Guest “USA, USA, USA!” by David Middleton

JULY 19, 2021
United States continued to lead global petroleum and natural gas production in 2020

More petroleum and natural gas was produced in the United States than in any other country during 2020 (a trend that began in 2014), despite year-on-year declines from the record-high production in 2019. U.S. petroleum and natural gas output in 2020 totaled 66.9 quadrillion British thermal units (quads), which was more than both Russia’s 45.5 quads and Saudi Arabia’s 26.5 quads of petroleum and natural gas production.

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Energy Information Administration
Source: U.S. Energy Information Administration, International Energy Statistics
Note: Petroleum includes crude oil, condensate, and natural gas plant liquids

Time will tell if the Harris-Biden Dominion can reverse this pattern. So far, most of their efforts have been thwarted by Sen. Joe Manchin (D-WV) and U.S. District Judge Terry Doughty.

Oil prices have fallen back off of 6-yr highs since OPEC+ reached an agreement to steadily increase production back to pre-shamdemic levels by 2023. Even with today’s sell-off, oil prices have rarely been higher over the past 6 years.

West Texas Intermediate (WTI) $/bbl (Investing.com)

And Goldman Sachs remains bullish on their oil price outlook…

Goldman Sachs Raises Oil Price Forecast Following OPEC Deal
By Tsvetana Paraskova – Jul 19, 2021

The agreement which OPEC+ reached on Sunday is modestly bullish for Goldman Sachs’s forecast that Brent will hit $80 per barrel this summer, the investment bank said in a note after the group agreed to start adding 400,000 bpd production each month from August.

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OilPrice.com

Oddly enough, the price roll-back will reduce the hedging losses that have plagued a lot of oil & gas companies this year. And that’s not the only “silver lining” to this “sow’s ear” (intentional mixed metaphor)…

OPEC will boost oil output — but don’t expect lower prices at the pump
BY SIMON HENDERSON, OPINION CONTRIBUTOR

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The good news is that there will be more oil on the market, which should ease prices, but the arrival of that oil is being phased in between now and the end of next year, so prices probably still will increase. At best they will remain sticky at the current high levels.

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The lead story in Monday’s Wall Street Journal, headlined “OPEC, Allies Agree to Boost Oil Output,” reported that “The Biden administration … reached out to Saudi Arabia and the United Arab Emirates when those two OPEC members clashed over terms of a deal.” And, please note, the “allies” in this case are led by Russia — which may be OPEC’s ally but surely isn’t ours.

For the White House, even that mention is embarrassing while the domestic emphasis is on the green energy transition away from carbon fuels such as oil and natural gas. The awkward fact is that the world still depends on such fuels and will do so for quite a few years.

A Wall Street Journal analysis on July 13 about record natural gas demand noted also that the hot summer means production of hydroelectricity from dams is down and even “thermal coal hasn’t been as expensive in a decade.” While climate change is a priority, having electricity to light homes, power refrigerators and keep the fans whirling is a more immediate demand for much of the world.

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Simon Henderson is the Baker Fellow and director of the Bernstein Program on Gulf and Energy Policy at the Washington Institute for Near East Policy. Follow him on Twitter @shendersongulf.

The Hill

via Watts Up With That?

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July 19, 2021