Two of the largest American oil companies just stood on the same stage and said the same thing.
ExxonMobil SVP Neil Chapman told the Bernstein Conference Wednesday that global inventories will hit all-time lows "in two or three weeks"...and when they do, Brent crude will "shoot up to $150, $160 a barrel." Chevron CEO Mike Wirth followed him to the podium and confirmed it...the market's shock absorbers are "steadily being drawn down" and pressure accelerates into June and July.
These aren't analysts. These are the operating chiefs of the two largest US oil companies. They don't put numbers like that on the record unless the math is already there.
I've watched inventory squeezes before. When the downstream tightens this fast, the upstream feels it within weeks...more crews, more completions, more everything. The difference this time is the cushion is gone and there's nothing left to release.
Where the Numbers Actually Stand
- Hormuz has been effectively closed since February 28...20 million barrels a day offline, 20% of global supply
- The IEA released 400 million barrels from strategic reserves to cover it. That runs out at the start of August
- Global inventories dropped 246 million barrels in two months...a record collapse
- When the cushion is gone the physical price has one direction
The Bakken is already pricing it in. Bakken crude is trading at a $7 premium over WTI...the first sustained premium since Hurricane Harvey in 2017. Continental Resources just restarted drilling after their first pause in 30 years. North Dakota is running 19,639 producing wells. Every dollar WTI moves is worth $3 million a day in state revenue.
North Dakota is producing 1.142 million barrels a day right now. The all-time record is 1.52 million.
The ceiling isn't the geology.
If you're running pipe in the Permian or the Bakken right now...what does activity actually look like on your end? Are companies moving or still sitting on it?