Midland Reporter-Telegram

by Mella McEwen

A glance at charts showing global oil supply and demand indicates a stock buildup of 3 to 4 million barrels a day through the first half of the year.

“That screams $40 oil,” Garrett Golding, assistant vice president for energy programs at the Federal Reserve Bank of Dallas said Thursday during a Permian Basin Petroleum Association membership luncheon at the Petroleum Club.

Yet, the oil market has displayed unexpected strength, he said, adding that what's supporting the market is uncertainty caused by sanctions and geopolitical risks.

Displaying a graph comparing oil price levels and rig count, Golding commented, “It feels like we’ve been here before — 2015 and 2020. There’s never a specific event to point to. (But) the industry always figures a way out.”

The bank is planning a two-day conference in early March focused on artificial intelligence and how to power AI.

“Data centers could be a tailwind for oil and gas,” Golding said. “Right now, the quickest way to get power is solar and battery storage. But when you need power 24/7, all roads lead to natural gas.”

Golding said he has seen hyperscalers evolve from looking to locate near fiber networks to looking to locate near energy sources.

“That’s drawing them to Texas; that’s drawing them to West Texas,” he said.

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