According to a report from The Hill this morning, President-elect Trump's transition team is already working with career staff at the White House on plans to slash federal spending with significant cuts expected to the budgets of the Department of Commerce, Energy, Transportation, Justice and State, among others, totaling $10.5 trillion over 10 years.
Oil prices have risen over 20% since the OPEC production cut agreement at the end of November. While concerns abound on quota cheating and increased production from Libya, Nigeria and US shale, the incoming US administration could change the market completely through strategic oil sales and new import taxes.
The US will offer to sell some 8 million barrels from the petroleum reserve. According to the notice of sale, the Energy Department is accepting bids on sweet crude oil until 2pm CT Jan. 17. The contracts will then awarded by the end of January, with early deliveries expected in February and other deliveries in March, April.
Even with the recovery in conventional oil and gas looking positive in 2017, the lack of major capital investment in oil sands that has become the norm in the past decade will be painful with no relief in sight.
"Our enemies are using foreign propaganda and disinformation against us and our allies, and so far the U.S. government has been asleep at the wheel. But today... with this bill now law, we are finally signaling that enough is enough; the United States will no longer sit on the sidelines. We are going to confront this threat head-on." - Sen. Rob Portman.
It looks like the president-elect is beginning to assemble a team to deliver on at least part of his campaign promises of 'An America First Energy Plan'. But Trump’s promised rise of oil and gas production over the years could have several consequences...
Aging infrastructure could render the U.S. strategic petroleum reserve (SPR) increasingly ineffective, according to a new report from the Department of Energy. In 2015, Congress authorized the DOE to sell $2 billion worth of oil from the SPR between 2017 and 2020 and use the proceeds to make infrastructure upgrades.
WTI Crude has tumbled back to a $46 handle this morning (from over $50 on Friday) with Brexit volatility weighing on every asset class and Nigeria and Canada restart production (following rebel attacks and wildfires respectively) but as OilPrice.com's Charles Kennedy notes companies pumping oil from the Gulf of Mexico will ramp up production in coming months, propping up American output, despite efforts to curb production and raise barrel prices.