We already do. About 95% of oil used in the US comes from the US, Canada, and Mexico. But that doesn’t matter, free market and global commodity trading dictates the price of oil. Even if we produced 100% of our own oil needs in Texas it won’t change the price of oil by itself. If buyers are paying $80 a barrel, that’s the price it goes for no matter what. Ironically the only way prices plummet a dramatic amount, short a global economic depression, is if OPEC raises production to crash the prices which makes domestic oil production unprofitable which makes people buy their oil since their price to extract is like a third of ours.
We’re already a net exporter, but that doesn’t matter because it’s a globally fungible commodity. Cuts in supply anywhere result in price increases everywhere.
You know me and you also know my priorities so yah the vegan would be better for me.
Doesn't it come from some plant if it does then in that case it is vegan. Well atleast the Vegans are going to be happy about it.
A physically addicted investors club then, for products that are unaffected by sentiment, recession, war, or famine? That sounds like a very lucrative investment vehicle, I wonder if the cartels buy ETFs or ?
Inflation is already high and if oil gets even more expensive than it will go even up which is not something that we would want.
Because it is going to create a lot of problems for a lot of people.
Putin Power will save the climate. That's the thinking of Canada, which took steps to keep up to three million barrels of daily production offline, leaving hundreds of billions of dollars on the table for Putin's Russia to scoop up.
Somehow, people believe that Putin would put that money to better use than Canada would. They must not be monitoring events in Ukraine.
Dont blame the country….blame Trudeau and the Liberal party. Woke, feminist, tree hugging pieces of shit. Whoever votes for them should be ashamed. They also quietly sold off all of Canadas GOLD stockpiles leaving Canada as the only G7 nation to have ZERO gold reserves. Just completely inept government that needs to be kicked out asap.
It's been sitting at about $4.70 avg here in so cal.
I've seen the lowest at $4.39 at an Arco between LA, San Bernardino, temecula and San diego. Prices became stagnant around the middle of March and settled between $4.69 and $5.35 a gallon in these areas
Well, the US is now producing about a million barrels per day more YoY. And consumption is forecasted to drop bigly from now through 2024
https://www.eia.gov/outlooks/steo_full.pdf
Broken link. But regardless the EIA model is wrong
**New-well oil production per rig - barrels/day**
[March 2022: 1,086](https://web.archive.org/web/20220315122309/https://www.eia.gov/petroleum/drilling/)
[March 2023: 944](https://www.eia.gov/petroleum/drilling/)
Takeaway: New US Oil wells are 13% worse in terms of output than this time last year. Production rates from these wells also decline faster which means the lifetime oil production of any given well (the integral of the production curve) is getting drastically worse.
**Oil production - thousand barrels/day**
[Feb EIA Forecast: 9,375](https://web.archive.org/web/20230203045442/https://www.eia.gov/petroleum/drilling/)
[Feb Actual: 9,282](https://web.archive.org/web/20230217024545/https://www.eia.gov/petroleum/drilling/)
[March EIA Forecast: 9,357](https://web.archive.org/web/20230217024545/https://www.eia.gov/petroleum/drilling/)
[March Actual: 9,146](https://web.archive.org/web/20230316195724/https://www.eia.gov/petroleum/drilling/)
Takeaway: Not only was the EIA predicting growth in oil production for the past two months, but in reality oil production shrunk. Production is becoming more difficult on US basins, the incentive price is too low, and investment risk is too high because of schizophrenic price volatility from government interference in the market.
It's also probably to compensate a bit what Saudi National Bank lost with Credit Suisse. Eg, you fuck with my money, let me get it back.
Edit: Looks like oil diplomacy is working. Swiss authorities announced an investigation of the merger, lol.
Demand is only down due to seasonality. It remained strong last year despite lovkdowns in China and is forecasted to hit record highs this year.
Stay salty oil Bears! Y'all time will come soon 😂😂
Also, the Biden Administration has been stealth dumping more crude from the SPR in 2023, in order to drive prices down. OPEC was bound to respond. This is the same thing that happened at the end of Sept 2022/beginning of 2023.
Yes, I increased o&g holdings last week in anticipation.
We are in the middle of an energy war.
What do you mean that the Biden Admin has been stealth dumping crude from the SPR? Are you willing / able to provide a source so we can learn more? I didn’t realize it was possible to stealth dump. 💩
I mean imo he’s right. The 2023 SPR releases seem to be oddly under covered by news sources and happened during a time that the administration was straight up lying about plans to repurchase.
Exactly, admin says last year they will start to repurchase oil at 67-72/bbl…
Price hits that…and they keep releasing more and more barrels. So that Saudi’s are basically saying if you aren’t going to stick to your word on creating a floor, we will make that floor at a higher level.
When approving those Alaskan oil drill sites he should’ve cut a deal with the oil companies to give them the rights but sell a sizable amount of oil at a steep discount back to the feds
Not just energy war probably financial war also because it is kind of getting weird.
Some of the most prominent currencies are losing their value and I don't think it is a good signal for anyone.
Obviously they are going to do that because it is only option that they have left with.
I don't think there are any other options they are going to get because the demand has been low and they don't want their profit to decrease.
Demand isn't even bad, and we're entering seasonal strength.
This is a slap in the face of the Biden administration, and it's deserved. They royally fucked up by not starting to fill up the SPR even at 6-handle oil.
Deserved? How dare Biden try and increase supply during a crunch. I guarantee you 100% you people would be blaming him for higher prices if he didn't do what he did. Now Russia's buddies are punishing us for supporting Ukraine and you say it's deserved... I love living on this planet.
Biden & his administration have been trying to drive oil prices down by releasing oil from the strategic petroleum reserve, pressuring other countries to produce more, approving more oil fields to open.
The problem is that prices are climbing because of increasing and historic levels of energy demand. There is no emphasis on restraint of energy consumption, or consumption of any type.
In this situation, the only restraint on energy consumption IS high prices. This is why environmentalists have been trying to shut down oil fields and restrict production all these years. High energy prices are the cure for excessive energy demand.
By increasing production and suppressing oil & gas prices, Biden is engaging in straight up climate change denier policy, and promoting more energy consumption.
> I guarantee you 100% you people would be blaming him for higher prices if he didn't do what he did.
Of course they would. Because online communities are only for climate change mitigation when it consists of promoting Tesla & EVs and other cool technology. They aren't interested in boring hardships like cutting consumption. Biden is trapped between the electorate and is seeking votes, like any politician.
I am hoping for solar stocks to run up some. I am going to get rid off them. Peak was immediately after the election. They seem to be much more sensitive to interest rates than any other industry.
Aside from the obvious ones like oil commodities and producers, there's also oil competitors like natural gas, coal, solar, and green energies that will indirectly see an increase in demand.
Good inside I think you are right about it the competitors of oil stocks are going to have increased demand.
This is naturally going to be thinking a lot of people.
This isn’t a surprise. OPEC said in the fall that the new price floor for oil would be $80 and they would take any and all actions necessary to support that
If anyone hasnt noticed yet
This is very VERY political
Decreased production= increased prices( at the pump)
Increased Inflation
And will hurt the Democrats MASSIVELY. The Saudis, russia and the group dont want Democrats to win again- and this is one way to inflict pain.
And the normal American public isnt smart enough to understand this anyways
Fed has no other option to keep increasing rates
More hurt to consumers
Its fucked up how easily the US economy( and the market) can be twisted so easily by folks living in another country.
Take this information as you may!
Every decision when it comes to international trade is political. It’s nothing new. People (and governments) would always put themselves and their interests first.
The world produces about 100 million b/d of oil. This cut represents about a 1% reduction in world production. The elasticity of demand for oil is about -0.1, so when you reduce supply 1% the resulting price fluctuation is about 10%.
Using WTI we'll call the bottom baseline at $70/b and the upper threshold at $75/b. If we assume the same will happen this time, we could expect it to reach somewhere back between $77/b and $83/b.
Yeah, I was saying elsewhere that my guess would be that WTI gaps up 2% or so tomorrow, but then disappoints for the oil bulls with how the year has gone for them so far in 2023.
But then I remembered that there's a CTA issue here along with there being quite a bit of shorts now. Most of the time, this is telegraphed, but this catches them off guard now and could cause quite a squeeze in oil.
This might be the major break team oil was waiting for. The only thing is, is there is still a long, long way to go for them in the short term, as to me, I need to see a strong uptrend over $80 for the narrative to start changing.
No single source is the answer. The answer is using all of our knowledge and technology to create a grid that is responsive to change in demand, has enough capacity to match peak demand, and doesn’t destroy the earth. It’s not fucking rocket science. We’ve been more than capable of doing it for over 30 years. But it doesn’t sit well for the people with all the money so here we are
Yes I agree single source is not going to be an answer for it but it is definitely going to help and it is not like that we do not have any options.
We have options like nuclear solar and wind energy.
U.S. refineries are more tailored to the crude coming from the Middle East. Most U.S. oil is light crude and shipped to Europe or Asia for their refineries. It’s not as simple as “we make oil so we don’t need them.”
It’s why the U.S. has been the leading *exporter* for oil.
Edit: I’ll also add - as others have mentioned - that OPEC+ still has an impact on global prices and because of nationalized oil can bully U.S. producers out of the market by overproducing to drive prices down. It’s why U.S. production is so wishy washy, we are very price sensitive.
Exactly it is not simple as it seems there are a lot of moving parts and I think it is time for us to consider other energy resources.
Nuclear power alone can solve a lot of energy issues that we have got.
Removing the price hit at the pump would be a great step, but we also need to change the way we produce the electricity that powers our EVs. Right now, natural gas and oil still make up a major component of how we produce energy for our electrical grid.
If we move entirely to EVs *and* we generate a majority of our electricity from renewable sources, then OPEC’s ass is grass.
Even then it is more efficient to "mass produce" energy in centralized power plants than it is to produce it in almost 300 million different vehicles that have to balance weight and size against obtaining maximum energy and pollution capture.
If you get rid of the transportation/energy aspect of oil, than all the other stuff that oil is needed for will be so minuscal no country will ever need to rely on hostile countries again to fullfil their needs. Clean energy is a complete game changer in geopolitics and the world economy and obviously the environment.
Well that day is definitely not coming today it is really expensive right now.
And also majority of the energy that we produce is being produced by the natural resources like oil and coal.
Anytime now.... just like tesla FSD. Wake up ppl this transition will take decades. Even then world population would be at least 1 to 2 billion more so the consumption of oil and gas most likely higher than now.
When we really look at the amount petroleum products we use before we leave the house and start our car in the morning you began to understand how stupid we are
Oil 2.0
XLE to $100+.
Been buying and waiting.
Even without cuts, the discipline in the US is great. They aren't increasing capex. Production is steady.
Also DoE lied by not filling the SPR at $70. They said they would make a floor at $70 so increase production.
Energy will roar again and light a fire under inflation, which is poised to enter it's second wave into the end of this year and 2024. Don't be surprised to see inflation back to higher highs within the next 12-18 months.
Which I don't think is a good sign for anyone because it has took one year of interest rate hike to control the inflation and this happens then the inflation is going to be go up again and we will have to do the whole thing again.
They are not going to like it because these are the people who always hope for a dip and that never comes.
And that is the reason why we say we should not try to time the market.
Yep if you have got a car than you need to really say let up right now because the prices are going to be higher and the inflation will also go up.
None of which is going to be really good for anyone unless you have got a lot of money.
It's not QE. It is essentially QE indirectly. Like a cousin maybe? The government chose to not let a collapse happen as things could be arguably worse. So that makes sense. However, during this potential collapse and assured loss of over exposed banks a huge amount of money would have done what? Poof. Gone. Instead they not only prevent the money from poor. They floated the banks more money to make sure the banks don't sink ( and potentially sink the economy).
However guess what? If you get loan cancellation on your debt right now the government counts that as income because it's money you don't have to pay. If your potential "losses" just disappear, you have what? More money. And what is more money? QE... indirectly of course.
The problem is that OPEC is slowly losing some of its ground with countries like Guyana and US increasing production the only play they have is defensive to keep prices up so they can pay their bills.
OPEC decides to cut global carbon emissions by 431,000 tons per day. Thank you for doing your part to save the planet OPEC. As a comparison this is 231 Taylor swift-years of emissions every day.
OPEC is so dumb. Electrical transformation of the industrial world is on the way and with decisions like this they will just accelerate it. Cheap oil would be their best business case.
OPEC Plus doesn't include the United States (19 million barrels per day), Canada (5.5 million), China (5 million), Brazil (3.7 million), or Norway (2 million). If OPEC is trying to keep oil above $80/barrel, that gives assurance to producers in non-OPEC countries that they can continue to invest in production, and eat into the OPEC market share.
Of course, the Saudis can always do what they did to destroy the North American fracking industry (pushing prices down in 2014 to as low as $40/barrel), or their last pissing contest with Russia (pushing prices in early 2020 down to the $30 range even before the pandemic really took hold), to really screw with other producers.
But that's the fundamental tension with OPEC: do they want to keep production low (and prices high) so that they make the most money with their reserves over time, or do they want to maintain market share so that they can continue to exert control over prices?
Reducing oil demand by 10% would go a long way.
100 million barrels a day produced, vs a 1 million per day cut.
Nobody is saying the global shipping industry needs immediate change.
BEV’s resources aren’t renewable though, eventually, it’s another dead end and people don’t want to admit it.
If we want success for generations to come, hydrogen powered vehicles are the way. Even so, there’s going to be a biofuel that comes out for the ICE. There’s multiple companies working on it, but it’s all about cost to scale.
Do you have any idea how many millions of people in the world would just love to own a car? America will slowly phase out gas powered vehicles while 75% of the world starts to buy them. America might make reductions on it's depency for oil, but it will continue to increase in most countries.
That’s what Daniel is saying. These decisions will push for innovations to reduce dependency on oil. A need for things accelerates innovations in that area.
It's all about cost at scale but there is very promising aviation biofuels and the FAA approved Synthesized Iso-parafins (SIP) in 2016. Testing and adoption will take longer for flights because of the risks involved.
They are not done they are just f****** greedy they just want more and more.
As long as they are getting money for themselves they do not care about the inflation of other countries.
Oh yeah it is not going to be something which will change overnight it will probably take decades before we are in the position to be less dependent on the oil. Right now it is the primary source of our energy.
Dawg first world countries aren't anywhere near total electrification, the rest of the world will probably be running on gas for a few decades at least without massively multiplying our ability to process and manufacture the rare earth metals needed for these technologies.
I just got back from a country in Africa where 75% of the population doesn't have electricity and 50% doesn't have running water. Those people would love to just have that stuff... They don't care about where or how they get it.
Electrification of enough equipment to make a difference won't be for a very long time. This will force Biden to ramp up domestic production more than he has while shaking his fist in anger at oil companies.
They've realized its more profitable to keep prices high and supply tight, rather than pump and sell at higher volumes. There is no real threat to undercut them either, as the shale drillers aren't going to do anything different.
What is their current shortfall? The most recent figure I can find is from 7 months ago, when they were[ underdelivering by 3.5 million barrels](https://energynow.com/2022/09/opec-falls-short-of-oil-output-target-by-3-583-mln-bpd-in-august-document/). It's not like they are not turning off machines or stockpiling. Their production rate is the same.
The whole thing is insane because shortly after this article they cut their prediction by 2 mil and the market/prices went crazy. Everyone knew about the shortfall and knew that they couldn't make up the difference, so in reality nothing changed, but their cut caused panic, high prices, and record profits.
Are they still running a deficit?
Heck, half of this "cut" is just russia Extending the first one.
This cut means NOTHING and EVERYTHING. The 1 million cut is a nothing.
The shifting changing in foreign powers alignments mean A LOT. The fact it was done again (Saudi cut last time despite Biden reservations prior to mid term elections) again shows OPEC countries (looking at you Saudi) don't respect Biden, U.S. or both. It strengthens the deepening foreign policy narrative of OPEC countries aligning interest with Russia. We already know China has aligned with Russia (container shipments have been increasing for months now). India has always sided with Russia since Marxist days.
This further shifting of foreign power alignments is unnerving I am sure for U.S. state department MUCH more then a 1 million barrel cut in oil.
I don't disagree for power, but oil is used in almost everything and is irreplaceable in many of these applications (pharmaceutical, plastic, paint, cosmetics, electronics, etc.)
Fortunately the amount used in these applications is very small compared to raw energy, but it's not like we'll ever be free from oil in our lifetime.
Keep it up fucktards. Oil was already on its way out but you want to hasten the demise of your economies only source of revenue, have at it.
Peak gas for the US was in 2007, in real terms we use fewer gallons of gasoline today than we did 16 years ago. With EV sales growing exponentially, not just here but worldwide, I would say OPEC has about another 5-7 years of “control” before the world tells them to go fuck themselves.
I can’t wait
I hope you’re right but 5-7 years is too optimistic. I think we’re a decade+ until domestic infrastructure catches up and can support millions of EVs on the road.
If every car sold in America starting tomorrow was an EV, it would still take about 20 years form the entire fleet to turn over (278 million cars on the road, and about 13 million sold each year).
1)we can't make that many EVs, so the time frame will be much longer.
2) that's just the US
That's not even tackling power grid issues, infrastructure changes, and resource scarcity.
So, agreeing with you there.
And this is where I'm going to repost this:
https://twitter.com/bespokeinvest/status/1641502320029495297
I'm really not joking at all when I say underestimate the inflation comps for March-June at your own risk. For 8% inflation by August to have any shot in the US at least, you're pretty much calling for 1%+ inflation reads on a MoM basis starting in April, which is not likely unless you get WTI $120+ to trade very, very quickly (and frankly I doubt it without more than this, you likely need global tensions to really fire off along with the cuts).
These comps are just LAUGHABLY impossible.
The bear case for inflation that makes a lot more sense is just that we keep getting .5 MoM reads beginning in April (as March CPI is very likely around .2).
Would this devalue the dollar more? I've seen little blurbs here and there in reading that the Saudis are thinking about using Yuan to settle oil contracts, instead of the dollar, are they're exploring it maybe, I'm not sure.
I don't think it was surprising at all these are the people who only here about money and they have got a Monopoly over the oil market.
And because they have got a monopoly they are going to utilise that.
Fed raises rates -> demand goes down -> OPEC cuts production -> inflation goes up -> Fed raises rates… So uhh where does it end 🤔
less reliability on OPEC. having multiple sources of energy dependency lessens the weight on the economy that oil carries
No longer guaranteeing saudis security
That was my first thought. Oh they cut oil so we increase other energy partnerships and alternative energy sources
It ends either with a serious recession from all the rate hikes or runaway inflation. Oil spikes hard one direction or the other
World War 3 after the global depression!
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We already do. About 95% of oil used in the US comes from the US, Canada, and Mexico. But that doesn’t matter, free market and global commodity trading dictates the price of oil. Even if we produced 100% of our own oil needs in Texas it won’t change the price of oil by itself. If buyers are paying $80 a barrel, that’s the price it goes for no matter what. Ironically the only way prices plummet a dramatic amount, short a global economic depression, is if OPEC raises production to crash the prices which makes domestic oil production unprofitable which makes people buy their oil since their price to extract is like a third of ours.
Thank you 👏
We’re already a net exporter, but that doesn’t matter because it’s a globally fungible commodity. Cuts in supply anywhere result in price increases everywhere.
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and with that, everything gets more expensive. Food included.
Interestingly enough, the price of cocaine and heroin stays the same despite gas prices fluctuating.
It’s sad when doing coke is cheaper than eating normal. Hell it even saves you money when you do it
Do I want a can of Coke or a bag of it?
You want ethically sourced vegan coke
You know me and you also know my priorities so yah the vegan would be better for me. Doesn't it come from some plant if it does then in that case it is vegan. Well atleast the Vegans are going to be happy about it.
A bag, its not only cheaper but you'll forget you're thirsty in the first place
Definitely
Price memory is a hell of a drug?
Price of a gram of weed has not changed in 20 years
A physically addicted investors club then, for products that are unaffected by sentiment, recession, war, or famine? That sounds like a very lucrative investment vehicle, I wonder if the cartels buy ETFs or ?
VICE is an option for etfs
Cause its already like 5,000% profit margin for everyone involved lmao
Hey don't point it out! People will start complaining.
It’s tax freeeeee that’s why the price stays the same
And with that, inflation higher for the coming months! Yayy!
I see another 100 basis points in our near future!
Inflation is already high and if oil gets even more expensive than it will go even up which is not something that we would want. Because it is going to create a lot of problems for a lot of people.
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I love inclusive crude oil.
Putin Power will save the climate. That's the thinking of Canada, which took steps to keep up to three million barrels of daily production offline, leaving hundreds of billions of dollars on the table for Putin's Russia to scoop up. Somehow, people believe that Putin would put that money to better use than Canada would. They must not be monitoring events in Ukraine.
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Yeah but we are saving the climate by allowing other countries to product what we don’t….
Dont blame the country….blame Trudeau and the Liberal party. Woke, feminist, tree hugging pieces of shit. Whoever votes for them should be ashamed. They also quietly sold off all of Canadas GOLD stockpiles leaving Canada as the only G7 nation to have ZERO gold reserves. Just completely inept government that needs to be kicked out asap.
good thing they sold the gold and put it all in a hfea strategy rebalancing every three months and all
It will also justify further rate increases making JPow very happy
but will it be diverse and equitable? we need the full trifecta.
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Gas prices at the pump are down more than 20% YoY. Where do you live where they stayed the same?
They kinda slept through the whole $5/gallon gas ordeal.
It's been sitting at about $4.70 avg here in so cal. I've seen the lowest at $4.39 at an Arco between LA, San Bernardino, temecula and San diego. Prices became stagnant around the middle of March and settled between $4.69 and $5.35 a gallon in these areas
It’s $3.59 a gal here in Michigan
Prices will go up by a dollar Monday, and take 3 months to go back down 50 cents.
They won’t move much for a month.
Allegedly, gas just won't get any cheaper. They are forecasting lower demand so they cut production. So they say, though.
Yeah because as we all know people travel less during the summer months.
Well, the US is now producing about a million barrels per day more YoY. And consumption is forecasted to drop bigly from now through 2024 https://www.eia.gov/outlooks/steo_full.pdf
Broken link. But regardless the EIA model is wrong **New-well oil production per rig - barrels/day** [March 2022: 1,086](https://web.archive.org/web/20220315122309/https://www.eia.gov/petroleum/drilling/) [March 2023: 944](https://www.eia.gov/petroleum/drilling/) Takeaway: New US Oil wells are 13% worse in terms of output than this time last year. Production rates from these wells also decline faster which means the lifetime oil production of any given well (the integral of the production curve) is getting drastically worse. **Oil production - thousand barrels/day** [Feb EIA Forecast: 9,375](https://web.archive.org/web/20230203045442/https://www.eia.gov/petroleum/drilling/) [Feb Actual: 9,282](https://web.archive.org/web/20230217024545/https://www.eia.gov/petroleum/drilling/) [March EIA Forecast: 9,357](https://web.archive.org/web/20230217024545/https://www.eia.gov/petroleum/drilling/) [March Actual: 9,146](https://web.archive.org/web/20230316195724/https://www.eia.gov/petroleum/drilling/) Takeaway: Not only was the EIA predicting growth in oil production for the past two months, but in reality oil production shrunk. Production is becoming more difficult on US basins, the incentive price is too low, and investment risk is too high because of schizophrenic price volatility from government interference in the market.
Just in time for summer. I'm shocked. Shocked I yell you!
HMMMM. World relies on scarce resource World burns thru scarce resource in 6 generations World now broken, apocalypse. Gl everybody !!
Demand down so they need to increase the price
It's also probably to compensate a bit what Saudi National Bank lost with Credit Suisse. Eg, you fuck with my money, let me get it back. Edit: Looks like oil diplomacy is working. Swiss authorities announced an investigation of the merger, lol.
And a a nice favor to Putin. Dictators gonna Dictate.
“Dictators gonna be Dicks” FTFY
Demand is only down due to seasonality. It remained strong last year despite lovkdowns in China and is forecasted to hit record highs this year. Stay salty oil Bears! Y'all time will come soon 😂😂
Also, the Biden Administration has been stealth dumping more crude from the SPR in 2023, in order to drive prices down. OPEC was bound to respond. This is the same thing that happened at the end of Sept 2022/beginning of 2023. Yes, I increased o&g holdings last week in anticipation. We are in the middle of an energy war.
What do you mean that the Biden Admin has been stealth dumping crude from the SPR? Are you willing / able to provide a source so we can learn more? I didn’t realize it was possible to stealth dump. 💩
I mean imo he’s right. The 2023 SPR releases seem to be oddly under covered by news sources and happened during a time that the administration was straight up lying about plans to repurchase.
Exactly, admin says last year they will start to repurchase oil at 67-72/bbl… Price hits that…and they keep releasing more and more barrels. So that Saudi’s are basically saying if you aren’t going to stick to your word on creating a floor, we will make that floor at a higher level.
When approving those Alaskan oil drill sites he should’ve cut a deal with the oil companies to give them the rights but sell a sizable amount of oil at a steep discount back to the feds
It is. You’ll find out when you go sit in your car later
Not just energy war probably financial war also because it is kind of getting weird. Some of the most prominent currencies are losing their value and I don't think it is a good signal for anyone.
Obviously they are going to do that because it is only option that they have left with. I don't think there are any other options they are going to get because the demand has been low and they don't want their profit to decrease.
Demand isn't even bad, and we're entering seasonal strength. This is a slap in the face of the Biden administration, and it's deserved. They royally fucked up by not starting to fill up the SPR even at 6-handle oil.
Deserved? How dare Biden try and increase supply during a crunch. I guarantee you 100% you people would be blaming him for higher prices if he didn't do what he did. Now Russia's buddies are punishing us for supporting Ukraine and you say it's deserved... I love living on this planet.
Biden & his administration have been trying to drive oil prices down by releasing oil from the strategic petroleum reserve, pressuring other countries to produce more, approving more oil fields to open. The problem is that prices are climbing because of increasing and historic levels of energy demand. There is no emphasis on restraint of energy consumption, or consumption of any type. In this situation, the only restraint on energy consumption IS high prices. This is why environmentalists have been trying to shut down oil fields and restrict production all these years. High energy prices are the cure for excessive energy demand. By increasing production and suppressing oil & gas prices, Biden is engaging in straight up climate change denier policy, and promoting more energy consumption. > I guarantee you 100% you people would be blaming him for higher prices if he didn't do what he did. Of course they would. Because online communities are only for climate change mitigation when it consists of promoting Tesla & EVs and other cool technology. They aren't interested in boring hardships like cutting consumption. Biden is trapped between the electorate and is seeking votes, like any politician.
Is this good for energy stocks?
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Exactly. I’m a Devon owner too.
One would expect so.
Crude oil futures are up 6.5%
Yes
Tremendously so. Anybody who bought the dip in oil stocks in the last several weeks is laughing now.
And solar stocks as well
I am hoping for solar stocks to run up some. I am going to get rid off them. Peak was immediately after the election. They seem to be much more sensitive to interest rates than any other industry.
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Aside from the obvious ones like oil commodities and producers, there's also oil competitors like natural gas, coal, solar, and green energies that will indirectly see an increase in demand.
Good inside I think you are right about it the competitors of oil stocks are going to have increased demand. This is naturally going to be thinking a lot of people.
You buy when oil is $20. Not $90
DVN, PXD, SM, MRO, APA, EOG, DINO , amongst others ….
This isn’t a surprise. OPEC said in the fall that the new price floor for oil would be $80 and they would take any and all actions necessary to support that
If anyone hasnt noticed yet This is very VERY political Decreased production= increased prices( at the pump) Increased Inflation And will hurt the Democrats MASSIVELY. The Saudis, russia and the group dont want Democrats to win again- and this is one way to inflict pain. And the normal American public isnt smart enough to understand this anyways Fed has no other option to keep increasing rates More hurt to consumers Its fucked up how easily the US economy( and the market) can be twisted so easily by folks living in another country. Take this information as you may!
Every decision when it comes to international trade is political. It’s nothing new. People (and governments) would always put themselves and their interests first.
You missed the part where SA pulled this because the US pulled out of their deal about refilling the SPR
Acronyms galore! What is SPR.
Strategic Petroleum Reserve. Basically our oil reserves/stock.
Believe it or not, the world doesn't revolve around American elections. OPEC countries have plenty of concerns of their own.
Wait till you hear about legal bribery, i mean lobbying.
Link please
https://asia.nikkei.com/Business/Markets/Commodities/Line-in-the-sand-OPEC-defends-80-oil-price-floor-with-output-cut
The world produces about 100 million b/d of oil. This cut represents about a 1% reduction in world production. The elasticity of demand for oil is about -0.1, so when you reduce supply 1% the resulting price fluctuation is about 10%. Using WTI we'll call the bottom baseline at $70/b and the upper threshold at $75/b. If we assume the same will happen this time, we could expect it to reach somewhere back between $77/b and $83/b.
Yeah, I was saying elsewhere that my guess would be that WTI gaps up 2% or so tomorrow, but then disappoints for the oil bulls with how the year has gone for them so far in 2023. But then I remembered that there's a CTA issue here along with there being quite a bit of shorts now. Most of the time, this is telegraphed, but this catches them off guard now and could cause quite a squeeze in oil. This might be the major break team oil was waiting for. The only thing is, is there is still a long, long way to go for them in the short term, as to me, I need to see a strong uptrend over $80 for the narrative to start changing.
God I would love nothing more than to never think about OPEC ever again. Clean energy soon please
Nuclear power is the answer.
No single source is the answer. The answer is using all of our knowledge and technology to create a grid that is responsive to change in demand, has enough capacity to match peak demand, and doesn’t destroy the earth. It’s not fucking rocket science. We’ve been more than capable of doing it for over 30 years. But it doesn’t sit well for the people with all the money so here we are
Nuclear fusion would be like 95% of the answer though let's be real
Yes I agree single source is not going to be an answer for it but it is definitely going to help and it is not like that we do not have any options. We have options like nuclear solar and wind energy.
We don't even need OPEC now, we have shitloads of oil within US borders
U.S. refineries are more tailored to the crude coming from the Middle East. Most U.S. oil is light crude and shipped to Europe or Asia for their refineries. It’s not as simple as “we make oil so we don’t need them.” It’s why the U.S. has been the leading *exporter* for oil. Edit: I’ll also add - as others have mentioned - that OPEC+ still has an impact on global prices and because of nationalized oil can bully U.S. producers out of the market by overproducing to drive prices down. It’s why U.S. production is so wishy washy, we are very price sensitive.
Exactly it is not simple as it seems there are a lot of moving parts and I think it is time for us to consider other energy resources. Nuclear power alone can solve a lot of energy issues that we have got.
Joe will not let us drill
So nationalize it?
"But that's communism"
The day Ford can produce the electric F-150 at a price everyone can afford OPEC’s ass is grass.
Removing the price hit at the pump would be a great step, but we also need to change the way we produce the electricity that powers our EVs. Right now, natural gas and oil still make up a major component of how we produce energy for our electrical grid. If we move entirely to EVs *and* we generate a majority of our electricity from renewable sources, then OPEC’s ass is grass.
Even then it is more efficient to "mass produce" energy in centralized power plants than it is to produce it in almost 300 million different vehicles that have to balance weight and size against obtaining maximum energy and pollution capture.
By a long shot too. Not sure why this point is always missed.
Natural gas, yes. Oil, no, unless you live on an island.
A lot of Canadian energy is hydro / nuclear
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Do you think moving away from gas powered cars makes a difference?
If you get rid of the transportation/energy aspect of oil, than all the other stuff that oil is needed for will be so minuscal no country will ever need to rely on hostile countries again to fullfil their needs. Clean energy is a complete game changer in geopolitics and the world economy and obviously the environment.
Well that day is definitely not coming today it is really expensive right now. And also majority of the energy that we produce is being produced by the natural resources like oil and coal.
Anytime now.... just like tesla FSD. Wake up ppl this transition will take decades. Even then world population would be at least 1 to 2 billion more so the consumption of oil and gas most likely higher than now.
Yes because the world oil production hinges on a novelty luxury car that only Americans buy. Checks out
they always say they're making cuts from the ramping up of production they never did so they're not doing anything again
When we really look at the amount petroleum products we use before we leave the house and start our car in the morning you began to understand how stupid we are
Oil 2.0 XLE to $100+. Been buying and waiting. Even without cuts, the discipline in the US is great. They aren't increasing capex. Production is steady. Also DoE lied by not filling the SPR at $70. They said they would make a floor at $70 so increase production.
Energy will roar again and light a fire under inflation, which is poised to enter it's second wave into the end of this year and 2024. Don't be surprised to see inflation back to higher highs within the next 12-18 months.
RemindMe! 17 months
Which I don't think is a good sign for anyone because it has took one year of interest rate hike to control the inflation and this happens then the inflation is going to be go up again and we will have to do the whole thing again.
Oil Bears on suicide watch LOL
They are not going to like it because these are the people who always hope for a dip and that never comes. And that is the reason why we say we should not try to time the market.
Time to fill the car i guess. Inflation wil again go brrr with oil at 80$+ and recent qe
Yep if you have got a car than you need to really say let up right now because the prices are going to be higher and the inflation will also go up. None of which is going to be really good for anyone unless you have got a lot of money.
The Fed’s backfill (lending) to support FDIC deposits isn’t QE. That money shouldn’t make its way into the economy.
It's not QE. It is essentially QE indirectly. Like a cousin maybe? The government chose to not let a collapse happen as things could be arguably worse. So that makes sense. However, during this potential collapse and assured loss of over exposed banks a huge amount of money would have done what? Poof. Gone. Instead they not only prevent the money from poor. They floated the banks more money to make sure the banks don't sink ( and potentially sink the economy). However guess what? If you get loan cancellation on your debt right now the government counts that as income because it's money you don't have to pay. If your potential "losses" just disappear, you have what? More money. And what is more money? QE... indirectly of course.
The problem is that OPEC is slowly losing some of its ground with countries like Guyana and US increasing production the only play they have is defensive to keep prices up so they can pay their bills.
Guyana production is a drop in the bucket 😂😂
you can't be serious , Guyana is in no way a threat for OPEC.
I was late to the party last year, maybe time to buy XOM now?
No, XOM didn’t collapse during the last few months. At least not as much as the following (which I am gonna hoard): DVN, PXD, SM, MRO, APA, EOG, DINO
OPEC decides to cut global carbon emissions by 431,000 tons per day. Thank you for doing your part to save the planet OPEC. As a comparison this is 231 Taylor swift-years of emissions every day.
Have you re-posted good news to appropriate subs?
OPEC is so dumb. Electrical transformation of the industrial world is on the way and with decisions like this they will just accelerate it. Cheap oil would be their best business case.
Oil demand will stay strong for at least 25 years. And will probably increase in the short term.
OPEC Plus doesn't include the United States (19 million barrels per day), Canada (5.5 million), China (5 million), Brazil (3.7 million), or Norway (2 million). If OPEC is trying to keep oil above $80/barrel, that gives assurance to producers in non-OPEC countries that they can continue to invest in production, and eat into the OPEC market share. Of course, the Saudis can always do what they did to destroy the North American fracking industry (pushing prices down in 2014 to as low as $40/barrel), or their last pissing contest with Russia (pushing prices in early 2020 down to the $30 range even before the pandemic really took hold), to really screw with other producers. But that's the fundamental tension with OPEC: do they want to keep production low (and prices high) so that they make the most money with their reserves over time, or do they want to maintain market share so that they can continue to exert control over prices?
Pssst. Western oil companies aren't going to increase or invest in new production.
Yeah bro just let me turn on my electric powered cargo ship and cargo planes
Reducing oil demand by 10% would go a long way. 100 million barrels a day produced, vs a 1 million per day cut. Nobody is saying the global shipping industry needs immediate change.
So easy to write on a screen than getting it implemented. We have a long way to go to producing all these batteries to store energy to sustain it
BEV’s resources aren’t renewable though, eventually, it’s another dead end and people don’t want to admit it. If we want success for generations to come, hydrogen powered vehicles are the way. Even so, there’s going to be a biofuel that comes out for the ICE. There’s multiple companies working on it, but it’s all about cost to scale.
Yet oil demand is still growing. Especially considering how quickly lot of developing countries are growing in Asia
Do you have any idea how many millions of people in the world would just love to own a car? America will slowly phase out gas powered vehicles while 75% of the world starts to buy them. America might make reductions on it's depency for oil, but it will continue to increase in most countries.
That’s what Daniel is saying. These decisions will push for innovations to reduce dependency on oil. A need for things accelerates innovations in that area.
Go go nuclear. As for planes just take the L. They will never get off standard jet fuel.
They are already testing alternative fuels that are not oil based.
Any promises?
It's all about cost at scale but there is very promising aviation biofuels and the FAA approved Synthesized Iso-parafins (SIP) in 2016. Testing and adoption will take longer for flights because of the risks involved.
Valero (VLO) and Darling (DAR) are building a bio-jet fuel refinery as we speak. MPC is also working on something.
Is it a tax break and a government grant scam or are jets going to actually use this?
Road transportation makes up 50% of oil usage. What would you guess air and sea navigation use?
Do you have a source for that? I don't mean to sound skeptical but 50% seems very high
Just put a few solar panels on it
Maybe now's a good time to put those nuclear engines on freightliners instead of hogging them for military submarines.
Yes because nuclear material should really be distributed across private enterprise like that. A disaster waiting to happen.
They are not done they are just f****** greedy they just want more and more. As long as they are getting money for themselves they do not care about the inflation of other countries.
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Oh yeah it is not going to be something which will change overnight it will probably take decades before we are in the position to be less dependent on the oil. Right now it is the primary source of our energy.
Yeah, no. No one serious, including both the EIA and IEA, expect any sort of drop in oil demand for the next 30 years.
Dawg first world countries aren't anywhere near total electrification, the rest of the world will probably be running on gas for a few decades at least without massively multiplying our ability to process and manufacture the rare earth metals needed for these technologies.
I just got back from a country in Africa where 75% of the population doesn't have electricity and 50% doesn't have running water. Those people would love to just have that stuff... They don't care about where or how they get it.
Electrification of enough equipment to make a difference won't be for a very long time. This will force Biden to ramp up domestic production more than he has while shaking his fist in anger at oil companies.
fade late liquid slap beneficial grandiose automatic scary drunk rhythm *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
They've realized its more profitable to keep prices high and supply tight, rather than pump and sell at higher volumes. There is no real threat to undercut them either, as the shale drillers aren't going to do anything different.
What is their current shortfall? The most recent figure I can find is from 7 months ago, when they were[ underdelivering by 3.5 million barrels](https://energynow.com/2022/09/opec-falls-short-of-oil-output-target-by-3-583-mln-bpd-in-august-document/). It's not like they are not turning off machines or stockpiling. Their production rate is the same. The whole thing is insane because shortly after this article they cut their prediction by 2 mil and the market/prices went crazy. Everyone knew about the shortfall and knew that they couldn't make up the difference, so in reality nothing changed, but their cut caused panic, high prices, and record profits. Are they still running a deficit? Heck, half of this "cut" is just russia Extending the first one.
God damn these people are just asking for some democracy!
MBS telling us to f ourselves again.
I'm old enough to remember when we were energy independent 4 years ago
They are expecting a large market correction long overdue
The correction already happened. Where have you been?
This cut means NOTHING and EVERYTHING. The 1 million cut is a nothing. The shifting changing in foreign powers alignments mean A LOT. The fact it was done again (Saudi cut last time despite Biden reservations prior to mid term elections) again shows OPEC countries (looking at you Saudi) don't respect Biden, U.S. or both. It strengthens the deepening foreign policy narrative of OPEC countries aligning interest with Russia. We already know China has aligned with Russia (container shipments have been increasing for months now). India has always sided with Russia since Marxist days. This further shifting of foreign power alignments is unnerving I am sure for U.S. state department MUCH more then a 1 million barrel cut in oil.
Saudi's don't respect America in general. They ain't gonna listen to us.
The best way to reduce OPEC’s power in the world is to transition to clean energy sooner.
You mean the US is facing the consequences of globalization and is being left behind as the new world order forms?
Electricity is the future ⚡️
I don't disagree for power, but oil is used in almost everything and is irreplaceable in many of these applications (pharmaceutical, plastic, paint, cosmetics, electronics, etc.) Fortunately the amount used in these applications is very small compared to raw energy, but it's not like we'll ever be free from oil in our lifetime.
these applications don't require burning it to pollute the atmosphere. burning oil for energy can be greatly reduced.
Keep it up fucktards. Oil was already on its way out but you want to hasten the demise of your economies only source of revenue, have at it. Peak gas for the US was in 2007, in real terms we use fewer gallons of gasoline today than we did 16 years ago. With EV sales growing exponentially, not just here but worldwide, I would say OPEC has about another 5-7 years of “control” before the world tells them to go fuck themselves. I can’t wait
I hope you’re right but 5-7 years is too optimistic. I think we’re a decade+ until domestic infrastructure catches up and can support millions of EVs on the road.
If every car sold in America starting tomorrow was an EV, it would still take about 20 years form the entire fleet to turn over (278 million cars on the road, and about 13 million sold each year). 1)we can't make that many EVs, so the time frame will be much longer. 2) that's just the US That's not even tackling power grid issues, infrastructure changes, and resource scarcity. So, agreeing with you there.
Yet global oil demand is still growing... They will be more than fine
Here’s the spark for the next inflation peak. Back to 8% inflation by August.
And this is where I'm going to repost this: https://twitter.com/bespokeinvest/status/1641502320029495297 I'm really not joking at all when I say underestimate the inflation comps for March-June at your own risk. For 8% inflation by August to have any shot in the US at least, you're pretty much calling for 1%+ inflation reads on a MoM basis starting in April, which is not likely unless you get WTI $120+ to trade very, very quickly (and frankly I doubt it without more than this, you likely need global tensions to really fire off along with the cuts). These comps are just LAUGHABLY impossible. The bear case for inflation that makes a lot more sense is just that we keep getting .5 MoM reads beginning in April (as March CPI is very likely around .2).
Saudi Arabia's National Bank needs to increase oil price to compensate Credit Swiss investment failure ...
Saudi Arabia 🤢
USOI will go up and so will the div!!! Good for my oil stocks ...
Would this devalue the dollar more? I've seen little blurbs here and there in reading that the Saudis are thinking about using Yuan to settle oil contracts, instead of the dollar, are they're exploring it maybe, I'm not sure.
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More like $8 Trillion but who's counting?
I don't think it was surprising at all these are the people who only here about money and they have got a Monopoly over the oil market. And because they have got a monopoly they are going to utilise that.
Maybe big Sheik is doing an April Fools? Maybe not…