Weekend Summary

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Can Carbon Dioxide Removal Save the World?

Negative emissions technologies – new tech that remove carbon from the atmosphere – are an innovation that could help take pressure off oil and gas companies. Some researchers argue that carbon ought to be treated like other waste forms: rather than expecting society to cease production, society should instead learn to manage it. Of course, if these solutions prove unscalable, they could lead to more emissions and bigger challenges down the road.

It’s Already Time to Start Thinking About Oil in 2019

U.S. oil producers are already looking toward 2019 to lock in their sales prices, hedging against a drop in oil prices. When prices peaked above $50 in Nov 2016, producers rushed to lock in oil prices above their break-even points; now, with WTI prices back in the $60 range, producers are hedging production a bit fruther out on the curve. Open interests suggest that exploration and production companies have locked in over 1 million barrels in 2019, an aggressive rate that suggests higher production rates in 2019.

States Seek Offshore Drilling Exemption

After Florida successfully secrued an exemption from the offshore drilling plan released by Interior Secretary Zinke, twelve other states have joined in to request exemptions. The Interior Department has indicated they plan to discuss exemptiosn with governors of all coastal states, which could lead to length conversations that delay implementation of the plan. Earlier this month, Zinke introduced a plan that would open up 90% of U.S. offshore areas for drilling.

Oil’s Path to $70 Defied Pressures That Still Threaten Prices

With Brent prices surpassing $70/bbl and WTI crude nearing $65, analysts are questioning how long the rally can last. Geopolitical risks seen at the end of 2017 have calmed, and oil inventories are showing normal seasonal gains. Disruptions like the Forties Pipeline outage and Libyan output concerns have been abated. In the face of consistently bearish news, oil markets have still found the strength to rise, which may be more related to technical exuberance rather than fundamental value.