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Economy U.S Energy Independence: From Net Oil Exporter To Begging OPEC To Increase Production Again.

Discussion in 'The War Room' started by Arkain2K, May 9, 2018.

  1. Arkain2K Si vis pacem, para bellum

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    OPEC member calls for calm after U.S. pressure to pump more oil
    By Abigail Ng | NOV 17 2021


    The United Arab Emirates' energy minister on Wednesday defended OPEC and its allies' decision to not increase oil supply to the market, despite U.S. pressure to pump more.

    "I would encourage people to calm, trust us," Suhail al-Mazrouei told CNBC's Hadley Gamble from the Adipec energy forum in Abu Dhabi.

    Al-Mazrouei said he has received calls from different countries' ministers asking him to take action, but added that OPEC intends to "follow the facts."

    He pointed to EIA predictions that suggest an oil surplus in the first quarter of next year.

    "In 2022, we expect that growth in production from OPEC+, U.S. tight oil, and other non-OPEC countries will outpace slowing growth in global oil consumption and contribute to Brent prices declining from current levels to an annual average of $72/b," the EIA's November report said.

    "It's going to soften in the first quarter, and we will start to see build up in the inventories in 2022," said al-Mazrouei on Wednesday.

    "That's what the experts said, and we agree with them, in OPEC," he said.

    If the current plan by OPEC+ to increase production by 400,000 barrels per day each month will already lead to a surplus, the alliance should not change that plan and increase production even further, he added.

    Not everyone agrees, however.

    Helima Croft of RBC Capital Markets said that, in practice, OPEC+ is not increasing production as planned because "a number of countries are unable to reach their targets, in part because of lack of investment."

    "The question is, are we going to still be short barrels when it comes to the first quarter, if it's a cold winter especially, and there's greater demand for oil because of switching needs," Croft, who is managing director and global head of commodity strategy, told CNBC on Tuesday.

    Both U.S. crude and Brent crude futures have risen more than 60% so far this year after demand increased when pandemic restrictions were loosened.

    The U.S. blames high energy prices on OPEC+'s reluctance to ramp up production further. Energy Secretary Jennifer Granholm has called on OPEC+ to increase crude supplies and U.S. President Joe Biden has also criticized the oil alliance for not producing more barrels.

    "The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right," Biden said on Oct. 31.

    https://www.cnbc.com/amp/2021/11/17...-calm-after-us-pressure-to-pump-more-oil.html
     
  2. Arkain2K Si vis pacem, para bellum

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  3. Arkain2K Si vis pacem, para bellum

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    U.S. marshals other nations, challenges OPEC+ with release of oil reserves
    By Timothy Gardner | November 24, 2021


    (Reuters) - The administration of U.S. President Joe Biden announced on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude.

    Biden, facing low approval ratings and accelerating inflation ahead of next year's congressional elections, has grown frustrated at repeatedly asking the Organization of the Petroleum Exporting Countries and its allies, known as OPEC+, to pump more oil without any response.

    "I told you before that we're going to take action on these problems. That's exactly what we're doing," Biden said in remarks broadcast from the White House.

    "It will take time, but before long you should see the price of gas drop where you fill up your tank, and in the longer-term we will reduce our reliance on oil as we shift to clean energy," he said.

    Crude oil prices recently touched seven-year highs, and consumers are feeling the pain. Retail gasoline prices are up more than 60% in the last year, the fastest rate of increase since 2000, largely because people have returned to the roads as pandemic-induced restrictions have eased.

    Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of U.S. demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.

    Japan will release "a few hundred thousand kilolitres" of oil from its national reserve, but the timing of the sale has not been decided, industry minister Koichi Hagiuda told reporters on Wednesday. read more

    Earlier the Nikkei newspaper reported that Japan will release about 4.2 million barrels of oil (666,666 kilolitres) or about 1 or 2 days' worth of its demand. A Japanese refining source said it has already bought oil for processing in February 2022. read more

    Seoul has said it would decide after discussions with the United States and other allies, but did not provide any details. read more

    China, the world's largest crude importer, remains non-committal, though it has taken steps this year to cool price rises of other commodities in its domestic market. Beijing will release crude oil from its reserves according to its needs, a foreign ministry spokesman said on Wednesday. read more

    "As a result, the Biden administration will have to turn to China again. This is a direction that benefits everyone, but China clearly has the upper hand," the state-backed Global Times said in an editorial. read more

    Brent crude rose for a second day on Wednesdayto $82.70 a barrel by 0908 GMT, after falling more than 10% for several days on concerns of more supplies from SPR releases. Goldman Sachs said the volume announced was "a drop in the ocean".

    It was the first time that the United States had coordinated such a move with some of the world's largest Asian oil consumers, officials said.

    OPEC+, which includes Saudi Arabia and other U.S. allies in the Gulf, as well as Russia, has rebuffed requests so far to pump more. It meets again on Dec. 2 to discuss policy but has so far shown no indication it will change tack.

    The group has been struggling to meet existing targets under its agreement to gradually increase production by 400,000 barrels per day (bpd) each month - a pace Washington sees as too slow - and it remains worried that a resurgence of coronavirus cases could again drive down demand. read more

    Recent high oil prices have been caused by a sharp rebound in global demand, which cratered early in the pandemic in 2021, and analysts have said that releasing reserves may not be enough to curb further rises.

    "It's not large enough to bring down prices in a meaningful way and may even backfire if it prompts OPEC+ to slow the pace at which it is raising output," said Caroline Bain, chief commodities economist at Capital Economics Ltd.

    The administration has also pointed to a notable gap between the price of unfinished gasoline futures and the retail cost of gasoline, which has widened to about $1.14 a gallon from roughly 78 cents in mid-October. The White House urged the Federal Trade Commission to investigate the issue last week.

    Biden's political opponents have seized on the announcement to criticize his administration's efforts to decarbonize the U.S. economy and discourage new fossil fuel development on federal lands.

    "Tapping the Strategic Petroleum Reserve will not fix the problem," said Senator John Barrasso, the ranking Republican on the Senate energy committee.

    The release from the U.S. Strategic Petroleum Reserve would be a combination of a loan and a sale to companies, U.S. officials said. The 32 million-barrel loan will take place over the next several months, while the administration would accelerate a sale of 18 million barrels already approved by Congress to raise funds for the budget.

    WARNING TO OPEC

    The effort by Washington to team up with major Asian economies to lower energy prices acts as a warning to OPEC and other big producers that they need to address concerns about high crude prices, up more than 50% so far this year.

    "It sends a signal to OPEC+ that the consuming nations are not going to get pushed around any more by them," said John Kilduff, partner at Again Capital LLC in New York. "OPEC+ has been stingy with their output for months now."

    Suhail Al-Mazrouei, energy minister of the United Arab Emirates, one of OPEC's biggest producers, said before details of the release of U.S. reserves were announced that he saw "no logic" in lifting UAE supply for global markets.

    An OPEC+ source said releasing reserves would complicate its calculations, as it monitors markets on a monthly basis. However, they and several analysts said the release was not as big as the headline figure suggested. They said Britain and India were releasing modest amounts and the United States had already announced some releases, and so the additional quantity was less than expected.

    The United States historically has worked on coordinated stocks releases with the Paris-based International Energy Agency (IEA), a bloc of 30 industrialised energy consuming nations.

    Japan and South Korea are IEA members. China and India are only associate members.

    https://www.reuters.com/markets/com...oil-release-bid-fight-high-prices-2021-11-23/
     
  4. ElKarlo Yellow Card Yellow Card

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    What is weird is that the Biden administration has t even talked to domestic producers at all. The rig count should be 500 and they should be asking them how to get it that high and how to help. Instead we get cackling and trying to talk to opec.
     
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  5. Yehudim Brown Belt

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    Arkain what is your take on this? Obviously a lot of this is the same reason other prices have increased, but what extent do you blame Biden policy on oil specifically?

    I haven’t followed closely enough but I’ve read some stuff on here that suggested that at least early on Biden was quietly allowing for a lot of oil exploration and exploitation while doing the symbolic stuff like cancelling Keystone XL to appease his supporters
     
  6. Arkain2K Si vis pacem, para bellum

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    Jan 2021: New drill leases on federal land and water suspended.
    www.cnbc.com/amp/2021/01/27/biden-suspends-oil-and-gas-drilling-in-series-of.html

    June 2021: Federal court says leases must continue.
    www.nytimes.com/2021/06/15/climate/biden-drilling-federal-land.html

    August 2021: Drill leases resumes.
    https://www.reuters.com/business/en...-resume-oil-gas-drilling-auctions-2021-08-31/

    Biden believes it's 100% other people's fault for the current crisis: Russia, OPEC, and now the U.S oil companies are blamed for colluding between themselves, without any evidence:
    https://amp.usatoday.com/amp/8649244002

    Analysts believe it's a simple case of demand outstrips supply, as the world recovers from the pandemic, compounded by natural disasters that slashed some production, with some political uncertainties sprinkled in:
    https://www.cbsnews.com/amp/news/gas-prices-high-profiteers-biden/

    In the end, we have a perfect storm of:

    - A bunch of supply setbacks from multiple fronts that contributed to this shortage, right when the immunized world reopen again for business.

    - Oil companies do not want to invest more capital to increase output beyond their production schedule to make up for that shortfall and risks their shareholders' anger again if that results in another glut.

    - Biden doesn't even want to engage in a discussion with the domestic oil producers, much less making an official request for an increase in output or offering any assurances that could increase production, because that would tarnish his environmental street cred.

    And that's how we have $5 gasoline, when it should be no more than $3.

    https://amp.cnn.com/cnn/2021/11/10/energy/oil-gas-prices-joe-biden/index.html
     
    Last edited: Nov 29, 2021 at 7:20 PM
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  7. Arkain2K Si vis pacem, para bellum

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    Biden calls for higher fees for oil, gas leasing on federal land, stops short of ban
    By AP | November 26, 2021

    [​IMG]
    https://www.npr.org/2021/11/26/1059...-gas-leasing-on-federal-land-stops-short-of-b
     
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  8. Arkain2K Si vis pacem, para bellum

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    Hmm...it almost sounds like Warren doesn't understand how the economy works.

    U.S. Senator Warren lashes out at energy companies over natural gas prices
    By Kanishka Singh | Nov 23, 2021

    [​IMG]

    (Reuters) - U.S. Senator Elizabeth Warren on Tuesday called on energy companies to explain "their decisions to export record amounts of natural gas while imposing massive price increases" on consumers, accusing them of "corporate greed" while Americans struggle to pay their bills.

    Warren sent letters to 11 energy companies, including Exxon Mobil (XOM.N), ConocoPhillips (COP.N) and Occidental Petroleum (OXY.N).

    "The cause of rapidly rising energy prices for consumers and manufacturers is clear: some of the nation's largest and most profitable oil and gas companies are putting their massive profits, share prices and dividends for investors, and millions of dollars in CEO pay and bonuses ahead of the needs of American consumers and the nation’s recovery from the pandemic," Warren wrote in letters sent to the companies and posted on her website.

    Warren said she was concerned about "the extent to which these price increases are being driven by energy companies’ corporate greed and profiteering."

    She called on the companies to detail, for the past 10 years, their natural gas exports, percentage of total natural gas production exported, average profit margin for exported natural gas, average profit margin for domestic sales of natural gas, and the amount invested in clean, renewable energy. Warren asked for replies by Dec. 7.

    Letters were also sent to EQT (EQT.N) , Coterra , BP (BP.L) , Antero Resources (AR.N) , Chesapeake Energy Corp (CHK.O) , Ascent Resources, Southwestern Energy Co (SWN.N) and Range Resources Corp (RRC.N) .

    Warren's broadside on the energy sector comes a day after she called on the Justice Department to open an investigation into the impact of price-fixing and consolidation in the poultry sector on consumers and farmers. read more

    The United States said earlier on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude. read more

    https://www.reuters.com/business/en...tural-gas-prices-energy-companies-2021-11-23/
     
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  9. Arkain2K Si vis pacem, para bellum

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    Explainer: What is happening with U.S. gasoline prices?
    By Laura Sanicola | November 24, 2021


    https://www.reuters.com/markets/commodities/what-is-happening-with-us-gasoline-prices-2021-11-24/
     
    Last edited: Nov 29, 2021 at 12:32 AM
  10. Arkain2K Si vis pacem, para bellum

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    Oil Prices Crash As Covid Does What Biden Couldn’t
    By Tom Kool - Nov 26, 2021

    [​IMG]

    Renewed Covid fears have managed to do what Biden couldn't, sending oil prices crashing as a new wave of demand destruction looms.

    Oil prices experienced one of their worst trading days in recent memory on Friday, plunging across the board by over 10% on fears that a new COVID-19 variant discovered in Southern Africa might dampen economic growth and trigger another demand slump. Following the spectacular failure of the SPR release, which instead of depressing prices ratcheted them up higher, renewed COVID-19 concerns have now brought about President Biden’s objective. OPEC+ might still have a say in this, with the group's December 02 meeting potentially resulting in a reduction in production targets for 2022.

    https://oilprice.com/Energy/Energy-General/Oil-Prices-Crash-As-Covid-Does-What-Biden-Couldnt.html
     
  11. Arkain2K Si vis pacem, para bellum

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    Oil drops 13% in worst day of 2021, breaks below $70 as new Covid variant sparks global demand concerns
    FRI, NOV 26 2021

    [​IMG]

    Oil posted its worst day of the year on Friday, tumbling to the lowest level in more than two months as the new Covid-19 strain sparked fears about a demand slowdown just as supply increases.

    The leg lower came amid a broad sell-off in the market with the Dow dropping more than 900 points. The World Health Organization warned Thursday of a new Covid variant detected in South Africa. It could be more resistant to vaccines thanks to its mutations, although the WHO said further investigation is needed.

    U.S. oil settled 13.06%, or $10.24, lower at $68.15 per barrel, falling below the key $70 level. It was the contract's worst day since April 2020. WTI also closed below its 200-day moving average — a key technical indicator — for the first time since November 2020.

    International benchmark Brent crude futures slid 11.55% to settle at $72.72 per barrel.

    Both contracts registered their fifth straight week of losses for the longest weekly losing streak since March 2020.

    A decrease in travel and potential new lockdowns, both of which could hit demand, come just as supply is about to increase.

    "It appears that the discovery of a Covid-19 variant in southern Africa is spooking markets across the board. Germany is already limiting travel from several nations in the affected region," said John Kilduff, partner at Again Capital. "The last thing that the oil complex needs is another threat to the air travel recovery," he added.

    On Tuesday the Biden Administration announced plans to release 50 million barrels of oil from the Strategic Petroleum Reserve. The move is part of a global effort by energy-consuming nations to calm 2021′s rapid rise in fuel prices. India, China, Japan, South Korea and the U.K. will also release some of their reserves.

    "This [the sell-off] is attributable to concerns about a sizeable oversupply in early 2022 that is set to be brought about by the upcoming release of strategic oil reserves in the US and other major consumer countries, plus the ongoing steep rise in new coronavirus cases," noted analysts at Commerzbank. "Furthermore, an even more transmissible variant of the virus has been discovered in South Africa, prompting a noticeable increase in risk aversion on the financial markets today."

    OPEC and its oil-producing allies are set to meet on Dec. 2 to discuss production policy for January and beyond. The group has slowly eased the historic output cuts it agreed to in April 2020 as the coronavirus sapped demand for petroleum products. Since August the group, known as OPEC+, has returned 400,000 barrels per day to the market each month.

    The group has maintained its gradual taper despite calls from the White House and others to hike output as oil prices surged to multi-year highs. West Texas Intermediate crude futures hit a seven-year high in October, while Brent rose to a three-year high.

    U.S. oil is now down more than $15 since its October high of $85.41.

    "The coordinated SPR release is getting a second look, as well, especially with OPEC decrying it and asserting that the release will tip the global market back into surplus. The release is much more than just a drop in the bucket," added Kilduff.

    Energy stocks followed oil lower on Friday, and the group was the worst-performing S&P 500 sector, falling more than 4%. Devon Energy, APA and Occidental were among the biggest losers.

    https://www.cnbc.com/amp/2021/11/26...id-variant-sparks-global-demand-concerns.html
     
  12. HeffDoesWant Brown Belt

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  13. Arkain2K Si vis pacem, para bellum

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    While market forces (especially unexpected events) quickly drives short-term fluctuations, U.S Presidents can definite set the board for long-term stability.

    For example, Obama's energy policies was instrumental in the American shale revolution back in 2008, something that assures oil prices will never reach $150 per barrel again due to OPEC shenanigans.

    https://www.forbes.com/sites/judecl...t-for-americas-shale-oil-and-natural-gas/amp/

    Biden simply pretends shale doesn't exists even when he needed more oil, and we already felt the domestic production crunch, if one day we hypothetically have a U.S President who is actually hostile to fracking and try to ban it in the United States, OPEC would surely assume full control of their monopoly on oil prices again.
     
    Last edited: Nov 29, 2021 at 12:18 PM
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  14. HeffDoesWant Brown Belt

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    So he somewhat controls world prices and therefore American prices?

    Fair summary?
     

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