Ukraine-Russia and US Oil/Gas Markets

Ukraine-Russia and US Oil/Gas Markets

While many experts are in “Chicken Little” mode on US oil and natural gas, a few of us out here have a different take.

Let’s take a look at the price, rig activity, and stockpiles.


Even with the geopolitical mess we see, the overall price in WTI is not being adversely affected. The US is not beholden to product coming from this region, so any stoppage or sanctions will not crude markets here. It’s a little higher than what we predicted before the beginning of the year, but you all should know that I think “long $100 oil” is not going to happen…even the EIA backs me up on this (see below).

Rig Count

This has been the most chaotic week so far, but looking at US rig counts, we went up from 634 last week to 644 (4 oil, 6 gas). Looking at the year, its been steady. That’s tells me that we’re all staying in our lane. I would take the argument that lack of labor/equipment may also play a role in the subtle increase in rig count, but would be minor when we’re in the middle of a renaissance of profitability.

US Stockpiles

Looking at US Stockpiles, it’s a little low but within range of “no panic”. Shale play activity is matching demand for now and what I predicted for the year, as well as the EIA.

From EIA 2/8/22: “We forecast global inventory draws in February, with an average Brent spot price of $90/b. However, we expect oil inventories will begin rebuilding in March and continue throughout the forecast, which will result in lower crude oil prices.”

Let’s get to it…Ukraine-Russia should not have a long lasting repercussions on the price and stockpiles of US Crude, mostly thanks to large US oil companies for having a measured response (especially in shale plays) to the price and stockpiles. I think we’ve learned our lessons on flooding the market…I think…