Believe it or not, this issue contains our 100th annual forecast. Way back in 1927, the staff working under our publication’s previous name, The Oil Weekly, suddenly grew extra-ambitious. They decided to try assembling a forecast of U.S. drilling, utilizing the contacts and sources that they had built up among producers, state governments and federal officials during the first 11 years of the publication, following its founding in 1916 under the name, Gulf Coast Oil News.
As a few years went by, this forecasting effort expanded to select countries around the world. The breadth and success of the international portion depended on a rather limited ability to communicate, consisting mostly of traditional snail mail and telex. As the effort entered into the late 1950s and 1960s, World Oil’s forecasting became global, and it has been ever since.
As has been traditional practice, all of our winter forecasting effort (we do a midyear version in the summer) is contained in the pages of this February issue. In addition, we also host an early peek at the main findings of the forecast, known as the Annual World Oil Forecast Breakfast. Always hosted in Houston on the last Friday of January, the event always attracts a large crowd, made up mostly of local industry folks. And this year was no exception.
The Annual World Oil Forecast Breakfast shines. Indeed, this year’s 58th annual edition of the Forecast Breakfast was pretty much a sell-out, as the room filled with somewhere in the neighborhood of 350 attendees. And while I’d like to think that everyone was there to hear the actual forecast, I also recognize that some were there mainly to hear our powerhouse group of four guest speakers.
As our Digital Editor, Ivy Diaz, recounted in a story on the Breakfast, our Gulf Energy Information President and CEO, John Royall, opened the program, celebrating World Oil’s centennial forecast by delivering a look back at the publication’s history, its growth, and a look ahead at its bright future amid the rapid digital transformation of the energy industry. He presented a demo of World Oil AI, a powerful new intelligence tool that equips professionals with decades of industry-backed knowledge to navigate the complexities of the global upstream industry.
Then came the first of our guest speakers, Ken Medlock, senior director of the Center for Energy Studies in the Baker Institute at Rice University, Fig. 1. As Ivy documented the proceedings, Medlock emphasized that global economic growth—particularly in non-OECD countries—will continue to underpin oil demand. “One of the easiest forms of energy to access, no matter where you are on the planet, is crude oil,” Medlock said. “We know how to lift it, and it’s easy to move.”
Medlock argued that energy discussions are shifting from “transitions” to “energy additions,” noting that all forms of energy consumption continue to rise in developing economies.
Sharing the drilling contractor perspective, Scott McKee, Senior V.P. of Marketing and Business Development at Patterson-UTI (Fig. 2), highlighted how U.S. shale producers are delivering record output with fewer rigs and frac fleets. “We’re doing more with less,” McKee said, pointing to gains in drilling efficiency, longer laterals and higher equipment utilization. “Rigs are drilling more footage per day, and frac fleets are pushing more production with fewer assets.”
Texas Railroad Commissioner Wayne Christian (Fig. 2) stressed the important role of independent producers in U.S. energy supply, warning that policy decisions often overlook their importance. “Nationally, about 80% of oil and gas production and nearly 90% of exploration comes from independent producers,” Christian said. “They take the risk, and they drive discovery.”
Our final guest speaker, Congressman Wesley Hunt (Fig. 3), referred to domestic oil and gas production as a matter of national security and economic strength, urging continued deregulation and investment. “Every single input in this world relies on what you do every day,” Hunt told attendees. “Why would we relinquish this power to other nations, when we can lead the world in affordable, abundant energy?”
Yours truly followed Hunt and delivered the highlights of the forecast, including those mentioned in the next section of this column.
The winter forecast and its highlights. As I told attendees at the Forecast Breakfast event, the year 2026 is going to be a mixed bag for the upstream industry. World Oil predicts that U.S. drilling will be down 4.1% at 15,495 wells, Fig. 4. Yet, the U.S., itself, is a mixed picture—while Texas is expected to be down 8.1%, and the Mid-continent is set to decrease 7.2%, other regions are doing better and will offset the negative regions partially. I’m speaking of the Northeast, where natural gas is thriving and thus the outlook is for just a 1.0% decline; the Rocky Mountains, which will actually post a 1.1% gain; and the West Coast, where Alaska and California are combining for a 16.3% improvement. We also predict that U.S. oil production will not grow any more this year—EIA says just a 20,000-bpd loss, but we think it will be more like 100,000 bpd.
In Canada, we are going along with the Canadian Association of Energy Contractors’ estimate that drilling in that country will increase 2.9%. When we add in the East Coast offshore wells that CAOEC doesn’t count, we’re looking at a 5,719-well total for 2026 in Canada. Offshore wells should edge up from eight to 10. Last year was a record high for Canadian oil production at 4.91 MMbpd.
And internationally, including Canada, we see a good year ahead, with global drilling up 4.0%. Offshore, drilling will improve at a slightly faster pace, tallying 2,402 wells for a 4.8% increase. Overall, seven out of eight regions should achieve some sort of drilling increase this year. Activity should be quite good in South America and Africa, while the Middle East will post another solid year. Please turn to the various forecast articles in this issue for more details.
Hydrocarbons keep the U.S. running during periods of extreme cold. During the back half of January, when multiple waves of extremely cold and precipitous weather hit the U.S., it didn’t take a rocket scientist to figure out that hydrocarbons were keeping the country running.
Natural gas, in particular, was a star performer, keeping homes heated, as well as generating the largest amount of electricity (some of which was also used for home heating). It truly was the “backbone” of the national grid. Coal-fired plants also provided additional electrical generation to satisfy the high demand during the cold weather. And heating oil continued to meet some demand in the Northeast, as it has traditionally done.
In Texas, Railroad Commission Chairman Jim Wright, Commissioner Christi Craddick and Commissioner Wayne Christian said collectively that they “would like to thank the frontline oilfield workers, first responders, linemen and all those who worked tirelessly across Texas during Winter Storm Fern to keep the state operational. Because of their efforts, the Texas natural gas supply chain remained stable throughout the event, delivering critical fuel to homes and power generators.”
Indeed, the Texas electrical grid and oil and gas production facilities held up far better than they did in the infamous Texas freeze of February 2021.
Arctic blast reveals shortcomings of Biden’s electric bus push. Speaking of cold weather, Fox News reported in an exclusive story that the Arctic blast that snowed in much of the East exposed not only the need for road salt but the possibility that numerous taxpayer dollars were wasted on unproven electric bus subsidy programs under the Biden administration.
That’s the contention of Power the Future (PTF), an energy advocacy and watchdog group that also compared the disbursement of more than $8 billion over at least two related federal subsidy programs to oversight failures by the Minnesota government involving its Medicaid and childcare entitlement crises recently exposed.
It seems that E-buses have been purchased by transit agencies in part through a "Low-No" emissions grant program. This was done mainly through the Federal Transit Administration that received a $1.6 billion cash infusion during the Biden years. "Given the scale of this investment, there must be an examination into whether taxpayers are receiving the reliable, deployable transit assets capable of serving the communities for which they were funded," PTF President Daniel Turner said.
Similarly, PTF highlighted a 2024 EPA Inspector General audit that found the agency failed to meaningfully track the deployment of electric school buses under a 2022 rebate program through which $836 million was handed out by federal officials. Only about 7% of participating school districts had completed the processes needed to put the buses into service, such as installing charging infrastructure.
"When hundreds of millions of dollars are awarded without confirmation that buses are delivered, operable or in service, the absence of oversight echoes the failures that are being highlighted in Minnesota," PTF wrote.
"When this failure is viewed alongside electric buses that cannot operate in cold weather, school buses that sit idle and grants producing little to no functional infrastructure, a troubling pattern emerges," PTF continued.
As a test case, Turner pointed to buses purchased by Vermont’s Green Mountain Transit, which had previously procured five electric buses with the help of federal funds. During the storm in January, Turner said e-buses had a tougher time charging and operating in below-freezing temperatures, as evidenced by cases in New York and New England. This is a known limitation of battery performance in cold weather.
School districts in Western New York have had issues driving the buses in the cold, and Turner told Fox News Digital the grants do not take into account the needs of schoolchildren over prioritizing green politics. PTF also cited a case in Maine, where a school superintendent said her district received four "bad buses" from a now-bankrupt Canadian EV firm. One e-bus's brakes failed recently and crashed into a snowbank.
Turner told Fox News Digital that while "these [green] games are ongoing, there are schoolchildren who cannot get to class because they are fixing problems that they themselves created."
So, yet another example of green politics over common sense. WO
IN THIS ISSUE
Special focus: 100th Annual Forecast & Review. For the 100th consecutive year, the World Oil staff has assembled its annual review and forecast of global E&P activity. The forecast section features Evercore’s capital spending outlook, the regulatory/political picture in Washington from Contributing Editor Gordon Feller, and the U.S. drilling forecast, compiled by our editorial team. The U.S. report includes considerable analysis. Additional reports cover Canadian and international E&P.
Deepwater/subsea technology: FPSOs, reliability and gas turbine air intake filtration. As an expert from Parker Filtration Group explains, with FPSO deployment rising in nations like Brazil, there is even greater emphasis on the must-run nature of key equipment onboard. For the gas turbines that help provide electrical power, as well as mechanical drive for key equipment far from shore, the critical denominator of performance and reliability is effective combustion air intake filtration.
ShaleTech report: The Marcellus and Utica shales. Contributing Editor Gordon Feller says that over the past 12 months, from February 2025 to January 2026, this region in the Northeast has witnessed a remarkable transformation. This includes the completion of long-delayed infrastructure projects, a surge in data center-driven demand, strategic consolidation through mergers and acquisitions, and the emergence of Pennsylvania as a critical hub for artificial intelligence’s energy-intensive computing needs. persists with its own expansion program to grow its Arctic footprint in cooperation with China.
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