President Donald Trump's decision to pull the US out of the Paris climate agreement may benefit oil, natural gas and coal producers, but companies such as ExxonMobil and ConocoPhillips believe the US would have been better off if it hadn't quit. The withdrawal is merely symbolic because markets and government policies have a greater influence on energy demand than the Paris deal, and some argue that the US would have been better positioned to shape the future of fossil fuels by staying in the agreement.
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US shale drilling activity is increasing faster than anyone had expected and will likely continue its expansion for the rest of the year and into 2018, thwarting efforts to lift oil prices, writes John Kemp. The US produced nearly 9.1 million barrels per day of crude and condensates in March, up by 62,000 barrels per day over February, while production is seen climbing by 440,000 barrels per day on average by the end of the year, according to the Energy Information Administration.
US shale natural gas exports hit a new record in May, with 18 liquefied natural gas cargoes departing Cheniere Energy's Sabine Pass terminal in Louisiana during the month for destinations such as China, Europe and Latin America. The surging LNG exports could help the US become a net exporter by 2018 and possibly the third-largest operator of LNG export terminals after Australia and Qatar by 2020.
US crude inventories plunged by 6.4 million barrels in the week ended May 26, the eighth weekly drop in a row and a draw twice as large as what analysts had expected, according to the Energy Information Administration. Gasoline supplies declined by 2.9 million barrels, while distillate stockpiles rose by 400,000 barrels.
The volume of US oil exported last week hit a fresh record of 1.3 million barrels of crude per day, while oil production was 9.34 million barrels per day, up from 9.32 million the previous week, according to the Energy Information Administration. Refinery runs for the week were 17.51 million barrels of oil per day, breaking an earlier record of 17.29 million barrels set in April.
Apache has agreed to sell its Canadian oil assets in Alberta's House Mountain and Saskatchewan's Midale and Weyburn oilfields, which produce 5,000 barrels of oil equivalent per day combined, to Cardinal Energy for $245 million in cash. "The sale of these assets is in line with Apache's efforts to further streamline its portfolio and focus on our high-growth areas of opportunity, particularly in the Permian Basin," an Apache spokesman said.
Chevron Chairman and CEO John Watson is confident that drilling activity will continue to rise in the Permian Basin despite service cost inflation and believes shale will out-compete deepwater and conventional oil "for a long time to come." To capitalize on the shale rebound, Chevron plans to invest billions of dollars in the Permian and boost its rig count from 12 to 15 by the end of the year and 20 by the end of 2018.
US oil production could hit 10 million barrels per day by the end of 2017, the first time it would reach that level since November 1970, fueled by shale and deepwater, according to Rystad Energy. "Based on proprietary and detailed well level data, Rystad Energy sees current US production bouncing back twice as fast as it dropped, reaching 9.4 million barrels on May 31st," the firm said.
Energy Transfer Partners' Dakota Access Pipeline came into service on Thursday and will ship about 520,000 barrels of oil per day initially from North Dakota to Patoka, Ill., then to Gulf Coast refineries.
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