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

• Oil Fell 10% in 2023. This Year Should Be Better

• U.S. Cuts Dependence on Middle Eastern Oil by Half

• Upcoming Oil and Gas Events

• Tweet of the Day

Oil Fell 10% in 2023. This Year Should Be Better

Oil prices fell by about 10% last year for the first time since 2020.

And there was a pandemic in 2020.

But this year should be better. At least, according to commodity traders.

Rates and dollars

You’d think it’s oil demand that will make 2024 a better year for prices—and producers.

But apparently, it’s rates and the greenback that traders expect to push up benchmarks.

Rates are expected to be cut and the dollar is seen weaker this year.

The combination of these will make oil more affordable, stimulating demand.

It sure makes sense—as long as it happens.

Inflation is on the decline, but it is still not where it was before the rate hikes began.

Rate cuts are nowhere near a certainty.

But it’s good to be optimistic.

Demand could yet surprise

“Weak demand” is the slogan of the oil doomsayers.

Weka demand is what we should expect from 2024 because China’s already done recovering from the pandemic.

But weak demand may be the opposite of what we get.

Just look at 2023 and gasoline demand.

You know what happened?

It hit a record—after being forecast to have peaked in 2019.

A lot of forecasters “forecast” weak oil demand because that’s what they want.

Just like they forecast weak gasoline demand.

If oil stays relatively cheap, demand is not going to weaken.

It’s going to strengthen.

And if those rate cuts materialize?

We may be looking at yet another record-breaking year.

Today’s Edition Is Brought To You By ROX Exploration

Invest in the future of energy with ROX Exploration – a family-owned, independent company dedicated to exploring, developing, and producing oil and natural gas assets. ROX's team of experts drills and operates properties throughout Oklahoma.

If you're an accredited investor looking to diversify into direct oil & gas working interest offerings, then connect with ROX Exploration today.

U.S. Cuts Dependence on Middle Eastern Oil by Half

Five years ago, a fifth of U.S. oil imports came from the Middle East.

This year, this fell to 10%.

The bulk of the oil we import is now coming from the Western hemisphere.

What a difference a few decades make

Half a century ago, nobody could have predicted that the U.S. would turn into the biggest oil producer in the world.

Another thing nobody could have predicted is that it would still be an importer of oil.

At a pretty stable rate of between 6 and 7 million bpd.

In the past, a solid part of that used to come from the Middle East.

Saudi Arabia and Iraq were the leading suppliers.

This year, it has been just Saudi Arabia and Iraq selling oil to the U.S.

Saudi imports accounted for 6.7% of the total.

Imports from Iraq accounted for 3.8%.

Geopolitically good

Now, swapping dependence on one importer with dependence on another one does not eliminate the dependence as such.

But it sure is better to depend on Canada and Mexico for oil.

Rather than on producers in that powder keg of a region that is the Middle East.

The recent events in the Red Sea have only confirmed this unfortunate reputation.

They’ve also confirmed reducing imports from Saudi and Iraq has been a smart move.

Upcoming Oil & Gas Events

• January 16: TIPRO/IPAA Leaders in Industry Luncheon, Petroleum Club of Houston, Houston, TX

• January 17: IPAA Private Capital Conference, The Post Oak at Uptown Houston, Houston, TX

• January 17-18: GO-WV Winter Meeting, Marriott Town Center Hotel, Charleston, WV

• January 18: Kansas Oil and Gas Day Legislative Reception, Kansas State Capital, Topeka, KS

• January 23-25: POWERGEN International, Ernest N. Morial Convention Center, New Orleans

Around the Global Patch

🇧🇷 EIG acquires ocyan: $390MM FPSO deal.
🇯🇵 Investors watch Bank of Japan 2024.
🇳🇬 Nigeria targets 2.6M BPD output by 2026.

Tweet of the Day

Thanks for reading today's Oil Patch!

Stay oily, my friend.

Two quick requests before you go:

• If you found this useful, forward this email to a friend to spread the word. 👇

• Take 1 second to answer the poll below, and please tell us what you think 👇👇