Weekend Summary

Compiled by the FUELSNews Editorial Team

FUELSNews is featuring a new weekly feature titled “Weekend Summary.” Each Monday we’ll share valuable articles that written during the previous week to help add perspective to our daily newsletters.

Oil prices could hit $110 again

The title may be a bit alarmist, but the point made in CNBC’s article on Friday makes a valid point. While consumers have been enjoying low oil prices, cheap oil is far from guaranteed. Most major oil producing nations are in geographic regions plagued with instability, meaning that millions of barrels of oil could be taken off the market overnight. A political coup, military conflict, or terrorist attack are all possibilities that must be considered. Despite being a low probability risk, the impacts would be severe. Read more from CNBC here: http://www.cnbc.com/2017/07/07/theres-still-a-major-reason-why-oil-could-jump-back-to-110-experts-say.html

Federal government to expand oil & gas production on federal land

In line with the federal government’s deregulation of oil production in the U.S., Interior Secretary Ryan Zinke announced that Department of Interior would be streamlining the process for oil and gas producers to drill on federal land, increasing U.S. production and creating revenue for the federal government. Permit approval times had swelled under the Obama administration from 30 days to 257 days, so Zinke will be putting measures in place to ensure agencies meet the 30-day window. Read more from the Washington Times here: http://www.washingtontimes.com/news/2017/jul/6/ryan-zinke-interior-chief-orders-more-lease-sales-/

Russia Faces Incentives to Increase Production

With prices below expected levels and a strong ruble, Russia may choose to increase production rates to offset lower revenues. So far, Russia has complied with the OPEC-NOPEC cuts, but that may change as their financial incentives change. Russian production usually rises higher in the second half of the year, so would not be unusual to see Russia “cheat” to make up for lower oil revenues. Read more from Platts here: https://www.platts.com/latest-news/oil/moscow/analysis-russian-oil-producers-may-abandon-restraint-26768458

Last Week’s RVO Announcement a Win for Biofuels

Last week, the EPA announced that they planned to keep 2018 renewable volume obligations (RVOs) at 19.24 billion gallons, in line with 2017 levels. Ethanol, in particular, was held at 15 billion gallons, still exceeding the “blend wall” (that is, ethanol’s 15 billion gallon requirement exceeds 10% of all gasoline sold). Read more from the Houston Chronicle here:  http://www.houstonchronicle.com/business/article/Ethanol-wins-a-round-in-its-battle-with-oil-11274353.php