Posted on 10/22/2023 2:58:52 PM PDT by Round Earther
As the global oil market focuses its attention on the oil-supply risks tied to the war between Israel and Hamas, U.S. production has climbed to its highest level on record and it's expected to continue its rise next year.
That's a "testament to the ingenuity of the U.S. oil-and-gas industry," said Phil Flynn, senior market analyst at The Price Futures Group.
The industry has faced a "harsher regulatory environment" under the Biden administration, which has plans for three oil and gas lease sales over the next five years. That would be the smallest number of lease sales offered in U.S. history.
Total U.S. petroleum production climbed to 13.2 million barrels a day as of week ended Oct. 6, according to the Energy Information Administration -- the highest figure based on data going back to 1983. The latest data released Wednesday showed output remained unchanged at that level for the week ended Oct. 13.
(Excerpt) Read more at morningstar.com ...
Russia’s war on Ukraine and Hamas’ war on Israel have potential to cause significant flux in the oil markets. Since many have only a limited understanding of these markets, I will lay out some of what I have learned in the past 13 years, which is well short of enough. My initial interest was sparked by the deadly BP oil rig disaster in 2010. [I own some BP stock.]
There are 2 main per barrel oil prices recognized in the Western World. WTI, or West Texas Intermediate, is a low sulphur, jight density, valuable crude. It is generally quoted a little below the price of Brent Crude from northern Europe. There is a wide range in per barrel prices, from cheap Saudi Arabia, and Russian crude, to high priced North Dakota crude. Keystone was an attempt to import dirty cheap tar sands oil using a pipeline. It ran into trouble both because of environmental factors in production, and because of the Kalamazoo river system oil spill also in 2010, caused when Enbridge’s pipeline burst and flowed for 24 hours. It cost over a Billion dollars to clean up this spill. States to be crossed by Keystone pipelines were not eager for a repeat of Kalamazoo with the dirty, toxic tar sands oil. The link below covers this disaster and following clean-up in some detail.
https://beltmag.com/kalamazoo-river-line-6b-oil-spill/
In 2016, tar sands continued to be in the bad news as a town of 80,000 people was evacuated due to wildfire which also burned much of the town.
In 2023 many in the US were made aware of wildfires in Canada by orange skies and smoke in the air Again, the tar sands were threatened.
https://www.upstreamonline.com/safety/canadian-wildfires-threaten-oil-sands-production-rystad/2-1-1452915
When President Trump took office, oil supplies in storage were plentiful at the end of the Obama administration. The largest oil storage place in America and perhaps the world is in Cushing, Oklahoma. Below are figures for March 2015.
https://www.cnbc.com/2015/03/05/cushing-oklahoma-small-town-is-holding-illions-in-black-gold.html
Cushing continued to fill up even higher, and gasoline prices came down as companies were eager to unload their soon to be excess supplies. Trump benefited from the happiness of gas consumers in this oversupply situation. At one point the oversupply became so bad that people were being paid to take oil away—free oil, amazing. Oil producers in places like N. Dakota where you need around $80 a barrel to make a profit stopped pumping, and drilling. Oil prices have recently moved above $80 a barrel and with current events they way they are, are likely to stay up there. N. Dakota and other expensive area producers are no doubt opening up their wells again. No doubt others are drilling, although it takes while for new drilling to affect the current price.
This link has many details about effects of Covid on pricing. https://www.bls.gov/opub/mlr/2020/article/from-the-barrel-to-the-pump.htm
This link shows how the price of oil fell to minus $40 one day thanks to Covid. https://www.weforum.org/agenda/2020/04/oil-barrel-prices-economic-supply-demand-coronavirus-covid19-united-states/
This summer’s gas increases have several causes, high temperatures around refineries, and changes in production by Russia, Saudi Arabia, etc. are some.
https://www.usatoday.com/story/money/personalfinance/2023/07/28/gas-prices-up-heat-wave-oil/70486841007/
If you have read even half the links posted, it should be apparent presidents have a minimal effect on the price of gas, at least in the short term. I will not try to engage in the long term policy implications of the above information.
See my detailed comment #61.
You forgot to mention the US’ oil refineries are old. The last large oil refinery that came online was in 1976. A small one came on line in 2020 in North Dakota.
If what you said above is correct, please explain the difference in total rig count between CYs 2011, 2016, 2017, 2018, 2019 and CY2023.
2011
https://www.aogr.com/web-exclusives/us-rig-count/2011
2016
https://www.aogr.com/web-exclusives/us-rig-count/2016
2017
https://www.aogr.com/web-exclusives/us-rig-count/2017
2018
https://www.aogr.com/web-exclusives/us-rig-count/2018
2019
https://www.aogr.com/web-exclusives/us-rig-count/2019
2023 thru (October)
https://www.aogr.com/web-exclusives/us-rig-count/2023
The above statement implies that Obama purposefully increased oil reserves.
EIA SPR over the past 50+ years.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcsstus1&f=m
During the Covid debacle and the decrease in oil prices due to the sudden and dramatic lack of demand gave the country an opportunity to top up the SPR. Trump intended to do just that but Congress in its great wisdom said no. Oil was less than dirt cheap due to world prices reacting to lower demand and over supply. It would have been a good deal. Now we only have 17 days left in the SPR and an impending Mid East war.
https://www.reuters.com/article/us-global-oil-usa-reserves-idUSKCN2251QU
“ “We're going to fill it right up to the top — saving the American taxpayer billions and billions of dollars, helping our oil industry,” Trump said at the time.”
I remember some woman up north saying she would only put her wells into production for 110 a barrel. Just like the corporate farmers, we are being held economic hostage by our own citizens.
Given the issues of age, hurricane and tornedo threats, and extreme summer or winter temperatures, some new locations besides Texas would probably be a good idea.
“You are a liar.
That is a straight up lie. Don’t lie and claim to be something you are not in the mistaken impression it will give you credibility here.”
You drunk, high? Big oil gets hostile? I have no reason to lie and don’t give a damn if anyone believes me or not.
I stated absolute fact as an insider. I was born into the business and we have a bulk plant in the family. The oil industry is crooked as hell when they think they can get away with it. Period...
“He a liar. Anther Social Media bot who states things as fact and claims to be “in the industry’s”.
Man... Big oil hostility much? I grew up with 2 retail fuel stations and a bulk plant in the family, so take your childish drunk accusations and shove em.
Daily Energy Report by Phil Flynn. Usually posted by 9:00 am Central. 😉
https://blog.pricegroup.com/author/philflynn/
That’s not the worst if it. Starting today, we’ll hear Biden and KJP bleating incessantly about how this administration has enabled and encouraged record oil production. What convenient timing, just in time to make a talking point for 2024.
Think you hate ‘em now? Just wait… 🙄
That is due in part to Kalifornia refineries relying on Saudi sweet oil to meet the very restrictive refinery requirements by the state. Kalifornia law prohibits importing cheaper gasoline from outside the state. Among other levels of stupidity.
Biden administration, which has plans for three oil and gas lease sales over the next five years.
Big deal our reserve supply tanks are on empty open the damned pipe line.
Paging president Trump
Surprisingly, in my little Central Kentucky town the prices have actually gone DOWN a little since Hamas attacked. WTF?
I noticed that here as well (no pun intended). $3.29 at Sams Club
our reserve supply tanks are on empty
And from what I heard much of that was given to or sold to China. That should be illegal (even if were Canada receiving it)
Agree
Well, if it makes you feel better, gas here just went up $0.20 per gallon overnight.
Many complained that Obama energy policies were hurting oil production. It does not appear that was thr case.
Topping off the SPR when prices are low is generally a good idea. I like to top off my canned soup supply when there are good sales.
I don’t have enough knowledge, and there are too many variables for me to try to answer that. How much could each rig supply, what were the bad weather conditions that year, what was the market price that year, etc, etc, and plenty of variables I have not even thought of.
Maybe someone with more expertise can give it a try.
So far as I know, the pipelines currently ready to be used are being used. Ones that have not been approved, and do not have building supplies set out for construction would take years before they could carry oil.
The Keystone folks have cancelled plans, packed up or sold all their ready supplies, and gone back to what they already have.
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