Weekend Summary
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Trump Proposal Would Allow Oil/Gas Drilling along Most of U.S. Coastline
A proposal from the Trump administration is considering allowing oil and gas drilling along 90% of the U.S. outer continental shelf, located 3 miles off shore. Environmentalists are already planning protests against the proposal, saying that the area includes many pristine marine environments worth protecting. The proposal is the most lease sales ever proposed, and would significantly increase U.S. production over the next decade. Click Here to read more from the Houston Chronicle.
Moody’s Expects Oil Prices at $40-$60 in 2018
Moody’s Investor Service expects oil prices to remain range-bound in 2018 between $40 and $60 per barrel. U.S. swing production will be the defining factor, with production in the rest of the world remaining restrained. With supply relatively constrained, downside risk comes from the possibility of demand slowdown this year. Click Here to read more from Reuters.
4 Ways the OPEC Deal Could End Early
While OPEC did extend their production cuts through the end of the year, the organization left in the possibility of an exit as early as June. Of those four scenarios, two are predicated on balancing out oil shocks, while the other two would send prices lower. Click Here to read more from Bloomberg.
5 Oil Market Myths that Need Dispelling
Myth 1: OPEC’s exit strategy means an exit. “OPEC’s hands are somewhat tied: unwind from the deal and undo all the good work achieved and so must continue managing the market in another guise to create stability and encourage long-term investment in oil.” After successfully driving prices out of 2016’s $40 price environment, it seems unlikely OPEC will throw in the towel on Dec 31 and go back to free-for-all production. Now that OPEC is (sort of) in control of oil prices again, they’re unlikely to back out any time soon. Click Here to read more from S&P Global Platts.
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