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Home » 2022 Oil Market Outlook & Allied Energy

2022 Oil Market Outlook & Allied Energy

by Derrick Thomas
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The Oil Market

Consumers are feeling a pain at the pump as oil stays above $80 per barrel, but how long will these high prices last? To understand the current oil situation analysts are looking at pre-pandemic production levels when US domestic oil production was at 12.8 million barrels per day. This number dropped to 9.7 million barrels per day by May as the pandemic decreased demand amidst disagreements between OPEC+ members regarding production levels.

This caused the price of oil to drop like a rock and forced producers to close shop as the US once again became a net importer rather than exporter. The number of rigs drilling for oil also took a hit and is still 255 less than previously. Even though the industry is recovering, U.S. oil demand rapidly increased to above 21.8 million barrels per day – far outpacing supply since it takes several months for rigs or any oil drilling operation to achieve production.

The global supply tension has reached a breaking point recently, driving President Biden to consider loaning crude oil from the nation’s emergency supply. A last resort for the administration which has repeatedly put pressure on OPEC to increase production as energy prices soar, Biden’s decision will coincide with the coordinated release of strategic oil stocks from Japanese and Indian stockpiles as well.

Allied Energy Corp.

Here enters Allied Energy Corp. (OTC: AGYP) – an oil and natural gas exploration company producing from marginal wells across the US. AGYP has been successful in utilizing technology to target the most optimal, abandoned wells in hydrocarbon rich regions like the Midland Basin and the Dallas-Fort Worth Basin of Texas. To access the Barnett shale and multiple stacked reservoirs in the Canyon Group, Palo Pinto Formation, and Mississippi Limestone nearby, AGYP has been using vertical and horizontal drilling at its Green Lease site

In September, the company made Well M-1 and Well X-3 at the Green Lease site commercial again after facing many weather related delays over the summer. One month later, the company began producing oil from three wells at a similar site – the Annie Gilmer Lease site – located on the Mississippi formation near the town of Breckenridge, Texas. Luckily the five wells at this site are drilled into the formation which – when caught on good geologic structure – can produce “prolific oil and gas cumulative numbers”. 

Although AGYP is still producing from two of its wells on the Gilmer lease site, complications with one of its wells has delayed the company temporarily. According to the company’s site update, this delay will soon be rectified. Meanwhile AGYP has focused its efforts on the Prometheus Lease Site located in Garza County Texas which could prove to be its most promising asset.

The company has executed a three phase plan designed by AGYP’s Oil Operations Manager, Curtis Boyles, to bring the Prometheus Well 1H back online. Originally tested by Apache Corporation in 2014, this well showed 335 barrels of production per day in addition to 298,000 cubic feet of natural gas per day. In light of this, the company is concentrating its efforts on what could be its most high-producing well.

Media Sentiment

It looks like 2022 could guarantee an even hotter oil market…

Technical Analysis

AGYP is currently trading at its primary support of $.2935 with a primary resistance at .30. The RSI is currently holding at 47 while the MACD appears poised for a bearish crossover following its positive upwards trend. After dropping earlier this month, accumulation has remained relatively steady.

Should you Buy

The oil bullish oil market appears set to last into the new year and as a domestic oil company, AGYP could be a prime investment with its ongoing production and acquisitions in strategic locations across the US. Committing to non-dilutive funding earlier this year, it is clear that AGYP places great emphasis on its shareholders and endeavors to generate the best possible return on their investment. Bullish investors point to AGYP’s long-term production plans and the Prometheus lease site’s promise as sure signs of the company’s potential going forward. While 2022 may hold surprises for the oil market, AGYP’s strategy and mission will likely lead it to bigger and better things in the new year.

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