Economy [Oil & Gas News v3] Biden Administration Finalizes Higher Fees For Oil and Gas Companies on Federal Lands

[Arkain2K]

Thread Index

- The United States produces more crude oil than any country, ever (March 11, 2024)
- U.S. oil production hit a record under Biden. He seldom mentions it. (Dec 31, 2023)
- Angola leaves OPEC, in blow to producer group (Dec 21, 2023)
- Some Canadian oil firms await Trudeau's fate rather than cut emissions faster (Dec 19, 2023)
- Canada Imposes Emissions Cap on Oil-and-Gas Industry
- Soaring U.S. Crude Production Fuels Export Boom (Dec 19, 2023)
- Bounce In U.S. Production And OPEC Cuts Reshaping Oil Market Landscape
- US crude exports set a record high amid market share war with OPEC (Dec 20, 2023)
- The United States is producing more oil than any country in history (Dec 19, 2923)

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[Arkain2K]

The United States is producing more oil than any country in history​

By Matt Egan | December 19, 2023




As the world grapples with the existential crisis of climate change, environmental activists want President Joe Biden to phase out the oil industry, and Republicans argue he’s already doing that. Meanwhile, the surprising reality is the United States is pumping oil at a blistering pace and is on track to produce more oil than any country has in history.

The United States is set to produce a global record of 13.3 million barrels per day of crude and condensate during the fourth quarter of this year, according to a report published Tuesday by S&P Global Commodity Insights.

Last month, weekly US oil production hit 13.2 million barrels per day, according to the US Energy Information Administration. That’s just above the Donald Trump-era record of 13.1 million set in early 2020 just before the Covid-19 crisis sent output and prices crashing.

That’s been helping to keep a lid on crude and gasoline prices.

US output – led by shale oil drillers in Texas and New Mexico’s Permian Basin – is so strong that it’s sending supplies overseas. America is exporting the same amount of crude oil, refined products and natural gas liquids as Saudi Arabia or Russia produces, S&P said.

“It’s a reminder that the US is endowed with enormous oil reserves. Our industry should never be underestimated,” said Bob McNally, president of Rapidan Energy Group.

Record-shattering US production is helping to offset aggressive supply cuts meant to support high prices by OPEC+, mainly Saudi Arabia and Russia. Other non-OPEC oil producers including Canada and Brazil are also pumping more oil than ever before. (Brazil is set to join OPEC+ next year.)

The strength of US output has caught experts off guard. Goldman Sachs analysts on Sunday cut their forecast for oil prices next year. The bank said the “key reason” behind the lowered forecast is the abundance of US supply.

Global demand for crude oil is set to hit a record in 2024 – but it will “easily be met” by the growth in supply, according to S&P’s projections.

Gas prices near $3​

All of this has helped to keep oil prices relatively in check. After flirting with $100 a barrel earlier this year, crude has since tumbled back to the $70 to $75 range.

Energy prices have jumped this week after BP halted shipments through the Red Sea due to security concerns. Still, US oil is trading below $74 a barrel, well below where it was when Hamas attacked Israel on October 7.

Gas prices neared the psychologically important level of $4 a gallon in September. But prices at the pump have since fallen sharply, helping to ease inflationary pressure on the US economy.

The national average for a gallon of regular gas stood at $3.08 a gallon on Tuesday, down from $3.14 a year ago, according to AAA.

‘Biden’s war on energy’​

Despite record-setting production, Biden has come under fire for his energy policy.

“Unfortunately, this Administration continues to pursue policies designed to limit access to new production—most notably on federal lands and waters. The world will continue to demand more energy, not less, and we urge policymakers to recognize the role American energy production can play as a stabilizing force for consumers here at home and around the world,” American Petroleum Institute Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer, said in a statement on Tuesday.

In September, the House subcommittee on Energy and Mineral Resources held a hearing titled: “Biden’s War on Domestic Energy Threatens Every American.”

Republican Sen. Dan Sullivan of Alaska warned in a floor speech that the Biden administration’s war on energy is a “gift to our adversaries.”

Earlier this month at a GOP presidential primary debate, Florida Gov. Ron DeSantis vowed to “open up all of our domestic energy for production” to “lower your gas prices.” DeSantis made a similar comment at the CNN town hall last week.

That the US is about to produce more oil than any country ever before undercuts the argument that Biden has waged a war on American energy.

Presidents don’t set oil production​

Of course, that doesn’t mean it’s Biden policies that have paved the way for record US oil production, nor that the White House would rush to take credit for that.

McNally, a former energy official to former President George W. Bush, said there isn’t that much presidents can do about US oil production, short of taking drastic emergency powers.

Unlike OPEC nations, the United States oil output is largely set by the free market.

“It’s not like President Biden or any president has a dial in the Oval Office to increase production,” McNally said.

Instead, the spike in US output has been driven by smarter and more efficient operations by oil companies. Energy firms have figured out ways to squeeze more and more oil out of the ground – often without increasing drilling dramatically.

The shale oil revolution has been driven by new drilling techniques that have unlocked new resources. But this technique can be more complex and requires vast amounts of water.

‘Kicking and screaming’​

Yet McNally said the White House has been forced to shift its tone on fossil fuels from the climate-focused stance of 2020 and early 2021 to something more neutral.

Last year, gas prices spiked above $5 a gallon following Russia’s invasion of Ukraine, which set off a panic in the oil market. Biden urged US oil companies to pump more oil – exactly the opposite of what climate scientists are calling for.

In March, the Biden administration even approved the Willow oil drilling project, a controversial ConocoPhillips drilling venture in Alaska that had been stalled for decades. That green light came in the face of deep criticism from climate groups worried about the environmental and health risks.

“President Biden has been dragged kicking and screaming from his initial keep-it-in-the-ground strategy towards a more pragmatic policy,” McNally said, noting the administration was “mugged by the reality of high gas prices and Russia’s invasion of Ukraine.”

The US is producing more oil than any country in history | CNN Business

As the world grapples with the existential crisis of climate change, environmental activists want President Joe Biden to phase out the oil industry, and Republicans argue he’s already doing that. Meanwhile, the surprising reality is the United States is pumping oil at a blistering pace and is on...

amp.cnn.com

 

[Arkain2K]

US crude exports set a record high amid market share war with OPEC​

By Aruni Soni | Dec 20, 2023



US crude oil exports set a new record earlier this year as booming production has helped erode OPEC's dominance in global crude markets.

Exports in the first half of 2023 averaged 3.99 million barrels per day, according to data released Wednesday from the Energy Information Administration.

That's up 19% from a year ago and the highest for the first half of a year since 2015, when the US ban on crude exports ended.

The surge in exports arrives as the US has been pumping a record amount of oil, topping 13 million barrels a day in September and reinforcing its status as the world's top producer.

To be sure, Saudi Arabia remains the leading exporter of oil, with shipments exceeding 6 million barrels a day. But the flood of oil from the US has made it harder for OPEC to dominate the oil market.

In fact, the huge volumes of production from countries like the US, Brazil, and Guyana has whittled OPEC's share of the oil market to its lowest levels in nearly a decade, according to the International Energy Agency.

That's as OPEC nations like Saudi Arabia have implemented steep production cuts this year in an attempt to stabilize oil prices after they fell during the pandemic.

Those efforts have been thwarted by a stream of non-OPEC oil production, as crude prices remain below September levels.

"Saudi Arabia has held barrels off the market making room for additional US exports, while at the same time flows from Russia have shifted away from Europe opening the opportunity for US barrels to go to Europe," Rebecca Babin, senior equity trader for CIBC Private Wealth, told Business Insider.

Energy expert Paul Sankey said earlier this month that Saudi Arabia would wage a "market share war" with the US to regain command over oil prices by flooding the market with a surge of supply.

But for now, the oil cartel plans to continue with its production cuts, slashing 2.2 million barrels per day in the first quarter of 2024. On the flip side, US production is expected to grow even more next year.

US crude exports set a record high amid market share war with OPEC

US exported nearly 4 million barrels a day of oil in the first half of 2023, up 19% from a year ago.

www.businessinsider.com

 

[Arkain2K]

Bounce In U.S. Production And OPEC Cuts Reshaping Oil Market Landscape​

By Gaurav Sharma

Not so long ago, the Organization of the Petroleum Exporting Countries (OPEC) spearheaded by Saudi Arabia, accounted for 60% of the total crude oil volume traded internationally. But as it cuts oil production in a bid to prop up crude prices, the organization's global clout appears to be slipping away.

Earlier this week, the International Energy Agency (IEA) said the global market share of OPEC+, a select group of OPEC and Russia-led non-OPEC oil producers, was just over 50%; the organization's lowest since 2016. At first glance, much of this decline may be attributed to OPEC+'s own moves this year largely underpinned by Saudi Arabia's production cuts.

However, it is not as straightforward as this. With OPEC in retreat, the IEA has not only highlighted incremental U.S. crude barrels on the market but also massive production upticks in Brazil and Guyana. Additionally, OPEC member Iran's production has also hit a five-year high given Tehran is currently exempt from the organization's quota restrictions.

Rising crude market star Guyana may be on a roll with an over threefold increase in production to 385,000 barrels per day (bpd), but the physical crude market is monitoring developments in the U.S. and Brazil more closely.

Starting with the latter, Brazil's output is up by 400,000 barrels per day (bpd) to 3.6 million bpd. Meanwhile, the U.S. continues to pump around 20 million bpd. Overall, despite warnings of an economic slowdown and a high interest rate climate, the IEA expects the U.S. register a supply increase of 1.4 million bpd.

However, the Paris-based think-tank does expect non-OPEC+ supply growth "to lose momentum in 2024." Whether that happens or not, desperate attempts by OPEC+ to support the oil prices - currently down by 20% since October (at 15:13 EST on December 15, 2023) - have certainly and unwittingly helped rivals in a tough climate too.

Of course, it would be foolish to assume OPEC's influence is waning. As it proudly notes that 79.5% of the world's proven oil reserves are located in OPEC member countries, with the bulk of OPEC oil reserves in the Middle East, amounting to 67.2% of the organization's total.

But in a cyclical industry, recent trading years offer ample testimony of non-OPEC producers being pretty deft at grabbing market share both in good times and bad. It is highly likely that 2024 will be no different, more so with crude oil supply tipped to outstrip demand by many.

Bounce In U.S. Production And OPEC Cuts Reshaping Oil Market Landscape

In a cyclical industry, recent trading years offer ample testimony of non-OPEC oil producers being pretty deft at grabbing market share both in good times and bad.

www.forbes.com

 

[Arkain2K]

Soaring U.S. Crude Production Fuels Export Boom​

By Charles Kennedy - Dec 19, 2023

Record-high crude oil production is driving a record in crude oil exports, too, as traders rush to rid themselves of inventory that they would otherwise have to pay taxes on.

Reuters reported this week that average crude oil shipments abroad from the Gulf of Mexico have averaged some 4 million barrels daily since the start of the year. This is half a million barrels per day over last year's average.

U.S. crude oil production recently hit an all-time high of 13.2 million barrels daily, according to the Energy Information Administration, whose latest confirmed data is for September. This is driving higher exports for Europe and Asia.

"Flows bound for Asia are looking to finish the year strongly, particularly for cargoes heading to China," Kpler's Matt Smith told Reuters. In fact, rising U.S. exports of crude oil to Asia were one reason, according to Bloomberg, that Saudi Arabia cut its oil prices for Asian buyers earlier this month. The intensifying competition from U.S. barrels seems to be pressuring the world's top exporter to fight for its market share.

Now, the end of the year is adding another motive for oil sellers to be quick about placing as many barrels as possible on tankers bound for Asia or Europe. Tax season is upon them, and the less oil they have in inventory as 2023 ends, the less they will pay in taxes. As a result, Kpler's Smith expects U.S. oil exports to end the year on a high note, at an average daily of 5 million bpd.

U.S. crude oil is shaping up as the biggest reason for the moderation in oil prices this year. With its main markets in Europe and Asia, exported crude from the world's top producer has proved a useful lever for keeping a lid on benchmarks even as Saudi Arabia and Russia reduced their production, especially the former.

The addition of WTI Midland to the Brent basket was a big reason for that surge in U.S. oil exports and, in turn, their moderating effect on global prices.

"As Midland becomes more and more important in the dated Brent assessment, it has a knock on effect on other grades having to price themselves lower to compete with WTI Midland," Vortexa market analyst Rohit Rathood told Reuters in August this year.

Midland is the cheapest grade included in the Brent basket, and this has been instrumental in making U.S. crude more popular, along with Europe's embargo on direct Russian oil flows.

The record exports will probably decline in January after tax season is over. Yet chances are they will remain much stronger than before as production continues to climb higher, albeit at a slower pace, at least according to the EIA. The agency has forecast that U.S. oil output will add some 180,000 bpd next year as opposed to 1 million barrels daily this year.

It may yet surprise to the upside, however. Forecasts for this year were that U.S. output would reach 12.5 million bpd in the final quarter. Yet actual output has significantly exceeded this, even at lower rig counts, to the surprise of many industry observers. Drillers themselves attributed this to improvements in drilling efficiency. These may continue, complicating OPEC+'s task of maintaining control of global oil prices. Unless they decide on a repeat of the 2014 flooding strategy that saw prices tank and dozens of U.S. drillers go under.

Should this happen—and some energy analysts predict it may—there would be fewer U.S. drillers to be affected by the move, and they would be more resilient as the industry matures and consolidates. This time, the flooding strategy may backfire.

https://oilprice.com/Energy/Energy-General/Soaring-US-Crude-Production-Fuels-Export-Boom.html

 

[Arkain2K]

U.S. and Canada produce record amounts of oil and gas in 2023​

By Susan Carpenter

The United States and Canada will produce more oil and gas this year than any other region in the world, according to a new analysis from S&P Global Commodity Insights.

The two countries are on track to produce more than 41 million barrels of oil and gas per day, whereas the Middle East produces about 38 million barrels.

“North America has an advantage that Europe and mainland China (and many other nations) do not,” S&P Global Commodity Insights North American Crude Oil Market director Celina Hwang said in a statement. “The United States and Canada produce more oil and gas than any other region in the world, and they also produce more than they consume.”

Production of oil and gas from shale deposits and the Canadian oil sands are driving this year’s record levels, the analysis found. The U.S. has more than doubled its oil and gas production since 2008, when oil production in the country hit a 62-year low.

U.S. crude oil production has surged from 5 million barrels per day in 2008 to a projected 12.7 million barrels per day by the end of this year, while natural gas production has risen from 54 billion cubic feet per day to more than 100.

The surge in domestic production is benefiting U.S. consumers, the analysis found. The cost of natural gas in the U.S. was 80% less in 2022 compared with Europe and China.
North American oil and gas production has helped buffer Europe from its reliance on Russian oil and gas, which western countries sanctioned after Russia invaded Ukraine in early 2022.

“If North American oil production was stuck at 2008 levels, Russia’s leverage in world energy markets would have been far higher than it already was on the eve of the Ukraine invasion,” S&P Global Commodity Insights’ Jim Burkhard said in a statement. “It would have been exceptionally difficult, if not impossible, for supplies from North America to not only protect North American consumers but also help fill the gap left by the cutoff of Russian oil and gas to Europe.”

The S&P report comes as national leaders around the globe agreed Wednesday to transition away from fossil fuels used for energy systems during COP28. The nearly 200 countries attending the annual climate conference said the transition would accelerate action this decade to achieve net zero emissions by 2050 and keep global temperatures from rising 1.5 degrees Celsius in accordance with the Paris Climate Accords.

To meet that goal, global greenhouse gas emissions need to decline 43% by 2030. They are currently on track to increase 9% in the same time frame, compared with 2010, according to the United Nations.

The fossil fuel transition announced at COP28 also included a commitment to triple the generation capacity of renewable energy globally and to double energy efficiency improvements before 2030.

According to S&P Global Commodity Insights, demand for coal will begin to decline in 2024, while demand for oil will continue peaking through 2030, before gradually declining through 2050. Demand for gas, however, will continue increasing over the next three decades.

U.S., Canada produce record amounts of oil and gas in 2023

They generate more oil and gas than the Middle East

ny1.com

 

[Arkain2K]

Canada Imposes Emissions Cap on Oil-and-Gas Industry
By Ismail Shakil and Nia Williams | December 7, 2023

Canada unveiled a plan on Thursday aimed at pushing oil and gas companies to cut emissions up to 38% from 2019 levels by 2030, by introducing a cap-and-trade system that drew immediate opposition from industry groups and some fossil fuel-producing provinces.

Federal Environment Minister Steven Guilbeault said the framework for the cap-and-trade system, which would allow companies to buy offsets if their emissions are too high, was "ambitious, but practical" and would help the industry cut pollution without cutting production.

"It considers the global demand for oil and gas, and the importance of the sector in Canada's economy, and sets a limit that is strict, but achievable," Guilbeault said in a statement.

The long-awaited proposal was slammed by two of Canada's main oil-producing provinces, Alberta and Saskatchewan, and the federal Conservative opposition, as well as industry groups who said a cap was unnecessary.

Canada, the world's fourth-largest oil producer, is aiming to cut emissions 40% to 45% below 2005 levels by 2030. The sector is Canada's highest-polluting industry, accounting for more than a quarter of all emissions.

Many climate campaigners have said oil and gas emissions should be capped at 110 megatonnes by the end of the decade, from 189 megatonnes in 2021, to meet that goal. Under the cap-and-trade system the emissions cap in 2030 would be set at 106 to 112 megatonnes.

However, oil and gas companies would be allowed to produce up to an additional 25 megatonnes and offset those emissions by purchasing carbon offset credits or paying into a decarbonization fund.

The federal government is aiming to publish draft regulations next year and the final regulations in 2025. The first compliance period is undetermined but will start between 2026 and 2030.

Climate policy analysts said the framework was a step toward meaningful and realistic reductions in oil and gas emissions, but the cap will need to decline steeply after 2030 for Canada to hit net-zero emissions by 2050.

"They have ended up at a reasonable level of stringency that looks like it's technically feasible and also gives firms a degree of flexibility," said Dale Beugin, executive vice president at the Canadian Climate Institute.

Beugin said the timeline is relatively slow however, and should be sped up, while a potential government change in Canada's next federal election, due to take place by 2025, could also undo the policy.

The opposition Conservative Party, currently leading in the polls, said the cap was "yet another attack on Canadian workers and Canada's world-class energy industry."

PROVINCIAL, INDUSTRY OPPOSITION​

Alberta Premier Danielle Smith said the announcement intentionally attacked Alberta's economy, and that her government will develop a "constitutional shield" in response to the proposal in the coming months.

"This proposed cap also undermines the unity of our country," Smith said in a statement.

Alberta is also challenging the federal government's requirement for a net-zero electricity grid by 2035.

The Pathways Alliance, a consortium of Canada's six largest oil sands producers proposing a carbon capture and storage project to cut emissions, said Canada already had sufficient regulations in place to hit its 2050 net-zero target.

A report by the Canada Energy Regulator this year said the country will fall short of reaching net-zero emissions by 2050, unless it takes actions beyond the efforts already underway.

Pathways President Kendall Dilling said imposing an emissions cap "does nothing to advance the certainty" needed to build multi-billion-dollar decarbonization projects.

A number of other jurisdictions including the European Union and California use cap-and-trade systems to limit emissions.

https://www.reuters.com/sustainability/climate-energy/canada-unveils-cap-trade-system-oil-gas-emissions-2023-12-07/

 

[Arkain2K]

Some Canadian oil firms await Trudeau's fate rather than cut emissions faster​

By Rod Nickel and Nia Williams | December 19, 2023

Some Canadian oil and gas producers say they will not rush to accelerate emissions cuts until they see if unpopular Prime Minister Justin Trudeau survives long enough to implement his proposed oil and gas emissions cap.

The long-delayed framework, released this month, demands oil companies in Canada cut carbon emissions by up to 38% by 2030 from 2019 levels. But polls show the opposition Conservatives led by Pierre Poilievre - who oppose the cap - with a commanding lead over Trudeau's Liberals before an expected 2025 election, raising the prospect that plans for the cap will be abandoned.

Canada's main oil-producing province Alberta has also vowed to develop a "constitutional shield" against the cap.

Some small- and medium-sized oil companies are openly asking if the Liberals losing in the 2025 election would avert the need to accelerate emissions cuts. Canada is the world's fourth-biggest crude producer and the oil and gas industry is the country's highest-polluting sector, accounting for more than a quarter of all emissions.

Yangarra Resources (YGR.TO), which produces 12,500 barrels of oil equivalent per day (boe/d), will continue cutting emissions as long as it makes money or improves efficiency from doing so, said CEO Jim Evaskevich.

"If we get to where we're having to spend a lot of money to become way more draconian with our reductions, then we're going to look at the federal election and go, 'yeah no we're not spending that money, no way.' Because our fervent hope is (Trudeau) is gone," Evaskevich said.

Rising Canadian oil and gas production means the sector's absolute emissions have climbed about 13% since 2005, according to the Canadian Climate Institute, even as its emissions intensity - the amount of carbon emitted per barrel of oil produced - has fallen.

A federal environment ministry spokesperson said oil companies should comply with the cap "because it makes business sense".

"They are making record profits at a time where affordability and the environment are the two most important issues," the spokesperson added.

A QUESTION OF SURVIVAL​

Resistance from small and mid-cap producers underscores the rift between the Liberal government's climate policies, some of which have been rejected by the courts, and a sector critically important to Canada's economy.

Shannon Stubbs, the Conservative shadow minister for natural resources, said the emissions cap represents federal over-reach into provincial jurisdiction.

Pathways Alliance, representing the six biggest oil sands companies, said it would not speculate on what a future government may look like and was committed to reaching net-zero emissions by 2050.

Oil sands companies account for 65% of Canada's oil production and are relying largely on proposed carbon capture and sequestration projects to cut emissions, although they have not yet committed the capital to build them.

Tamarack Valley Energy (TVE.TO), which plans to produce about 62,000 boe/d in 2024, is already reducing methane emissions from gas infrastructure but needs more details about the cap before it can decide if it must cut faster, said CEO Brian Schmidt.

The possibilities of a government change and of courts rejecting the emissions cap mean "nobody's putting much weight" into the cap yet, including Tamarack, Schmidt said.

Tristan Goodman, CEO of the Explorers and Producers Association of Canada, said producers had made significant progress in reducing emissions, mainly through cutting methane emissions, and efforts would continue regardless of the political party in power.

Despite the emissions cap, Bonterra Energy (BNE.TO) is looking to boost production to above 20,000 boe/d from 14,000 boe/d currently, through acquisitions, CEO Pat Oliver said.

Bonterra is already cutting emissions by reducing gas flaring and replacing old equipment, but is unlikely to accelerate efforts until there is clarity on the rules and the Liberal government's fate, Oliver added.

"Say that we would have to spend significant capital (to comply), we would have a look at, is this government going to survive and what are the chances of this legislation surviving?" Oliver said.

https://www.reuters.com/business/energy/some-canadian-oil-firms-await-trudeaus-fate-rather-than-cut-emissions-faster-2023-12-19/

 

[Deorum]

The United States is producing more oil than any country in history​

By Matt Egan | December 19, 2023




As the world grapples with the existential crisis of climate change, environmental activists want President Joe Biden to phase out the oil industry, and Republicans argue he’s already doing that. Meanwhile, the surprising reality is the United States is pumping oil at a blistering pace and is on track to produce more oil than any country has in history.

The United States is set to produce a global record of 13.3 million barrels per day of crude and condensate during the fourth quarter of this year, according to a report published Tuesday by S&P Global Commodity Insights.

Last month, weekly US oil production hit 13.2 million barrels per day, according to the US Energy Information Administration. That’s just above the Donald Trump-era record of 13.1 million set in early 2020 just before the Covid-19 crisis sent output and prices crashing.

That’s been helping to keep a lid on crude and gasoline prices.

US output – led by shale oil drillers in Texas and New Mexico’s Permian Basin – is so strong that it’s sending supplies overseas. America is exporting the same amount of crude oil, refined products and natural gas liquids as Saudi Arabia or Russia produces, S&P said.

“It’s a reminder that the US is endowed with enormous oil reserves. Our industry should never be underestimated,” said Bob McNally, president of Rapidan Energy Group.

Record-shattering US production is helping to offset aggressive supply cuts meant to support high prices by OPEC+, mainly Saudi Arabia and Russia. Other non-OPEC oil producers including Canada and Brazil are also pumping more oil than ever before. (Brazil is set to join OPEC+ next year.)

The strength of US output has caught experts off guard. Goldman Sachs analysts on Sunday cut their forecast for oil prices next year. The bank said the “key reason” behind the lowered forecast is the abundance of US supply.

Global demand for crude oil is set to hit a record in 2024 – but it will “easily be met” by the growth in supply, according to S&P’s projections.

Gas prices near $3​

All of this has helped to keep oil prices relatively in check. After flirting with $100 a barrel earlier this year, crude has since tumbled back to the $70 to $75 range.

Energy prices have jumped this week after BP halted shipments through the Red Sea due to security concerns. Still, US oil is trading below $74 a barrel, well below where it was when Hamas attacked Israel on October 7.

Gas prices neared the psychologically important level of $4 a gallon in September. But prices at the pump have since fallen sharply, helping to ease inflationary pressure on the US economy.

The national average for a gallon of regular gas stood at $3.08 a gallon on Tuesday, down from $3.14 a year ago, according to AAA.

‘Biden’s war on energy’​

Despite record-setting production, Biden has come under fire for his energy policy.

“Unfortunately, this Administration continues to pursue policies designed to limit access to new production—most notably on federal lands and waters. The world will continue to demand more energy, not less, and we urge policymakers to recognize the role American energy production can play as a stabilizing force for consumers here at home and around the world,” American Petroleum Institute Senior Vice President of Policy, Economics and Regulatory Affairs Dustin Meyer, said in a statement on Tuesday.

In September, the House subcommittee on Energy and Mineral Resources held a hearing titled: “Biden’s War on Domestic Energy Threatens Every American.”

Republican Sen. Dan Sullivan of Alaska warned in a floor speech that the Biden administration’s war on energy is a “gift to our adversaries.”

Earlier this month at a GOP presidential primary debate, Florida Gov. Ron DeSantis vowed to “open up all of our domestic energy for production” to “lower your gas prices.” DeSantis made a similar comment at the CNN town hall last week.

That the US is about to produce more oil than any country ever before undercuts the argument that Biden has waged a war on American energy.

Presidents don’t set oil production​

Of course, that doesn’t mean it’s Biden policies that have paved the way for record US oil production, nor that the White House would rush to take credit for that.

McNally, a former energy official to former President George W. Bush, said there isn’t that much presidents can do about US oil production, short of taking drastic emergency powers.

Unlike OPEC nations, the United States oil output is largely set by the free market.

“It’s not like President Biden or any president has a dial in the Oval Office to increase production,” McNally said.

Instead, the spike in US output has been driven by smarter and more efficient operations by oil companies. Energy firms have figured out ways to squeeze more and more oil out of the ground – often without increasing drilling dramatically.

The shale oil revolution has been driven by new drilling techniques that have unlocked new resources. But this technique can be more complex and requires vast amounts of water.

‘Kicking and screaming’​

Yet McNally said the White House has been forced to shift its tone on fossil fuels from the climate-focused stance of 2020 and early 2021 to something more neutral.

Last year, gas prices spiked above $5 a gallon following Russia’s invasion of Ukraine, which set off a panic in the oil market. Biden urged US oil companies to pump more oil – exactly the opposite of what climate scientists are calling for.

In March, the Biden administration even approved the Willow oil drilling project, a controversial ConocoPhillips drilling venture in Alaska that had been stalled for decades. That green light came in the face of deep criticism from climate groups worried about the environmental and health risks.

“President Biden has been dragged kicking and screaming from his initial keep-it-in-the-ground strategy towards a more pragmatic policy,” McNally said, noting the administration was “mugged by the reality of high gas prices and Russia’s invasion of Ukraine.”

The US is producing more oil than any country in history | CNN Business

As the world grapples with the existential crisis of climate change, environmental activists want President Joe Biden to phase out the oil industry, and Republicans argue he’s already doing that. Meanwhile, the surprising reality is the United States is pumping oil at a blistering pace and is on...

amp.cnn.com

Forever my vote for Best Thread Starter.

This is pretty glorious news to behold, even if subject to some advantageous conditions. I wish @ElKarlo was here to see it. The US shale extraction industry's innovation and resiliency has really been nothing short of awe-inspiring, especially given what it's gone through over the last dozen years: from consistent demonization and inflammatory political rhetoric at home to multiple Saudi-led OPEC pricing wars waged on it to even outright global demand destruction on account of COVID. It's always going to rise from the ashes so long as the product remains fixed and present under the ground, with perpetually more efficient and profitable drilling technology.

 

[Arkain2K]

Forever my vote for Best Thread Starter.

This is pretty glorious news to behold, even if subject to some advantageous conditions. I wish @ElKarlo was here to see it. The US shale extraction industry's innovation and resiliency has really been nothing short of awe-inspiring, especially given what it's gone through over the last dozen years: from consistent demonization and inflammatory political rhetoric at home to multiple Saudi-led OPEC pricing wars waged on it to even outright global demand destruction on account of COVID. It's always going to rise from the ashes so long as the product remains fixed and present under the ground, with perpetually more efficient and profitable drilling technology.

There's nothing that makes me feel more patriotic than the ability to be self-reliant through scientific and technical innovations, instead of being at the mercy of other countries - anything from medicine (like vaccines) to energy (like oil & gas) to natural resources critical for tech applications (like lithium).

OPEC is losing their strangle-hold, possibly permanently. Their marketshare is now the lowest in a decade, whatever production cuts they attempt in the Middle East to shore up prices is quickly offset in the Americas by the U.S, Canada, Brazil, and Guyana (which only took a mere 5 years from first discovery of oil to become a major player in this space):

Guyana's Oil Boom Challenges OPEC+ Dominance | OilPrice.com

Guyana's meteoric rise as a significant oil producer is reshaping global energy markets, challenging OPEC Plus's dominance, and bolstering its economy.

oilprice.com

Even more interesting, Brazil is joining OPEC+ next year, but will not comply to any quotas imposed by the cartel, so that's that:

https://www.cnn.com/2023/11/30/energy/saudi-arabia-extend-production-cut-opec/index.html

 

[SakurabasEar]

Black gold baby

 

[Arkain2K]

Angola leaves OPEC, in blow to producer group​

REUTERS | DEC 21 2023

Angola said on Thursday it would leave OPEC in a blow to the Saudi-led oil producer group that has sought in recent months to rally support for further output cuts to prop up oil prices.

Angola's Oil Minister Diamantino Azevedo said the Organization of the Petroleum Exporting Countries no longer served the country's interests. It joins other mid-sized producers Ecuador and Qatar that have left OPEC in the last decade.

"We feel that ... Angola currently gains nothing by remaining in the organisation and, in defense of its interests, decided to leave," Azevedo was quoted as saying in a presidency statement.

International oil prices dropped by as much as 2.4% on Thursday as analysts said the departure raised questions about the unity of OPEC and OPEC+, the wider group that includes Russia and other OPEC allies. OPEC+ implements a new round of oil-output cuts from January to try to strengthen the market.

"Prices fell on concern of the unity of OPEC+ as a group, but there is no indication that more heavyweights within the alliance intend to follow the path of Angola," UBS analyst Giovanni Staunovo said.

Angola's announced departure follows a protest from Angola about OPEC+'s decision to cut its output quota for 2024. The dispute helped to delay OPEC+'s last policy meeting in November and its agreement on new output curbs.

"This shows that there is no consensus within OPEC itself and this was for some time now," Ali Al-Riyami, former marketing director general at Oman's energy ministry, said.

"There will be consequences no doubt about it, but I don't think others (countries) will follow."

Nigeria is another African OPEC member that has been trying to boost output and has been struggling to meet its quota. At the November meeting, it received a higher OPEC+ target for 2024, although lower than it had sought, restricting its ability to increase production should it be able to do so.

OPEC did not reply to a request for comment.

Falling market share​

Three OPEC delegates who spoke on condition of anonymity said Angola's decision to leave came as a surprise, as they had expected the dispute over Angola's quota to blow over.

Angola, which joined OPEC in 2007, produces about 1.1 million barrels of oil per day, compared with 28 million bpd for the whole group.

Angola's departure will leave OPEC with 12 members and crude oil production of about 27 million bpd, some 27% of the 102 million bpd world oil market.

This further reduces OPEC's share of the world market, which stood at 34% in 2010.

As well as the exit of some members, OPEC and OPEC+ decisions to cut production and the rising output of non-OPEC countries including the United States have reduced its market share.

Brazil is expected to join OPEC+ in January but will not take part in the group's coordinated output caps.

Angola has been unable to produce enough oil to meet its OPEC+ quota in recent years, because of falling investment and a lack of big new oilfield developments.

It has struggled to reverse falling output since a peak of 2 million bpd in 2008 and expects to maintain current production into 2024, a senior government official said in October.

For Angola, oil and gas accounts for around 90% of total exports, an over-reliance the government has been seeking to reduce after the Covid-19 pandemic and lower global fuel prices hit the country's economy hard.

Several oil majors and independents operate in the southern African nation, including TotalEnergies, Chevron, ExxonMobil and Azule Energy, a 50/50 venture between Eni and BP.

Angola leaves OPEC, in blow to producer group

Angola is leaving OPEC because membership is not serving its interests, oil minister Diamantino Azevedo said on Thursday.

www.cnbc.com

 

[Fluffernutter]

Angola leaves OPEC, in blow to producer group​

REUTERS | DEC 21 2023

Angola leaves OPEC, in blow to producer group

Angola is leaving OPEC because membership is not serving its interests, oil minister Diamantino Azevedo said on Thursday.

www.cnbc.com

Will Nigeria be next?

If I remember correctly, OPEC+ has been telling both Angola and Nigeria to cut their quota

 

[Arkain2K]

Will Nigeria be next?

If I remember correctly, OPEC+ has been telling both Angola and Nigeria to cut their quota

Nigeria is staying as an OPEC member, but they have no intention to comply with the lower quota given to them and plans to pump at least 300,000 barrels per day more than what they're supposed to.

Nigeria petroleum minister reaffirms commitment to OPEC​

Reuters | December 22, 2023

LAGOS, Dec 22 (Reuters) - Nigeria on Friday reaffirmed its commitment to OPEC, its junior petroleum minister said, a day after Angola said it would leave the Saudi-led oil producer group that has in recent months sought to rally support for more output cuts to prop up prices.

Africa's biggest oil producer, Nigeria and Angola, were among several countries given lower output targets for 2024 after years of failing to meet the previous ones.

Angola said on Thursday OPEC no longer served the country's interests.

But Nigeria's minister of state for petroleum Heineken Lokpobiri said in a statement that the country's commitment to OPEC remained unwavering.

"Our collaboration within the organisation remains pivotal in fostering stability and sustainability in the oil market," Lokpobiri said in a statement.

"We are resolute in our dedication to OPEC's objectives while actively engaging with the organisation to address concerns that resonate not only within our nation's borders but across the entire continent."

Nigeria was given a 2024 target of 1.5 million barrels per day (bpd) but says it plans to produce at least 1.8 million bpd.

https://www.reuters.com/world/africa/nigeria-petroleum-minister-reaffirms-commitment-opec-2023-12-22/

 

[Arkain2K]

U.S. Shatters Oil Production Records in 2023​

By Robert Rapier - Dec 24, 2023

The U.S. set a new annual oil production record on December 15, based on data from the Energy Information Administration. Although the official monthly numbers from the EIA won't be released for a couple of months, we can calculate that a new record has been set based on the following analysis.

For reference, the previous record was set in 2019, the year before the Covid-19 pandemic impacted the oil industry. Total U.S. crude oil production in 2019 was 4.49 billion barrels (source), or 12.3 million barrels per day (BPD). Then the pandemic hit, and oil production fell in 2020 and 2021, before rebounding in 2022.

The EIA reports oil production numbers in multiple places. The U.S. Field Production of Crude Oil shows monthly totals and averages, but they are always a couple of months behind. For example, as I write this on December 14, the most recent month posted is September, and U.S. oil production up until then stood at 3.50 billion total barrels.

However, we can also find weekly production numbers in the EIA's Petroleum Status Report published every Wednesday. A table from that report called U.S. Petroleum Balance Sheet shows the status of U.S. oil production, inventories, imports, etc. for the previous week, as well as the four-week average.

If we look at the November 3 archive of that report, we can see that average weekly production in October was 13.2 million BPD. Thus, during October, the U.S. produced another ~409 million barrels. (Technically, it's a four-week average that is reported, but that will be within a fraction of a decimal point of monthly production).

Jump forward a month to the December 6 archive, and the preceding four-week average ending December 1 - which will be very close to November monthly production - was 13.175 million BPD. Thus, the U.S. produced another ~395 million barrels in November, to bring the year-to-date total to 4.30 billion barrels.

That means that on December 1, U.S. producers were only 190 million barrels from breaking the previous record. The most recent weekly production number from the EIA - representing the first week of December - was 13.1 million BPD. At that rate, it would take 14.5 days of December production to break the record. If we make a more conservative assumption of 13.0 million BPD, then it only changes the timing to 14.6 days.

Thus, it is a safe assumption that around noon on December 15, the U.S. set a new production record for oil.

It is possible that the EIA could slightly adjust the production numbers once it publishes the final monthly numbers for 2023. That won't happen until March or April of next year. But at most it would shift the record date by a day or two. It won't change the fact that a new oil production record was set.

An open question is how high the record will be set. Again, if we assume a more conservative 13.0 million BPD of production for the rest of December - which would be the lowest monthly number since July - then the year would end up at 4.70 billion barrels. That would be nearly 5% above the previous record, or 210 million barrels above that 2019 level.

Natural Gas​

The U.S. is also on pace to set a new natural gas production record this year. Through September, we are running a little over 4% above last year's record. However, to my knowledge the EIA does not report weekly natural gas production numbers. Therefore, this record can't be estimated as precisely as the record for oil.

Assuming September production remains the same for the rest of the year, the natural gas production record would be set around December 20. But there is probably about five days of uncertainty in either direction due to the variability in monthly gas production. We won't know the timing for certain until the EIA releases the monthly numbers for natural gas next year, but it is near certain that we will set a new record for natural gas as well.

U.S. Shatters Oil Production Records in 2023 | OilPrice.com

The U.S. has set a new annual record for oil production in 2023, surpassing the previous record set in 2019.

oilprice.com

 

[Arkain2K]

US buys 3 million barrels of oil for strategic reserve​

Reuters | December 26, 2023

Dec 26 (Reuters) - The United States has finalized contracts to purchase three million barrels of oil to help replenish the Strategic Petroleum Reserve (SPR) after the largest sale in history last year, the U.S. Department of Energy said on Tuesday.

The department said it bought the oil, for delivery to a site in Big Spring, Texas, for an average of $77.31 a barrel, below the average of $95 a barrel that oil sold for in 2022.

The administration of President Joe Biden had conducted sales last year, including a record one of 180 million barrels, to help control oil prices after Russia, a large crude exporter, invaded Ukraine.

The U.S has now purchased about 14 million barrels for replenishment after last year's sales. About 4 million barrels are also coming back to the SPR by February as oil companies return oil that had been loaned to them through a swap.

On the latest transaction, Sunoco Partners Marketing & Terminals LP sold 1.2 million barrels to the SPR, while Macquarie Commodities Trading US LLC and Phillips 66 (PSX.N) each sold about 900,000 barrels, the Energy Department said on its website.

The Energy Department had already secured the cancellation of 140 million barrels in congressionally mandated sales from the SPR scheduled from late this year through late 2026. The cancellation "has led to significant progress toward replenishment," the department has said.

https://www.reuters.com/markets/commodities/us-buys-3-million-barrels-oil-strategic-reserve-2023-12-26/

 

[Arkain2K]

OPEC+ can't cut oil production enough to push crude prices higher, energy expert says​

By Aruni Soni | December 26, 2023

Oil prices have been edging higher this week, but there's not much OPEC+ can do to lift prices beyond this point, one energy expert said.

That's because the US has been producing boatloads of oil, notching record levels of production and crude oil exports.

"OPEC+ just can't cut enough to sustain a price much above where we are right now," John Kilduff from Again Capital told CNBC on Tuesday.

West Texas Intermediate crude oil is trading at $75.94 a barrel, up from levels of around $73 last week. Prices have ticked up as tensions in the Red Sea have been rising. Brent crude, the international benchmark, spiked to $81 a barrel on Tuesday, up from $79 the week before.

But oil prices are still far below September highs of $94 a barrel for WTI crude. Those sinking prices have come as the US has pumped a record amount of oil, flooding markets with a glut of supply — and it's gone directly against OPEC's attempts to boost prices by slashing production.

More broadly for oil markets next year, Kilduff sees crumbling demand in the face of a slowing global economy.

"For the most part, there's headwinds here in terms of the economic outlook," he said. "The reason global central banks are cutting rates is not just because the inflation situation has potentially been tamed but because the economic outlook is softening, and that's going to speak right into crude oil demand, energy demand, for next year."

The US central bank has also been eyeing rate cuts next year as key economic data like inflation has hinted at signs of a cooling economy. But rate cuts might not be all that positive a sign, and are more like a double-edged sword. According to Kilduff, it could crush demand for oil.

Meanwhile, the turmoil in the Middle East seems less threatening to oil, Kilduff added, noting that recent attacks by Houthi rebels on key shipping routes wouldn't be a big deal, and that markets didn't budge much after other political events like missile attacks by Houthis in 2019, or the US drone strike in 2020 that assassinated Iranian major general Qasem Soleimani.

"We will have these pinprick events, there may be some boost in oil price like we are seeing today," he said. "Plus, it's a thinly traded market so they're getting that advantage. But in terms of this thing escalating, at some point in time, the Iranians will cross a line that will get them put back in their box, or their agents."

OPEC+ can't cut oil production enough to push crude prices higher, energy expert says

The US is producing way too much oil for OPEC to be able to push prices higher with any more production cuts.

www.businessinsider.com

 

[Arkain2K]

Top Russian official affirms commitment to OPEC's oil cuts ​

By Filip De Mott | December 27, 2023


Russia is a "responsible participant" in OPEC+ efforts to limit global crude output and keep prices from falling further, Deputy Prime Minister Alexander Novak said in an interview with the state-run Rossiya 24 channel.

"Our companies fulfill their obligations," he said in a Wednesday interview, quoted by Bloomberg.

The acknowledgment comes as the country's energy exports have surged in recent weeks, at times appearing to test Moscow's commitment to the pledges made by the cartel of oil producing nations.

For instance, seaborne crude exports jumped to 3.28 million barrels per day in the four weeks through December 17, rising from a four-week average of 3.04 million barrels per day at the start of this month.

That's despite Russia's pledge at the last OPEC meeting to extend crude export reductions by another 200,000 barrels a day, adding to the 300,000 per day of cuts already in place. In early December, Novak added that another 50,000 barrels a day curb could follow this month.

Collectively, the organization and its allies have promised to cut 2.2 million barrels a day in the first quarter of 2024, an effort that should help keep Brent crude prices between the $80-$85 per barrel range, Novak told Rossiya 24.

OPEC members have slashed output multiple times through this year, as a way to limit oil market speculation and boost slumping prices. Previously, Novak has warned that first-quarter curbs could be extended if the coming cuts are ineffective in combating volatility.

"Our task is to balance supply and demand so that the industry works stably," he said on Wednesday.

But despite the cartel's best efforts, prices have continued to slump amid surprising strength in US output, which has marked the highest level of crude production in history. Since late September, Brent crude has fallen nearly 14%, now standing at $80 per barrel.

Meanwhile, strong demand for Russian crude in China and India are part of the reason for Moscow's surging outflows. Since Western sanctions were handed down for Russia's invasion of Ukraine, exports to Europe have dropped from 40%-45% to around 4%-5%, Novak said.

"The main partners in the current situation are China, whose share has grown to approximately 45-50%, and, of course, India," he said. "Earlier, there basically were no supplies to India; in two years, the total share of supplies to India has come to 40%."

Top Russian official affirms commitment to OPEC's oil cuts even as the country's crude exports surge

"Our task is to balance supply and demand so that the industry works stably," Deputy Prime Minister Alexander Novak said on Wednesday.

www.businessinsider.com

 

[Siver!]

I think we can stop talking about China not pulling their weight...

And the US have everyone looking in multiple different directions on this one. All distractions?

 

[KaNesDeath]

Yesterday when i filled up my car was shocked to see $3.07 per gallon. These prices are late 2008 values.