US NEWS

MELBOURNE : Oil prices clawed back some losses on Wednesday after steep falls in the previous session, as major producers prepared to discuss how to respond to the threat of a hit to fuel demand from the Omicron variant. U.S. West Texas Intermediate (WTI) crude futures rose 78 cents, or 1.2per cent, to US$66.96 a barrel at 0122 GMT, after a 3.9per cent drop on Tuesday.

TOKYO, Nov 29 (Reuters) - Oil prices rebounded on Monday as investors looked for bargains after Friday's slump and on speculation that OPEC+ may pause an output increase in response to the spread of Omicron, but the mood remained cautious with little known about the new variant.

LONDON/MOSCOW, Nov 26 (Reuters) - OPEC+ is monitoring developments around the new coronavirus variant, sources said on Friday, with some expressing concern that it may worsen the oil market outlook less than a week before a meeting to set policy. The Organization of the Petroleum Exporting Countries and allies, known as OPEC+, is already facing a release of oil stocks led by the United States to try to cool prices. Still, a source said Russia, a key OPEC+ member, was not concerned about the virus variant yet.

The United States uses more gasoline than any other nation in the world, and lately Americans have grown concerned about the swift rise in costs at the pump. The White House on Tuesday, November 23, announced plans to release millions of barrels of oil from strategic reserves in coordination with other nations in hopes of lowering costs.

Analysts at Goldman Sachs offer their take on the US oil release from the Strategic Petroleum Release (SPR) and any ban of oil exports from the US. “Both the release of oil from reserves and any ban of oil exports from the US are ineffective.” “At present, the US exports around 3m barrels of crude a day. If this export stopped domestic pipelines would be unable to reroute that crude to US refiners. The refiners do not have enough capacity to process it.”

Crude oil and natural gas production in the Eagle Ford shale play, situated in southeast Texas, dropped by almost 35% and 20%, respectively, in May 2020 due to the COVID-19 pandemic, according to GlobalData. The data and analytics company notes that, despite a recent sustained upswing in WTI crude oil prices, with prices hovering over US$70 per barrel, production of both crude oil and natural gas is failing to show signs of a major increase. In order to reverse the production trend, it is estimated that an additional US$1.5 billion of investment is required to increase production by 10% by the end of next year.

MELBOURNE :Oil prices fell on Tuesday, reversing gains in the previous session, on growing talk the United States, Japan and India will release crude reserves to tame prices despite the threat of demand faltering as COVID-19 cases flare up in Europe. The United States is expected to announce a loan of crude oil from its emergency stockpile on Tuesday as part of a plan it hashed out with major Asian energy consumers to lower energy prices, a Biden administration source familiar with the situation said.

It began amicably, with a request from President Biden to OPEC countries to consider boosting their crude oil production because U.S. retail fuel prices were rising fast. Things escalated quickly, with the request becoming a demand and later a veiled threat that unless OPEC did what the White House wanted it to do, there would be consequences.

Japan is considering the unprecedented release of state oil reserves after a request from Washington for coordinated action to combat soaring energy prices, three government sources with knowledge of the possible plan told Reuters. One of the sources said the government was looking into releasing from the portion exceeding the minimum amount required as a legal workaround. Japanese law permits the release of oil reserves in cases of a shortage or natural disasters but makes no mention of doing so to counter rising prices.

"(Bloomberg) - Oil was on track to post its biggest weekly drop since August as Europe’s worsening Covid-19 crisis renewed the prospect of lockdowns just as key consuming nations look to add emergency supply to the market. The January futures contract in New York tumbled as much as 4.2% on Friday. Brent fell as much as 3.9%. The wave of infections in Europe is growing, once again raising the prospect of restrictions on mobility and a hit to oil demand. Austria imposed a lockdown while Germany introduced some restrictions. Both benchmarks are also set to decline for the fourth straight week."

Americans could soon see relief at the pump as U.S. gasoline prices are set to decline if the drop in crude oil prices holds, Patrick De Haan, head of petroleum analysis at fuel-savings platform GasBuddy, said on Friday.

Sweet crude grades from the U.S. Gulf Coast have seen increased interest from Asian buyers in recent weeks, as many refiners in the world’s largest oil-importing region are purchasing more of the sweeter crude varieties, energy analytics firm Vortexa says. Asian refiners are looking for more crude of the sweeter variety as high energy costs are making sour crude processing more expensive. The high cost of hydrogen, which is used to remove the sulfur from the sour grades in diesel hydrocrackers, has risen in recent months amid the natural gas crunch in Europe and Asia.

Oil rose in choppy trade as recent declines below $80 lured some investors back for bargains while the market waited to see whether the U.S. would match China’s plans to release strategic reserves.

As U.S. oil companies show a new brand of fiscal discipline even as oil prices continue to climb, oil companies spent nearly $192 million on drilling rights in the Gulf of Mexico on Wednesday, according to a press release from the U.S. Department of the Interior’s Bureau of Ocean Energy Management.

Happy Wednesday and welcome to On The Money, your nightly guide to everything affecting your bills, bank account and bottom line. Subscribe here: thehill.com/newsletter-signup. Today’s Big Deal: President Biden is pushing for a probe of high gas prices. We’ll also look at the House’s prospects for a Friday vote on the Build Back Better plan and a very angry letter from former President Trump.

The American Petroleum Institute (API) reported a small inventory build in crude oil that was just enough to keep the market from panicking over dwindling inventories. This week, the API estimated the inventory build for crude oil to be 655,000 barrels. U.S. crude inventories are now 60 million barrels below where they were at the beginning of the year. Analyst expectations for the week were for a build of 1.550-million barrels for the week. In the previous week, the API reported a draw in oil inventories of 2.485-million barrels, compared to the 1.90-million-barrel build that analysts had predicted.

America’s right-leaning oil industry has little political will to help President Joe Biden lower energy prices by raising production. But there’s another reason why Texas wildcatters are refusing to help: the status quo is just so profitable.

The OPEC+ group is not concerned about a possible release from the U.S. Strategic Petroleum Reserve (SPR), according to Oman's Energy Minister Mohammed Al-Rumhi cited by FXStreet. U.S. President Joe Biden is considering a possible release from the strategic American crude stockpiles as a way to bring down high gasoline prices. No decision has been made yet amid debates within the Administration, but calls for a release from the SPR have become louder in recent days.