Even at the risk of getting coal in my stocking, you must admit that the US oil and gas industry helped save Christmas! US oil production broke a world record by pricing 13.3 million barrels a day last week as US oil exports in the first half of 2023 averaged 3.99 million barrels per day (b/d), which is a record high for the first half of a year since 2015 when the U.S. ban on most crude oil exports from the United States was repealed. That historic achievement has helped ease global inflation while feeding economic growth in a world where central banks are ending up one of the fattest rate cycles tightening in history.
Not bad for an industry that has been slandered and derided by the Biden administration. Biden, as you remember, went as far as to accuse mom-and-pop gas station owners of price gouging and accusing the industry of being “war profiteers”. He also threatened to replace and end the oil business in the US.
Over time Biden issued a slew of executive orders and had his administration openly try to get investors to stop investing in the US oil and gas industry. The funny thing is that the industry that Biden has shown such disdain for is probably the only thing keeping the US economy going.
The ridiculous and unsound economic policies called Bidennomics any non-partisan economist will tell you is a disaster is running up record debt and record deficits. If this is the way to economic prosperity, then why doesn’t everybody do it? Oh yeah, I remember, it was called the Great Depression.
Without getting into the false claims that Biden made about the success of his economic policies, the reality is that the American people know the truth. They are the ones who are living it with the Biden misery index as their real wages fall. Biden should openly congratulate and thank his lucky stars for the oil and gas industry that despite some of the harshest attacks and hostility by any administration in history has continued to flourish. The US oil and gas industry has helped create a supply buffer that has helped keep prices under control in a world that has been challenged with wars and geopolitical threats that have skyrocketed on Biden’s watch.
There are good people in the US oil and gas industry. People who understand hard work and are inspired to innovate. The US oil and gas industry is the glue that is keeping the global economy together. It is also the reason that we have seen a reduction in inflation helping save the world from the ill effects of Bidenomics which is not based on any real economics but based in solidifying political power. While oil prices did dip down a bit on the reports that U.S. oil production hit a record high, the market was still strong. US exports were up last weekend, imports were up, and refinery runs were up in the sign that they will increase runs in the coming weeks.
News today that Angola is leaving OPEC is raising concerns that there might be growing pressure within the OPEC cartel to raise production. On the surface Angola leaving OPEC is not that big of a deal because they can barely pump their oil quota. Today the concern is that Angola’s departure might signal some underlying tension with the fact that the cartel is losing market share to non-OPEC producers and mainly the United States. Angola’s oil minister said, “The decision, duly considered, was taken at a session of the Council of Ministers, guided by the President of the Republic, João Lourenço.”
EIA data did have some green shots for the coming weeks. U.S. crude oil refinery inputs averaged 16.5 million barrels per day during the week ending which was 403 thousand barrels per day more than the previous week’s average. Refineries operated at 92.4% of their operable capacity last week.
Gasoline production increased last week, averaging 10.0 million barrels per day. Distillate fuel production decreased last week, averaging 4.9 million barrels per day. U.S. crude oil imports averaged 6.8 million barrels per day last week, increased by 233 thousand.
Over the past four weeks, crude oil imports averaged about 6.7 million barrels per day, 7.6% more than the same four-week period last year. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 2.9 million barrels from the previous week. At 443.7 million barrels, U.S. crude oil inventories are about 1% below the five-year average for this time of year. Total motor gasoline inventories increased by 2.7 million barrels from last week and are about 2% below the five-year average for this time of year.
Total demand over the last four-week period averaged 20.1 million barrels a day, up by 0.2% from the same period last year.
Today natural gas will get the inventory report. Yet what matters is the weather more than reports. Is winter is going to take a vacation. We could be on track for the warmest Christmas in history is putting downward pressure on prices.