Shale Giant Diamondback Says Threat of Oil Glut Is Receding

Article content(Bloomberg) — Fears of a global oil glut that had been expected to crater crude prices are fading amid resilient energy demand, according to Permian Basin driller Diamondback Energy Inc.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentAs recently as mid-December, the prevailing outlook among respected oil watchers was that a huge surfeit was in the making that would send crude prices tumbling. Everyone from the International Energy Agency to prominent trading houses such as Trafigura Group were warning of dark days ahead as supplies overwhelmed demand.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Article contentArticle contentBut the specter of too much crude has failed to materialize, Diamondback Chief Executive Officer Kaes Van’t Hof wrote in a letter to shareholders Monday. And although the danger hasn’t passed, it appears to be receding, he added.Article contentTop StoriesGet the latest headlines, breaking news and columns.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article content“The wave of oversupply that has been widely telegraphed for the better part of the last two years continues to get pushed to the right,” Van’t Hof wrote. “At some point the market will slowly begin to find reasons to be less bearish as demand is strong and the global economy is growing.”Article contentSo far, price signals appear to validate Van’t Hof’s analysis: Just eight weeks into the year, benchmark US oil futures already have advanced more than 15%, wiping out almost all of 2025’s 20% loss.Article contentFor its part, Diamondback is still taking a cautious approach, pledging to hold output roughly steady with the final three months of last year. But a closer look at Van’t Hof’s letter reveals that the company is exploring deeper layers of the Permian region to locate as-yet untapped oil reserves.Article content“We have begun to meaningfully test the deepest development zones,” he wrote. Article contentArticle contentTrending Posthaste: Forget tariffs, here's how Trump is really making money off Canada News IBM shares plunge as Anthropic touts COBOL modernization efforts Innovation Loblaw plans $2.4-billion investment in 2026, including 70 new stores Retail & Marketing Subscriber only. Garry Marr: There's a great divide in Canada's office real estate market and it's creating big winners and big losers Subscriber only Commercial Real Estate Xi Gains Leverage Before Trump Summit After Tariff Reversal PMN Business Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Posthaste: Forget tariffs, here's how Trump is really making money off Canada News IBM shares plunge as Anthropic touts COBOL modernization efforts Innovation Loblaw plans $2.4-billion investment in 2026, including 70 new stores Retail & Marketing Subscriber only. Garry Marr: There's a great divide in Canada's office real estate market and it's creating big winners and big losers Subscriber only Commercial Real Estate Xi Gains Leverage Before Trump Summit After Tariff Reversal PMN Business