"Biden Drains US Strategic Oil Reserve To Lowest Since 1986; UAE Warns Not To Expect Any Help From OPEC" - Zero Hedge

[Tom Nolan + 2,443]

Biden Drains US Strategic Oil Reserve To Lowest Since 1986; UAE Warns Not To Expect Any Help From OPEC

by Tyler Durden

Monday, Jun 27, 2022 - 12:45 PM

Continuing to do the same action and expecting different results is the Einsteinian definition of insanity... but that hasn't stopped the Biden administration in the case of its attack of his oil/gas prices.

This morning, despite DOE's servers being reportedly fried, they managed to report that the US released 6.9 million barrels of crude from its Strategic Petroleum Reserve (SPR) last week (~985,000 b/d).

As Bloomberg's Javier Blas notes, the latest weekly release has pushed the SPR below the 500 million barrels mark for the first time since 1986...

And as the chart above shows, the plummeting SPR is not having the impact on prices that President Biden hoped (which explains why he is blaming everyone and everything else for the rise in gas prices - as it becomes clear it's a refining capacity issue as much as anything else).

As is obvious in the spread between barrel-equivalents for products vs crude...

After last week's discussions between The White House and energy executives, a number have spoken out to defend against the vitriolic attacks from Biden. However, Scott D. Sheffield, Chief Executive Officer of Pioneer Natural Resources, perhaps said it all best, concluding on the problems that the administration is going to face in dealing with a rapidly emptying SPR very soon...

Yeah, first of all, I think we’ve all seen the true behavior of the Biden administration when they came out — when he first came in office, they basically wanted to ban fracking, no federal leases and they’ve already shutdown gas infrastructure, moving gas across the Northeast down to the Gulf Coast. New York won’t take a pipeline, they've rejected several pipelines, they rather use fuel oil instead of natural gas in the state of New York.

So that’s been amazing to me and the rhetoric coming out of Secretary of Energy was go find another job in another industry versus the fossil fuel industry.

So all of a sudden, things are getting tight, gasoline is going up, we have a war in Ukraine and then the entire administration changes. But the rhetoric really hasn't, you saw the argument between Mike Wirth and Biden.

So when I said we’re not going to add growth, he quoted me and used my name that some CEO basically said that they wouldn't change your growth rate if oil was $200.

So in my opinion, relying on SPR and federal tax removing $0.18... those are band-aids. In my opinion, our inventory after six months SPR will be at the lowest in 40 years. So he is going to have to buy at a higher price and refill it in my opinion. And we’re going to be even shorter, and SPR will be half of what it was three years ago."

Separately, as Biden heads to the Middle East to ask for help with his ratings, Reuters is reporting that of a conversation caught between French President Macron US President Biden.

"I had a call with MbZ," Macron was heard telling U.S. President Joe Biden on the sidelines of the G7 summit

"He told me two things. I'm at a maximum, maximum (production capacity). This is what he claims. And then he said Saudis can increase by 150 (thousands barrels per day). Maybe a little bit more but they don't have huge capacities," Macron said.

In other words, no matter how much Biden begs, the two top OPEC oil producers - Saudi Arabia and UAE - can barely increase oil production.

https://www.zerohedge.com/energy/biden-runs-us-strategic-oil-reserve-lowest-1986-uae-warns-not-expect-any-help-opec

[Tom Nolan + 2,443]

3 minutes ago, Tom Nolan said:

This morning, despite DOE's servers being reportedly fried, they managed to report that the US released 6.9 million barrels of crude from its Strategic Petroleum Reserve (SPR) last week (~985,000 b/d).

As Bloomberg's Javier Blas notes, the latest weekly release has pushed the SPR below the 500 million barrels mark for the first time since 1986...

 

[Tom Nolan + 2,443]

4 minutes ago, Tom Nolan said:

the US released 6.9 million barrels of crude from its Strategic Petroleum Reserve (SPR) last week (~985,000 b/d).

As Bloomberg's Javier Blas notes, the latest weekly release has pushed the SPR below the 500 million barrels mark for the first time since 1986...

U.S. Gulf Coast Crude Exports Are Breaking Records

By Rystad Energy - Jun 27, 2022, 12:00 PM CDT

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Oil exports from the US Gulf Coast are set to hit an all-time high of 3.3 million barrels per day (bpd) in the second quarter of 2022, as refining capacity outages limit operators’ ability to meet demand and the US government’s Strategic Petroleum Reserve (SPR) release boosts supply, Rystad Energy research shows. More than 95% of all US crude exports transit through the Gulf ports of Corpus Christi, Houston, Beaumont, Port Arthur and Louisiana. The Biden Administration is exploring ways to rein in gasoline prices for US consumers and is reportedly considering a full or partial ban on crude exports, but many industry leaders and politicians argue such a move would not necessarily reduce prices and would hurt key allies.

The government’s unprecedented support for the domestic crude system has accelerated US supply, with levels expected to hit 13 million bpd this summer for the first time since November 2019. But the unintended consequence of federal intervention is that more barrels than ever before are being sold to international buyers.

Crude exports through Gulf Coast ports are expected to top 3.3 million bpd in the second quarter this year, exceeding the previous record of 3.2 million bpd in the first quarter 2020, before the Covid-19 pandemic took its toll on global markets. The Port of Corpus Christi is a significant driver of the growth, with throughput increasing by more than 150,000 bpd to reach 1.86 million bpd, up from a total 1.7 million in the first quarter of 2022, far surpassing pre-Covid levels. Port of Houston exports have also been rising since the third quarter of last year, but still fall short of their pre-pandemic levels.

Related: Ecuador Could Completely Stop Pumping Oil Within 48 Hours

“Domestic refining capacity in the US remains depressed compared to pre-Covid levels, so it’s no surprise that government intervention to support crude supplies has resulted in an increase in exports of domestically produced light barrels. It means the US is able to support global markets amid the most challenging energy crisis in at least 30 years,” says Artem Abramov, head of shale research at Rystad Energy.

US Gulf oil exports stayed relatively resilient throughout the Covid-induced downturn, generally fluctuating between 2.7 million and 3.1 million bpd. The new growth trend was established in late 2021 following a domestic supply recovery and support given to domestic consumption from a moderate SPR release.

The future looks bright for Gulf Coast exports, with volumes transiting through the hubs of Corpus Christi, Houston and Beaumont, Port Arthur and Louisiana expected to accelerate in the coming years. Under Rystad Energy’s base case scenario, crude exports will approach 4 million bpd in the first three months of 2023 and break the 4 million bpd barrier by the second quarter of 2023, thanks to strong SPR draws and a rosy domestic supply outlook.

While a quicker expansion is not off the cards from the perspective of loading and port inbound flow capacity, the growth outlook could be tempered by bottlenecks in the upstream and basin midstream side, including the new public E&P business model, supply chain constraints, and schedules for gas takeaway capacity expansion in the Permian Basin. The likelihood of soaring exports could be deemed unrealistic as there is little that the nationwide US supply chain can do to resolve existing labor and capacity challenges faster. However, should supply chain challenges alleviate even somewhat in the first half of 2023, exports could rise beyond current forecasts.

By Rystad Energy

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https://oilprice.com/Energy/Crude-Oil/US-Gulf-Coast-Crude-Exports-Are-Breaking-Records.html

[Tomasz + 1,608]

Biden should send another $50 billion to Zelensky and make him the president of Sri Lanka too

Also he as I understand avoids any issues impacting middle and low income Americans

Probably  he likes to live in Ukraine