Analysis by the father of American Geopolitics Dr. Daniel Fine, MIT.

Posts tagged ‘OilJobs’

Analysis: Trump and Saudi collision on oil, and Bingaman’s return to Santa Fe by Dr. Daniel Fine


The whole article is here->https://www.daily-times.com/story/money/industries/oil-gas/2018/11/25/analysis-trump-and-saudi-collision-oil-bingamans-return-santa-fe/2015081002/

n an earlier column, readers overseas benefited from this writer’s forecast that crude oil prices would fall dramatically because most commodity traders got it wrong. Simply, this column’s analysis was the buying of oil assumed a shortage would result once the sanctions against Iran would be activated the first week of November.

President Trump wanted lower oil prices with OPEC and Saudi Arabia pumping more. Two weeks ago, a call from the Middle East confirmed readers of the column had followed the analysis in the Energy Magazine and sold Brent oil — and profited.

Oil has slumped under $60 as the delusion of a shortage vanished. In the November issue column, this writer made a call: the oil price would reach $50 as a low. There is no change in that forecast. The price in the commodity market for WTI crude would touch in the very high $40 range before the Saudi-led production cut-back is realized. Why? Again, too much capacity to produce too much oil for demand.

What’s the impact on SW oil?

Oil demand without commodity traders’ bets on the sanctions against Iranian oil production and export contradicts flagging demand. Some Southwest shale producers, faced with discounts on domestic sales, are exporting oil to world markets and capturing the higher Brent price or differential between the WTI priced Midland domestic and the Brent price for the World.

But this would shift Southwest tight oil into a world market where such supply also chases weaker demand. This switches U.S. oil into world oil as exports and diverts it from going into U.S. storage.

Unlike the last three price sell-offs Saudi Arabia, speaking for OPEC, is strangely silent on calling on non-OPEC producers join it in lowering production or “balancing” the

market.

Quite the opposite. Led by shale producers in the Delaware (New Mexico) Basin in the Permian complex, United State production approaches 12 million barrels per day, a historic high and number one position against the Middle East and Russia.

Only a serious price decline, short of the 2015 bottom, would signal oil non-completions. A cutback of U.S. production by 750,000 barrels per with an OPEC cutback independent of Russian production of around one million barrels will stabilize or balance the world oil market.

But U.S producers cannot (anti-trust) belong to a collective price-setting organization (cartel).

President Trump wants lower prices, even if this means a breakup of OPEC into two and a moderate production roll-back by Southwest producers – a negative cash flow for those without or less advantaged by Tier One wells.

The overwhelming Democratic Party electoral win influenced OPEC and Saudi Arabia to resist President Trump’s pressure for lower world oil prices because he is much weaker and easier to upend in oil supply and demand world “domination.”

Bingaman is back!

The Democratic Party indirectly dimmed the “blue flame” price outlook regardless of blue wave voting margins. But enough of “color revolutions” in politics or economics?

This writer is constructively reacting to the return of former Sen. Jeff Bingaman to New Mexico’s politics through new state Governor-elect Michelle Lujan Grisham. She asked him to head her transition team.

With Democratic Party factionalism into Progressive/Ultra-Progressive forces against the traditional Moderate/Conservatives, Sen. Bingaman’s experience and history in working with the late Senator Domenici in forging the U.S Energy Act of 2005 is in best interest of New Mexico.

Recall the energy policy of “all of the above” in the Bush and Obama Administrations coupled with the Energy Policy of outgoing Governor Susana Martinez was a compromise of give-and-take between two New Mexico Senators of different parties and energy policy objectives.

Dr. Daniel Fine is the associate director of New Mexico Tech’s Center for Energy Policy and the State of New Mexico Natural Gas Export Coordinator. The opinions expressed are his own.

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Oil producers want U.S. to restrict imports


By Kevin Robinson-Avila / ABQ Journal Staff Writer

The full story is here-> http://www.abqjournal.com/803674/oil-producers-want-u-s-to-restrict-imports.html

“ALBUQUERQUE, N.M. — New Mexico and West Texas oil producers are gearing up for a national effort to draw all major U.S. oil basins into a grassroots movement to restrict crude imports from overseas.

Leaders of the Panhandle Import Reduction Initiative, which launched in April in the Permian Basin, are seeking public meetings and rallies in other oil-producing zones to convert what’s now a regional initiative into a national movement, said Daniel Fine, associate director of the New Mexico Center for Energy Policy, who is working with local producers.

Those efforts will kick off in September with a presentation at the fourth Southeastern New Mexico Energy Summit in Carlsbad. After that, initiative leaders expect to hold public meetings in other shale oil basins, including the Bakken in Montana and the Dakotas and the Eagle Ford in South Texas.

“We’ll take it to Carlsbad first, and then it goes national,” Fine said. “We want to organize public rallies with producers and field workers whose jobs are at stake. This is a grassroots effort in the basins where the oil bust has taken place.”

The initiative is a reaction to the Organization of Petroleum Exporting Countries’ aggressive oil-pumping policies since mid-2014, which have helped drive global oil prices to ten-year lows and thrust domestic U.S. production into crisis. Initiative leaders say those policies were a deliberate effort by the mid-Eastern members of OPEC, particularly Saudi Arabia, to drive U.S. producers out of business.

Banning crude imports from overseas would undercut OPEC’s ability to manipulate prices, they say, and allow U.S. producers to ramp up domestic production to supply the U.S. market.”

Energy group hopes to reduce foreign oil imports


by James Fenton

The full article is at–> http://www.daily-times.com/story/money/industries/oil-gas/2016/06/14/energy-group-hopes-reduce-foreign-oil-imports/85855044/

“FARMINGTON – A group of oil and gas executives and energy policy experts from the Texas Panhandle and New Mexico’s piece of the Permian Basin are pushing a plan to restrict seafaring imports of foreign oil from coming into the U.S. in order to stabilize the oil and gas industry and bring back lost oilfield jobs.

The group’s plan, which would exempt crude oil imported from Mexico and Canada, is an effort to push back against the price wars the group said are being waged by OPEC, or the Organization of the Petroleum Exporting Countries, led by Saudi Arabia.

Members met at the School of Energy at San Juan College Tuesday to promote  the “Panhandle Import Reduction Initiative,” which they say could be implemented in multiple phases within 90 days of the next administration, with the ultimate goal of reducing heavy crude oil imports to about 10 percent of demand.

Launched in November, the initiative aims to cut foreign oil imports enough to activate more domestic drilling rigs and boost domestic production to meet current demand levels within four years.

Former state legislator and Four Corners Economic Development Chief Operating Officer Tom Taylor said the drop in natural gas prices eight years ago and the fall of crude oil in 2014, has delivered prolonged pain to the regional economy.

“We find ourselves … in a situation now where we’re down about 6,000 jobs, most of those in the oil and gas industry,” Taylor said of the San Juan Basin. “We have about 11,000 people who have left (San Juan County) … So while we’re down 6,000 jobs and down 11,000 people, we’ve built seven fast-food restaurants, three more under construction, and two big box stores. It’s a different world out there.

“But the fact of the matter is that the economic base of the community is in trouble. And not only is the community in trouble, but the state of New Mexico is in trouble, and not only is New Mexico in trouble but our nation and its security. It’s all tied together. It’s a very difficult situation we find ourselves in when we have one country that can control oil prices. It goes beyond free trade. It’s a problem we need a solution to. We are at the dependence of foreign oil.”

Taylor said about a third of New Mexico’s general fund comes from the oil and gas industry in the form of taxes and fees.”

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