OPEC, for some quiet moments..

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With Donald Trump set to enter the White House in January and populists on the march across Europe, political risk will loom large in 2017. Cautious investors may find stability in an unfamiliar place: the oil market. A deal between the Organization of Petroleum Exporting Countries and other producers to limit output next year won’t simply siphon off some of the global glut of crude: if participating nations make the cuts they’ve promised, the effort will also add to a buffer of unused capacity that can be tapped to plug supply disruptions.

Oil market seen as haven from political risk in 2017

Investors are showing no sign of turning their backs on oil heading into 2017. Money managers’ wagers on rising West Texas Intermediate crude prices are triple what they were at the end of 2015, and are the highest since the start of the crude market crash 2 1/2 years ago. Crude futures settled at the highest in almost 18 months on Dec. 28, with investors now eyeing the Organization of Petroleum Exporting Countries and other producers to see who complies with agreed output cuts.

Hedge funds bet oil rally to extend into 2017 as output cuts hit

After more than two years of nearly full-time travel as president of the Society of Petroleum Engineers (SPE) and having given hundreds of speeches, I have come to expect certain questions, including, “When will prices recover?” or, “Should I stay in the industry?” As I talk to students and young professionals, I notice a major difference in attitudes about climate change, compared to those of more senior engineers.

Climate change: inconvenient truth or opportunity to lead?

We are approaching the end of 2016, and here, there be dragons. The “lower-for-longer malaise” has settled in place, and the longer we stay below a stable global price of $65/bbl, the more pressure that is placed on companies to tighten their belts and show shareholders fiscal efficiency. If your company has focused exclusively on onshore unconventionals, you are likely feeling lots of pain. In the Bakken play, for example, the rig count has dropped from 203 units in 2012 to 30 in October 2016. The loss of rigs is, of course, reflective of lost jobs and a reduction of capital investments.

Here, there be dragons