OIl Breaks Out

 2/27/2026

Oil Breaks Out

 

If economi conditions worsen, drilling and completion activies will cease in 2026

Dallas Federal Reserve

Crude oil has broken out to a new six month high at  $66.96. June 23,2025 saw the last high at $68.21. Crude is only  $1.30 form setting a new annual high.

The fracking boom of the early 2000s made the US the largest oil and gas producer in the world. Trump’s ‘drill baby drill’ comment in his State of the Union message has a hollow ring to most energy producers. At recent prices, Primary Vision data indicates one-fifth of the fracking equipment in the Permian Basin has moved overseas.  Prices under $60 simply do n ot support continued exploration.

The jump in price cited above is great  but will it hold?  It must do so for a a period of time to induce more drilling activity.

In the last month, natural gas prices have fallen from $4.00 to $2.85. the mild winter, aside from the recent Northeast stornsm and lots of supply have tempered price.

Gasoline futures have rallied from less than $2.00 to $2.28. This is still low enough to keep pump prices around $3.00.

The Dow Industrials as well as SPX and NDX have been range bound this year.  The DOW has traded between 48,50 and 50,500. As I write Friday morning the DOW is down about 500 points. This takes it to the bottom of the year’s range. But momentum indicators have fallen to a level indicating the possibility of a rally. Mortgage rates have finally fallen under 6%, a welcome sign for real estate.

The Ten-Year Treasury Yield has dropped to 3.97%. this is just a few ticks above the November low of 3.94%. Yes, this is what Trump wants to cover for his disastrous tariff policies. But it is hard to see why given an inflation rate of 2.7%, well above the FED target of 2%.

TCU’s Neeley School of Business is offering an eight-week course regarding what a real, versus Tommy Norris aka Paramount, landman actually does. The class has a focus on land management. In addition,  oil, gas, wind and solar development are also covered. Practicing landmen will also lecture in class to give real world exposure.