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Your guide is what 2024 US elections mean for Washington and the World
Cutting red tape, release, debottenecking – all these good business-friendly policies. They do wonders in industries that are previously bound by regulation. But there is little evidence that this is the US fossil fuel case. That suggests President Donald Trump’s efforts to facilitate oil and gas projects give three, not floods.
Produces of oil has long been “drill, baby, drilling”. At 2024, US wool Production is an average of 13.2m of a day, which makes it largest producer of oil worldwide. That’s two and a half times in the country in 2008. The US gas supply, also, almost doubled at that time.
True, this fast rapidly does not continue indefinitely. Industry will add an additional 270,000 guns a day on average by 2025 and 2026, according to consultancy argus media, almost a quarter of what it has spotted in 2023.
Trumpian policies, such as the urge to drill the US coastline, open new territories. Although it has exploitable resources, however, the time it takes to develop a project exceeds the length of a four-year presidential term. This is not a short period of time.
Unfortunately for Trump, the prevailing oil flow is not red tape, but low price. Creating oil from US shale formations is relatively expensive. The companies needed the prices were in a place between $ 60 and $ 80 per gun if they wanted to cover all their expenses and pay dividends, Christopher Wheaton at Stifel.
The shale is also very sensitive to commodity prices because, unlike traditional projects where most costs are drowning forward, maintaining shale output requires regular expenditure. For example, the record of low prices for natural gas in the US in 2024 causes production reduction.
That is rather limiting Trump’s room for maneuvering, at least in oil. Gas can be more responsive, because there are some hope that strong demand, especially from data centers, and maintaining LNG exports can increase local prices. That can help the producers to justify the additional supply.
Currently, the oil market is scarce. A wasted Chinese translated into weak demand. OPEC +, who wants to see prices stay high, sufficiently concerned that it actively holds the supply. That means any increase in US oil production is likely to push prices and so flush. The only thing that drains the oil patch is rhetorical.
