Open post

Biden Tries Again to Clarify His Fracking Stance, and Fails Again

The Biden/Harris ticket has been the source of a great deal of confusion during this campaign related to the candidates’ stances on the subject of hydraulic fracturing. Senator Kamala Harris firmly stated several times in the past that she is absolutely in favor of banning fracking, but has been attempting to walk all of that back in recent weeks as the polls have tightened in oil and gas states like Pennsylvania and Michigan.

Former Vice President Joe Biden, meanwhile, has been all over the place on this issue, promising repeatedly to ban fracking in whole or in part during the primary season, and more recently joining Harris’s efforts to modify that position in order to shore up his chances in those and other crucial swing states. Biden was asked the question again by an undecided voter during his CNN town hall appearance in Moosic, Pennsylvania this week, and again attempted to modify and clarify his position. Unfortunately, a reading of the transcript of that exchange doesn’t really clarify much at all.

Here is that transcript:

QUESTIONER: Good evening Mr. Vice President, Mr. Cooper. With the abundance of natural gas in northeast Pennsylvania. Do you support the continuation of fracking safely and with proper guidelines, of course, and growing the industry (garbled) additional jobs to our region?

BIDEN: Yes, I do. I do. In addition to that, we can provide for right now, as you know, for thousands of uncapped wells because a lot of companies gone out of business. Whether they’re gas or oil facilities, we can put to work right away 250,000 people from iron workers and other disciplines, making union wages. Capping those wells that are leaking methane and their danger to the community. And so, not only do I continue to support it.

Read the Rest Here

 

That is all.

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Open post

Chesapeake Energy Finally Succumbs With Chapter 11 Filing

One of the longest-running dramas in corporate oil and gas history finally came to a climax on Sunday when management for Chesapeake Energy announced it would seek Chapter 11 protection under the U.S. bankruptcy code. The company has traveled a long and winding road to reach this point.

Rumors about the company’s pending bankruptcy have run rampant over the past year as it teetered on the financial brink. But in reality, Chesapeake’s financial troubles go back much further, to the early years of this century, when founder and former CEO Aubrey McClendon famously made a bet on natural gas continuing to be a scarce resource in high demand whose price would remain strong for decades. Based on that market view, the company then went on a buying spree for the next several years, buying up natural gas assets and companies at very high prices. In one acquisition in which the company I worked for – Burlington Resources – was the second high bidder, Chesapeake’s winning bid was $3 per MMBTU equivalent higher. That’s a lot of excess capital deployment.

None of his assumptions about the future for natural gas turned out to be accurate, of course, but it must be pointed out that McClendon certainly was not alone in making them. For example, I personally played a leadership role in a 2003 National Petroleum Council study which attempted to project natural gas supply, demand and prices through the year 2025. The study was led by ExxonMobil and Anadarko Petroleum (acquired last year by Oxy), and included participants from many other industry companies, the Energy Department, the Department of Interior and environmental NGOs.

Most Popular In: Energy
  • Deloitte: COVID-19 Fallout Demands That U.S. Shale Completely Transform Its Operations

  • The Oil And Gas Situation: The E&P Sector Faces A Reckoning

  • BP’s Big Writedown: A Harbinger For A Declining Industry Or Of A Struggling Company?

The fundamental conclusions and projections of that study basically supported McClendon’s view of natural gas remaining a scarce resource with pretty high commodity prices as far as the statistical models we used could project. It was in fact the prevailing common wisdom in the industry at that time.

The NPC study projected that imports of Liquefied Natural Gas (LNG) would in fact have to make up an increasingly high percentage of U.S. natural gas supply. That incredibly wrong projection led to the building of a series of LNG import facilities in the U.S. and helped compel ExxonMobil to invest billions in its own fleet of new LNG tankers to help supply America’s coming needs.

While other operators held similar views about the future for U.S. natural gas, Chesapeake was without doubt the most aggressive in terms of pursuing new reserves. In addition to arguably over-paying for acquisitions of other companies or their assets, Chesapeake became infamous for radically driving up lease bonus prices in every new shale play, in the process running up a prodigious level of corporate debt. At one point, Chesapeake’s corporate debt exceeded that held by ExxonMobil, a company many times its size.

As natural gas prices collapsed in the late ‘00s, McClendon next turned to sales of his own company’s assets or portions of working interests in big play areas as a means of continuing to finance and pay down that debt. He sold shares of the company’s working interests in the Barnett, the Eagle Ford, the Marcellus and the Haynesville to various other players, like BP and CNOOC, but every sale also meant less and less cash flow coming into the company itself. Many in the business during that time joked about it being a sort of a pyramid scheme in which the debts would ultimately end up outstripping the company’s income and ability to pay.

 

 

 

 

Read the Rest Here

 

That is all.

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Open post

The Shale Daily Update – 4.3.2020

Here are 10 things you need to know about oil and gas for April 3, 2020:

Trump calls on Russia and Saudi Arabia to cut oil production – Excerpt:

The Trump administration is pressing OPEC to hold an emergency meeting as early as next week to try to end the standoff in the oil market that has threatened to cripple the U.S. oil industry, three industry and government officials familiar with the talks said.

The U.S. pressure is aimed at persuading Saudi Arabia — which has also called for a meeting — and Russia to declare a ceasefire and reverse the export increases that have drowned the global market in crude even as the coronavirus pandemic has decimated international demand.

The White House has not yet decided who, if anyone, it would send to a possible OPEC meeting next week, the industry and government officials said. Candidates included Secretary of State Mike Pompeo, Department of Energy Secretary Dan Brouillette and Trump’s son-in-law and adviser Jared Kushner, the people said.

Oil Extends Gains As OPEC Leaders Call Emergency Meeting To Discuss Trump Production Cuts – Well, guess the pressure from the President worked, as OPEC called a special meeting overnight. The cartel will hold its meeting next week via “emergency teleconference,” which one supposes must be more urgent than just your ordinary, everyday OPEC teleconference.

OPEC+ Debates Biggest Ever Cut as Virus Destroys Oil Demand – It’s worth noting that Russia’s oil minister denied the narrative told in this New York Times report, but Russia says all sorts of things that end up not being accurate. Let’s hope this is one of them.

 

Read the Rest at Shale Magazine

Open post

Why Does Joe Biden Ignore Fracking Science ?

Today’s Campaign Update, Part II (Because the Campaign Never Ends)

Joe Biden and his fellow Democrats are fond of pointing fingers at others and accusing them of ignoring science. They resort to this canard whenever they are trying to avoid having to form a rational, fact-based argument around “climate change,” but they like to use it as a crutch against logic on other topics as well.

But in Sunday night’s debate, when Biden once again demonized hydraulic fracturing – or “fracking” – and promised his administration would invoke a “no new fracking” policy should he actually stumble into the White House next January, it was Biden and no one else who was ignoring real, actual science.

Ironically, in ignoring the actual science around the very safe, well-regulated industrial process of fracking, Biden was ignoring the advice of the senior officials who held regulatory sway over oil and gas-related activities while he served as Vice President. These officials include, but are far from limited to:

Steven Chu, Stanford PhD. Nobel Prize Winner (Physics) DOE Secretary

U.S. Senator Ken Salazar, (Juris Doctor from University of Michigan) DOI Secretary

Sally Jewell (Mechanical Engineering, University of Washington) DOI Secretary

Gina McCarthy (Master of Science in Environmental Health Engineering and Planning and Policy, Tufts University) EPA Administrator

Lisa Jackson (Master of Science in chemical engineering from Princeton University) EPA Administrator

Each and every one of these cabinet-level appointees by President Barack Obama testified and commented on the record on multiple occasions throughout the Obama/Biden administration that hydraulic fracturing was a safe and well-regulated process that offers no threat to groundwater and produces very little air emissions. These senior Obama-era officials were literally forced to make these admissions after spending years in the conduct of a vain search for examples of fracking polluting groundwater or releasing major, harmful air emissions.

The effort at the EPA rose to such hyperbolic levels that one EPA Region 6 administrator, former SMU professor, Dr. Al Armendariz, was removed after his allegations of groundwater contamination by Range Resources were proven to be false. However, that proof did not prevent the State of New York from using Armendariz’s findings in its own doctored report that was used to justify banning fracking within its state borders.

Mr. Biden loves to talk about his years of serving as Vice President to President Obama. Yet, when it comes to fracking and the science his own administration developed and communicated during those 8 years in office, the former VEEP seems to have developed a mental block.

But no worries – we will continue to remind him – and you – of the real, extremely well-developed body of science that surrounds this safe and well regulated industrial process. Because facts are stubborn and important things, especially during troubling times such as these.

That is all.

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Open post

For the U.S. Oil and Gas Industry, the Time for Alarm Has Arrived

Today’s Energy Update 

I’m no fan of alarmism, whether it be about energy, the environment or any other subject, but the situation for the domestic oil and gas industry has grown somewhat alarming over the past two months. Since early January the S&P Oil & Gas Index has plunged 32%. Investors appear convinced not just that there is oodles of oil in the world but that the spread of Coronavirus brings the risk of economic flatlining in the biggest growth market for oil — China.

With the virus set to spread and the OPEC+ group running out of options to contain the oil glut, the price of West Texas Intermediate (WTI) crashed through the important $50 level this week, and promises to slide further. Chevron yesterday sent home 300 workers in London over virus fears. Thus, a year that began with a fairly promising outlook is rapidly devolving into one that will present a fight for survival for some domestic producers.

The statement on Tuesday by Dr. Nancy Messonnier, an official at the U.S. Centers for Disease Control and Prevention (CDC), that spread of the Coronavirus in the U.S. was “inevitable,” and that citizens here should begin preparing for an outbreak will certainly work to further inflame the markets. President Donald Trump has reserved television time for a statement designed to calm the situation on Wednesday night, but it could come too late to prevent further disruption in the commodity and financial markets.

Meanwhile, the U.S. market for natural gas remains chronically over-supplied with no real relief in sight. Although the NYMEX price per MMBtu has remained fairly stable during the first two months of the year, it is stable at a price that is far too low for many natural gas producers to remain profitable.

All of these factors now combine to create a precarious situation for heavily-leveraged companies as they head into debt re-determination season. Chesapeake Energy is a good example. When I wrote about that company’s long, difficult struggle to survive last November, Morgan Stanley had just lowered its price target for CHK stock from $2.25 per share to $1.25.

But it isn’t only independent producers who are finding the current market conditions to be challenging: Even ExxonMobil, despite its prime position in the Permian Basin and major international discoveries over the past two years, is experiencing a disturbing rate of value destruction. As noted by Bloomberg, XOM stock dropped to a 15-year low on Monday and fell further on Tuesday, “just over a week before Chief Executive Officer Darren Woods is scheduled to present the oil explorer’s long-term strategic plan to investors and analysts.” For the year, XOM is now down by almost 25%.

Read the Full Piece Here

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Open post

Democrats Present a Stark Reality for the Oil Industry in 2020 Elections

The time has come for people in the oil and gas business — especially its senior executives and those who do government affairs work within the larger companies — to wake up to the reality of the Democratic Party as it exists today, as exemplified by its current crop of presidential contenders and caucuses in both houses of Congress.

Simply put, this is not your father’s Democratic Party.

Gone are the days when there existed a subset of fairly moderate Democratic members of Congress in both the House and Senate who could be classified as strong supporters of the oil and gas industry. There are no more Mary Landrieus in today’s United States Senate, nor even a Heidi Heitkamp to be found. In the House, you still have one identifiable Democrat — Texas Rep. Henry Cuellar, who can be said to be a real supporter of the oil and gas industry, but that’s pretty much it. And even Rep. Cuellar was so cowed by Speaker Nancy Pelosi that he cast a “yes” vote to impeach the most pro-oil and gas president in U.S. history on the flimsiest grounds imaginable in December.

Gone are the days when a startup industry trade association, America’s Natural Gas Alliance (ANGA), could be effective by hiring a former Clinton operative to be its president and hiring a raft of pro-Democrat contractors to shape its messaging. ANGA, created at the outset of the Obama Administration in early 2009, was able to quickly become a force for promoting the benefits of natural gas using that model a decade ago. A decade later, pretty much none of the Democrat senators and congressmen with whom ANGA formed effective working relationships remain in Congress. All have been replaced by Republicans, or by more radical left-wing, anti-oil and gas members.

While ANGA and other industry trade associations were able to form working relationships with many Democrats of the time — even in those years, those Democrats could not be counted on for industry support on the truly big votes. ANGA and the rest of the industry, for example, were unable to secure a single Democratic vote during the battle over the national carbon cap-and-trade bill that barely failed in 2010.

I know all of this to be true because I was intimately involved in ANGA’s work during those years when I was Director of Government Affairs at El Paso Corporation. Working to form those relationships with Democrats in Congress made sense at the time since a number of them really were pro-oil and gas, at least to some extent, and because there was a Democratic administration in place that was decidedly hostile to the industry’s interests.

Read the Rest Here

Open post

Bernie Sanders’ Dorian Tweet Proves he is an Ignorant, Shameless Hack

Today’s Campaign Update
(Because The Campaign Never Ends)

Grand Bahama this morning looks a lot like Galveston did on September 9, 1900. – On September 8 of that year, the deadliest hurricane in American history slammed into Galveston Island with winds in excess of 140 mph – which would make it a Category 4 hurricane – and a storm surge that inundated the entire island.

Captains and sailors from ships coming into port had been warning islanders for days in advance of a large storm lurking in the Gulf, and a prominent local weather man, Isaac Cline, also tried to warn locals that a big storm was coming. But government officials assured residents that a major hit on the island was virtually impossible due to the shallow waters of the Gulf of Mexico and other factors, and predicted that any storm in the Gulf of Mexico would be most likely to make landfall in Florida. Thus, few people evacuated Galveston in advance of the storm, and, without air travel or gasoline powered automobiles, evacuation for most residents would have been difficult if not impossible in any event.

Thus it was that more than 8,000 Galvestonians died in the resultant inundation. Cline himself lived in a two-story home near the downtown area, and was only able to survive the rising flood waters by climbing onto the roof of his house along with his family. The destruction of all but the sturdiest of buildings on the island, like the famous Moody Mansion and many of the downtown business establishments, was utter and complete.

For many months afterwards, the refuse and debris from those buildings that had been carried out to sea was washed back up onto the island’s shores, along with the rotting carcasses of human beings, farm animals and pets who had perished in the storm. The cleanup operations were grim and seemingly unending; the stench was horrible and reportedly lingered for years afterwards.

The story we see coming out of Grand Bahama this morning is similar and tragic. The island was largely inundated by the storm surge, and thousands of houses and non-sturdy buildings have been destroyed. The refuse and debris from those buildings that was carried out to sea will wash back up onto shore in the months to come.

But that debris and refuse will not be accompanied by the rotting bodies of thousands of dead human beings. Many of the island’s pets and other animals were also taken to safety and even evacuated off the island, thanks to volunteer animal rescue operations. That happy result is largely due to modern means of predicting the path these storms will take days in advance. But it is also due to the existence of modern means of travel that allowed so many of the residents there to evacuate the island.

Virtually all of those means of travel, whether by boat, by plane or by automobile in the case of mainland U.S. residents in several states who are evacuating their own homes in advance of the storm’s path, are powered by gasoline or diesel fuel. Almost 100% of them. Even the growing number of electric vehicles on the roads now obtain their charge from power stations whose electricity is generated by a U.S. energy grid that is more than 80% powered by fossil fuels, including coal.

These modern, fossil-fueled means of transportation are why, when the ultimate death toll from this very strong hurricane is totaled up, the number most likely will consist of two digits instead of four or five.

So, when you see craven Democrat/Socialist presidential candidate Bernie Sanders issue a tweet like this:

…remember that the deadliest hurricane in American history occurred in 1900, when Americans were traveling using horses and buggies, almost a full century before the climate change scam was invented by the global socialist political movement.

Next time you run into someone who works in America’s oil and gas industry, thank them for producing the fuels that help save so many human lives in advance of these terrible storms. I guarantee you they will appreciate the gesture.

That is all.

 

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Open post

The Evolution of American Natural Gas in the 21st Century

Today’s Energy Update
(Because Energy Fuels Our Lives)

The Evolution of American Natural Gas in the 21st Century

[This is the cover story for the new issue of Shale Magazine, where I serve as editor, a story that I really enjoyed researching and writing, since I’ve lived through all of it.  If you want to know how and why our amazing natural gas resource has developed during this century, and the potential for its further development in the coming decades, please give it a read. Thanks!]

Read the Full Piece

In the summer of 2002, the National Petroleum Council (NPC) gathered together some of the smartest minds from the oil and gas industry, academia and in the environmental community to study the potential for natural gas in North America. The study lasted for the better part of a year, after which a report titled “Balancing Natural Gas Policy – Fueling the Demands of a Growing Economy” was released.

As we sit here 16 years later, reviewing the findings of this study in light of the current situation where natural gas in North America and globally is concerned is a fascinating exercise — one that demonstrates the challenges presented to even the most informed and intelligent people when it comes to making accurate projections about how the oil and gas industry will evolve in years to come.

oil and gas processing industry. rectification column and storage of finished productI personally chaired one of several subcommittees that were established to conduct various aspects of this study, led by ExxonMobil and Burlington Resources, which was my employer at the time. When the study was issued, those of us who had worked on it were quite proud of it and were firm in our belief that it would stand the test of time, providing an accurate roadmap for the public and policymakers to use as a guidepost for years to come.

Providing such guidance is, after all, the role of the NPC, a federal advisory committee that reports directly to the U.S. Secretary of Energy. The NPC’s own website describes its role, in part, as follows:

The National Petroleum Council (NPC), a federally chartered and privately funded advisory committee, was established by the Secretary of the Interior in 1946 at the request of President Harry S Truman. In 1977, the U.S. Department of Energy was established and the NPC’s functions were transferred to the new Department. The purpose of the NPC is solely to advise, inform, and make recommendations to the Secretary of Energy with respect to any matter relating to oil and natural gas or to the oil and gas industries submitted to it or approved by the Secretary. The NPC does not concern itself with trade practices, nor does it engage in any of the usual trade association activities.

Even though the NPC had conducted a natural gas-related study in 1999, incoming Bush Administration Energy Secretary Spencer Abraham felt that the situation had shifted significantly enough by 2002 to warrant another look. It is important to keep in mind that, when the request came down from Secretary Abraham, natural gas was a commodity in short supply and subject to huge price swings. Because a large percentage of our country’s production came out of the Gulf of Mexico, it was also subject to being significantly interrupted by major hurricane events.

Large liquefied natural gas (LNG) carrier with 4 LNG tanks sails along the sea

In 2002, the Barnett Shale was the only major natural gas-bearing shale formation that had been discovered. The Barnett was in the early stages of its development, and the industry had little understanding of its ultimate potential. Nor did any of the experts assembled by the NPC for its new study have any inkling of the magnitude of domestic natural gas resource that would be discovered in massive reserves trapped inside formations with names like Marcellus, Haynesville, Bakken, Eagle Ford, Spraberry, Woodford and Wolfcamp.

One of the most popular bits of conventional wisdom said about any economic study is “garbage in, garbage out.” Our base of information for the 2002 NPC study wasn’t “garbage” — the information we had was high-quality, but it was also very limited. The study by its very nature had to be based on available data, and the data available at the time indicated that North American natural gas production through the year 2025 would be characterized by limited domestic output, rising imports of liquefied natural gas (LNG) coming into the country on huge tanker ships, and high commodity prices as a result.

It should come as no surprise that the study’s findings, some of which we will review here as examples, reflected this general outlook.

Every study based on economic analyses will include multiple cases that produce differing outcomes. Typically, these are described as a “base case” which assumes a status quo of outside-influencing factors going forward, an aggressive case that assumes some set of positive changes, and possibly even a non-aggressive case that assumes a set of negative changes.

One of the big decisions the NPC study committee had to make revolved around how many cases to include and how to structure them. In the end, the decision was made to include:

• “Balanced Future” case in which U.S. energy policy would evolve in ways that would encourage the development of new natural gas resources and the building-out of adequate midstream infrastructure and LNG import facilities; and

• “Reactive Path” case in which energy policy evolves, but mainly in reaction to various negative events such as shortages of supply or crises caused by lack of adequate infrastructure.

Given that background and knowledge about how the study was structured, the fact that most of the findings produced in our report have turned out be quite inaccurate should come as no surprise. Here are a few of them taken from the study’s Executive Summary:

• From page 32-33: “Given the relatively low production rates from non-conventional wells, the analysis further suggests that even in a robust future price environment, industry will be challenged to maintain overall production at its current level. This conclusion is reached even though new discoveries in mature North American basins represent the largest contribution to future supplies of any component of this supply outlook.”

• From page 33: “The NPC estimates that production from the lower 48 states and non-Arctic Canada can meet 75 percent of U.S. demand through 2025. However, these indigenous supplies will be unable to meet the projected natural gas demand.”

• From page 52: Price Projections: The NPC “Balanced Future” case projected a 2019 average price of between $3.20 and $5.00 per mmbtu. Its “Reactive Path” case projected a price range of $5.00 to about $6.90.

• From page 63: “To meet future demand, the NPC is projecting LNG imports will grow to become 14-17 percent of the U.S. natural gas supply by 2025. This will require the construction of seven to nine new regasification terminals and expansions of three of the four existing terminals.”

Of course, with the benefit of 16 years of hindsight, we now know that none of these key projections have come to fruition. For example, where prices are concerned, today’s natural gas producers can only long for a price per mmbtu of even $3.20, much less long-forgotten levels of $5.00 or $6.90.

LNG TANKER - Ship at dawn moored to the gas terminal

Far from being challenged to maintain overall current production levels, today’s natural gas industry struggles with finding adequate areas of demand to which to move their product, even as the number of active drilling rigs exploring for natural gas resources has fallen from 1,600 as recently as 2012 to around 130 at the first of 2019. In a way, producers are victims of their own expertise, having become so adept at maximizing volumes from each new well, that they threaten to oversupply the market―even with a dramatically-reduced rig count.

The nature of the shale plays discovered since 2003 has also played a large role in creating this new reality for gas producers. It’s not just the massive resource contained in natural gas plays like the Haynesville and Marcellus keeping the gas rig count low — it’s also the amazing volumes of methane flowing out of what are classified as oil wells being drilled in the Bakken, Eagle Ford and the Permian Basin. A little-recognized fact of life in today’s U.S. oil patch is that the oil-heavy Permian Basin is now the second-largest producer of natural gas in North America, behind only the Marcellus/Utica Basin.

Simply put: Today’s biggest problem for natural gas producers is not a lack of supply, but lack of demand.

It’s important to recognize that this sea-change in the supply/demand equation for domestic natural gas has taken place during a period of time when demand for natural gas has increased significantly. In 2003, Americans and American businesses consumed about 22.7 trillion cubic feet (tcf) of natural gas, according to the U.S. Energy Information Administration (EIA). By 2017, overall U.S. consumption had grown to 27.1 tcf, an increase of 20 percent.

More to the point, demand for natural gas over that period of time rose in all of its key demand sectors: It was up in power generation, up in home heating use, up in chemicals and plastics and all other key manufacturing uses. Indeed, the phenomenal new abundance of natural gas supply and the chronic low prices that abundance has produced has played a significant role in the ongoing renaissance of manufacturing in the U.S., making the country globally competitive in that space for the first time in several decades.

This newly-found abundance may be a curse to natural gas producers and their bottom lines, but it has been a true blessing to the country.

Read the Full Piece Here

 

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Open post

The Oil And Gas Situation: A Transition In Fundamentals For 2019

Today’s Energy Update
(Because Energy Fuels Our Lives)

A couple of interesting studies have come across my desk in recent days that merit noting. Taken together, they paint a picture of a domestic shale oil and gas industry that is relatively healthy and will only grow healthier throughout 2019 as it benefits from stronger commodity prices.

Will oil inventories hit a record deficit later this year? – That’s what the partners at the Goehring and Rozencwajg investment firm think. In their March 15 analysis, they estimate that stronger-than-projected global demand for crude, combined with the full implementation of promised export cuts by the OPEC-plus countries will result in a significant drop in global crude inventories over the course of this year.

The report correctly notes the habit of the International Energy Agency (IEA) of underestimating global crude demand growth in its initial annual projections. The IEA has had to revise its initial estimates upwards in seven of the last eight years by an average of about half a million barrels of oil per day (bopd) . The firm assumes this trend will continue for 2019, and that IEA’s estimate of demand growth for 2019 is understated by 500,000 bopd.

The report also criticizes the IEA for its rosy projection that production growth for the non-OPEC countries outside of the U.S and Russia will grow by 120,000 bopd during 2019, a projection Goehring and Rozencwajg believe is “simply not possible. Instead, given the severe recent weakness in this group, we believe this number may actually decline by 300,000 b/d” during 2019. Taken together, the firm believes the IEA is overly-pessimistic in its estimates by a total of 920,000 bopd.

Read the Rest Here

 

Follow me on Twitter at @GDBlackmon

Today’s news moves at a faster pace than ever. Whatfinger.com is my go-to source for keeping up with all the latest events in real time.

Posts navigation

1 2 3
Scroll to top
%d bloggers like this: