Crude oil, which was selling for $75 per barrel back in the summer, returned to near triple-digit territory before falling back recently. Some of that run-up can be credited to events like supply disruptions following Hurricane Isaac or threats from Iran to close the strategic Strait of Hormuz shipping lane.
But it wasn't until Ben Bernanke spoke, announcing yet another round of monetary easing, that benchmark West Texas Intermediate (WTI) prices breached the $100 per barrel level.
It goes without saying that $100 oil would have producers around the world opening their checkbook. The higher prices climb, the more economic incentive to invest in new expansion projects that boost production and reserves.
Even before this advance, oil and gas execs at the world's leading companies were already planning to invest huge amounts of cash this year.
Research firm Global Data just forecast that industry capital expenditures will top the $1 trillion mark for the first time in 2012. That's a healthy 13.7% increase from the $916 billion that was spent last year.
Typically, only sovereign governments deal in numbers that contain 13 zeroes. But then again, Exxon Mobil (NYSE: XOM) does have a budget larger than the gross-domestic-product (GDP) of some small nations.
State-owned national oil companies (NOCs) such as China Petroleum & Chemical (NYSE: SNP) and Brazil's Petrobras (NYSE: PBR) are expected to account for roughly half of the industry's expenditures. But from the biggest NOC to the smallest independent exploration & production outfit, almost everybody is upping their spending plans.
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 29th, 2014 | John Ransom
Today, at 11:20 AM PT: Get the Market Movements in Advance; Williams Edge Webinar for October 27th, 2014 | John Ransom