The number of drilling rigs at work in Texas at the end of August was 456, much higher than last year but slightly down from last month, according to oilfield services firm Baker Hughes. Nationally, there were 940 rigs at work, a decrease from 946 at this time last month. Overall, US crude production continues to slowly trend upward at around 9.53 million barrels/day.
The price of oil remained relatively flat but decreased throughout August and settled at a one month low. The surplus in global supply continues, but in the first two weeks of August, OPEC's crude oil exports decreased and oil prices increased slightly.
According to Kuwait's oil minister, in the November meeting OPEC will consider extending or ending the production cut deal made at the start of this year. OPEC is expected to extend that deal beyond March 2018 to June 2018, but unless OPEC agrees to make further cuts in production it may not improve oil prices significantly.
Hurricane Harvey has already impacted crude oil prices, causing a dip, due to the fact that 10 oil refineries along the coast were closed. Additionally, there is a decreased demand for oil production since the fourth largest U.S. city is shut down and residents and airports are not using fuel. Refinery production is coming back as the storm retreats, which may help crude prices in September. However, some predict that overall U.S. demand will decrease hurting crude prices, while others suggest that the reduction in crude production when rigs were offline due to the storm could help crude oil prices in the short term. Crude production in the Gulf of Mexico should return quickly and most do not expect any crude shortages in the U.S.
Uncertainty around oil prices due to the disaster is not great news for the Texas Economy. By the end of August, oil prices still did not rebound and the storm could negatively impact them. However, good news for solar energy and the overall grid came this month, as ERCOT easily withstood the solar eclipse where there was a drop of 461MW in production. This was less than expected by nearly 150MW. Solar and wind energy continue to grow as more utilities across Texas buy into these projects. Additionally, technology changes, such as battery storage, are on the horizon and could spur increased development of wind and solar plants.