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Exclusive: Whistleblower Accuses Exxon of ‘Fraudulent’ Behavior for Overvaluing Fracking Assets For Years

Exclusive: Whistleblower Accuses Exxon of ‘Fraudulent’ Behavior for Overvaluing Fracking Assets For Years

ExxonMobil
ExxonMobil announced a $19.3 billion write-down on Tuesday, a big hit to a company reeling from depressed oil and gas prices and a rapidly changing global energy market.

The write-down reduces the value of the assets on Exxon’s books. The announcement comes as part of the company’s fourth quarter earnings for 2020.

The fossil fuel giant, however, may be understating the financial damage to its assets, according to a former ExxonMobil employee turned whistleblower, Franklin Bennett. The oil major has overvalued its assets for years, according to Bennett and a team of advisors, a practice he describes as “fraudulent and defiant behavior” in a January 31 supplement to a whistleblower complaint he filed with the U.S. Securities and Exchange Commission (SEC).

Bennett and his team argue that instead, the company has been overvaluing its U.S. oil and gas assets by as much as $56 billion, as of year-end 2019.

At the root of the SEC complaint is ExxonMobil’s 2010 purchase of shale fracking company XTO Energy, which it acquired at the height of the natural gas boom for $46 billion. In the months and years following the acquisition, natural gas prices collapsed, and never returned to previous heights, rendering much of XTO’s assets uneconomic to produce.

Until now, ExxonMobil largely refused to take a meaningful write-down on those assets, despite several downturns in oil and gas market conditions. In particular, a deep natural gas price slide in 2015–2016, and another in 2019, hollowed out the valuation of many high-cost shale gas assets. Through it all, Exxon never took a significant write-down, which Bennett and his team argue is illegal.

In accounting terms, Exxon essentially told regulators that they could still get full value from the assets that they paid for in 2010, despite the deterioration in the natural gas market, claims the SEC complaint.

…click on the above link to read the rest of the article…

Leaked Document Reveals Exxon’s Plan To Increase Emissions As Energy Space Prepares For Decarbonization

As oil majors prioritize their own decarbonization goals, an internal document viewed by Bloomberg reveals Exxon Mobil Corp. is planning to increase annual carbon-dioxide emissions output by as much as a small country like Greece.

Exxon is one of the biggest corporate emitters of greenhouse gasses globally,  and the leak comes as the Texas-based company’s rivals, such as BP Plc and Royal Dutch Shell Plc, are planning, or have already begun, to shrink oil and gas operations to become net-zero on carbon by 2050 or before.

The internal document revealed Exxon’s stunning investment strategy of more than $200 billion in energy investments that would increase its emissions by about 17% through 2025. These investments are projected to drive higher cash flows and double earnings. However, much of the strategy was developed in pre-virus pandemic times and has yet to be revised for a post-pandemic world of lower oil demand and collapsing energy prices

But the planning documents show for the first time that Exxon has carefully assessed the direct emissions it expects from the seven-year investment plan adopted in 2018 by Chief Executive Officer Darren Woods. The additional 21 million metric tons of carbon dioxide per year that would result from ramping up production dwarfs Exxon’s projections for its own efforts to reduce pollution, such as deploying renewable energy and burying some carbon dioxide.

These internal estimates reflect only a small portion of Exxon’s total contribution to climate change. Greenhouse gases from direct operations, such as those measured by Exxon, typically account for a fifth of the total at a large oil company; most emissions come from customers burning fuel in vehicles or other end uses, which the Exxon documents don’t account for.

…click on the above link to read the rest of the article…

The Criminology of Global Warming

The Criminology of Global Warming

Pulp mill, Longview, Washington. Photo: Jeffrey St. Clair.

Some – like Exxon since 1957 – have been aware that the world is facing global warming that has all the signs to render earth uninhabitable. At least with United Nations’ IPPC and NASA reporting on global warming, others have realised that we also face an unprecedented threat. Potentially, all of this is an issue of criminology. Somewhat similar to biology and psychology, criminology is the science of crime and criminal behaviour. Global warming can be seen from an environmental, geological, atmospheric, capitalist, etc. perspective, but it can also be seen as an issue of criminology.

Like lawyers and judges, etc., criminologists also prefer tide and often somewhat legalistic definitions to work with. For them, global warming is simply defined as the rising of the earth’s temperature. At the same time, climate change is seen as the inter-related effects of rising temperatures on our environment and on human beings.

Criminology comes into play when global warming is caused by harmful behaviour that contributes to the problem. It also comes in when human, state or corporate actions prevent responses to global warming. At the centre of criminology is the idea that a corporation or someone can commit a wrong. In a second step, criminology stresses that these wrongs demand a response.

One might simply argue that a crime is what the law defines as a crime. The l’idée fixe of malum prohibitum is, for example, that something is not so much a crime because it is inherently wrong, but because the laws of a state prohibit it. This idea lets some off the hook – for example, those who perpetrated the Holocaust. Nazi Germany certainly did not have a law that states, if you kill communists, trade unionists, democrats, homosexuals, Gipsies, and Jews, you will be punished. Instead, the opposite was the case. Auschwitz fulfilled every single regulation down to the German building code.

…click on the above link to read the rest of the article…

DC Is the Latest to Sue Exxon and Big Oil for Climate Disinformation Campaigns

DC Is the Latest to Sue Exxon and Big Oil for Climate Disinformation Campaigns

DC Attorney General Karl Racine

Washington, D.C. is suing the four largest investor-owned oil and gas companies — BP, Chevron, ExxonMobil, and Shell — for allegedly misleading consumers about climate change, including historically undermining climate science and even now using deceptive advertising about the companies’ role in leading solutions to the climate crisis.

District of Columbia Attorney General Karl A. Racine announced the consumer fraud lawsuit on Thursday, June 25. The lawsuit claims that the four oil majors violated the District’s Consumer Protection Procedures Act by engaging in misleading acts and practices around the marketing, promotion, and sale of fossil fuel products, which produce globe-warming pollution. The D.C. lawsuit alleges that these companies knew since at least the 1950s about the harmful consequences of burning fossil fuels and that they engaged in a campaign to deceive the public about those risks.

“For decades, these oil and gas companies spent millions to mislead consumers and discredit climate science in pursuit of profits,” said Attorney General Racine. “The defendants violated the District’s consumer protection law by concealing the fact that using fossil fuels threatens the health of District residents and the environment. [The Office of Attorney General] filed this suit to end these disinformation campaigns and to hold these companies accountable for their deceptive practices.”

In particular, the D.C. Attorney General’s Office called out the oil industry’s use of fake grassroots groups, such as the Advancement of Sound Science Coalition, which started out as a front group for tobacco giant Philip Morris in 1993. This group had transitioned to become the Advancement of Sound Science Center in 1997 and was run out of the home of climate science denier Steve Milloy, who most recently worked in public relations for coal company Murray Energy.  The group has now been phased out of existence.

…click on the above link to read the rest of the article…

BIG TROUBLE FOR THE BIG THREE U.S. OIL COMPANIES: Financial Disaster In Its Domestic Oil & Gas Sector

BIG TROUBLE FOR THE BIG THREE U.S. OIL COMPANIES: Financial Disaster In Its Domestic Oil & Gas Sector

There’s no better way to describe what is taking place in the U.S. Big three Oil Companies domestic oil and gas sector than a complete and utter financial disaster. Honestly, I am not exaggerating.  The only place ExxonMobil, Chevron, and ConocoPhillips are making decent money is in their non-U.S. or International oil and gas sector.

While it’s no secret that the U.S. shale oil industry continues to be a trainwreck, the damage is now spreading deep into the financial bowels of the Big Three Oil Majors.  Unfortunately, the largest, ExxonMobil, has the worst-performing domestic oil and gas sector in the group.  So, it’s no surprise that ExxonMobil was forced to borrow money just to pay dividends.  I posted this chart in my last article on ExxonMobil:

As you can see, ExxonMobil’s long-term debt over the four-quarters (Q2-2019 to Q1 2020) increased nearly the same amount as the shortfall between the dividend payouts and the free cash flow.

However, if we look at the Big Three as a group, Q1 2020 wasn’t pretty at all.  The next chart combines ExxonMobil, Chevron, and ConocoPhillips Upstream Earnings and Capital Expenditures (CAPEX) from their U.S. sector versus their non-U.S. or International sector.  The upstream sector refers to the company’s oil and gas wells.

The Big Three suffered a net $900 million earnings loss from their U.S. upstream sector while spending a whopping $5.6 billion ($5,591 million) in CAPEX. Now compare that to the combined non-U.S. or International upstream earnings of $4.3 billion based on investing $4.6 billion in CAPEX.

…click on the above link to read the rest of the article…

THE END OF A U.S. OIL GIANT: ExxonMobil’s Days Are Numbered

THE END OF A U.S. OIL GIANT: ExxonMobil’s Days Are Numbered

ExxonMobil, the largest oil company in the U.S. and a direct descendant of John D. Rockefeller’s Standard Oil, days are numbered.  The once-great profitable oil giant is now borrowing money just to pay dividends.  How long can this charade go on?

Good question.  Now, some may believe that ExxonMobil was forced to borrow money to pay dividends due to the collapse in oil prices as a result of the global contagion.   However, the company hasn’t been able to pay shareholder dividends from its cash from operations over the past four quarters, even with much higher oil prices.

The leading culprit as to why ExxonMobil lacks the available cash to pay dividends stems from the lousy economics of its U.S. oil and gas wells, especially the company’s shale oil portfolio.  Ever since ExxonMobil ramped up its domestic shale oil production, that’s when the financial troubles at the company began to intensify.

The best way to compare ExxonMobil’s U.S. Upstream (oil and gas wells) performance, BEFORE and AFTER SHALE, is to go back to 2004.  Even though the oil price fell considerably in Q1 2020, it was higher than the oil price in 2004.  For example, ExxonMobil’s U.S. Upstream Sector earned $4.9 billion in 2004 with an average oil price of $41.51 compared to a $704 million loss on a $42.82 oil price:

Furthermore, look at the U.S. oil production differences between 2004 and Q1 2020.  According to ExxonMobil’s 2006 Annual Report, the company’s average U.S. oil production in 2004 was 414,000 barrels per day (bd) versus 699,000 bd in Q1 2020.  Even with higher oil production and similar oil price, ExxonMobil’s U.S. Upstream Earnings in Q1 2020 were dismal in comparison.  Moreover, the company invested $1.9 billion in CAPEX for all of 2004 on its U.S. oil and gas wells compared to the $2.8 billion just for Q1 2020.

…click on the above link to read the rest of the article…

Exxon Crushed By Pandemic, Reports First Quarterly Loss In 32 Years

Exxon Crushed By Pandemic, Reports First Quarterly Loss In 32 Years

Exxon Mobil Corp. has reported its first quarterly loss in 32 years amid oversupply conditions, a crashed economy, and a pandemic that continues to destroy petroleum demand. 

The company reported a $610 million loss for the quarter ending March 31. That is equivalent to about a 14c loss per share in 1Q versus earnings per share estimates of around 55c Y/Y. 

First-quarter results are a reminder that the worst has yet to come. Lockdowns began around mid-month, so the quarter only captured about 15 days or so of demand destruction. 

Here are some of the highlights from the 1Q earnings report:

  • 1Q production 4,046 mboe/d, +1.6% y/y, estimate 3,943 (Bloomberg Consensus)
  • 1Q capital expenditure $7.14 billion, +3.7% y/y
  • 1Q production 9,396 mmcfe/d, -5.3% y/y, estimate 8,633
  • 1Q chemical prime product sales 6,237 kt, -7.9% y/y
  • 1Q downstream petroleum product sales 5,287 kbd, -2.4% y/y
  • 1Q cash flow from operations and asset sales $6.36 billion, -25% y/y
  • 1Q refinery throughput 4,060 mb/d, +4.5% y/y 

Exxon also announced it is “reducing 2020 capital spending by 30 percent and cash operating expenses by 15 percent. Capex is now expected to be approximately $23 billion for the year, down from the previously announced guidance of $33 billion.” 

“COVID-19 has significantly impacted near-term demand, resulting in oversupplied markets and unprecedented pressure on commodity prices and margins,” said Darren W. Woods, chairman and chief executive officer.

“While we manage through these challenging times, we are not losing sight of the long-term fundamentals that drive our business. Economic activity will return, and populations and standards of living will increase, which will in turn drive demand for our products and a recovery of the industry.”

…click on the above link to read the rest of the article…

Exxon Cuts 2020 Capex By 30% On Expectations For 25-30% Demand Drop

Exxon Cuts 2020 Capex By 30% On Expectations For 25-30% Demand Drop

With oil trading at prices that are uneconomical even for the world’s biggest majors, on Tuesday morning Exxonmobil announced it cut its 2020 Capex by 30% and cash Opex by 15% as the CEO said he expects a record 25-30% demand drop this year.

The company said that the largest share of Capex reductions, or roughly 30% of total, would be in the Permian Basin. As a result of the spending cuts, the company will a production hit of 100,000 to 150,000 barrels/day from the Permian Basin in 2021 due to its spending reductions, CEO Darren Woods says on call with reporters, adding that in 2020 the production cut would be a modest reduction of only 15,000 barrels, which will hardly be enough an OPEC+ demanding US shale producers join the global production cuts now not in one year.

Among the other Exxon announcements:

  • Expects to meet projected investments of USD 20bln on US Gulf Coast manufacturing facilities
  • Expects to reach proposed US investments of USD 50bln over 5yrs announced in 2018
  • Mozambique project, expected later this year, has been postponed
  • Current operations onboard Liza Destiny production vessel are undisturbed
  • Capital allocation priorities remain unchanged
  • Long-term fundamentals that underpin Co’s business plans are unchanged
  • Globally, the company sees industry refinery output declining in-line with demand and storage available

We’re in a “capital-intensive commodity business that’s used to ups and downs in price cycles. However, I have to say we haven’t seen anything like what we’re experiencing today” the CEO said, concluding ominously that “these are definitely challenging times for all of us.”

Exxon’s stock price rose by 7% on the news, although it remains about 40% below levels it traded at at the start of the year. The company’s dividend yield remains a above 8% – a staggering number for what was not that long ago one of the world’s largest companies.

…click on the above link to read the rest of the article…

IEA: The Oil Glut Is Going Nowhere

IEA: The Oil Glut Is Going Nowhere

Barrels

Global oil markets will remain well supplied this year, with a possible overhang of some 1 million bpd, the head of the International Energy Agency, Fatih Bitol, told Reuters.close [x]ReplayUnmuteLoaded: 0%Progress: 0%Remaining Time -0:00CaptionsFullscreen

“Non-OPEC production is very strong. We still expect production coming from, not just United States, but also Norway, Canada, Guyana, among other countries,” Birol said, adding “Therefore, I can tell you that the markets are, in my view, very well supplied with oil, and as a result of that, we see prices remain at $65 a barrel.”

Norway is about to experience a sharp jump in oil production in the next four years, a new forecast from its Petroleum Directorate has shown. After a steady decline over several years, production is set for a 43-percent increase between 2019 and 2024, the NPD said, reaching 2.02 million bpd in 2024. This will be thanks to the start of production at the Johan Sverdrup offshore field along with several smaller fields.

In Guyana, Exxon has just begun production from the Liza-1 well. Daily output from the deepwater field should reach 120,000 bpd before the end of 2020. Exxon is also building a second production vessel that should raise the total to 220,000 bpd.

In Canada, meanwhile, oil production is also set to grow despite a government-imposed curtailment aimed at supporting prices. The curtailment was relaxed twice in 2019 and it only concerns large producers, allowing smaller ones to pump as much as they can sell. Based on this, the Canadian Conference Board recently forecast oil production in the country will be growing at 4.2 percent annually between this year and 2024.

Demand growth, however, will be slow, according to Birol.

“We are expecting a demand growth of slightly higher than 1 million barrels per day,” the top IEA man told Reuters.

This means that except sudden spikes in prices due to geopolitical factors or possible production outages in a major producer, oil prices this year will remain largely range-bound.

By Irina Slav for Oilprice.com

Canadian Oilsands Firm Denied Its Own Science On Climate Change

Canadian Oilsands Firm Denied Its Own Science On Climate Change

While Imperial Oil was calling the link between fossil fuels and global warming an ‘unproven hypothesis,’ internal reports had confirmed the connection.

SmokestacksSunset.jpg
Contradicting the company’s own assessment of CO2 from 1970, Imperial Oil’s then chairman wrote in 1998, ‘Carbon dioxide is not a pollutant but an essential ingredient of life on this planet.’ Photo by Jonathan Franson, the Canadian Press.

Oilsands giant Imperial Oil continued to call the link between fossil fuels and global temperature rise an “unproven hypothesis” decades after its own research confirmed the industry’s role in global warming, newly released documents show.

That decision made Imperial Oil, which is majority-owned by Exxon, an early supporter of an oil industry campaign of climate denial that continues to slow progress in combating the greatest existential challenge of our time. 

Brendan DeMelle, executive director of the research group DeSmog, said the documents show that as early as the 1970s Imperial Oil had confirmed the link between fossil fuels and global warming. DeSmog and the Climate Investigations Center last week published thousands of pages of official Imperial Oil documents found in an archive in Calgary.

DeMelle said that with pressure building in the late 1990s for Canadian climate change solutions that might reduce fossil fuel consumption and hurt the company’s business model, “they start talking about scientific uncertainties and doubt.”

Imperial Oil declined to provide comment for this story, instead pointing The Tyee to its website, which states that “We believe that climate change risks warrant action and it’s going to take all of us — business, governments and consumers — to make meaningful progress.” 

That was not what the company was arguing in the late 1990s, however, as its 1996 Annual Report makes clear.

…click on the above link to read the rest of the article…

Big Oil Needs to Pay for the Damage It Caused

Big Oil Needs to Pay for the Damage It Caused


protestors hold up a sign that says exxon knew

Environmental activists rally for accountability for fossil fuel companies outside of New York Supreme Court on October 22, 2019, in New York City. New York’s attorney general, Letitia James, is taking on ExxonMobil in a landmark case that accuses the oil corporation of misleading investors about the company’s financial risks from climate change.DREW ANGERER/GETTY IMAGES

This month in a Manhattan courthouse, New York State’s attorney general Letitia James argued that ExxonMobil should be held accountable for layers of lies about climate change. It’s a landmark moment—one of the  first times that Big Oil is having to answer for its actions—and James deserves great credit for bringing it to trial. But it comes with a deep irony: Under the relevant New York statutes, the only people that New York can legally identify as victims are investors in the company’s stock.

It is true that Exxon should not have misled its investors—lying is wrong, and that former CEO Rex Tillerson had to invent a fake email persona as part of the scheme (we see you, “Wayne Tracker”) helps drive home the messiness. But let’s be clear: On the spectrum of human beings who are and will be hit by the climate crisis, Exxon investors are not near the top of the list.

In fact, if the “justice system” delivered justice, the payouts for Exxon’s perfidy would go to entirely different people, because the iron law of climate is, the less you did to cause it, the more you’ll suffer.

The high-end estimate for economic damage from the global warming we’re on track to cause is $551 trillion, which is more money than exists on planet Earth.

…click on the above link to read the rest of the article…

Exxon Continues to Fund ‘Science’ Group Steeped in Climate Denial and Delay

Exxon Continues to Fund ‘Science’ Group Steeped in Climate Denial and Delay

Exxon, under chief executive Darren Woods, has continued to fund a group promoting climate denial and delay of climate action

ExxonMobil, under chief executive Darren Woods, center, has cut ties with some groups over their climate denial work, but continues to fund the American Council on Science and Health. Photo credit: Exxon via Twitter  

ExxonMobil is funding a little-known nonprofit that calls itself a “pro-science advocacy organization,” but whose scientific advisory board includes several renowned climate deniers and has worked for decades to sow doubt about the health impacts of climate change.

Records show the ExxonMobil Foundation provided grants of at least $60,000 in both 2017 and 2018 to the American Council on Science and Health (ACSH), a group that says its mission is to “publicly support evidence-based science and medicine.” 

Members of the ACSH scientific advisory board, however, include a who’s who of climate deniers, including Patrick J. Michaels, who has worked for more than 30 years on behalf of the fossil fuel industry; S. Fred Singer, who last year wrote an article for the Wall Street Journal falsely claiming that sea level rise is not caused by climate change; and William Happer, a current member of President Trump’s National Security Council who as recently as 2016 argued that carbon dioxide is not a pollutant.

Documents recently revealed in an investigation by The Guardian show ExxonMobil’s current funding of the ACSH began prior to 1999, when Exxon and Mobil merged to become Exxon Mobil Corporation, one of the largest oil companies in the world.

“ACSH is a front group for libertarian billionaires, fossil fuel companies, and basically every other industry selling dangerous products,” said Geoffrey Supran, a Harvard University researcher who in 2017 published a study that showed how Exxon’s internal memos take the climate issue seriously while its public communications emphasize doubt about the science.

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Supreme Court Blocks ExxonMobil’s Effort to Conceal Decades of Documents in Probe of Oil Giant’s Climate Deception

Supreme Court Blocks ExxonMobil’s Effort to Conceal Decades of Documents in Probe of Oil Giant’s Climate Deception

ExxonKnew protesters in T-rex costumes

The high court’s ruling means the company must hand over records to the Massachusetts attorney general for her ongoing investigation

In a win for climate campaigners and Massachusetts’ Democratic Attorney General Maura Healey on Monday, the U.S.Supreme Court rejected ExxonMobil’s attempt to block Healey’s demand for documents related to her state’s ongoing investigation into allegations that one of the world’s largest oil and gas corporations deceived the public and investors for decades about how fossil fuels drive global warming.

“The public deserves answers from this company about what it knew about the impacts of burning fossil fuels, and when,” Healey said, responding on Twitter to the ruling. This victory, she added, “clears the way for our office to investigate Exxon’s conduct toward consumers and investors.”

The news, which followed a Massachusetts Supreme Court ruling against the company in April, was also welcomed by climate activists — including 350.org U.S. communications manager Thanu Yakupitiyage, who thanked Healey “for her vigilant leadership in standing up for people over polluters.”

“Executives at Exxon knew about climate change decades ago, but they chose to lie to the rest of us to line their oily pockets,” Yakupitiyage declared. “Now, it’s those who have done the least to cause the problem who are paying the cost of this deception through our lives and livelihoods. In 2019, we’ll use all our power to make sure Big Oil pays its fair share for climate destruction.”

…click on the above link to read the rest of the article…

Permian Drillers Prepare To Go Into Overdrive In 2019

Permian Drillers Prepare To Go Into Overdrive In 2019

Permian

In recent months, pipeline capacity shortage in the Permian has been the center of shale drillers and oil analysts’ attention as much as the surging production from this fastest-growing U.S. oil region that has helped total American crude oil production to exceed 11 million bpd for the first time ever.

Many of the big U.S. companies—including supermajors Exxon and Chevron—boosted their Permian oil production in the third quarter as they have firm capacity commitments and integrate Permian production with downstream operations.

Many smaller drillers, however, are going on a ‘frac holiday’—as Carrizo Oil & Gas said in its Q3 earnings release this week—in some of their Permian acreage by the end of this year, to sit out the worst of the pipeline constraints, and to be ready to return to completions next year.

The majority of company executives and industry analysts expect that the Permian bottlenecks and the wide WTI Midland to Cushing price differential are transitory issues that will go away by the end of 2019, when many of the new pipelines out of the Permian will have started operations.

Until then, some smaller drillers like Carrizo are on a ‘frac holiday’ this month and next. Commenting on the Q3 performance, Carrizo’s President and CEO S.P. “Chip” Johnson said that the company had been drilling more in the Eagle Ford than in the Permian in order to capture higher pricing from the Eagle Ford oil.

“We expect our activity to remain weighted to the Eagle Ford Shale until the second half of 2019, when we plan to begin moving rigs back to the Delaware Basin,” Johnson said. In the earnings call, he noted that the shift to the Eagle Ford “shielded us from the dramatic widening of differentials in the Permian Basin during the quarter.”

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Big Oil Walking A Tightrope As Prices Rise

Big Oil Walking A Tightrope As Prices Rise

offshore arctic

Supermajors have had a great year so far, and their third-quarter results, to be released over the next couple of weeks, are likely to strengthen this impression. But this does not necessarily mean that investors will reward them. Investors have become a lot more careful in the past few years, and chances are they will want to see more proof of post-crisis flexibility and strict cost discipline before stock prices reflect an increase in trust.

On the face of it, Exxon, Shell, Chevron, and their likes have everything going for them: oil prices are higher, free cash flow is coming in at higher rates, and there have even been a few discoveries, most notable among them Exxon’s 4-billion-barrel elephant off the coast of Guyana. But Big Oil still needs to be cautious.

In a recent article for 24/7 Wall Street, its senior editor Paul Ausick noted the heightened prospects of even higher oil prices after a Reuters report revealed that OPEC has been having trouble lifting production by the promised 1 million bpd. From May to September, the cartel’s combined production plus Russia’s had fallen well short of that figure because of production declines in Venezuela, Iran, and Angola, among others. These, the internal OPEC document that Reuters saw, offset some substantial output hikes from Saudi Arabia, Russia, the UAE, Iraq, and Kuwait.

What this means is that there seems to be less spare capacity than optimists believed. This, in turn, means prices are likely to climb further, despite a fresh assurance from Treasury Secretary Steven Mnuchin that traders have already factored in the U.S. sanctions against Iran. Mnuchin’s warning that Washington will insist on importers cutting Iranian crude imports by more than 20 percent most certainly has not helped rein in prices, though its effect has yet to be fully acknowledged.

…click on the above link to read the rest of the article…

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