Tag: shale oil

The Era Of Cheap Oil Has Come To An End

Ms. Cat

In its latest monthly report, OPEC revealed it had yet again failed to produce as much oil as it agreed to produce the last time it discussed output. And it wasn’t by a few thousand barrels per day, either. The shortfall was some 1.8 million barrels daily, but more importantly, that sort of undershooting of its own target has become a regular thing for the cartel. Meanwhile, the United States federal government needs to buy some oil for its strategic petroleum reserve after releasing close to 200 million barrels from it this year as a way of countering fuel price inflation. Yet U.S. drillers are not in a rush to boost production. On the contrary, it seems production growth has lost its place among these companies’ top priorities.

The Era Of Cheap Oil Has Come To An End

Previously:

U.S. Begins SPR Repurchase Program As Oil Prices Crash

U.S. Accelerates Three-Tier Plan To Reduce Oil Prices

Ms. Cat

U.S. President Biden has three key strategies in place to lower oil prices.

– The first and foremost strategy is the implementation of the NOPEC bill.

– The second pillar of the plan is to release more crude from the U.S. SPR.

– The third element of the plan to bring oil prices down is to be a concerted effort to encourage U.S. oil firms, shale or otherwise, to increase their production.

U.S. Accelerates Three-Tier Plan To Reduce Oil Prices

White House Leaves Door Open For Additional SPR Releases + It’s Implications

Ms. Cat

The White House said on Tuesday that it has many options to counteract OPEC+’s looming production cuts, including the release of even more crude oil from the nation’s Strategic Petroleum Reserves.

White House Leaves Door Open For Additional SPR Releases

Related:

The Implications Of U.S. SPR Withdrawals

Implications of OPEC-+ Production Cut 

I think OPEC has not learned from its past mistakes, as it is not a good time to cut oil production by 2 million bpd in November 2022, especially at a time when global economies are under pressure. While higher oil prices at this juncture may bring much needed oil revenues to (national) oil companies and OPEC members, this will come at the cost of accelerating a global recession, bringing more misery to consumers. Consequently, it will weaken global oil demand and oil prices. Oil prices in the range of $70-$80/bbls at this difficult time could be a win-win situation for both producers and consumers, and shield global economies from collapsing. Consequently, the U.S. should take its own measures to enhance its domestic oil production, encourage EVs and halt further releases of the SPR. Running down the SPR will allow OPEC+ more flexibility to play around with production.

Meanwhile:

U.S. Rig Count Slides Amid Jump In Crude Prices

China Heralds Another Major Oil Discovery

Ms. Cat1 Comment

China’s state-run China Petrochemical Group, Sinopec, says it has discovered a massive oilfield in the Tarim Basin, containing 1.7 billion tons of oil reserves.

The discovery is the result of exploration in the Shunbei oil and gas field, said to be one of the deepest commercial fields in the world, in the country’s Xinjiang region.

China Heralds Another Major Oil Discovery

Related:

Chinese Oil Giants Sinopec And PetroChina To Delist From NYSE

The Energy Industry in Xinjiang, China: Potential, Problems, and Solutions

How oil has shaped Xinjiang

Vast oil deposits discovered in Xinjiang

I’m sure Halliburton would love to get their hands on that oil! Oh wait, that was Iraq!