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Oil and Gas Roundup — Jan. 15

January 15, 2015
TOPICS: In the news
A roundup of oil and natural gas industry news from around the state, nation and world:

Dems change tune after mocking GOP for ‘drill, baby, drill’

Back when gas topped $4 a gallon, Republicans chanted "drill, baby, drill" at rallies across the country -- arguing more domestic drilling would increase supplies, reduce dependence on foreign oil and boost the U.S. economy.

Democrats, almost universally, mocked the GOP plan. In 2012, President Obama called it "a slogan, a gimmick, and a bumper sticker ... not a strategy."

"They were waving their three-point plans for $2-a-gallon gas," Obama told a laughing audience during an energy speech in Washington. "You remember that? Drill, baby, drill. We were going through all that. And none of it was really going to do anything to solve the problem."

"'Drill, baby, drill' won't lower gas prices today or tomorrow," Rep. Janice Hahn, D-Calif., echoed on the floor of Congress in 2012. "But it will fuel our addiction to fossil fuel."

Today, Democrats are singing a different tune, as increased domestic drilling has led to a record supply of domestic crude, put some $100 billion into the pockets of U.S. consumers and sent world oil prices tumbling.

The price of a gallon of regular gasoline on Monday was $2.13 nationwide, and below $2 in 18 states.

"Of course [Obama] was wrong. We've seen oil prices fall internationally now by half since last June," said American Enterprise Institute economist Ben Zycher. "The U.S. is now the biggest oil and gas producer in the world, or almost that, and the effect has been to drive prices down as we've seen."

Read more: http://www.foxnews.com/politics/2015/01/12/dems-change-tune-after-mocking-gop-for-drill-baby-drill/


T. Boone Pickens sees $100 oil

Legendary business magnate and oil tycoon T Boone Pickens believes oil will return to $100 in 12 to 18 months due to a recovery in demand for the commodity. Pickens was speaking to the Fox Business Network Thursday, just after oil dropped to a 5 ˝ year low of $48.98.

The BP Capital Management’s Chairman has put his money where his mouth his, increasing the energy stocks in his Hedge Fund’s portfolio to 97.8% according to a Guru Focus report. BP Capital Management has added three energy firms Western Refining, Inc.(NYSE:WNR), WPX Energy Inc (NYSE:WPX) and Gastar Exploration Inc (NYSEMKT:GST) to its portfolio.

Just last month, in a fiery appearance on CNBC, Pickens attributed the current decline in oil prices to a primarily slump in demand rather than an increase in supply. He said that low prices will fix the existing demand-supply problem and return the market to equilibrium.

According to Pickens, 75 of the 1500 rigs running on oil have been dropped in the three weeks leading up to the interview. He expects another 500 rigs to drop in a year. This is in line with a trend consistent with previous plummets in the global oil prices, including during past recessions in the United States.

Read more: http://www.octafinance.com/bp-capital-managements-oil-titan-t-boone-pickens-sees-100-oil/


$40 oil? That’s how low Goldman Sachs says it needs to go

Oil prices, which have fallen by more than half since June, need to drop even further and stay there for the first half of the year for the market to find a balance between supply and demand, Goldman Sachs Group Inc. says.

With OPEC resisting a production cut to stem the price slide, output reductions will come from U.S. shale drillers, who are pumping at the fastest pace in three decades, according to an e-mailed report by Goldman analysts including Jeffrey Currie in New York. Excess storage and tanker capacity suggests the market can run a surplus longer than it has in the past, so oil at around $40 for six months will be needed to slow U.S. producers, they said.

The bank reduced its six- and 12-month predictions for West Texas Intermediate, the U.S. benchmark, to $39 a barrel and $65, from $75 and $80, respectively, while its estimates for Brent, the global benchmark, were cut to $43 and $70, from $85 and $90, according to the report.

“We forecast that the one-year-ahead WTI swap needs to remain below this $65 a barrel marginal cost, near $55 a barrel for the next year to sideline capital and keep investment low enough to create a physical re-balancing of the market,” the bank said.

Read more: http://www.bloomberg.com/news/2015-01-12/goldman-sees-need-for-40-oil-as-forecast-for-opec-cut-abandoned.html


Fox News Poll: Voters want Obama to sign bill approving Keystone pipeline

Most Americans of all political stripes support construction of the long-delayed Keystone XL oil pipeline, and want President Obama to sign legislation approving it, according to a new Fox News poll.

The pipeline would transport oil from Canada to refineries in the United States.

A 65-percent majority says Obama should sign the Keystone legislation, according to the poll.  That includes 82 percent of Republicans, 60 percent of independents and 52 percent of Democrats.

Overall, only 22 percent of voters think the president should veto it -- which he has threatened to do.

The U.S. House passed a bill approving the pipeline Friday.  The Senate is now considering Keystone legislation, but there won’t be a final vote this week.

Support for Keystone has held steady for years:  68 percent of voters backed it at the end of 2014, 70 percent in 2013 and 67 percent in 2012.

Here again, support comes from more than half of Democrats, most independents and almost all Republicans.

The Fox News poll is based on landline and cell phone interviews with 1,018 randomly chosen registered voters nationwide and was conducted under the joint direction of Anderson Robbins Research (D) and Shaw & Company Research (R) from January 11-13, 2015. The full poll has a margin of sampling error of plus or minus three percentage points.

Click here to view full results of the poll (pdf).




 
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