Peak Oil Review: A Midweek Update – 10 Nov 2016

Oil prices fell to nearly $43 a barrel after the outcome of the US Presidential election became clear, but rebounded quickly to close at $45.27 on Wednesday. London was up 32 cents to close at $46.36. The price increases so far this week have come from OPEC statements reassuring observers that a production freeze agreement will be reached before the end of the month and speculator perceptions that a Trump administration will be good for the oil industry.
 
Rumination about the advent of a Trump presidency has already begun. Most observers do not see any immediate impact on oil supplies or prices as the OPEC situation is likely to have more of an immediate impact and Trump has not as yet formulated detailed energy policies.  Statements by Trump during the campaign suggest that his administration will roll back environmental regulations dealing with pipelines and emissions. Some observers are already wondering if there will be much left of the EPA after the Trump administration and the Republican majorities in Congress are through making promised cuts.
 
A major issue is whether a Trump administration will be able to withdraw the US from the Paris climate change agreement or will be able to entice the electric industry to switch back to burning more coal, supporting mining. During the campaign the new President-elect frequently said that he supported fracking and would remove any hindrances to expanding the technique. Lifting the sanctions on Moscow would free Exxon to renew oil exploration projects in Russia that have been on hold.
 
Harold Hamm, CEO of Continental Resources, and who is being touted as a candidate for Trump’s Secretary of Energy is already saying the Trump administration will take a harder line on the US’s oil producing rivals such as Saudi Arabia.  Some in the oil industry, however, are skeptical that all these radical policy shifts will come to pass after the new administration has had time to sort out effective policies from election rhetoric.
 
The EIA has revised upwards its estimates of how much crude the US will produce in 2016 and 2017. The administration now says that US production will fall by only 580,000 b/d to 8.84 million this year vs. the 690,000 b/d year-over=year decline it had been forecasting.  Oil production in 2017 is now forecast to fall by an additional 110,000 b/d as compared to a previous forecast of 140,000 b/d.
 
The Niger Delta Avengers announced that they had sabotaged the Trans Forcados pipeline for the third time in the week or so it has been reopened. The attacks are a warning to the oil companies not to repair damaged pipelines until a settlement has been reached with the government on the division of oil revenues.
 
In its annual review, OPEC now sees demand for oil as peaking within 15 years, efforts to combat climate change and the advent of more electric cars will bring a century of ever increasing oil consumption to a close.