Posted on 06/22/2022 2:22:35 PM PDT by blam
It wasn’t just the epic confusion unleashed by the Biden admin in the past few days over how to lower record gas prices (suggesting that Biden really has no idea what the 79-year-old president is doing), that sparked today’s jump in crude oil and surge in energy names.
Monday: gas-tax holiday under consideration Tuesday: Russian oil price-caps https://t.co/uoaN73gSkJ
— zerohedge (@zerohedge) June 21, 2022
Providing some bullish support for the oil cash, in his latest weekly note, Bank of America’s energy analyst Fernando Blanch writes that even if the world goes into recession, Brent oil could average more than $75/bbl next year. Here is some more from his summary:
◾As Europe targets Russian oil export reductions, the energy supply side needs more than just a price fix. Investors are looking to curb exposure to the energy sector too on ESG concerns. Also, US shale supply has become much less sensitive to price. What does this mean for balances and prices?
◾If Russian oil supply does not drop below 10mn b/d, global oil demand could grow by 1.7mn b/d in 2023.
◾Having averaged $104/bbl this year, BofA stills see Brent at $102/bbl in 2022 and 2023 on average, with a potential spike to $150/bbl if European sanctions push Russian oil production below 9mn b/d.
◾Yet the market does not seem to be pricing in a decade-long Russian supply crisis, as long dated oil prices have stayed firmly anchored in our long term oil price band of $60 to $80/bbl.
There is much more in the full BofA note, available to professional subs.
A similarly bullish message, yet one where there was much more book talking, came from Exxon Mobil, whose CEO said that global oil markets may remain tight for another three to five years largely because of a lack of investment since the pandemic began.
Chief executive Darren Woods said it’ll take time for oil firms to “catch up” on the investments needed to ensure there’s enough supply.
Woods was speaking at the Economic Forum in Qatar, which is among the world’s biggest exporters of liquefied natural gas and one of few nations that can substantially replace Russian gas supplies to Europe. Firms including ConocoPhillips are investing in a $29 billion project to boost Doha’s exports. On Tuesday it emerged that Exxon is also one of the bidders and Qatari Energy Minister Saad Al-Kaabi, speaking alongside Woods, said the US firm would get a stake. The project is one of the largest in the gas industry and state-controlled Qatar Energy is scheduled to formally announce a deal with Exxon later on Tuesday.
Incidentally, Exxon got some more good news today when Credit Suisse upgraded the stock to a buy with a $125 price target, with CS analyst Manav Gupta writing that Exxon “always believed that the world will need fossil fuels for much longer and in the medium term demand for oil and gas will be increasing not contracting” and adding that “while some of XOM’s peers have been selling refining assets at the bottom of the cycle at distressed valuations, XOM has actually been investing in its refining assets,” Gupta wrote. Notably, the CS analyst also sees XOM reducing net debt and being in net cash position by 2024.
Woods message was also echoed by Russell Hardy, the CEO of the world’s largest independent oil merchant, Vitol; he too believes that oil prices will remain high because the market can’t see where additional supply is coming from to balance demand, although he noted that high oil prices are starting to curb demand “at the edges” (many others, such as the gas buddy guy, disagree, failing to see any slowdown in demand despite record high gas prices).
Finally, and ensuring that gas prices aren’t going lower any time soon, in a world where refining capacity is approaching the lowest in years, China’s state-run refiners again trimmed operating rates to 70.8% in the week ended June 17, from 71.3% the prior week according to Citic, which also noted that run rates for teapots edged higher to 65.6% from 64.4%.
I’ve said this before and it’s time to say it again, Biden is truly the STUPIDEST SumBitch on the face of the Earth.
FJB
I usually ask lefties “why are gas prices always sky high when democrats are running the country…are they in with big oil or are they hampering production like a dictator”?
These gas prices are 100% Biden’s fault.
“Here Is What Biden Actually Could Do To Lower Gas Prices… But Is Blocked By Environmentalists” should read:
Here Is What Biden Actually Could Do To Lower Gas Prices… But Is Blocked By Biden and his handlers.
Not stupidity, it’s intentional , purposeful, deliberate, evil and by design.
3 to 5 years? Obey the prescription. Not 3 to 5 years. 12 to 18 months.
The UAE has been running out of oil and they know it. Probably one of the reasons they’re trying to attract folks there for reasons other than oil.
The Saudi prince knows that his country can’t count on oil forever and why they’re building The Red Sea Project.
Those folks have gotten wise. They know when to ease up on production and when not to. They know where their money comes from and they are t going to blow it all playing one hand.
I didn’t like that movie. (There Will Be Blood)
The Rock reference?
“Not stupidity, it’s intentional , purposeful, deliberate, evil and by design”.
Exactly!!!
Then when there's blowback he yells at people, calls them liars, and says it's all because of Putin.
Worst and most damaging President ever, worse that fools like Carter and Buchanan because rather than being merely an incompetent fool Biden is a malignant sociopath that does his damage on purpose.
Oil Giants Warn Of Much Higher Prices For The Next 3-5 Years Amid Lack Of Supply
Until we get a real president and he has time to fix what Biden has broken.
The Biden administration is uncannily taking cues from Wesley Mouch in Atlas Shrugged. Their condescending behavior is only outmatched by their incompetence.
The world was drowning in oil during Trump’s time , what happened
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