David Feldman

Three Things to Know in Energy – 11/7/2016

Blog Post created by David Feldman Champion on Nov 6, 2016

1. The US Presidential Elections are finally upon us!

 

It seems like it’s been years in the making, but finally the big Election Day is here, and let’s be honest…  No matter what side of the fence you are on, it will be nice to have this done and over with so we can all move on.  The question becomes:  depending on who is elected president, what does that mean for the oil and energy industries?  The answer is, regardless of who steps into the Oval Office, there will likely be a significant shake-up.

Brian Scheid, senior oil editor at Platts, was speaking at the Platts Crude Oil Summit in London when he made the following comments.

 

 “This election is going to have a major impact on the direction of US and possibly, global oil supply."

 

“Maybe the most significant impact of any election in US history. Essentially a one million barrel per day swing depending on the result of a single election. This is a relatively major difference in supply, equal to nearly the amount of crude the entire state of North Dakota now pumps each day.”

 

“Who wins in November may dictate if the US shale renaissance peaked last year or if this year has been a dip ahead of a new high.”

 

In summary, even if you’re not in the US, this will be a big week to see where the future of oil and energy is headed.

 

2. Oil futures are up today (Monday), with traders citing opportunistic buying

 

Following sharp declines last week that brought prices to their lowest point since early August, prices are starting off the week going up. 

 

International Brent crude oil futures LCOc1 were trading at $46.00 per barrel, up 42 cents, from their previous close.  U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 48 cents to $44.55 a barrel. WTI hit $43.57 on Friday, its lowest since Sept. 20.

 

Last week's losses were the largest since January, and even though we are trending up to start the week, overall market fundamentals still remain weak and uncertain with the upcoming US Elections.

 

3. Dakota Access Pipeline may be rerouted

 

After months of protests by Native Americans and last week’s intense clashes with police, President Obama stated federal officials are considering rerouting the Dakota Access pipeline. 

 

The President said, “As a general rule, my view is that there is a way for us to accommodate sacred lands of Native Americans, and I think that right now the Army Corps is examining whether there are ways to reroute this pipeline.  So we’re going to let it play out for several more weeks and determine whether or not this can be resolved in a way that I think is properly attentive to the traditions of the first Americans,”

 

It is anticipated that the 1,170-mile pipeline will transport as much as 450,000 barrels of crude oil daily from the Bakken production area of North Dakota through South Dakota and Iowa to an existing pipeline in Patoka, Ill.  The controversy has erupted due to the fact that it would travel less than a mile north of the Standing Rock Sioux Indian reservation near Cannon Ball, N.D., crossing under Lake Oahe, a dammed section of the Missouri River that provides the tribe’s water supply.

Outcomes