The majority of shale oil companies announced their rejection of US President Joe Biden's offer to buy back crude oil to compensate for the withdrawal from the strategic stockpile when the price of a barrel falls between $67 and $72 or less, in an attempt to reassure producers.
This week, Greenlake Energy Ventures CEO Matt Gallagher took a Twitter poll to assess companies' attitudes about US President Joe Biden's proposal.
The results of the poll showed that nearly 80% of the 49 respondents do not expect oil futures to decline during 2023 to a level that would enhance any US purchases, according to Reuters .
Analysts also argued that the set price was not enough to stimulate production, and the American Petroleum Institute called on the White House to focus on long-term policies that stimulate investment, according to what was monitored by the Specialized Energy Platform.
Refill the strategic stock
Last week, President Joe Biden announced that his administration intends to buy back strategic crude oil when prices are between $67 and $72 a barrel.
The administration instructed the Energy Department to release 15 million barrels of strategic oil reserves for delivery during December (2022), which is the last payment targeted by the US government since March, and thus 180 million barrels are scheduled to be released by the end of this year.
Analysts Criticism
Analysts believe that it is unlikely that oil prices will fall to the level set by the US administration, and then boost purchases to refill the strategic stockpile.
This indicates that shale oil companies will not boost production in response to President Biden's plan.
Petroners CEO Trisha Curtis rejected the offer, saying Biden's announcement appeared to throw bone at the oil industry.
She asked about the position of shale oil companies in the event that oil did not fall to this price, saying: "Are we going to keep our stocks low?"
She noted that the recent withdrawal of about 180 million barrels along with the repurchase price was an attempt by Biden to strike a balance between supporting his green plan and trying to reduce fuel prices, but he did not accomplish either of them.
Abhiram Rajendran, head of global oil at consultancy Energy Intelligence, sees the price of oil - currently - at $85 a barrel, and the repurchase set at $70 a barrel is a price that does not support supply growth.
Oil market analyst at Rapidan Energy Hunter Cornfind said that US oil prices reached $120 a barrel this year (2022), and there was no surge in production due to lack of labor and equipment and high costs.
Kornfind explained that oil futures contracts until mid-to-late 2024 are trading at around $72 a barrel, which means oil producers can lock the selling price of future production around the specified level of oil purchases to refill their strategic oil stocks.change policies
The first vice president of the American Petroleum Institute, Frank Macchiarola, said that the Biden administration should change its policy on producing more oil and gas in the United States if it wants to increase supplies.
Last week, Mike Summers, President and CEO of the American Petroleum Institute, commented on US President Joe Biden's comments on gasoline prices, saying: "At a time when American energy sources can be a force for stability at home and abroad, we urge caution against continued Reliance on short-term efforts, which are no substitute for sound long-term policies that lead to American energy leadership.”
He added that the administration should focus on addressing the industry's economic and security challenges by stimulating investment in energy, infrastructure, and markets, and enabling American consumers to benefit from reliable American energy resources.
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The majority of shale oil companies announced their rejection of US President Joe Biden's offer to buy back crude oil to compensate for the withdrawal from the strategic stockpile when the price of a barrel falls between $67 and $72 or less, in an attempt to reassure producers.
This week, Greenlake Energy Ventures CEO Matt Gallagher took a Twitter poll to assess companies' attitudes about US President Joe Biden's proposal.
The results of the poll showed that nearly 80% of the 49 respondents do not expect oil futures to decline during 2023 to a level that would enhance any US purchases, according to Reuters .
Analysts also argued that the set price was not enough to stimulate production, and the American Petroleum Institute called on the White House to focus on long-term policies that stimulate investment, according to what was monitored by the Specialized Energy Platform.
Refill the strategic stock
Last week, President Joe Biden announced that his administration intends to buy back strategic crude oil when prices are between $67 and $72 a barrel.
The administration instructed the Energy Department to release 15 million barrels of strategic oil reserves for delivery during December (2022), which is the last payment targeted by the US government since March, and thus 180 million barrels are scheduled to be released by the end of this year.
Analysts Criticism
Analysts believe that it is unlikely that oil prices will fall to the level set by the US administration, and then boost purchases to refill the strategic stockpile.
This indicates that shale oil companies will not boost production in response to President Biden's plan.
Petroners CEO Trisha Curtis rejected the offer, saying Biden's announcement appeared to throw bone at the oil industry.
She asked about the position of shale oil companies in the event that oil did not fall to this price, saying: "Are we going to keep our stocks low?"
She noted that the recent withdrawal of about 180 million barrels along with the repurchase price was an attempt by Biden to strike a balance between supporting his green plan and trying to reduce fuel prices, but he did not accomplish either of them.
Abhiram Rajendran, head of global oil at consultancy Energy Intelligence, sees the price of oil - currently - at $85 a barrel, and the repurchase set at $70 a barrel is a price that does not support supply growth.
Oil market analyst at Rapidan Energy Hunter Cornfind said that US oil prices reached $120 a barrel this year (2022), and there was no surge in production due to lack of labor and equipment and high costs.
Kornfind explained that oil futures contracts until mid-to-late 2024 are trading at around $72 a barrel, which means oil producers can lock the selling price of future production around the specified level of oil purchases to refill their strategic oil stocks.change policies
The first vice president of the American Petroleum Institute, Frank Macchiarola, said that the Biden administration should change its policy on producing more oil and gas in the United States if it wants to increase supplies.
Last week, Mike Summers, President and CEO of the American Petroleum Institute, commented on US President Joe Biden's comments on gasoline prices, saying: "At a time when American energy sources can be a force for stability at home and abroad, we urge caution against continued Reliance on short-term efforts, which are no substitute for sound long-term policies that lead to American energy leadership.”
He added that the administration should focus on addressing the industry's economic and security challenges by stimulating investment in energy, infrastructure, and markets, and enabling American consumers to benefit from reliable American energy resources.
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The majority of shale oil companies announced their rejection of US President Joe Biden's offer to buy back crude oil to compensate for the withdrawal from the strategic stockpile when the price of a barrel falls between $67 …" />
Africa Energy Insights - Biden's Offer To Buy Crude Rejected By Shale Oil Companies
Oil & Gas
Biden's Offer To Buy Crude Rejected By Shale Oil Companies
Juma Mandali
2 years
The majority of shale oil companies announced their rejection of US President Joe Biden's offer to buy back crude oil to compensate for the withdrawal from the strategic stockpile when the price of a barrel falls between $67 and $72 or less, in an attempt to reassure producers.
This week, Greenlake Energy Ventures CEO Matt Gallagher took a Twitter poll to assess companies' attitudes about US President Joe Biden's proposal.
The results of the poll showed that nearly 80% of the 49 respondents do not expect oil futures to decline during 2023 to a level that would enhance any US purchases, according to Reuters .
Analysts also argued that the set price was not enough to stimulate production, and the American Petroleum Institute called on the White House to focus on long-term policies that stimulate investment, according to what was monitored by the Specialized Energy Platform.
Refill the strategic stock
Last week, President Joe Biden announced that his administration intends to buy back strategic crude oil when prices are between $67 and $72 a barrel.
The administration instructed the Energy Department to release 15 million barrels of strategic oil reserves for delivery during December (2022), which is the last payment targeted by the US government since March, and thus 180 million barrels are scheduled to be released by the end of this year.
Analysts Criticism
Analysts believe that it is unlikely that oil prices will fall to the level set by the US administration, and then boost purchases to refill the strategic stockpile.
This indicates that shale oil companies will not boost production in response to President Biden's plan.
Petroners CEO Trisha Curtis rejected the offer, saying Biden's announcement appeared to throw bone at the oil industry.
She asked about the position of shale oil companies in the event that oil did not fall to this price, saying: "Are we going to keep our stocks low?"
She noted that the recent withdrawal of about 180 million barrels along with the repurchase price was an attempt by Biden to strike a balance between supporting his green plan and trying to reduce fuel prices, but he did not accomplish either of them.
Abhiram Rajendran, head of global oil at consultancy Energy Intelligence, sees the price of oil - currently - at $85 a barrel, and the repurchase set at $70 a barrel is a price that does not support supply growth.
Oil market analyst at Rapidan Energy Hunter Cornfind said that US oil prices reached $120 a barrel this year (2022), and there was no surge in production due to lack of labor and equipment and high costs.
Kornfind explained that oil futures contracts until mid-to-late 2024 are trading at around $72 a barrel, which means oil producers can lock the selling price of future production around the specified level of oil purchases to refill their strategic oil stocks.change policies
The first vice president of the American Petroleum Institute, Frank Macchiarola, said that the Biden administration should change its policy on producing more oil and gas in the United States if it wants to increase supplies.
Last week, Mike Summers, President and CEO of the American Petroleum Institute, commented on US President Joe Biden's comments on gasoline prices, saying: "At a time when American energy sources can be a force for stability at home and abroad, we urge caution against continued Reliance on short-term efforts, which are no substitute for sound long-term policies that lead to American energy leadership.”
He added that the administration should focus on addressing the industry's economic and security challenges by stimulating investment in energy, infrastructure, and markets, and enabling American consumers to benefit from reliable American energy resources.
