1. Oil prices jump on news of extension of supply cuts.
It’s been rumored for a while, but now it seems to be official. Oil prices are up on news that two of the biggest players in the “oil cut” camp have agreed to extend supply cuts from mid-2017 through the spring of 2018. After a meeting in Beijing China on Monday, Saudi Energy Minister Khalid al-Falih and Russian energy representative Alexander Novak publicly announced they have reached a deal to cut crude supplies through March of 2018 in order to prop up the market.
Last year OPEC and other oil producers led by Russia, committed to decreasing output by almost 1.8 million barrels per day (bpd) at least through the first half of 2017, but haven’t seen the effects they would like due to the United States ramping up its oil production. U.S. energy firms have continued to ramp up the number of oil rigs, and now we’re at 17 consecutive weeks of rig increases. And from the looks of things, everyone expects the US drilling recovery to extend into 2018. Current U.S. production is at 9.3 million bpd, up more than 10% since mid-2016.
2. Bloomberg is reporting: China is looking to US to meet increasing crude oil and natural gas demands.
As China grows and looks to overtake the US as the highest consuming nation of crude oil, they are looking for suppliers to bolster and sustain the demand. In an interview with Bloomberg on Monday, China National Petroleum Corp Chairman Wang Yilin said China will import more crude oil and natural gas from the U.S. and will consider participating in America’s growing liquefied natural gas export industry.
“The U.S. has very rich oil and gas resources, and as China pursues a diversification of its crude supply the U.S. will of course be one of the sources.” Wang said. “We will consider exploring cooperation in areas such as jointly developing liquefied natural gas facilities and gas transport.”
3. Trump's executive order on energy independence hit its first deadline.
The Energy Independence and Economic Growth Executive Order signed March 28th reached its first deadline on Friday. The directive was a multi-agency “energy impact review” to be submitted 45 days after Trump’s order was signed in March. The order called for an immediate review of "all agency actions that potentially burden the safe, efficient development of domestic energy resources." It required the heads of agencies to evaluate "all existing regulations, orders, guidance documents, policies and any other similar agency actions (collectively, agency actions) that potentially burden the development or use of domestically produced energy resources, with particular attention to oil, natural gas, coal, and nuclear energy resources."
Now that the deadline has past, it is anticipated that each agency will submit its reviews to the White House Office of Management and Budget over the next few weeks.