Biden Administration stops ANWR development

My point wllm in case you missed it was in 2013 the Saudi's were content with oil prices. So was the Obama administration and the rest of worlds energy producers. The day one keystone pipeline shut down by Obama 2.0 was a signal to the Saudi's and the rest of the world that oil prices are going up. You might not like a $100 plus barrel of oil for whatever reason, but its coming. Plan for it.
Saudis think otherwise, or they did in 2014-2015. Given they are the global low cost producer, I put a lot of weight on their opinion.

https://money.cnn.com/2015/01/12/investing/oil-prices-saudi-prince/index.html
 
So as an American resident and given a choice where MY oil/gasoline/diesel/plastic/ect comes from. Alaska, Saudi Arabia, or the Alberta Tar Sands, I'm choosing Alaska.
That is not the way it works. You don't get a choice. They don't label gasoline as "from Texas" or plastics as "from Saudi oil". It's a totally fungible commodity. Even with the expansion of fracking, the US still imports Saudi oil. That happens even while we export oil to other countries. I'm not sure how that will ever change. The consumer just doesn't get a choice.
 
Oooookay. So as an American resident and given a choice where MY oil/gasoline/diesel/plastic/ect comes from. Alaska, Saudi Arabia, or the Alberta Tar Sands, I'm choosing Alaska.

That’s awful that they couldn’t do a better job of managing tailings. But that’s already established so why not continue to extract? Save ANWR for the pristine ecosystem and all for now as it’s good to enjoy and also great to know we have it should it become necessary. Canadian Federal gov’t should get funding for those First Nations people too. It’ll be fine. Like look at KY. They had barren strip-mined waste fields that they reclaimed and today? Elk. We all remember Exxon-Valdez, but viable commercial fishery today despite the lingering effects. Alberta is established and should remain that way. And #*^@#* Saudi Arabia.
 
My point wllm in case you missed it was in 2013 the Saudi's were content with oil prices. So was the Obama administration and the rest of worlds energy producers. The day one keystone pipeline shut down by Obama 2.0 was a signal to the Saudi's and the rest of the world that oil prices are going up. You might not like a $100 plus barrel of oil for whatever reason, but its coming. Plan for it.
Supply - Demand Economics
Option 1. Keep oil below $70 (arbitrary number), if your OPEC + Russia you do this by cranking up capacity, they absolutely have it. This price point (probably more like $55-65 WTI) keeps lots of areas in the US uneconomic, thus reduced US market share, the US doesn’t prorate oil production (though we have tried in the past) so our industry will produce flat out as long as we can make money.
Option 2. Allow oil to hit $100+ (this as you noted happened) part of it was no one thought US shale had the capacity it does, partly OPEC + Russia liked the money. Produced in the US skyrocketed, drilling happened in all the fringe basins, expanded drilling in Tier 3 Utah, WY, AK, OK, Texas, all kinds of weird stuff, water flood projects in Oklahoma, etc. The world over produced prices crashed.

2020 was a blackswan event where OPEC + Russia saw the writing on the wall about US shale over extension and then saw a crash in demand from Covid and decided to double down and crush the US, it kinda worked oil prices crashed you saw negative day prices (-$37 Brent) with prices in the market hovering in the high $20 low $30 for months.

It killed a pile of companies but also hurt OPEC + Russia.

My guess is that on a go forward OPEC will chose option 1 and Wall Street won’t invest in companies like Roan who died in a blazing glory of debt, so essentially forcing the US market to follow option 1 as well.

People get greedy though so you never know 🤷‍♂️
 
Supply - Demand Economics
Option 1. Keep oil below $70 (arbitrary number), if your OPEC + Russia you do this by cranking up capacity, they absolutely have it. This price point (probably more like $55-65 WTI) keeps lots of areas in the US uneconomic, thus reduced US market share, the US doesn’t prorate oil production (though we have tried in the past) so our industry will produce flat out as long as we can make money.
Option 2. Allow oil to hit $100+ (this as you noted happened) part of it was no one thought US shale had the capacity it does, partly OPEC + Russia liked the money. Produced in the US skyrocketed, drilling happened in all the fringe basins, expanded drilling in Tier 3 Utah, WY, AK, OK, Texas, all kinds of weird stuff, water flood projects in Oklahoma, etc. The world over produced prices crashed.

2020 was a blackswan event where OPEC + Russia saw the writing on the wall about US shale over extension and then saw a crash in demand from Covid and decided to double down and crush the US, it kinda worked oil prices crashed you saw negative day prices (-$37 Brent) with prices in the market hovering in the high $20 low $30 for months.

It killed a pile of companies but also hurt OPEC + Russia.

My guess is that on a go forward OPEC will chose option 1 and Wall Street won’t invest in companies like Roan who died in a blazing glory of debt, so essentially forcing the US market to follow option 1 as well.

People get greedy though so you never know 🤷‍♂️
I think that the Saudi's, Biden, and the rest of the globalist are going to work together to raise the price of oil. Russia is the wild card in that strategy. We will see what happens soon enough.
 
I think that the Saudi's, Biden, and the rest of the globalist are going to work together to raise the price of oil. Russia is the wild card in that strategy. We will see what happens soon enough.
I think tossing Biden in there would make more sense if he had any control over us production. He can’t exactly say, hey guys can we keep production to 9,000,000 barrels this year I made a deal with the Saudi’s.
 
I think tossing Biden in there would make more sense if he had any control over us production. He can’t exactly say, hey guys can we keep production to 9,000,000 barrels this year I made a deal with the Saudi’s.
He likely already has buy in that keeping production down will bring prices up. It's in their best interest after all. Produce less and make a profit or produce more and keep losing money. Tough decision there.
 
He likely already has buy in that keeping production down will bring prices up. It's in their best interest after all. Produce less and make a profit or produce more and keep losing money. Tough decision there.
Also the 800lb gorilla... out of the game for now...
 
Joe "threading the needle" with Saudi Arabia.


Bet that was an exciting call.....

"But the king is 85 and in poor health, and it was unclear to administration officials how much he absorbed as Mr. Biden talked about a “recalibration” of the relationship with the United States."
 
This one agrees with both of us @wllm1313

That article syncs up pretty much exactly with my company and our banks thinking.

Seems that you, like me, are really interested in Energy.

When I got my first job in the OG industry I had a Landman, who became my mentor, come into my office and say, "You seem to know a lot about computers but not much about Oil, read the first two so you don't look like a moron when you go to lunch with the big boys and the third because it's entertaining as hell"

The Prize: The Epic Quest for Oil, Money and Power by Daniel Yergin
Petroleum Politics and the Texas Railroad Commission by David F. Prindle
The Big Rich by Bryan Burrough

As you probably guessed I ate them up, and I love learning and thinking about energy. If your looking for something to read all three are worth your time.
 
Back
Top