughes. Nationally, there were 950 rigs at work, up from 941 at this time last month. Overall, US crude production is steady around 9.41 million barrels/day.

Oil prices reached a two-month high this week, as worldwide output stabilized. The price of West Texas Crude futures rose over 8.5%, nearly reaching $50/barrel.

With prices remaining relatively low, Texas producers like ConocoPhillips have cut expansion plans and deleveraged their obligations. However, renewables continue to boom. In a sign of times to come the University of Texas offered its first lease of Permanent University Fund (PUF) lands to a solar power company. Typically, PUF lands have hosted oil and gas leases. Across Texas, new solar and wind developments are being planned with 20 and 30-year lifespans.

In Washington, the Trump Administration attempted to kick off July with "energy week." Energy Secretary Rick Perry used the opportunity to promote fossil fuels, including new federal efforts  to use "clean coal", open public lands for drilling, and roll-back of public health regulations. "Energy Week" came as the Trump Administration moved to aggressively shut down federal programs that study climate change.