DawgTalkers.net Forums DawgTalk Palus Politicus Get ready for higher gas prices | OPEC+ makes big oil cut to boost prices

https://www.msn.com/en-us/money/mar...mp;cvid=167dd449724e4a97b6a1efb47bb50070

OPEC+ makes big oil cut to boost prices; pump costs may rise
By DAVID McHUGH, AP Business Writer - 15h ago

FRANKFURT, Germany (AP) — The OPEC+ alliance of oil-exporting countries decided Wednesday to sharply cut production to support sagging oil prices, a move that could deal the struggling global economy another blow and raise politically sensitive pump prices for U.S. drivers just ahead of key national elections.

Energy ministers cut production by a larger-than-expected 2 million barrels per day starting in November after gathering for their first face-to-face meeting at the Vienna headquarters of the OPEC oil cartel since the start of the COVID-19 pandemic.

The group said the decision was based on the “uncertainty that surrounds the global economic and oil market outlooks.” Saudi Energy Minister Abdulaziz bin Salman stressed the group’s stated role as a guardian of stable energy markets.

“We are here to stay as a moderating force, to bring about stability,” he told reporters.

Oil is trading well below its summer peaks because of fears that major global economies such as the U.S. or Europe will sink into recession due to high inflation, rising interest rates and energy uncertainty over Russia's war in Ukraine. The OPEC+ decision could help member Russia weather a looming European ban on most of Moscow’s oil, but its impact will have some limitations because countries in the alliance already can’t meet their quotas.

U.S. President Joe Biden considered the OPEC+ decision “short-sighted while the global economy is dealing with the continued negative impact of (Russian President Vladimir) Putin’s invasion of Ukraine,” White House press secretary Karine Jean-Pierre told reporters aboard Air Force One.

“It’s clear that OPEC+ is aligning with Russia with today’s announcement,” she said.

Bin Salman rejected questions referencing the reaction in Washington or implying that OPEC was assisting Russia, saying the discussion was in a nonpolitical “silo” where the focus was prudent management of oil markets.

Following a token trim last month, Wednesday's decision is an abrupt turnaround from months of restoring deep cuts made during the depths of the pandemic. As demand rebounded, global energy prices have swung wildly since Russia invaded Ukraine, helping fuel inflation that is squeezing economies worldwide.

Related video: Oil prices up as OPEC+ considers output cut


Part of the OPEC+ cut is “on paper” because members already can’t supply enough oil to hit their allotments, said Gary Peach, oil markets analyst at energy information firm Energy Intelligence. “Only about half of that is real barrels,” he said.

A cut with oil near $90, which is “a comfortable price for all producers,” might not sit well with customers, but the oil ministers are “looking into the tunnel of recession ” that could lower demand in coming months, Peach said. “They decided to pre-empt that.”

The recent fall in oil prices has been a boon to U.S. drivers, who saw lower gasoline prices at the pump before costs recently started ticking up, and for Biden as his Democratic Party gears up for congressional elections next month.

Biden has tried to receive credit for gasoline prices falling from their average June peak of $5.02 — with administration officials highlighting a late March announcement that a million barrels a day would be released from the strategic reserve for six months. High inflation is a fundamental drag on Biden’s approval and has dampened Democrats’ chances in the midterm elections.

Oil supply could face further cutbacks in coming months when a European ban on most Russian imports takes effect in December. A separate move by the U.S. and other members of the Group of Seven wealthy democracies to impose a price cap on Russian oil could reduce supply if Russia retaliates by refusing to ship to countries and companies that observe the cap.

Hmm, have they been talking to Trump again?

Oil prices were sky rocketing well before the Ukraine invasion so that is a non factor\red herring.

The Biden administration needs to adjust its policy to resume fracking on federal lands immediately. We've seen his refusal to do this during his term. He'll pay dearly for it in November as he should.

Worst president in my life time. So, when is he going to fix the southern border? Or wait a second, wasn't that Kamala's job? What a damn joke.

Were you in a coma from 2017-2021?



How exactly? Red Wave?

ALL: ^How many GOPers really think November will be a cake walk still? Y'all about to get a reality check.

I think it's suspect that they would lower production 5 weeks before the mid term elections. Could this be collusion with the Trump team and republicans? I don't see a real reason to do this. Other than the obvious political reasons that they would rather have Trump in the white house.... Hell they can control him with a few bucks.

It sure would have been nice to have our pipelines open. Too bad they were shut down. This Pres. owns the gas prices. Plain and simple. Even when it lowered it was still about $2 a gallon more than before he took office.

Ding, ding, ding, we have a winner!

The administration has done everything it could to slow down or shut down our own oil production, so it is what it is.

Bro, read the post above yours and start paying attention. This is all Trump's fault. Trump, Trump, Trump! Get with the program!

Oil companies are sitting on 9,950 approved drilling permits they’re not using. Only 418 of those permits are being prepared to be used in the near future.
But yes, Biden.

It wasn't "our pipeline". It was Canada's. If you're going to come in here and blame Biden because the Saudi's are cutting production at least figure out whose oil it was. It was Canada's. And the vast majority of it was being refined for export and wasn't going to stay in the U.S. anyway.

But why doesn't Biden give them more leases when they are sitting on thousands of leases they aren't using now? Sometimes these guys have no idea what's really going on and repeat everything the right media spoon feeds them.

Please educate me on all these actions. Thanks

While the president can't directly control the prices, his policies can.. So Cancelling Drilling leases and limiting production domestically. It’s just basic economics that when the government throttles future supply in an industry, that will lead to higher prices both now and in the future. Biden was warned by many critics at the time that this would happen, but he proceeded anyway. He imposed a bunch of regulations on the energy sector, which had direct financial costs and caused companies indirect compliance costs...all leading to affecting the futures. Big-government environmentalism just don't work.. remove the goverment barriers and the free markets can let the people adapt cheaper. Probably a bigger way is his words and his open hostility to oil and gas industry. Has investors shying away from investing in to production as they normally would.

And vice-versa. Drilling permits and leases have little to do with today's gas prices either, yet everyone on the left says prices are high because Putin and "oil companies won't drill".

You have a president that says things like:

“I want you to look at my eyes. I guarantee you, I guarantee you we’re going to end fossil fuels,”

"If we don’t stop using fossil fuels we’re all dead”

"Number two, holding them liable for what they have done,' (climate change) he said of fossil fuel executives, 'particularly in those cases where your underserved neighborhoods and – you know the deal, ok. And by the way, when they don't want to deliver, put them in jail. I'm not joking about this."
(The Biden admin also likes to make fossil fuels a racial issue)


And people wonder why oil companies won't indulge in the most expensive part of their business model under an administration that openly hates them and vows to end them??

That's a new take. Biden hates them so they refuse to drill. Wow! Maybe you should look at where they are built their petrochemical plants and in what neighborhoods before you try and accuse someone of making it a racial issue. Biden talks bad about them so they won't drill. Yeah, that's a new one.

Simple question, Pit.

If you were a oil company would you be investing in new drilling sites right now?

Most certainly. EV's only comprise about 1% of the vehicles on the road in the U.S. 99% of all vehicles still run on gas or diesel. I mean unless of course I was just trying to keep prices high for some reason. Maybe to help someone get elected that would appoint people to run the EPA and Department of Energy that are more favorable to my industry.

Some people don't understand oil leases. Having a lease on land somewhere does NOT mean there is oil on/under that land. It takes time to determine if it would even be worth drilling.

Having the 'lease' only means the companies pay the gov't. rent for rights to the land.

Some people think the oil companies can produce oil like the government prints money.

I guess some people don't understand business. You don't pay for leases where there is no oil. They aren't called leases only. They include the mineral rights needed to drill. They are negotiated and their price is dependent on them being gas and oil leases specifically. Oil companies are sitting on almost 10 million acres of leases in the western part of America alone. I guess they're just leasing all of that land in hopes they may find oil there having no idea if any is actually there.

Yeah, taking out specific leases that are designated specifically for oil and natural gas leases and then sitting on them seems to be fine with you. Although I'm not surprised. Use them for what you leased them for or stop whining you aren't being given millions of more acres to sit on. Some of you never blame big business for the things they do because that's not who you want to blame for anything.

Of course I think it will be a cake walk! There's really no reason it shouldn't be.

Republicans don't even need to campaign at this point. The only thing they need to do is point at the economy. In addition, a 5th grader could do a better job at being president than what we have in office right now. At least he'd be able to form logical sentences.

Actually they do. They must obtain the lease, then they can explore for oil and gas. But before they can to that, the permitting, red tape and legal battles could take years before that exploration can take place. Then you also have the environmental groups who can tie things up in court even more. So it's not as simple and sign the lease and put up a well.

Just to help you understand how oil companies decide where to lease for oil and gas. Some of you make it sound like they throw darts at a map and have no way of knowing if there is anything there or not. Even though common sense would dictate you would have to know better. This gives you the steps in the process of how they determine where to take out leases.....


There is a lot to the article which explains in more detail all of the steps and requirements land must meet before an oil company even considers leasing it. It's not some automatic guarantee that oil will be there but it greatly increases the odds and it predetermines that the land is worth drilling on.

Good... looks like you're on the same page with the corps that are being blamed for "sitting on leases".







"You see", arguing about oil leases is ridiculous by either side. As I've said many times... oil leases are dirt cheap (as little as $2 per acre) AND a tax deduction. There is no good reason why any large oil company wouldn't hold hundreds of leases, regardless of whether there was oil beneath the soil or not. But acting like oil leases are a faucet and someone can snap their fingers and cure all of our problems is silly. There is a significant period of time between exploration, drilling and producing oil.

So let me get this straight. First your assertion was that Biden hates them and that's why they aren't drilling. With that you then asked me if it were my decision would I drill. Now you're claim is they are drilling?

How does that change they are still sitting on millions of acres of leases while doing nothing with them? I posted the information as to all of the prerequisites involved before they ever initiate any oil or gas lease. They weren't just throwing darts at a dartboard and just taking out leases because they could. Lots of studies are done before hand to make sure these leases are worthy of drilling on before they take out these leases.

Nope. My statements were simply a remedy for the endless banter that oil companies should be out on every acre drilling for oil -- and that the fact that they're not is the reason for the "problem". This, like many problems, has many facets.

My whole entry in the thread was to point out the hypocrisy... On one hand, Biden's words and posture are said to have no effect on oil drilling or price -- on the other, as soon as opec says they're cutting production (something they've been doing for over fifty years), the chants are "because Trump!!".

The dirty ass backroom deal Trump made to have OPEC raise prices in the first place is stuck in the old craw, that could be why Fate. Or maybe you prefer your POTUS to act against the best interest of the country. See POTUS only has an effect on gas prices when it's convenient for reDtard arguments like this entire thread being used to bludgeon all things Biden. I think Biden has done what could be done to stave off as much of the financial pain as he could during this recovery from yet another GOPer mess.

Biden is not OPEC and as far as I know, he doesn't have a connection with the SA crystal ball globe like the big orange dope does.



Looks like a clip from an episode of Pinky and the Brain, doesn't it?

So, basically what I'm saying is, you GOPer trolls can hold Biden accountable for things out of his control but you can't hold Trump, or any GOPer for that matter accountable for anything... Trump literally made a deal with OPEC to raise oil prices instead of letting gas prices bottom out. It didn't matter that he picked winners and losers in the free market, attacked businesses he didn't like, etc. So yeah, the left doesn't want to see this kind of attack on Biden for MUCH less.

I'm not sure I heard any "chants" but I'm sure there are outliers just as with anything. All I've really been hearing thus far is how it's all Biden's fault. Even you entered into this thread casting shade as to how Biden's words were preventing them from drilling.

The point I was making is that gas prices are going to be increasing. And the reason for that is because OPEC is cutting production. Instead as you saw once again they made that Biden's fault. And how was your reply any different?


That doesn't in any way sound like the intent was to "point out the hypocrisy".

I'm very much with you in terms of it being a multifaceted problem. There's no one size fits all answer until we become much more reliable on renewable energy sources. But the entire premise of "Biden is mean to them" is a non starter in terms of any validity.

Fair enough.

I'm obviously pointing out the other side after people starting jumping on the Trump train. Just look at OCD's post -- Biden holds no responsibility and has no control -- yet Trump is behind the scenes pulling all the strings.

Pffft... it gets exhausting, that's why I usually stay out of the fray. I'll just bow out now. The whole conversation is, by definition, very complex. When it comes down to it, like nearly all our problems; look to the power elite, wall-street, corrupt corporations and political connections. That elaborate pile of that trash complicates any conversation, let alone one in the social climate we live in. We just scream at each other, fighting for table scraps while they laugh at us and decide on dessert. I basically don't have the energy to play ping-pong with all the talking points that have little bearing on the problems. Good job stating your side, have a nice evening.

You have a good evening as well.

Why was Cheech Marin there?

I think you are correct. Some people don't understand business. On the lands leased, there is no guarantee there is oil.

https://money.cnn.com/2011/06/06/news/economy/oil_drilling_leases/index.htm

"The huge amount of untapped land being leased is accurate, said Erik Milito, director of exploration and production at the American Petroleum Institute. But to just look at that number and say the industry is sitting on its hands is too simplistic, "it doesn't explain the oil and gas businesses at all."

One reason the industry isn't producing on these lands, said Milito, is because there's simply no oil there. Only 25 to 30% of the acres the industry leases offshore ends up having large enough oil deposits to bring into production, he said.

Another reason is the time it takes to go from bidding on a lease to producing oil. It can take seven, eight, nine years to do the seismic work, line up the contractors, conduct the exploratory drilling, and then build the infrastructure needed to bring the oil and gas market, he said.

"Companies are in the businesses of developing oil and gas resources, not buying leases," said Milito. "You're not going to make any money if you're sitting on it."

Guy Caruso, former head to the government's Energy Information Administration who's now at the Center For Strategic and International Studies, agreed.

Caruso also cited the long lead time needed to develop an oil lease and the fact that firms want to recoup any money they put into exploration relatively quickly.

Accusations that oil companies aren't drilling in order to book the oil reserves also seem simplistic. An exploration well would be needed for the firm to book the discovery on its balance sheet. "

There's more, a lot more. Just one more link: https://www.bizpacreview.com/2022/0...-gas-leasing-here-are-the-facts-1209961/ "“There are 9,000 unused, approved drilling permits,” White House press secretary Jen Psaki told reporters Monday. “So I would suggest you ask the oil companies why they’re not using those if there’s a desire to drill more.”

The answer came in response to a question on why the White House had stopped short of pushing for greater domestic fossil fuel production amid rising energy costs. On Monday, nationwide gasoline prices hit an all-time high, topping $4.103 for the first time ever while oil prices — a large factor in determining gas prices — have surged in the wake of Russia’s invasion of Ukraine.

However, the unused drilling leases represent a fraction of the active permits, many of which are being used by the private sector to produce oil and gas daily, industry groups said. There are more than 37,496 active oil and gas leases nationwide, meaning more than 75% are in use, according to the latest Bureau of Land Management (BLM) data.

In addition, it isn’t guaranteed all approved leases will yield output and installing rigs is a complicated and expensive endeavor, according to American Petroleum Institute Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola. Leases also expire after a certain amount of time.

“Not every lease contains oil and natural gas, nor does every non-producing lease represent untapped resource potential,” Macchiarola said during a media call Thursday. “Companies are in the business of finding and producing oil and gas and developing those leases.”

“It takes several years of due diligence, sizable investment for a company to analyze the geology, perform the technology and engineering assessments, and the law provides for that time and only that time,” he added. "

Also: "Macchiarola said that the Biden administration is creating uncertainty in the marketplace by sending a signal the government will oppose further oil and gas drilling as part of its climate agenda.

“Regulatory uncertainty has stifled further development, oftentimes, but the time period is stretched out by legal challenges,” he said.

The Western Energy Alliance is actively defending more than 2,200 leases in court, the group said in response to Psaki’s argument. Most leases cannot be developed or explored while a case is litigated.

Kathleen Sgamma, the president of the Western Energy Alliance, also echoed Macchiarola, saying regulatory uncertainty created by the administration has prevented aggressive drilling patterns. She also noted that oil drilling companies need multiple forms of government approval before drilling on a plot of land.

“Because of the uncertainty of operating on federal lands, companies must build up a sufficient inventory of permits before rigs can be contracted to ensure the permits stay ahead of the rigs. We drill wells in a matter of days and rigs are very expensive, so it’s a delicate balancing act,” she wrote on Friday. “But there are other things that can delay a company from developing a well right away.”

“The federal permit to drill is not the only government approval required. Rights of way (ROW) must be acquired to access the lease and for natural gas gathering systems,” she added. “ROWs can take years to acquire. With the pressure not to flare from regulators and investors, most companies cannot drill before the gathering lines are in place.”

After a federal judge ordered the Biden administration to halt its attempted ban on new federal land drilling leases, the Department of the Interior has dragged its feet and defied multiple court-ordered deadlines to restart the program. The Interior Department also signaled it would choose not to appeal a recent ruling that prohibited an offshore drilling lease in the Gulf of Mexico the agency facilitated in the fall.

Overall, there are 4,621 applications for a permit to drill that are pending before the BLM, the agency said in its most recent report published in December.

Since taking office, President Joe Biden has waged a war on fossil fuels, nixing the Keystone XL oil pipeline, ditching an oil drilling project in Alaska, introducing sweeping fossil fuel regulations and making it harder for utilities to gain approval for natural gas projects. He has also aggressively pushed renewable forms of energy despite doubts from experts.

“(The Biden administration) is sending a signal to the marketplace, now, that the United States policy is to be closed for business as it applies to oil and natural gas,” Macchiarola said. “That is unacceptable. It’s not what the American people want.”

The administration has also turned to hostile foreign powers Iran and Venezuela, which have been sanctioned by the U.S. government for years, as it considers ways to increase global oil supply. The White House is considering a potential trip to Saudi Arabia to plead for more oil production, Axios reported."

Yes, you are correct. Some people don't understand business.

""American Petroleum Institute Senior Vice President of Policy, Economics and Regulatory Affairs Frank Macchiarola""

Not saying you are wrong - but highlighting this was an article with a perspective coming from 'Big Oil'. It might be a completely unfair comparison - but the Tabaco Industry proclaimed to be ignorant of the negative health impacts of smoking back in the 60's and 70's - they were looking out for themselves. Big Pharma claim they need exorbitant margins on their drugs because of the incredibly high costs of research and if they don't make those high margins then new developments and break throughs will cease ... Like all things, what's being said? By whom? Why? How do they benefit? What is their agenda?

As for reliance on Gas and what the American people wants - I wouldn't trust the Government to tell me that any more than I would a quote from someone representing big oil. I think there is a blend, and the % of the population that wants to see an end to gas powered family cars is growing and will likely continue to grow - it's the future. And at the end of the day - oil is a finite resource, we need alternates whether it's 2040 or 2240.

I'm not certain what you're getting at.

Let me paraphrase: An oil/natural gas lease is simply an oil company paying a lease fee for land. There is NO guarantee there is oil/natural gas on/under that land.

Did you notice that there are some 37,000 'leases', and only 9,000 have not been drilled? +/-.

Do you have any idea the amount of time, money, getting other leases to transport oil/natural gas takes?

Let me put it this way: you don't lease land, then the next day drill, and a week later produce.

That's not Cheech! That's fat Ron DeSantis.

https://www.yahoo.com/news/oil-dispute-prompts-call-remove-171759875.html

This is absolutely the right move. I hope Republicans can think past their obstructionism and come together on this one.

Aren't those our staging points for military action in that part of the world? I can't stand SA, but I wouldn't want to lose strategic advantages either. The world is a crap show right now, we may need to be there.

They won't, we won't. Perfect opportunity too, makes me sick.

And that is the problem. The oil companies aren't going to spend $millions in developments to then have the administration change their mind and then maybe restrict the pumping or transport of petroleum.

Everybody knows nobody F's with a Biden....to use his words...lol