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U.S. crude to trickle onto new Gulf Coast lines as connections, storage opens: sources

The United States exported a record 3.8 million bpd of crude in late June after Congress lifted a 40-year export ban in late 2015. Soaring Permian crude output last year exceeded available pipeline space, creating a West Texas glut that knocked regional prices to the lowest levels in four years and helped spur a pipeline construction boom.

The start-up of three new pipelines by year-end from the Permian Basin was expected to bring about 2 million new barrels per day to export terminals around Corpus Christi.

 

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Source: The Mighty 790 KFGO

 

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U.S. Accounts For 98% Of All Global Oil Production Growth

US Accounts

For 2018, the Review reported that the world or US Accounts set a new oil consumption record of 99.8 million BPD, which is the ninth straight year global oil demand has increased.

US Accounts

The United States remains the world’s top oil consumer, averaging 20.5 million BPD in 2018. China was second at 13.5 million BPD, although this would be far below the U.S. in per capita consumption. India was third at 5.2 million BPD. Both China and India have averaged oil consumption growth of at least 5% per year over the past decade.

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Source: oilprice.com

 

 

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OPEC and Russia Seek to Support the Price of Oil

Seek to Support

OPEC and Russia Seek to Support the Price of Oil. Oil ministers meeting this coming week are expected to continue an agreement to reduce production.

OPEC’s main producers find themselves in a predicament: They must reduce their own output to sustain prices at levels they consider acceptable but the higher prices encourage more production by the United States and other countries.

Significant Attention

The upcoming meeting of officials representing approximately half of the world’s oil output has garnered significant attention from global markets. With such a significant portion of oil production represented in one gathering, market players are eagerly awaiting the outcomes and decisions that will emerge from this crucial meeting.

The meeting, which will bring together key officials from major oil-producing countries, has the potential to significantly impact the global oil market. With discussions likely to revolve around production levels, supply and demand dynamics, and potential price adjustments, market participants are keen to gain insights into the future direction of oil prices. This gathering of influential figures in the oil industry provides a unique opportunity for stakeholders to assess the potential implications on their investments and portfolios, as well as to make informed decisions based on the outcomes of these discussions. The decisions made during this meeting hold the potential to shape the trajectory of the global oil market, making it a crucial event for investors and analysts alike.

 

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Source: The New York Times

 

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IS OIL ON ITS WAY BACK UP TO $100 PER BARREL?

Is oil price really going up? By early April, global crude-oil benchmark ICE Brent Crude Futures had closed over $70 per barrel for the first time since November 2018, having already surged by some 30 percent since the beginning of the year. Just a few weeks later, it rallied to $75 per barrel to hit a near six-month high, before modestly retreating. The gains notched up this year have now raised much speculation over whether crude can sustain its rally and hit $100 per barrel in the near future. If so, it would be the first time since 2014 that it reached this milestone.

Production cuts by OPEC+, which includes 10 non-OPEC countries—most notably Russia, Mexico and Kazakhstan—in addition to the organisation’s 14 member countries, are aiming to prevent excess supply in the global market following the dramatic drop in crude prices late last year. As such, the alliance has agreed to slash output by 1.2 million barrels per day (bpd) during the first six months of 2019, before meeting again in June to decide whether to extend the agreement. The plan has been mostly successful to date, with OPEC supply falling by more than 1.5 million bpd this year, which, in turn, has helped drive prices higher. Saudi Arabia has been chiefly responsible for the cuts, having reduced output by a further 324,000 bpd in March.

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Source: International Banker

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Shale gas impact fees raise $252 million, breaking record!

Shale Gas Impact Fees, Yielded its Highest Payout

Shale Gas Impact Fees on natural gas wells yielded its highest payout to date this year, in 2018, the annual fee imposed on wells harnessing the abundant natural gas reserves in the Marcellus and Utica shales of the state yielded an impressive sum of $243 million. This significant revenue was further augmented by an additional $8.9 million in back fees, which were collected from companies that had previously refrained from making payments while awaiting court rulings on the exemption status of low-producing “stripper” wells. The successful collection of these fees not only represents a substantial financial gain for the state but also signifies a resolution to a long-standing legal dispute.

The revenue generated from these fees serves as a testament to the economic potential of the state’s gas-rich shale formations. The Marcellus and Utica shales have emerged as vital energy sources, attracting considerable investment and driving economic growth in the region. By imposing the annual fee, the state is able to leverage the extraction of natural resources for the benefit of its citizens, funding vital infrastructure projects, environmental protection measures, and other public services.

Underscores the State’s Commitment

Furthermore, the recovery of back fees from companies that withheld payments underscores the state’s commitment to fair and equitable enforcement of regulations. The legal deliberations surrounding the exemption status of low-producing “stripper” wells were complex and required careful consideration. By patiently awaiting the court’s decision and subsequently collecting the unpaid fees, the state demonstrates its dedication to upholding the rule of law and ensuring that all operators adhere to their financial obligations.

Overall, the successful collection of the annual fee and back fees signifies the state’s ability to effectively manage its natural resources and enforce industry regulations. It is a testament to the positive impact that the energy sector can have on the state’s economy, while also highlighting the importance of fair and consistent enforcement of policies. With these funds, the state can continue to invest in projects that promote sustainable development, foster innovation, and support the well-being of its residents.

 

 

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Source: Pittsburgh Post-Gazette

 

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Oil and Natural Gas War

Oil and Natural Gas War | Iran is Starting One

The standoff between the US and Iran has been brewing intensely throughout Donald Trump’s three years in the White House because unlike Obama, Trump did not agree to help Iran build nuclear weapons. Let’s talk more about the oil and natural gas war.

The standoff stems from Iran’s confrontational and irresponsible attitude towards other nations. Iran has consolidated its presence in Iraq. And Saudi Arabia has paid the price for Iran’s dominance in Lebanon.

The interests of the US and of its allies are vulnerable on the oceans as oil tankers carrying almost one-third of the world’s oil, pass within a few miles of the Iranian coastline because their route takes them through the Strait of Hormuz to all the different industrial points of the world.

Though America is not completely beholden to Middle Eastern oil because of fracking and oil shale. Too bad the braindead states of California and New York don’t get this!

America is loaded with natural gas. America does not need natural gas and oil from other countries like it used to.

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Source: energycentral.com

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DRILLING REPORT

DRILLING REPORT: June 13 through June 19

Permian Basin: Permit applications approved by the Texas Railroad Commission for June 13 through June 19 for Districts 7C, 8 and 8A. Numbers in parentheses indicate the number of permits approved for that leasehold. Here is a drilling report.

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Source: OAOA.com

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This Refining Giant Joins a Race to Solve America’s $100 Million a Day Oil Problem

Oil Problem, the global oil market is shortchanging American oil producers. The primary global benchmark, Brent, was recently around $62 a barrel. The main domestic benchmark, WTI, on the other hand, traded at roughly $53.50 a barrel. Because of that discount, U.S. oil companies are earning about $8.50 less per barrel than their global peers. With oil companies currently pumping out more than 11 million barrels per day (BPD) from beneath U.S. soil, it means they’re missing out on nearly $100 million of revenue each day.

The main issue causing the discount in U.S. crude prices is that there isn’t enough refining capacity in the country to handle its growing gusher of crude from shale fields. That’s leading several energy companies to work on solutions that would narrow the shortfall. The latest entrant in the race to build more export capacity is refining giant Phillips 66 (NYSE:PSX), which is proposing a new deep-water oil export terminal off the coast of Texas. It’s the ninth such project aimed at making America an energy export juggernaut.

 

 

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Source: The Motley Fool, LLC.

 

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Oil Prices Are Up, and Could Go Even Higher

Geopolitical tensions with Iran and a potential interest rate cut are coming in. This is since the US Federal Reserve sent US oil prices are up.

Oil prices soared more than five percent on Thursday. This is after Iran shot down a United States military drone. It will be raising fears of a military confrontation between Tehran and Washington.

Also supporting oil prices was a drop in US crude inventories. There are expectations that the US Federal Reserve could cut interest rates at its next meeting. This will stimulate growth in the US, which is the world’s largest oil-consuming country.

“It’s a confluence of events. There’s a looming easing cycle which is going to hit the dollar and prop up commodity prices. Moreover, there are also the tensions with Iran,”. This was said by John Kilduff, a partner at Again Capital LLC in New York.

The security premium built into oil prices could rise further as tensions between the US and Iran heat up, he said.

Brent crude, the global benchmark, rose $2.63, or 4.3 percent, closing at $64.45 a barrel. US West Texas Intermediate (WTI) crude rose $2.89, or 5.4 percent, to $56.65 a barrel.

Brent’s premium over WTI narrowed to its lowest margin since April. The change came as US crude rose more quickly than Brent due to the tailwind provided by potential Federal Reserve policy, said Bob Yawger, director of futures at Mizuho Americas in New York.

US President Donald Trump played down Iran’s downing of a US military drone, saying he suspected it was shot by mistake and that “it would have made a big difference” to him if the remotely controlled aircraft had been piloted.

While the comments appeared to suggest Trump was not eager to escalate the latest in a series of incidents with Iran, he also warned that “this country will not stand for it”.

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Source: aljazeera.com

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US oil surges 5.4% to settle at $56.65 after Trump says Iran made a ‘very big mistake’

U.S. oil surges on Thursday after Iran shot down a U.S. military drone, prompting President Donald Trump to blast Tehran on Twitter and fueling concerns of a conflict between the two countries.

U.S. West Texas Intermediate crude U.S. oil surges up to $2.89, or 5.4%, to $56.65 a barrel after surging as much as 6% around 10 a.m. ET. Brent crude, the global benchmark, was up $2.79 — a 4.5% increase — at $64.61 a barrel.

US oil surges after Trump says Iran made a 'very big mistake

 

The strained relationship has sent crude prices soaring since more than 20% of the world’s oil output comes from the Middle East. Any threats to the free flow of oil through key chokepoint the Strait of Hormuz could dampen crude supplies.

“If we didn’t have the U.S. resource endowment, oil would absolutely be over $100. Pre-Permania, oil would be above $100” says RBC head of global commodities strategy, Helima Croft.

“We have a drone shot down, we have President Trump now tweeting Iran made a big mistake. I think the market may be waking up to the degree of risk entailed by these incidents,” Croft said.

 

Also boosting oil on Thursday was a larger-than-expected decline in U.S. crude inventories and the potential for prolonged supply restraints by the Organization of the Petroleum Exporting Countries.

 

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Source: CNBC.com

 

 

 

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