Tag Archives: Oil

Biden orders release of 1 million barrels of oil per day for next 6 months but numbers don’t add up

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Biden tapping oil reserve for 6 months to control gas prices
  • President Joe Biden is ordering the release of 1 million barrels of oil per day from the nation’s strategic petroleum reserve for six months, the White House said Thursday, in a bid to control energy prices
  • The White House said Biden would also call on Congress to impose financial penalties on oil and gas companies that lease public lands but aren’t producing. He also intends to invoke the Defense Production Act to encourage the mining of critical minerals for batteries in electric vehicles.
  • Americans on average use about 21 million barrels of oil daily, with about 40% of the consumption devoted to gasoline, according to the U.S. Energy Information Administration.
  • The U.S. is producing on average 11.7 million barrels daily, down from 13 million barrels in early 2020.
  • The Biden administration in November announced the release of 50 million barrels from the strategic reserve in coordination with other countries. And after the Russia-Ukraine war began, the U.S. and 30 other countries agreed to an additional release of 60 million barrels from reserves, with half of the total coming from the U.S.
  • According to the Department of Energy, which manages it, more than 568 million barrels of oil were held in the reserve as of March 25.

Read the original article by clicking here.

Inflation Highest in Four Decades. Surge in Oil, Gas Will Push Inflation Even Higher

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Inflation Reaches New High as Consumer Prices Jump 7.9%, Highest in Four Decades
  • The Department of Labor said that the consumer price index rose 7.9 percent compared with a year ago. Prices were up 0.8 compared with the prior month.
  • This is the ninth straight month of inflation above 5 percent. Prices rose at an annual rate of 7.5 percent in January, jumping 0.6 percent from December.
  • Compared with a year ago, core prices were up 6.4 percent, the fastest pace for this measure since August 1982.
  • Surge in oil and gasoline prices. Those are likely to push inflation even higher in March.

Read the original article by clicking here.

Tesla CEO: “Sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports”

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Elon Musk calls for increase in US oil, gas production to combat Russia despite negative effect on Tesla
  • Musk’s tweet calling for more fossil fuel production was retweeted roughly 20,000 times in 30 minutes
  • “Hate to say it, but we need to increase oil & gas output immediately,” Musk tweeted Friday. “Extraordinary times demand extraordinary measures.”
  • Musk added, “Obviously, this would negatively affect Tesla, but sustainable energy solutions simply cannot react instantaneously to make up for Russian oil & gas exports.”
  • Additionally, reports have shown that the U.S. is buying 650,000 barrels a day from Russia, which some have argued is essentially financing Russian President Vladimir Putin’s war machine.

Read the original article by clicking here.

Oil Giants Leaving Russia Energy Sector

Important Takeaways:

  • Energy Giant Shell Withdrawing From Russia, Will Stop Buying Moscow’s Oil And Gas
  • The company had already announced it intends to end its involvement in the Nord Stream 2 pipeline project and exit its equity partnerships with Russia’s Gazprom and related entities, including its 27.5 percent stake in the Sakhalin-II liquefied natural gas facility, its 50 percent stake in the Salym Petroleum Development, and the Gydan energy venture.
  • Dozens of companies, including major oil sector firms such as BP and Exxon, have said they are exiting Russia as the West imposes tight sanctions on Russia as punishment for its aggression against Ukraine.

Read the original article by clicking here.

1200 Contracts Already Out for $200 Per Barrel in Crude Futures

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Traders Are Now Betting On $200 Oil By The End Of The Month
  • The main U.S. price last week topped $110 a barrel for the first time in more than a decade and in off-hours trading late Sunday, they burst above $130 following fresh attacks, mounting civilian casualties and a push by U.S. lawmakers to ban Russian oil imports.[WSJ Reported]
  • Now that prices hit $130 early on Monday, $200 oil by the end of March is not so unthinkable, as even major investment banks predict that a Russian oil ban would easily send prices to $150 and possibly to $200.
  • Data compiled by Bloomberg, more than 1,200 contracts were traded on Monday for the option to buy Brent Crude future for May at $200 per barrel.
  • Bank of America says that if most of Russia’s oil exports were stopped, the market would find itself in at least a 5-million-bpd deficit, which could trigger an oil price move to $200 per barrel.

Read the original article by clicking here.

Biden Halts Oil and Gas Leases Even as Ukraine Crisis Escalates

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • After Legal Setback, Biden Halts Oil and Gas Leases Even as Oil Nears $100 A Barrel
  • The administration said in a legal filing that a Feb. 11 ruling by a Louisiana federal judge will affect dozens of rules by at least four federal agencies
  • The immediate effects is an indefinite delay in planned oil and gas lease sales on public lands in a half-dozen states in the West.
  • The ruling also will delay plans to restrict methane waste emissions from natural gas drilling on public lands and a court-ordered plan to develop energy conservation standards for manufactured housing, the administration said. The ruling also will delay a $2.3 billion federal grant program for transit projects, officials said.

Read the original article by clicking here.

Inflation Would Rise If War Breaks Out

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Ukraine-Russia crisis could push inflation to 10% if conflict escalates
  • Escalating Russia-Ukraine crisis could push oil prices to $120 a barrel
  • Russia is the world’s second-largest producer of both oil and natural gas
  • Germany already halted the certification of the Nord Stream 2 gas pipeline from Russia, while the U.S. and the European Union have floated potential sanctions against Moscow
  • American and European officials fear that Russia may retaliate against the sanctions by cutting off the supply of oil and natural gas that flows from Moscow to Europe, sending prices spiraling higher.

Read the original article by clicking here.

Oil is $100 per barrel. J.P. Morgan warns a run up to $150 could stall world economy

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • $100 Oil Threatens to Compound World Economy’s Inflation Shock
  • Oil’s surge toward $100 a barrel for the first time since 2014 is threatening to deal a double-blow to the world economy by further denting growth prospects and driving up inflation.
  • More broadly, JPMorgan Chase & Co. warns a run-up to $150 a barrel would almost stall the global expansion and send inflation spiraling to over 7%, more than three times the rate targeted by most monetary policy makers.
  • China, the world’s biggest oil importer and goods exporter, has so far enjoyed benign inflation. But it’s economy remains vulnerable as producers are already juggling high input costs and concerns over energy shortages.

Read the original article by clicking here.

Canadian shippers find few easy alternatives for grain, oil cut off by flood

By Rod Nickel

WINNIPEG, Manitoba (Reuters) – Canadian exporters of commodities from grain to fertilizer and oil scrambled on Wednesday to divert shipments away from Port of Vancouver, which floods have isolated, but they found few easy alternatives.

The disaster, which has killed at least one person, has caused the latest blockage in the congested global supply chain, driving up inflation fears ahead of the holiday shopping season.

A month’s worth of rain in two days caused floods and mudslides in British Columbia that wrecked highways and two critical east-west rail lines owned by Canadian National Railway Co and Canadian Pacific Railway leading to Canada’s busiest port.

The Trans Mountain oil pipeline and part of an Enbridge Inc gas line have closed as precautions.

“That western corridor is our lifeblood,” said John Brooks, CP’s chief marketing officer, at an investor conference on Tuesday. “Just about all commodities to some extent flow through that.”

Vancouver’s port moves C$550 million ($437 million) worth of cargo a day, ranging from automobiles and consumer goods to commodities.

The alternatives include diverting commodities to British Columbia’s northern port of Prince Rupert, to the U.S. Pacific Northwest or across the continent to eastern Canada.

The clock is ticking. Port of Vancouver said it expects vessels to anchor longer while they await delayed cargo, a situation that usually results in shippers paying demurrage for the extra wait.

Buyers can also charge penalties for shipments that arrive late, raising the urgency to find alternatives.

“Everyone is looking at it,” one Canadian grain trader said.

Even if the railways can carry out repairs within a few days and restore service – they have not provided estimated timelines – delays will stretch for as much as one month given the backlog of shipments to work through, said a second grain industry source.

The Prince Rupert grain terminal, owned by Richardson International, Viterra and Cargill Inc, is already busy with exports, limiting its capacity to handle more volumes, said Wade Sobkowich, executive director of the Western Grain Elevator Association.

Canola futures for January delivery fell 1.5% as traders factored in transportation problems from the floods.

Teck Resources, a copper and coal miner, said in a statement that it was diverting trains from Vancouver to a Prince Rupert terminal.

Canpotex Ltd, the potash export company owned by Nutrien Ltd and Mosaic Co, will ship more of the crop nutrient through its smaller terminals in Portland, Oregon. and Saint John, New Brunswick, spokesperson Natashia Stinka said.

Trans Mountain’s closure means some 300,000 barrels of oil and refined products each day will start filling storage tanks, or find another conduit.

The main alternatives are shipping oil east on Enbridge’s Mainline or south by train to the United States, said John Zahary, CEO of Altex Energy, which owns rail terminals in Alberta and Saskatchewan.

“(It) does seem like supply chains are so tight these days that when something happens, panic and scrambling becomes the plan,” Zahary said.

(Reporting by Rod Nickel in Winnipeg; Editing by Lisa Shumaker)

White House asks U.S. oil-and-gas companies to help lower fuel costs -sources

By Jarrett Renshaw

(Reuters) -The White House has been speaking with U.S. oil and gas producers in recent days about helping to bring down rising fuel costs, according to two sources familiar with the matter.

Energy costs are rising worldwide, in some cases leading to shortages in major economies like China and India. In the United States, the average retail cost of a gallon of gas is at a seven-year high, and winter fuel costs are expected to surge, according to the U.S. Energy Department. Oil-and-gas production remains below the nation’s peak reached in 2019.

“We are closely monitoring the cost of oil and the cost of gas Americans are paying at the pump. And we are using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets,” a White House official said.

Press Secretary Jen Psaki said Wednesday that she is not aware of any contact with oil and gas companies “around this particular issue.”

U.S. crude oil recently hit $80 a barrel for the first time in seven years, as the Organization of the Petroleum Exporting Countries and their allies known as OPEC+ restrict output. The White House has discussed rising prices with top OPEC producer Saudi Arabia in recent weeks.

The average retail price of a gallon of gasoline has risen to $3.29, according to AAA figures. The U.S. Energy Department said on Wednesday that household heating costs are expected to rise dramatically this winter for all fuels, but particularly for heating oil and propane.

U.S. oil production has been slow to rebound from 2020, when output dropped during the coronavirus outbreak. Production hit a record of nearly 13 million barrels per day (bpd) in late 2019, but the U.S. Energy Department said Wednesday that output will only average 11 million bpd in 2021, rising to 11.7 million bpd in 2022.

Natural gas prices are up sharply this year, the result of supply shortages and stronger-than-expected demand in Europe and Asia.

U.S. shale producers, who are responsible for the boom in crude oil output in the last 10 years, have been less willing to drill for more oil after years of weak financial performance, and have instead focused on cutting spending to boost returns for investors.

It can take six months to drill and complete a new well and bring the oil and gas to market. Any call by the White House for an increase in U.S. production is likely to fall on deaf ears, according to one oil executive, who did not want to be identified criticizing the approach. The industry has also been unhappy with some of Biden’s earlier actions, including a temporary drilling halt on federal lands, that they see as an attack on the industry.

“By pursuing policies that restrict supply and make it harder to produce oil and natural gas here in America, Americans will have to pay more for their energy,” said Anne Bradbury, chief executive officer at the American Exploration and Production Council, which lobbies for independent oil-and-gas producers.

President Joe Biden’s administration has been conducting internal discussions about rising fuel costs, one of the two sources added.

The White House has been trying to tackle supply bottlenecks that have boosted the price of various goods, from meat to semiconductors. Officials said Wednesday that the administration has been working with major ports in Los Angeles and Long Beach, along with shipping giants UPS and FedEx, to alleviate congestion slowing deliveries.

(Reporting by Jarrett Renshaw, Ron Bousso and David French; Editing by Howard Goller and Andrea Ricci)