Good morning, here's what the Oilman has for you today:

• It’s Official: We’re in a Shortage Situation

• Billionaire of the Week: Ray Lee Hunt

• Upcoming Oil and Gas Events

• Tweet of the Day

It’s Official: We’re in a Shortage Situation

The world has slipped into an oil shortage that will persist over the final quarter of the year.

That’s what OPEC and EIA separately reported, the difference being only in the size of the shortage.

So about that demand that was about to peak…

OPEC sees the shortfall at 3.3 million bpd.

EIA sees it at a much lower 230,000 bpd.

Both, however, see Brent crude remaining elevated for the rest of 2023 and the first half of 2024.

Because while supply is tightening, demand is showing resilience.

A huge surprise for the world’s most inelastic commodity.

Still, some expect a weakening in demand because of prices.

That’s normal.

Prices go too high, hit demand, weaken, and eventually lead to lower prices.

Lower prices spur greater demand, which, in the absence of investment, leads to higher prices.

The only question is how long it would take to complete the cycle this time.

A less cyclical industry?

It might take longer than usual.

Some analysts have argued that the oil and gas industry is changing.

It’s not strictly boom-bust anymore.

Because producers have gotten more careful with production growth.

What this means is that they are betting on slower growth.

Slower production growth means shortage for longer.

And higher prices for longer, too.

Because producers in the U.S. and elsewhere have learned an important lesson.

If they keep supply tight, they are putting a floor under prices.

An elegant way of avoiding painful busts, even at the expense of some boom.

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Billionaire of the Week: Ray Lee Hunt

The son of a legend

Ray Lee Hunt is one of the wealthiest men in U.S. oil and gas. Surprisingly, he’s not a self-made billionaire.

Ray Lee was one of the 15 children of a true legend in oil: wildcatter H.L. Hunt.

His beginnings were that of a pure speculator with sharp senses.

In 1930, these senses told him to pay for the rights to an oil tract in east Texas where oil had just been struck.

This marked the beginning of what is one of the largest U.S. energy companies.

A summer worker at the oil fields

Ray Lee Hunt began his career at his father’s Hunt Oil Company in 1958.

He worked in the oilfields over the summer.

Then, he went on to graduate from university with a degree in economics and went back to the family business.

During his tenure at the company, Hunt Oil expanded locally and internationally.

To date, the company says it has drilled on every continent but Antarctica.

A truly integrated energy giant

Hunt Oil Company marked the beginnings of an empire.

Now, Hunt Consolidated also has refining and pipeline operations, LNG facilities, and power generation.

The conglomerate is also active in real estate and even ranching.

While not literally a self-made man, Ray Lee Hunt’s story is no less interesting.

After all, it’s much easier to lose a fortune than to build it.

Build it; Ray Lee sure did – from a pure oil player to a diversified conglomerate in a few short decades.

Upcoming Oil & Gas Events

• September 15-16: GO-WV Sports Weekend, Bridgeport Country Club, Bridgeport, WV

• September 17-20: GPA Midstream Annual Convention, San Antonio Marriott Rivercenter, San Antonio, TX

• September 17-21: 24th World Petroleum Conference, Stampede Park, Calgary, Canada

• September 19-21: North Dakota Petroleum Council Annual Meeting, Watford City, ND

Around the Global Patch

🇦🇺 Chevron's Australian LNG facilities brace for strike.
🇮🇹 Saipem's departure: Kazakh offshore fabrication facility.
🇷🇺 Russia's oil export revenues soar with price spike.

Tweet of the Day

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