Fox News Cancels Lou Dobbs’ Fox Business Program

Crude prices have climbed to their highest level since February 2020, just before the start of the novel coronavirus COVID-19 and the resulting oil market crash.

West Texas Intermediate on the New York Mercantile Exchange briefly passed $57 a barrel in Friday trading before closing at $56.85 a barrel, a gain of 62 cents. The contract rose all week, starting with a $1.35 rise Monday to $53.55 a barrel, followed by a $1.21 increase Tuesday, 93 cents on Wednesday and 54 cents Thursday.

The posted price ended the week at $53.33, according to Plains All-American.

Natural gas on the NYMEX started the week with a near-29 cent jump as frigid weather hit the Northeast and added 15 cents Thursday before losing 7 cents Friday to close at $2.863 per Mcf, up from $2.850 at Monday’s close.

“The recovery in oil prices is premised on recovery in global demand which is premised on a successful rollout of the vaccines across the globe,” Steve Pruett, president and chief executive officer of Elevation Resources told the Reporter-Telegram by email. “Current oil prices are underpinned by OPEC+ discipline on cuts in supply, which Saudi Arabia underwrote with an additional 1 million barrels of oil equivalent cut through March. It will be critical for global oil demand to show continued improvement by April to offset the extra barrels coming on the market from Saudi Arabia and likely from Iraq, Libya and Nigeria.”

Pruett reported his company obtained additional capital at the beginning of the year “and we are back to drilling with one rig for the foreseeable future. It’s exciting to see our drilling and soon our completion teams back to work in Andrews County drilling Barnett oil wells. The capital was well-timed to coincide with the dramatic recovery in oil prices. Differentials to Cushing and the NYMEX roll are also supportive, with the narrowest differential to NYMEX Cushing WTI we’ve ever seen after transportation charges. Midland barrels are trading at a premium to Cushing barrels due to the abundance of oil pipeline capacity to the Gulf Coast.”

Rene Santos, manager of North American supply and production analytics at S&P Global Platts, told the Reporter-Telegram by email that US shale production is expected to return to growth in the second half of the year as activity increases. The higher crude prices are driving activity but unlikely to have a large effect on 2021 production as most operators are expected to maintain capital discipline, he said. Still, he cautioned, “the risk of unconstrained growth remains.”

Santos continued that the higher prices will result in favorable well economics and free cash flow this year, allowing some operators to self-fund drilling programs and/or pay down debt.

He added that the recent 60-day moratorium on federal well permitting and ban on new leasing by the Biden Administration is not expected have a short-term impact.

Vito Turitto, lead quantitative risk analyst at S&P Global Platts Analytics, told the Reporter-Telegram that Brent futures – the international benchmark – are likely to remain supported in the very short-term. “But if new buying momentum is not able to push prices above the $60 a barrel threshold, then volatility would likely move back up and a period of consolidation would occur.”

According to Bloomberg, the recent rally is being backed by a surge of interest in commodities. The Organization of Petroleum Exporting Countries and its allies have pledged to keep draining a virus-driven surplus and there are expectations that the global economy will recover this year, raising forecasts for stronger oil demand. Investor holdings of West Texas Intermediate futures have soared to the highest since 2018.

“As we said in October, Fox News Media regularly considers programming changes and plans have been in place to launch new formats as appropriate post-election, including on Fox Business — this is part of those planned changes,” the company said in a statement. Starting Monday, an interim program, “Fox Business Tonight,” will fill Dobbs’ 5 p.m. slot, anchored Monday and Tuesday by  Jackie DeAngelis and on Wednesday, Thursday and Friday by David Asman. Dobbs’ show was also re-rerun each night at 7 p.m.

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