Market Snapshot
- WTI crude: $88.92 per barrel, down 4.25% versus the October 1 close (October 2nd, 10:09 a.m. ET).
- Brent crude: $99.25 per barrel, down 3.0% versus the October 1 close (October 2nd, 10:09 a.m. ET).
- Henry Hub: $3.017 per million Btu, down 0.3% versus the September 30 close (October 1, 9:53 a.m. ET).
- U.S. rig count: 599 as of September 25, up four from 595 on September 18.
Oil prices are dated intraday snapshots, not closing prices. WTI is the U.S. oil benchmark and Brent is an international benchmark. Henry Hub is a U.S. natural-gas benchmark. The rig count measures active drilling rigs.
Hormuz Cargo Flows Rise. Shipping Risk Remains.
More natural gas is moving through a key export route, while a new tanker incident highlights continuing supply risks.
Reuters reported that September liquefied natural gas (LNG) shipments through the Strait of Hormuz reached their highest monthly level since the war began. S&P Global Energy counted 19 cargoes and Kpler counted 21. Separately, Seatrade Maritime reported a tanker fire following an October 1 projectile strike, with the crew reported safe.
The two developments show that more cargo is moving, while shipping remains risky. Hormuz is a narrow route used to export Middle Eastern oil and LNG. A recovery in shipments and a recovery in shipping security are different things.
Why It Matters to You
Oil trades globally, so overseas disruptions can affect prices received by U.S. wells. Restricted exports can tighten supply and raise prices; recovering shipments can ease that pressure. For a well investor, higher prices can increase revenue when production is unchanged. The price actually received, production volume, and costs determine the effect on a specific project.
Participate Directly in Well Economics
For accredited investors seeking exposure to domestic energy production, a working interest offers participation in the revenue generated by wells. Unlike owning shares in a publicly traded energy company, the investment is tied to the economics of the underlying wells. Owners also share development and operating costs.
The price connection: With unchanged production, higher prices actually received generally mean more revenue. Selling 1,000 barrels at $80 instead of $70 adds $10,000 in gross well revenue before royalties and costs. Each owner receives only their applicable share.
The investment case rests on the wells, operator, purchase terms, costs, and expected production. Revenue is not profit. Lower prices, declining output, unsuccessful drilling, or additional costs can reduce returns. Contracts that lock in prices can also limit the benefit of a market increase. Partnership distributions depend on expenses and governing documents.
Use Data Alongside the Headlines
The U.S. Energy Information Administration (EIA) is the Department of Energy's statistical agency. Its independent data helps readers assess energy supply and demand. Its October 1 report showed 3,415 billion cubic feet of gas in storage for the week ended September 25, up 64 billion cubic feet. Stored gas helps meet seasonal demand; supply, weather, and export demand can influence gas prices and well revenue.
Sources: Reuters, Hormuz LNG cargoes, October 2nd; Seatrade Maritime, tanker incident, October 2nd; Reuters, oil prices, October 2nd; EIA, natural-gas storage, October 1; About EIA; EIA, Hormuz background; PHX Minerals SEC filing, working-interest overview; WSJ, natural-gas snapshot, October 1 (9:53 a.m. ET); RBN Energy, rig count, September 25. LNG totals are estimates from separate data providers.
This communication is for informational purposes only and does not constitute an offer to sell, or a solicitation of an offer to buy, any security. Any offering is made solely through the applicable Private Placement Memorandum, subscription documents, and related agreements to eligible accredited investors. Oil and gas investing involves substantial risk, including loss of principal. Distributions and tax outcomes are not guaranteed. Consult your own tax and legal advisors regarding your specific situation.