First oil

While the global oil market preoccupied itself with tracking what OPEC+ might or might not do to address supply-and-demand concerns, a rather significant historical moment was reported in the U.S. Indeed, the U.S. Energy Information Administration (EIA) reported on Nov. 13, in its monthly Short-Term Energy Outlook, that for the first time in 70 years, the U.S. during September exported more crude oil and refined products than it imported.

Actually, the timeframe might be more than 70 years, since the U.S. federal government has only been tracking such data since 1949. Based on preliminary data and model estimates, EIA estimates that the U.S. exported 140,000 bpd more of crude oil and petroleum products in September than it imported. Furthermore, EIA projects that total exports exceeded imports by 550,000 bpd in October.

The agency said that it would have to confirm this development in survey-collected monthly data. Looking farther ahead, EIA also said that it expects total U.S. crude oil and petroleum net exports to average 750,000 bpd during 2020, compared with average net imports of 520,000 bpd in 2019.

We don’t have to state the economic and geopolitical implications, as they are obvious. The U.S. is becoming a new swing producer in the global market. And, no doubt, the OPEC+ group took this factor into account, when it agreed upon a more aggressive, deeper production cut.

The latest OPEC+ agreement. Speaking of OPEC+, the group has agreed to deepen its production cut by another 500,000 bopd, bringing the output cut target to a reported 1.7 MMbopd through March 2020. The move caught oil traders by surprise, even though before OPEC’s meeting in Vienna, Saudi Energy Minister, Prince Abdulaziz bin Salman (according to Bloomberg), had said that his biggest priority was getting some group members to stop cheating and fulfill their quota promises. 

The prince told Reuters that he expected a resumption of production from Khafji and Wafra oil fields jointly operated by Saudi Arabia and Kuwait—“very soon”—but he hastened to say that this would not affect “both our countries’ commitments (with OPEC+ cuts).”

Speaking with forked tongue. Early this month, API alerted us to the fact that Colorado Public Radio (CPR) had investigated how climate activists had used disinformation and imitated The City of Denver to falsely report a “climate emergency.” It seems that members of a youth-led climate activist group distributed a fake letter to attendees at the start of the Dec. 5 Sustainable Denver Summit. The letter appeared to be on city letterhead, but it actually was fabricated by the youth group and not written by Denver Mayor Michael Hancock.

The disinformation campaign also played out on Twitter. As the event got started, and Hancock took the stage, the activists tweeted out the fake letter. Their goal was to pressure the city to declare a climate emergency and shame them for allowing an oil company (Suncor) to sponsor the conference. Earlier in the week, this group had shared a press release with the media that detailed how Hancock would declare a climate emergency at the summit and publicly apologize for Suncor’s Silver Sponsorship status.

During a conversation with CPR News, the group said that Hancock would pass out this letter to the audience. When pressed on its origins, the group continued with disinformation. “This apology is really wonderful, in that it is admitting a wrong and reflecting on behavior that may have flown in the past, but it will no longer be permissible in the future as we move forward,” said one activist.

But the city never planned such an apology. At the sustainability summit, Janna West-Heiss with the city’s Office of Climate Action, Sustainability and Resiliency, confirmed the letter was not from the mayor. “It was not our language and not how we approach things,” she said.

About the Authors

Kurt Abraham

World Oil

Kurt Abraham kurt.abraham@worldoil.com