Posted on 02/02/2025 4:51:04 PM PST by Miami Rebel
Several U.S. oil and gas companies have warned that they will not be looking to increase production unless prices increase significantly. President Donald Trump stated he wanted to “Drill, Baby, Drill”, when it came to oil and gas. However, oil majors are concerned that increasing oil and gas output even further could create a glut and drive prices down, something they want to avoid. On his first day in office, President Trump declared an energy emergency, stating, “The integrity and expansion of our Nation’s energy infrastructure is an immediate and pressing priority for the protection of the United States’ national and economic security.” Trump signed executive orders on his first day in office, including one aiming to “unleash America’s affordable and reliable energy and natural resources”. This effectively ended the Biden administration’s pause on the approval of new LNG exports. It also commenced processes for easing regulations on oil and gas production. Trump also signed an order to lift restrictions on oil, gas, and mineral production in Alaska and announced plans to establish an inter-agency working group to determine and implement measures to expedite oil and gas development. Last year, U.S. oil and gas production rose to record highs. U.S. crude output increased by 260,000 bpd month-on-month, to a record 13.46 million bpd, in October, in line with demand growth, according to the U.S. Energy Information Administration (EIA). In 2024, drilling operations became more efficient, allowing for greater output. However, weaker-than-expected demand growth in several parts of the world contributed to lower oil prices. Many oil and gas companies have shown support for Trump’s executive orders including new exploration projects and production increases. However, several oil executives have said that these new policies will not lead to an immediate boost in output, stating concerns over oil prices.
(Excerpt) Read more at oilprice.com ...
Why couldn’t we manufacture drugs currently bought from China and India in Puerto Rico instead? Didn’t we used to make generics there? Make them boom again.
Regime change for the people by the people in Cuba, then replumb the island with electric power, gas, water, and set up manufacturing there. ? A nuclear plant inland supplying the whole thing?
Huge tourism, resorts, casinos, spas.
Rent classic ‘50s Ametican autos to tourists .
Build a real premier health care system that attracts medical tourists.
Trudeau is history.
Meanwhile, the new, incoming Conservative has this to say:
The leader of Canada’s Conservative Party indicated this week that America would be “hit hard” in retaliation over President Trump’s impending tariffs if he’s elected the country’s next prime minister.
“We’re both going to lose as Americans and Canadians if we get in a trade war,” Pierre Poilievre told CTV News Atlantic Friday, the first time he’s outlined his agenda. “We can buy elsewhere to maximize the impact on Americans and minimize the impact on Canadians.”
When asked if he would seek a “dollar for dollar” punishment for Trump’s looming 25% tariffs, the pol heavily favored to replace embattled PM Justin Trudeau did not hold back.
“I would say so. It has to hit hard. We have to be very pinpoint and surgical,” Poilievre, 45, said.
“They’re cheaper. The idea is to undercut OPEC and the Russians.”
Good luck on that! We’re not exactly a low-cost producer.
“It’ll force Putin to negotiate if he’s no longer able to fund his war machine in Ukraine.”
He doesn’t seem to be in a big hurry. Perhaps he’s not as concerned as the Neocons think he should be?
“Source for your claim that President Trump plans to ask the Saudis to pump more?”
Trump can ask, but the Saudis need high prices just to keep their jihadists at bay. Even Russia doesn’t need high prices to that extent.
Obviously, in some some areas extraction costs much less than others. How much oil in “cheap” areas was blocked by Biden? What would be the break even production cost in those areas?
We have a “weird” situation @ present where oil is not truly fungible due to gov’t intrusions, and, the war in Ukraine, and the resulting sanctions: The sanctions seem to work a while, then Russia figures out work-arounds, then sanctions are strengthened and the cycle repeats. A side effect is overextended transport capacity. (The Houthis are affecting that, too.) The most recent round of additional sanctions has resulted in India and Russia refusing deliveries from (apparently) quite a lot of sanctioned “grey fleet” ships. I don’t personally see an easy workaround this time, but, we shall see.
I do see Iranian oil largely removed from the market, again.
If more Russian oil goes the same way, and tankers are available, the oil companies extracting oil operating in the US may have a lucrative market. Additionally, the Ukies are using more and more advanced drones, and getting better and better with them, to hit major Russian oil infrastructure.
This does not bode well for Trump, however - he BADLY needs low oil prices to keep inflation tamped down in the US. If he can’t manage that (keeping inflation down), the elections in 2026 and 2028 will be very tough indeed. :-(
I do see one possible “out”. The Euros may conclude that “break even” production is to their advantage in taking punches @ Pooty, and follow the present Norwegian model of rapid expansion of production, but invest in such anywhere they can, even in the US. This perhaps with price supports or other “insurance” to keep their oil and gas companies afloat should prices dip too low. That is, the goal is not profit, it is to weaken Putin. This would minimize balance-of-trade issues that Trump likes to complain about, keep global gas and oil prices down, and it would help keep inflation down - a big favor to President Trump (and people like me on limited incomes, too!)
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A lot of those companies bit the dust during COVID. But then again, I’ve been reading about “US Oil Companies learned their lesson” (about overextending) for 40 years. There may be more risk takers left than we think.
Also see my post above, about parties worried less about strong and durable profits, than other factors.
“Consumption” though, also includes vast volumes that get exported, some as refined products.
Russia’s not gonna run out, but, transport / storage / refining is an entirely different matter. The Ukies’ capacity with modest cost long range drones is increasing substantially in both capability (navigational, stealth, numbers, etc.) and range. If this trend continues, Pooty is going to have a real problem.
Congress needs to pass legislation restricting when the SPR can be drawn upon.
**Congress needs to pass legislation restricting when the SPR can be drawn upon.**
In an ideal world we wouldn’t have to wait for congress act. It’s the ‘strategic’ reserve. Democrats have varying degrees as to what’s strategic. It’s like the rich paying their ‘fair share’. You’ll never get a straight answer.
Prepare for shock. 😉
Its also in most news sources
4,000 miles oil pipeline via Iceland, not Greenland, wouldn’t be economically feasible, since the Middle East is still cheapest producer. In spite of recent growth and move to US independence, ME is still shipping some into US/Western Hemisphere. But most of what did come to Western Hemisphere, has now shifted over last decade or so to growing Asia.
Pipeline Probably has some technical hurdles too, given depths or need to skirt ice bergs scraping bottom if too shallow.
Gas is moving to Europe via special built LNG tankers.
But no dumb question what are you thinking
Trump’s best move is get Ukraine war settled and Russia back flooding the market
New Mexico may have a little more to grow because the industry had to fight the state and US on Federal leases. Besides that, you’re dead on, the industry has made massive investments in shale leases, water rights and handling, pipelines and facilities, drilling rigs and fracking supply system to get and move the oil/gas. And the plan now is drill / frack as needed to keep full.
Eventually other parts of the world will figure it out.
Enterprise Product => smart investor buys a lot of dumb steel => tax free dividends. I should have bought more than I did.
I bought on the IPO in ‘98. The units initially traded poorly, so I called to speak with EPD’s investor relations.
When no one answered, my call got kicked up to the CFO, and when HE didn’t answer I was put through to the chairman and CEO, Dan Duncan! I still remember what he said. “We can’t predict how Wall Street values us, but we’ve met or exceeded every internal financial and operating objective that we’d set.” That call encouraged me to double my position.
As an aside, I’ll mention that Duncan knew a lot about tax efficiency: he chose to die in the year 2010, when the estate tax had lapsed. His family inherited over $20 billion tax-free!
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