Oilexco Share Discussion Threads

[waldron] 07/11/2018 17:57

Total
51.73 +1.67%


Engie
12.445 +3.54%

Orange
14.495 +2.87%

FTSE 100
7,117.28 +1.09%
Dow Jones
25,985.73 +1.37%
CAC 40
5,137.94 +1.24%


BP
544.3 +0.87%


Shell A
2,430.5 +0.83%


Shell B
2,473.5 +0.73%

Brent Crude Oil NYMEX 71.95 +0.35%
Gasoline NYMEX 1.65 -2.06%
Natural Gas NYMEX 3.54 +0.20%

[the grumpy old men] 05/11/2018 15:39

Monday, 05 November 2018
U.S. Officially the World’s Largest Crude Oil Producer
Written by Bob Adelmann

font size decrease font size increase font size Print Email

U.S. Officially the World’s Largest Crude Oil Producer

In an interview with CNNMoney in June, Pioneer Natural Resources Chairman Scott Sheffield said he expected U.S. crude oil production to surpass 11 million barrels a day by this fall, making the United States the world’s top oil producer. Right on schedule the Energy Information Administration announced on Thursday that the U.S. oil industry produced 11.3 million barrels of crude oil a day during August, an increase of 416,000 barrels from the previous month and topping production from Saudi Arabia and Russia. That level of crude oil production is more than 2 million barrels a day ahead of August 2017, the largest increase over any 12-month period in U.S. history.

Sheffield told CNNMoney that “we’ll be at 13 [million] very quickly” and predicted that that number could jump to 15 million in a very few years.

On Wednesday U.S. Interior Secretary Ryan Zinke told Fox News that officially “today we are the largest oil and gas producer on the face of the planet, rolling through 11 million … on our way to 14.”

In less than 10 years, thanks largely to the development of, and continued improvement to, fracking technology, U.S. crude oil production has more than doubled, from 5 million bpd (barrels per day) in 2008 to more than 11 million today.
ULINE Shipping Supplies
Huge Catalog! Over 31,000 Products. Same Day Shipping from 11 Locations
www.ULINE.com

This has immediate as well as long-term ramifications that extend far beyond gas prices at the pump. On October 3, the price of crude for November delivery was over $76 a barrel. At Friday’s close the price for December delivery was below $63. Gas prices, which had hit more than $3 a gallon in many places in the country, now average $2.77 a gallon at the pump with further declines expected.

The record puts the United States in the position where it will no longer be bullied by OPEC. As Patrick Buchanan pointed out on Tuesday, OPEC still thinks it can push the United States around:

Over the Weekend Donald Trump warned of “severe punishment” if an investigation concludes that a Saudi hit team murdered Washington Post columnist Jamal Khashoggi in the Saudi consulate in Istanbul.

Riyadh then counter-threatened, reminding us that, as the world’s largest oil exporter, Saudi Arabia “plays an impactful and active role in the global economy.”

That role is steadily diminishing thanks to the fracking revolution that has been taking place in the United States, enhanced and encouraged by the Trump administration and its relatively light regulatory hand on the industry.

It’s also putting the lie to the “peak oil” theory that has, since its development by geologist M. King Hubbard in 1956, increasingly been discredited as a soggy shibboleth — a now provably false belief — that has nevertheless long informed federal government policy (i.e., CAFE standards that have been imposed on the automobile industry since 1975).

Hubbard’s theory initially predicted that U.S. crude oil production would peak at around 1970. Revisions to the theory pushed the peak date out to 2000 when U.S. crude would hit 12.5 billion barrels per year and then start its inevitable and irreversible decline. For 2018 U.S. crude oil production will hit 30 billion barrels.

But as Eric Peters (who blogs at EricPetersAutos.com) laments, government interference based on the discredited “peak oil” theory remains firmly in place:

Easing of the regulatory burdens on domestic oil producers combined with new methods of extraction have increased the domestic oil supply….

These are things the government and its media hyena chorus swore could never happen. Their mantra was that the U.S. is a spent hen as far as oil production is concerned and not only were we running out [but] so was the world.

Hence the austerity measures.

But things are no longer austere — so why the measures?

In August Trump’s EPA and the Department of Transportation proposed rolling back some of those measures, specifically reducing CAFE from 54.5 mpg proposed by then-President Obama in 2011 to 37 mpg. In its statement accompanying the proposed rule change, EPA acting administrator Andrew Wheeler and Transportation Secretary Elaine Chao said the change was needed because the current rules “impose significant costs on American consumers, and eliminate jobs” — making it economiclly not feasible. Nothing was mentioned about the failed Hubbard theory which still informs that government policy.

Obviously, though, the belief by many Americans that government should dictate to Americans and businesses is deeply engrained: Even Trump's modest CAFE reduction is facing opposition from California and 18 other states, which immediately announced that should the proposal be enforced, they would sue to reject the change.

Nevertheless, the United States is now the big dog in the oil business, with its influence globally ever increasing as it continues to outproduce both Russia and Saudi Arabia. This gives the president even more clout when dealing with recalcitrant parties who are considering resisting his trade policies.

Photo: Clipart.com

An Ivy League graduate and former investment advisor, Bob is a regular contributor to The New American magazine and blogs frequently at LightFromTheRight.com, primarily on economics and politics. He can be reached at [e-mail].

[maywillow] 05/11/2018 07:58

Why Trump Decided To Back Down On Iran
By Nick Cunningham - Nov 04, 2018, 4:00 PM CST
Join Our Community
Trump Iran speech

The Trump administration has finally faced up to what many knew all along: It won’t be able to take Iran’s oil exports down to zero.

The U.S. is set to grant waivers to eight countries, allowing them to continue to import some level of oil from Iran, on the condition that they ratchet down their purchases in the months ahead. The full list of the countries will be released on Monday, but they will surely include China, India, South Korea and Japan, which are four of Iran’s top buyers.

“The reported awarding of waivers by the US for up to eight countries to continue buying Iranian oil, on the basis that they reduce volumes, shows that in the short term at least the Trump administration has set aside the goal of trying to cut Iran's oil exports to zero,” Peter Kiernan, lead analyst of energy at the Economist Intelligence, said in a statement.

Convincing countries to zero out imports from Iran was always going to be tricky. On the one hand, even if the Trump administration had a free hand, it would be technically difficult to achieve. Iran continues to discount its crude, offer cargoes in barter deals, use currencies other than the U.S. dollar, and otherwise ship oil using a variety of furtive means. Iran was always going to be able to maintain some level of exports.

More importantly, however, the oil market is simply too tight to zero out Iranian supply. Notwithstanding the latest plunge in oil prices – down more than 15 percent in the past month – the market is still tight. The U.S. and OPEC are adding supplies at a torrid pace, but it is unclear if this can keep up. The U.S. could see production growth slow in 2019, and in the case of OPEC, the additional production comes at the expense of spare capacity.

The room to maneuver for the White House is still pretty thin. “Although there are concerns of weakening oil demand in 2019 the underlying fear is that an abrupt shut off of Iranian supply would cause a spike in prices and leave oil consuming economies scrambling to buy oil elsewhere,” Peter Kiernan, lead analyst of energy at the Economist Intelligence, said in a statement. “Saudi Arabia may be able to partially offset substantial Iranian supply losses, but not completely, leaving the market extremely vulnerable to a supply interruption from another source. Therefore, to some extent the Trump administration has had to show to some flexibility as larger oil buyers such as India and China especially have been unwilling to immediately cease all purchases from Iran.”
Related: World’s Cheapest Natural Gas Market Could Be Facing A Shortage
Oilprice.com
The most vital industry information will soon be
right at your fingertips

Join the world's largest community dedicated entirely to energy professionals and enthusiasts
Join Today

Wood Mackenzie expects Iran to lose another 800,000 bpd of exports compared to September levels after sanctions take effect, taking total exports down to 1 million barrels per day. “We think there’s just enough growth in supply from elsewhere to muddle through the next few months, meet winter demand and avert a price spike,” Ann-Louise Hittle, VP Oil Markets at Wood Mackenzie said in a commentary. “Brent should hold around US$78 a barrel, but it’s a very fine line. OPEC spare capacity was an ample 4-5 million b/d two years ago. There’s only 0.7 million b/d of additional available within 30 days right now. That means the market is vulnerable to strong demand in a cold winter or any new supply outage.”

If the Trump administration had succeeded in zeroing out Iran’s oil exports, prices would have gone much higher. But that would have presented a political problem at home, ahead of mid-term elections. That was a price the administration was not willing to pay. Instead, as it became clear in recent weeks that Iran’s oil exports were going to hold up, oil prices fell back.

Still, despite the concession, the Trump administration struck a confident tone and tried to convey its determination to continue to disrupt Iran’s oil exports. “We’re quite confident moving forward that the actions that are being taken are going to help us exert maximum pressure against the Iranian regime,” deputy State Department spokesman Robert Palladino said at a briefing on Thursday.

To the extent that the Trump administration succeeds in this effort, it will only be able to do so as long as oil prices remain at tolerable levels. Otherwise, more waivers for longer periods of time will be required.

By Nick Cunningham for Oilprice.com