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U.S. Shale’s Capital Discipline Outweighs Trump’s Pro-Growth Rhetoric

January 19, 2025 Clark Savage

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter

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Michael Tanner: [00:00:10] What’s going on, everybody? Welcome into a special Saturday, January 25th, 2025, edition of the Daily Energy News. Beat Stand up. It man, it was a long, great week. We had a lot of stories. Trump taking office, all what’s going on with, you know, with him. You know, we’ve got, you know, all of the different actions that he’s taking. Will things remain to be seen? Oil prices were up. So it’s been absolutely busy week. I held down two solo shows, so I apologize in advance for that. But I’m going to go ahead. We got the team coming up, some of our best segments from the week. So I’m going to go ahead and turn it over that quickly, though, guys. As always, energy news beat. Hit the description below. Sign up for the substack. Invest in oil.energy newsbeat.com if you want to get access to better oil deals. But other than that guys, we’re going to let you get out of here. Start your week. Thank you for making us part of your weekend and we will be back in the chair Monday morning. [00:01:02][51.9]

Stuart Turley: [00:01:03] Let’s start with drill, baby, drill, drill. And fiscally responsible. Excuse me. I mean, when US shale capital discipline outweighs Trump’s pro growth rhetoric, it’s an interesting article, and this actually comes from Rystad Energy. Our folks over there rystad, there are three main bullet points. My goal and then there’s some details in here, U.S. shale producers are focused on capital discipline. Really what this is, we’ve been saying this for quite a while and shareholder returns increase. Permian rig activity is unlikely due to significantly boost production due to inventory depletion and efficiency concerns. I believe this great man has been talking about that. I believe his name is Michael Tenner. Yes. Thank you, sir. And then the U.S. is already on track to meet a Besson’s 333 hydrocarbon production target without policy changes driven by Engels and Gas. I’ll tell you how the growth could come in at the expense of the capital spending more than 11 billion. While Permian reinvestment rates are also expected to edge higher during 9%. Point is pretty interesting for I love the folks over there Rystad. They normally have some good stuff. [00:02:16][73.5]

Michael Tanner: [00:02:17] No, they have great stuff. I love this this look because again, I think it piggybacks off of what we’ve been saying here on the podcast. Stu That yeah, I think drill, baby, drill. Wow. That’s great rhetoric. And I think, you know, corporate executives, as this article talks about, are going to be encouraged by this. It’s not necessarily going to all of a sudden know, well, we got to pick up three rigs now nobody’s sitting there like that. You know, they specifically mentioned shale 4.0, which, you know, really is a combination of of the learnings from 3.0, what went on in shale 3.0, increase production at all costs, show production growth, show inventory, not really what’s going on now. It’s all capital discipline, it’s all consolidation. It’s how do we squeeze the most amount of profit out of what theoretically is a declining inventory count, not necessarily declining? Well, count not a play on words there, but a diminishing, you know, economic inventory at these prices. So it’s going to be really interesting. I mean, this article does point out that, you know, Trump’s Treasury secretary, Scott Besser, has floated an increase of 3 million barrels of oil equivalent per day as part of his broader 333 economic plan. You know, again, whether that’s BOE or barrels of oil, who knows? As always, you know, there is a BOE. It’s a sleight of hand. If someone’s thrown BOE at you, you should ask, well, how? Give me the break down. What’s your gas versus oil? Because you’re sometimes using, you know, it’s a 6 to 1 ratio to convert gas to oil equivalent, but it’s about a 20 to 1 economic conversion. And so if someone’s giving you BOE and they’re doing it in 6 to 1, it’s look over here, not over here, because it can be a sleight of hand. So it’ll be interesting to see what he says underneath. But again, I think what this does is specifically underscoring and, you know, things that we’ve been talking about in terms of it’s a Trump is not going to be able to just wave a wand and increase production because it wasn’t like there was production being held back in the previous administration. For all the power, all the knocks that Joe Biden gets, one of them can’t be all he’s holding down. Oil production actually increased under his administration, whether he likes it or not. [00:04:29][132.0]

Stuart Turley: [00:04:29] Well, the the malarkey that they did under the Treasury and we’ll talk about her and her haircut. I mean, we’ll talk about her here in a second. And but the stuff that they just put out will cost a lot of people, a lot of money and all this stuff. China and India scramble for crude is sanctioned Russian tankers turn back. This one is very interesting. Here’s a quote out of the article. It is even likelier there will be a sustained market disruption. Fishman added. We could see a meaningful drop in Russian exports. I think that it’s going to be ended fairly soon. So I don’t think this disruption in fact, I think. We’re actually going to see sanctions being released on Moscow. Because when you take a look at China and India, listen to this have bought 81% of Russian seaborne crude exports since the invasion of Ukraine. Now, Michael, here’s where it gets funny. India and China’s refinery capacity has grown substantially. The U.S. has shrunk. So guess who’s selling Russian refined products? India and China. Guess who they’re selling them to? The U.S. and the EU. This is a gigantic can of worms. [00:05:47][77.9]

Michael Tanner: [00:05:47] It really is. Talk about the Dark fleet. This is going to get super crazy. I think a lot of this is what you’re seeing reflected in kind of the current weekly bump in prices. You know, I mean, we saw early in the week prices were above $80. We’re now kind of sit in that 77, 78 range. But you’re talking about 600 or 161 tankers are involved in about basically 2000 shipments have been sanctioned since this the old invasion. But now it’s it’s continuing to match Indian. You know, India and China are going to get and are already seeing effects of this being turned away. You know, it’s about 1.4 million barrels of crude oil per day, according to an estimate from the some London based E.A. Gibson Ship Brokers Limited. This equates about half of Russian seaboard crude exports, which is pretty unbelievable. The Maguire Group estimates that this is going to be even greater at 2.15 million barrels per day of global exports, which obviously is could drive up prices. So this is a big old hairy mess. I don’t know what’s going to happen here. What’s the read on the the the Trump admin stance on this? They’re going to keep these sanctions in place. What are they going to do? [00:06:58][70.7]

Stuart Turley: [00:06:59] I think it’s going to be dependent on the negotiations on ending the war. It is so important for President Trump to end the Ukraine war immediately. And I think that sanctions are going to ease everybody saying, sanctions are going to stay in place for a long time. And the Democrats are quite honestly putting some landmines out there. They are despicable players in this whole process. But I believe that Trump is going to meet with Putin sooner than later. So I think it’s going to be great. UK is in trouble. Nuclear power Ambitions Hampered by delays and soaring costs. The construction of Hinkley Point C in size will see nuclear power plant is facing significant delays and cost overruns, jeopardizing the UK’s energy security. This is not just the only thing doing the UK energy security. It’s called all of their med green energy policies. They’re not doing all forms of energy. They are absolutely horrific in their energy policies. They’re following the German model. The UK government and EDF currently plan to fund 40% of Sizewell C, which is expected to power as many as 6 million homes once operational again. The problem is they let this go too long and they need the baseload trying to put the renewable energy in there and now they don’t have the natural gas coming out of it. And then you have natural gas shortages in other areas. So energy security needs to be thought out more like the Saudi Arabia Arabia folks, when you take a look at energy policies over a ten, 20 year plan, you cannot do what the United States has been live, just live through four years of bad energy policies and then trying to do it. Don’t do what the U.S. and the UK you’re doing. [00:08:56][117.5]

Stuart Turley: [00:08:57] The EU makes admission about Russian gas spokesperson is acknowledge the sanctioned country energy is still flowing into the block. Russian energy continues to flow to the EU. Particularly glass is still present in the EU. The EEC spokesperson for Climate Action and Energy and US. Anna Kizer. I’m sorry, I’m going to butcher your name, it, Pocan told a briefing on Monday. She noted the commission plans to issue a road map in late February or mid-March aimed at completely ending Russian energy imports. Here’s where it is absolutely going to be a little tricky. Germany Chancellor Schulze has lost the vote of confidence and now they’re having a runoff or another election in Germany. And so what you’re going to see is his opponent now is calling for Russia to keep Russian natural gas. So Germany has totally been industrial advised because they cannot get enough natural gas. I just had an interview with Steve Reese, who is, in my opinion, one of the foremost knowledgeable men in the United. States about natural gas, the auditing, and he has talked to Harold Hamm. This this podcast is going to come out and it’s absolutely phenomenal. He’s also talked to Toby Rice about things. They’ve got a cradle to grave solution where they are going to be supplying LNG to the German markets. And and so that he is but is still a lot more costly in order to get it there. But it is secure and he did make that point home big with me. So you’ve got to have energy security if you’re going to have businesses and industrialization. [00:10:44][107.1]

Michael Tanner: [00:10:46] IEA says global gas market set to remain tight in 2025. I mean, this is super interesting. This is specifically focused on natural gas, which, again, you know, if you’re concerned about what’s going on in oil, it looks like supply might quite outpace demand. What they’re saying on the oil side is the demand may not be there. But with this focus specifically on natural gas, the IEA does these kind of quarterly gas market updates. Their quote was that the markets have, quote, moved towards a gradual rebalancing last year after the supply shock that followed the Russia full scale invasion of Ukraine in February 2022. Again, pointing out that this report is talking about global natural gas markets, not necessarily the U.S. gas markets, which do remain slightly overbalance from the standpoint we get a lot of natural gas sitting on the sideline being flared. We’re talking specifically about the global gas balance. So basically, the IEA is talking about that. You know, they the reason why they’re saying it’s tightened a little bit AK that the supply is now getting back in balance with demand is mainly due to Asia. You know, in terms of again, from the demand side, Asia’s, you know, their demand, their global gas demand rose by about 2.8 percentage points or about 150,000,000,000m³. I mean, 2024, which was above the 2% growth rate that they saw somewhere between 2010 and 2020. We also saw below average growth in liquid LNG output, which really kept supply tight. And there was a bunch of kind of wild weather events that happened. You know, this report is basically saying that the similar dynamics are expected to persist in 2025 as this new export capacity gets going. A lot of that’s coming from the U.S., which we’ll cover in the next segment. But also Qatar is coming online both over the course of next year and the second half of the decade. They also note that geopolitical tensions have kind of continued to kind of push volatility in gas markets there, though, the halt of the Russian piped gas transit via Ukraine on January 1st, 2025, does not pose an immediate security risk for the European Union. It could increase European LNG import requirements and further tighten global market fundamentals in 2025. We know what’s going on with Moldova and all that stuff. The quote from the IEA, Director of energy Markets and Security. I’m going to butcher this name Kosuke Summer Dorie quote Gas market fundamentals have improved over the past year, but for now we are still seeing significant tightness due to rising demand and muted growth in LNG capacity. Heightened geopolitical uncertainty adds to the risk. He goes on to say While international cooperation on gas supply security has expanded since the region energy crisis began, greater efforts are needed from responsible producers and consumers who should strengthen their collective efforts to reinforce architecture for safe and secure global gas supplies. So, you know, global gas markets are going to continue to stay tight. [00:13:29][163.1]

Michael Tanner: [00:13:30] First, a full day in office. Trump lifts pause on not FDA LNG export Approvals. This was an executive order which was widely expected to basically get our LNG export terminals going, specifically according to the order of the Energy Secretary. Great friend of the show, Chris Wray, is directed to restart reviews of applications for approvals of LNG projects, quote, expeditiously as possible, consistent with applicable law. The order goes on to say, quote, In assessing the public interest to be advanced in any particular application, the Secretary of Energy shall consider the economic and employment impacts to the United States an impact of security of to its allies and partners that would result from granting the application. They’re also going to look at the Alaskan LNG potential, which which includes all the permitting and infrastructure to get pipelines and all that done. You know, and this why this bleeds into what the IEA is talking about is the US has an ability to help wean Europe off its Russia supply, which means the security risk that everybody scared about Russia. You can get off Russian gas and bring yourself more energy security If the United States would get its act together and we would start building these things. And that’s exactly what Trump and Chris Right. Are going to be doing. It’s great that we have them in office. We remember that in January of 2024, the Biden administration paused pending decision on exports of LNG to non-OECD countries until the deal. We can update its underlying analysis for authorizations. Basically, they released a report last month, but it didn’t really say anything. There are several projects that will benefit from this. These include Cambridge’s Commonwealth LNG project in Cameron, Louisiana, and Venture Global’s LNG CP2 project in Louisiana. Also the Sabine Pass Stage five expansion by Cheniere Energy and Energy Transfer’s Lake Charles LNG export Patel facility and Sempra. Their Port Arthur LNG export will also benefit lots of great benefits of here in the LNG space. Good for you. [00:15:24][114.0]

Michael Tanner: [00:15:25] Trump unveils a $500 billion A.I. Stargate program. This is, as I said, in the open. On one level, great. On one level, spooky, basically with Larry Ellison, Sam Altman and Marsha Schiro, signed by his side. US President Donald Trump announced the launch of Stargate, which is a new initiative set up. That is, according to reports, going to invest up to $500 billion in artificial intelligence, intelligence infrastructure. You know, basically the three primary caught corporate partners, SoftBank leading the financing side open, A.I. leaning the operational side, and Oracle, which is kind of leading the data center effort, have pledged $100 billion in investment. And with an additional $400 billion set to be attracted over the next four years. The quote from President Trump is that this is a monumental undertaking and a resounding declaration of confidence in American potential under a new president. You know, they already you know, Larry Ellison said in kind of an initial kick out meeting that they already have one of these data centers, these Stargate data centers under construction here in Texas. There will be up to 20 of them, which each spend basically about half 1,000,000ft² are planned to support the huge amount of infrastructure that’s needed across these high computational AI systems. Trump went ahead and said he estimated that these would create 100,000 jobs across the United States. Sam Altman, who’s the CEO of Open Air or Closed? I also named ARM Microsoft and Indivior as key initial technology partners. You know, this was dropped actually back in 2023. The news website Information did report that Microsoft and Open Air were collaborating on a supercomputer known as Stargate, which was estimated to cost about $100 Million. It’s not quite clear, per se whether or not that project is connected to the new Stargate initiative that was announced today. You know, I think one, I think it’s fascinating. And then the part where I think this connects into energy is where one obviously AI in these huge supercomputers need power. And eventually you hook hooking up to a wind farm can hooked up. This is a solar farm. You’re either going to have to pipe in natural gas or start building nuclear facilities. And my guess is because Larry Ellison came out and said that there’s already one of these in construction in the great state of Texas. My guess is that they’re going the natural gas route. So I think that’s that’s you know, what this means for energy is this could become an interesting off grid solution for natural gas companies. And it’ll be interesting to see exactly where this is located, because if you can now all of a sudden, almost like a Bitcoin mine, take your gas off grid and instead of trucking it to a, you know, energy transfer or, you know, who’s going to send it on down to their processing or fractionation facility, you know, you’re now able to take the gas directly out of the pipeline or directly from these oil and get these upstream firms and power your, you know, power your your data center. It could be a very, very interesting shift of the model when it comes to what we would consider on versus off grid power generation. I had a great interview actually with Eric Rice. He’s the president over at Sovereign Capital. And we talked a lot about on grid off grid type generation when it comes to specifically Bitcoin mining, but this type of stuff as well. I mean, you know, if you’re able to, again, take this gas that would otherwise be sold down a pipeline or flared off and use it to power these data centers, you know, you’re going to see this is truly where when companies like OECD talk about the artificial intelligence boom as it comes as it pertains to the natural gas market, this is things they’re talking about specifically. So again, I think it remains to be seen how they’ll power this. But, you know, this is this is a big endeavor. And, you know, $500 billion is nothing to sneeze at it. It’ll be interesting to see. We did see Elon Musk in a in a tweet war with Sam Altman basically say, hey, you don’t even have less than 10% of this $100 billion raised. And and Sam kind of quipped back at him. So again, it’ll be interesting to see how this works. And we know Elon Musk is no fan of open AI or he calls it closed AI. So we will see what happens. [00:15:25][0.0][907.8]

The post Week Recap: U.S. Shale Steady, Trump’s $500B AI Plan, Tight Gas Markets appeared first on Energy News Beat.

 

Energy News Beat

2024 was the worst year since 1995 for sales because prices are too high after the 50% spike in 2019-2022.

By Wolf Richter for WOLF STREET.

The market for resale homes has started to thaw just a little from its frozen condition as more buyers and sellers started getting used to the 7% mortgage rates, rather than waiting for them to plunge or whatever. And more “locked-in” homeowners are selling their homes to deal with changes in life, thereby giving up their below-4% mortgages. So sales volume ticked up a little over the past few months from the deep-freeze levels before, but remained still very low.

Sales of existing single-family houses, townhouses, condos, and co-ops that closed in December rose to 329,000 homes, not seasonally adjusted, up by 10.8% from December 2023, but still down by 36% from December 2021, testimony to the ongoing but slightly softening demand destruction.

The seasonally adjusted annual rate of sales, which attempts to iron out the seasonal changes and multiplies this out to a 12-month period, rose by 2.4% in December from November to an annual rate of 4.25 million homes – down by 30% from the rate in December 2021 and by 23% from the rate in 2019, according to the National Association of Realtors today (historical data from YCharts):

For the whole year 2024, actual sales fell to 4.06 million homes, the lowest since 1995, below even the worst years during the Housing Bust, when demand destruction was caused by an economic and financial meltdown that followed years of reckless mortgage lending.

But in 2023 and 2024, demand destruction was caused by a historic spike in home prices in the prior three years, when the NAR’s national median price shot up by nearly 50% from June 2019 through June 2022 – which then collided in 2023 with mortgage rates that returned to the normal-ish levels before the money-printing era started in 2009.

Highest supply for any December since 2018.

Supply of unsold existing homes on the market, at 3.3 months (red line in the chart below), was the highest for any December since 2018, and higher than 2017 and 2019-2023.

Active Listings doubled since 2021.

Active listings – total inventory for sale minus homes whose sales are pending – at 871,500 in December (bold red line), were at the highest level for any December since 2019, having nearly doubled since December 2021 amid the plunge in sales.

Unsold inventory, at 1.15 million homes, was up by 16% year-over-year. Over the holiday period in December, demand dries up, homes get pulled off the market, new listings dry up, and what is on the market, sits there longer without selling.

Days on the market lengthen to 70 days.

The median number of days before the home is either sold or pulled off the market because it failed to sell rose to 70 days in November, the most for any December since 2019, and up from 61 days a year ago, according to data from Realtor.com.

Days on the market track the mix of how motivated sellers are by letting their home sit on the market when it doesn’t sell right away, and how quickly homes sell that do sell.

Prices are too high.

Single-family house prices. As has been the case for months, the median price of single-family houses was revised down for the prior month, which also reduced the year-over-year gain for that month. For November, the median price was revised down to $409,200 from $410,900 originally reported a month ago, which shaved the year-over-year gain for November to +4.3%, from the originally reported +4.8%. These downward revisions keep happening. I bring this up because the December year-over-year gain was an outlier of +6.1%, the highest since October 2022, but when the December median price gets revised down next month, the year-over-year gain will be back in the range of other year-over-year gains in 2004.

Based on the pre-pandemic seasonality, the median price drops sharply in January, and January-February mark the seasonal low points.

The 50% price explosion between June 2019 and June 2022, on top of the large price gains in the prior 10 years, was driven by the Fed’s interest-rate repression and money-printing schemes which have created the #1 problem in the housing market today: Prices are way too high.

Condo and co-op prices. Here too, as has been the case for months, the median price of condos and co-ops was revised down for November to $358,200, from the originally reported $359,800. This shaved the year-over-year gain to +2.3%, from the originally reported +2.8%. And so we can expect that the December median price will also stick with tradition and get revised down as well.

As reported today, the median price in December, at $359,000, was up by 4.5% year-over-year, and we expect tradition to continue with a downward revision next month. Unlike single-family house prices, the median condo price didn’t experience year-over-year declines in mid-2023.

But home prices vary widely by metro. 

In a number of the largest cities, prices of single-family houses and condos have been dropping for over two years.

Double-digit price declines of single-family houses from their respective peaks in 2022 or 2021 occurred in four of the biggest cities:

• Austin: -19%, to lowest price level since 2021
• Oakland: -17%, to lowest since 2020
• New Orleans: -17%, to lowest since 2020
• San Francisco: -15%, to lowest since 2018

Double-digit price declines of condos and co-ops from their respective peaks in 2022 or 2021 occurred in seven of the biggest cities:

• Austin: -21%, to lowest price level since 2021
• Oakland: -19%, to lowest since 2016
• San Francisco: -15%, to lowest since 2015
• Detroit: -13%, back to 2018
• New York City: -13%, back to 2017
• New Orleans: -12%, first seen in 2016
• Seattle: -10%, back to 2017.

Here are all our charts and data of the big cities with the biggest price declines from their respective peaks years ago. And here are our charts and figures of home prices in the 33 biggest metropolitan areas, from steep declines to ongoing increases, documenting the divergence in the US housing market.

Slowly getting used to the old normal 6-7% mortgages.

The average 30-year fixed mortgage rate has been above 6% since September 2022 and above 7% on and off since October 2022. The daily measure by Mortgage News Daily is today at 7.11%. Freddie Mac’s weekly measure, released yesterday, of the average 30-year fixed mortgage rate was 6.96%.

The real estate industry has now given up waiting for mortgage rates to plunged to wherever and is encouraging sellers and buyers to get used to “a new normal of mortgage rates between 6% and 7%,” as the NAR had put it, which are the old normal rates that prevailed before the money-printing era started in 2009..

The CEO of Fannie Mae, the largest Government Sponsored Enterprise that buys and guarantees mortgages, also encouraged buyers, sellers, and everyone in the industry to get used to these 6% to 7% mortgage rates.

Before the money printing era, the average mortgage rates had been well above 5%. The Fed’s QE and zero-interest-rate policy, which started in 2008 and, with some interruptions, finally ended in 2022, had created an anomaly:

Demand destruction by region.

The charts below show the seasonally adjusted annual rate of sales, released by the NAR today, in the four Census Regions of the US. A map of the four regions is in the comments below the article.

Northeastern US: The seasonally adjusted annual rate of sales rose to 530,000 homes:

Midwestern US: The seasonally adjusted annual rate of sales dipped to 990,000 homes.

Southern US: The seasonally adjusted annual rate of sales rose to 1,930,000 homes.

Western US: The seasonally adjusted annual rate of sales rose 790,000:

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The post Sales of Existing Homes Finally Begin to Thaw a Little, amid Highest Supply for December since 2018 appeared first on Energy News Beat.

 

Energy News Beat

• President Trump’s eased regulations and infrastructure investments aim to boost U.S. natural gas production and exports.
• Rising LNG exports and surging AI-driven electricity demand are creating new growth opportunities for American gas producers.
• Market forces, including domestic and international gas prices, will ultimately determine the scale of the U.S. gas production boom and what domestic prices will look like.

President Trump’s ‘drill, baby, drill’ policy promises to unleash a new boom in U.S. oil and gas production with eased regulations and greater access to export markets.

Yet, U.S. producers will need market forces to align with the now friendly policy to pull America’s natural gas output out of the stagnation last year as a result of multi-year low domestic prices amid record output, warmer weather, and inventories above average.

Higher demand for American gas will boost drilling activity, but it will also push up energy prices and costs for consumers and businesses. Higher costs are the opposite of what President Trump has been promising all year.

Ultimately, the gas markets and prices, both at home and abroad, will determine how much natural gas American producers will pump in the near to medium term.

At the beginning of President Trump’s second term in office, the U.S. and international natural gas markets look supportive of a jump in American gas production with rising demand for LNG and surging domestic power demand, where gas could be the big winner of the AI-driven jump in electricity consumption.

President Trump’s policies are also supportive of the industry, with eased regulation, efforts to accelerate energy infrastructure, the lifting of the pause on LNG export permits, and last but not least – the $500-billion AI initiative, which will begin in Texas.

US Natural Gas Production

U.S. gas producers, many of which had to curtail output last year due to low prices, are preparing to return to growth in drilling activity as additional demand is being created with the AI and data centers and the LNG exports.

Higher LNG exports could also put a floor under U.S. gas prices, making boosting American production profitable for companies.

Last year, U.S. shale gas production, which accounts for 79% of total dry natural gas production, decreased slightly and was on track for the first annual decline in EIA shale output records dating back to 2000. Output in Texas, home to the Permian, grew because gas is associated with oil production. But the Appalachian Basin, where the pure shale gas formations lie, saw a drop in output as the major gas-oriented companies scaled back drilling and deferred completions last year to sit out the low prices.

As a result, U.S. natural gas production in 2024 was slightly lower than in the record year 2023.

This year, the market fundamentals are aligning with President Trump’s ‘drill, baby, drill’ efforts.

LNG Exports Driving U.S. Natural Gas Demand

U.S. natural gas demand will rise with the start-up of additional LNG export plants. The EIA sees LNG exports as the leading source of natural gas demand growth in its latest monthly forecast. Exports of natural gas by pipeline and liquefied natural gas are set to increase by 2.9 Bcf/d in 2025, with most of the increase coming from LNG exports.

U.S. LNG exports are expected to jump by 15% in 2025, reaching almost 14 Bcf/d, thanks to higher export capacity with the Plaquemines LNG and Corpus Christi LNG Stage 3 plants, which achieved first gas at the end of 2024.

Europe’s gas demand could be a boon to U.S. LNG exporters as European gas storage will need to be filled to at least 90% of capacity by November 1, 2025, in anticipation of the 2025/2026 winter.

That’s not even counting President Trump’s “tariffs all the way” threat if Europe doesn’t buy more U.S. oil and gas.

One of the reasons behind the Biden Administration’s now-reversed pause on LNG export approvals was that unrestricted exports would drive up gas prices for consumers in America.

Under President Trump, approvals are expected to be expedited, which would support U.S. gas prices to levels enough for producers to return to growing output.

If production grows too much too fast, again, the market forces of supply and demand will push prices lower.

AI Boom to Boost Natural Gas

Another major driver of the U.S. natural gas growth is the AI boom.

After two decades of flat power consumption, U.S. electricity demand rose by 2% in 2024 and is set to rise at a similar pace this year and next, the EIA says.

The surge in U.S. power demand due to AI advancements and data center construction is set to unleash a new boom in the buildout of natural gas power plants to provide reliable 24/7 electricity.

Big Oil is already proposing to help power the AI revolution and the enormous energy consumption with gas power plants. Chevron and Exxon are talking to power generators, energy providers, and data centers to provide what they describe as lower-carbon energy.

Natural gas-fired power generation in the United States soared to a record high last year, driving up global gas demand. Gas-fired power plants are the single largest source of U.S. power generation, at around 42-43%.

U.S. power-generating companies are announcing plans for the highest volume of new natural gas-fired capacity in years.

With the U.S. Administration now favoring natural gas and moving to accelerate energy infrastructure expansion, gas producers will benefit, and supply to consumers will rise.

Gas demand will be driven by LNG exports, AI centers, and weather, of course.

Supply and demand in the U.S. and global gas markets will be the ultimate drivers of America’s new gas boom or bust.

By Tsvetana Paraskova for Oilprice.com

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The world’s biggest crude oil exporter, Saudi Aramco, bought this week its first cargo of U.S. WTI Midland, the crude grade which is now part of the dated Brent benchmark, S&P Global Commodity Insights told Reuters.

The Saudi oil giant, which is also the world’s biggest oil company, bought the cargo in the Platts window from commodity trader Gunvor. This was Saudi Aramco’s first purchase of WTI crude in the window, Joel Hanley, global director of crude and fuel oil markets at S&P Global Commodity Insights, told Reuters.

Aramco, which looks to expand its crude trading business, has already sold WTI. This occurred in February last year.

“Aramco has clearly made a decision to get more involved in trading – we will see more and more of this,” Adi Imsirovic, director at consultant Surrey Clean Energy, told Reuters.

WTI Midland has gained popularity among crude oil traders since it was included in the dated Brent benchmark a year and a half ago.

WTI Midland, produced in Texas, was included in June 2023 in the Dated Brent part of the Brent benchmark as one of several grades underpinning the contract. Dated Brent, the world’s leading benchmark price assessment is being assessed by Platts. Apart from WTI Midland, Dated Brent includes Brent, Forties, Oseberg, Ekofisk, and Troll—all of these are crude grades produced in the North Sea.

According to the Intercontinental Exchange, Brent is the price barometer for about 80% of global crude.

Going forward, Saudi Aramco expects global oil demand to grow by a steady 1.3 million barrels per day (bpd) this year compared to 2024, the oil giant’s chief executive Amin Nasser told Reuters earlier this week.

“We still think the market is healthy … last year we averaged around 104.6 million barrels (per day), this year, we’re expecting an additional demand of about 1.3 million barrels … so there is growth in the market,” Nasser told Reuters.

By Charles Kennedy for Oilprice.com

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• India has been granted permission to unload sanctioned Russian oil at its ports until February 27.
• The US sanctions have disrupted India’s access to cheap Russian oil, and Indian refiners are scrambling for alternative supplies.
• India will continue to buy Russian oil only if it meets certain conditions, including a price cap of $60 per barrel and the use of non-sanctioned tankers.

India has received clarification from the U.S. that the Russian oil tankers sanctioned earlier this month are allowed to discharge their crude at Indian ports until February 27, Indian oil secretary Pankaj Jain said on Friday.

“There was a round of clarification by OFAC (the U.S. Office of Foreign Assets Control). Formally they did clarify that Feb. 27 is the deadline,” Reuters quoted the Indian official as telling reporters in response to questions about the end of the wind-down period.

The wind-down deadline for completing the financial transactions is March 12, according to Jain.

The outgoing U.S. Administration on January 10 imposed the most severe sanctions on Russia’s oil yet, designating two major Russian oil companies, Gazprom Neft and Surgutneftegas, as well as 183 vessels, dozens of oil traders, oilfield service providers, insurance companies, and energy officials.

The sanctions caught a few million barrels of crude oil en route to India in a precarious situation.

At least 4.4 million barrels of crude from Russia are currently being shipped to India, according to ship-tracking data compiled by Bloomberg and Kpler. Some of these are traveling on newly-sanctioned tankers and the fate of part of the cargoes is unknown.

For India, which imports more than 80% of the crude it consumes daily, the costs are spiking and the cheap Russian barrels are disappearing as Indian refiners steer clear of tankers explicitly sanctioned by the U.S.

The U.S. clarification about the deadline for sanctioned vessels to discharge their crude could be a relief for India, for the next month at least.

But Indian refiners are already scrambling for supply for arrival after February.

India will continue to buy Russian oil if it is sold below the $60 per barrel price cap and delivered on non-sanctioned tankers and without any involvement of sanctioned companies or individuals, the Indian official said today.

By Michael Kern for Oilprice.com 

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The post Sanctioned Russian Oil Tankers Get Temporary Reprieve in India appeared first on Energy News Beat.

 

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ENB Pub Note: We recommend following Andrew Korybko’s newsletter on Substack. He has an in-depth view of lots of geopolitical issues. 

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Trump’s preference for sanctions and his latest threat to double down on secondary ones could derail India’s careful multi-alignment between the US and Russia by forcing it to choose between them.

The media has been awash with reports speculating that Russo-Indo relations might suffer as a result of the US’ latest energy sanctions seeing as how they’ve recently centered on Delhi’s large-scale import of discounted oil from Moscow that could be jeopardized by these latest unilateral restrictions. An unnamed Indian source told the media that “Russia will find ways to reach us” and predicted steeper discounts to counteract the new sanctions risks, however, so there isn’t much cause to worry for now.

The measures won’t kick in till March so there’s still time for both parties to plan workarounds, one of which is taking the form of India recently expanding its Russian insurers’ pool to include non-sanctioned companies, though it remains unclear what they’ll do about Russia’s sanctioned “shadow fleet”. In any case, it’s a step in the right direction and shows the importance that India places on continuing its large-scale import of discounted Russian oil, the strategic significance of which will now be explained.

Not only did it help avert a polycrisis over the past few years that could have catalyzed disastrously cascading consequences across the Global South as touched upon here in late 2023, but it also kept India’s impressive growth trajectory on track, thus retaining its foreign investment attractiveness too. Additionally, India preemptively averted Russia’s potentially disproportionate dependence on China by diversifying its energy revenue streams, thus preventing Russia from becoming China’s junior partner.

This stopped Sino-US bi-multipolar trends and facilitated the tri-multipolar transitional phase of the global systemic transition towards more complex multipolarity (“multiplexity”). That outcome might be seen by some US policymakers as detrimental to their country’s grand strategic interests, but on the flipside, Russia has yet to turn into a raw materials reserve for turbocharging China’s superpower rise like it could have already become had it not been for India diversifying Russia’s energy revenue streams.

India’s grand strategic interests are to prevent that from happening due to the possibility that China might one day leverage its senior partnership over Russia to get the latter to curtail and ultimately suspend (regardless of the pretext) new and spare military supplies to India. Moreover, Russia’s turbocharging of China’s superpower rise could compel India to become the US’ junior partner in kind, which could lead to serious concessions on its hard-earned strategic autonomy.

These imperatives suggest that India will do everything in its power to retain its large-scale import of discounted Russian oil since the alternative is to risk Russia becoming China’s junior partner with all that would entail for reshaping the global systemic transition by restoring Sino-US bi-multipolarity. In the event that India feels coerced into complying with these latest sanctions, such as if Trump is misled by misguided advisors into threatening crippling secondary sanctions, then it could try to strike a deal.

In exchange for sanctions waivers, which India could explain would be required for preventing Russia’s transformation into a raw materials reserve for turbocharging China’s superpower rise at the expense of the US’ grand strategic interests, it could try to convince Russia to accept Trump’s peace plan. While it remains unclear exactly what he has in mind, the signals that he’s sent thus far suggest that he’ll demand tough compromises from Russia, which Putin might reject and then Trump could escalate in response.

This could lead to even more anti-Russian sanctions, including the enforcement of threatened secondary ones against third countries like India, and more armed aid to Ukraine for perpetuating the conflict. If Russia doesn’t accept the ceasefire, armistice, or peace terms on offer, then it might have no choice but to become China’s junior partner out of desperation for funding and potentially even military-technical equipment in exchange for selling its resources at basement-bargain prices like it’s thus far refused to do.

Trump wants to “Pivot (back) to Asia” pronto in order to more muscularly contain China, which necessitates him swiftly resolving the Ukrainian Conflict, so its possible perpetuation could indefinitely delay that while resulting in Russia turbocharging China’s superpower rise like he wants to avoid. He and his advisors might not see it that way, but India could help convince them of this scenario forecast, which some on his team might be receptive to due to their Indophilia.

Even if India can’t convince Trump to demand tough compromises of Putin and then can’t convince Putin to accept them, it might still defy the US’ predictable secondary sanctions threats to continue importing discounted Russian oil, even if perhaps not at the same scale as before. This possibility is premised on the grand strategic importance of their energy ties as they relate to the global systemic transition from India’s perspective and the imperative to prevent Russia from becoming China’s junior partner.

With all this insight in mind, the likelihood of the US’ latest energy sanctions harming Russo-Indo ties is low and nowhere near what some in the media have speculated, but the risk still exists that they might be damaged a bit if they’re not successful in pioneering workarounds. The other variable of significance is whether India can convince Trump to grant it a sanctions waiver due to how these large-scale purchases prevent Russia from becoming China’s junior partner or in exchange for mediating on Ukraine.

Trump’s preference for sanctions and his latest threat to double down on secondary ones in that event could derail India’s careful multi-alignment between the US and Russia by forcing it to choose between them, which it doesn’t want to do under any circumstances. This contextualizes India’s recent expansion of its Russian insurers’ pool as a pragmatic compromise for now at least, which proves how much India doesn’t want to be forced into the aforementioned dilemma, though it might still ultimately be.

At the end of the day, everything depends on how far Trump is willing to pressure India on its large-scale import of discounted Russian oil and the degree to which India might then defy him. Trump might be convinced by India to reconsider going all out, while India might then boldly pursue its grand strategic interests if that doesn’t happen, though at the risk of a serious crisis with the US. Observers should therefore keep a close eye on these dynamics due to their potentially huge impact on the world order.

Source: Korybko.substack.com

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The post What Impact Might The US’ Latest Energy Sanctions Have On Russo-Indo Relations? appeared first on Energy News Beat.

 

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Those entering the US illegally will “face severe consequences,” President Donald Trump’s press secretary has said

The post First US deportation flights have taken off – White House appeared first on Energy News Beat.

 

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The Kommersant columnist outlines what Donald Trump’s return means for Russia and the world

The post Russia and the Trump Doctrine: Adapting to the ‘Rules of the Strong’ appeared first on Energy News Beat.

 

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Former Ukrainian ministers, MPs, and judges will be reportedly allowed to swap prison time for military service

The post Kiev to allow convicted officials serve in ‘specialized units’ – media appeared first on Energy News Beat.

 

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It’s no secret that Germany’s economy is in crisis.

What’s less obvious, and far more concerning, is why none of the major German parties are prepared to address what ails it.

Just today, the economy ministry revised its economic outlook again. We’re now down to 0.3% growth in 2025 from the already low 1.1% forecast expected three months ago, Handelsblatt reports.

Germany’s GDP has been stagnating for five years.

At this point, the slump is structural. Not just the usual ups and downs of economic cycles.

High energy prices, an ageing workforce, a lack of innovation, and a changing world economy put a question mark behind Germany’s once-mighty export model.

And what do the mainstream parties have to say about it? Not much.

The governing Social Democrats and Greens focus on calling for more public spending, which is undoubtedly part of the solution.

But their pet projects, such as artificially reducing energy prices through subsidies, only risk wasting money on energy-intensive industries that have – anyway – no future in Germany.

Subsidies are a crutch, not a cure, for long-term competitiveness.

The main solution of conservative election frontrunners CDU/CSU, meanwhile, is corporate tax cuts. Although there is no convincing financing plan.

Even CDU/CSU Chancellor candidate Friedrich Merz isn’t quite sure. He recently said in an interview these tax cuts are meant to be phased in until 2029 and will have to be “earned” through good economic performance.

But if the tax cuts can only be implemented if the economy is growing again, how can they be the recipe to bring growth back in the first place?

The answer is bleak.

So, Merz’s main instrument for bringing back growth seems to be good vibes.

“Economic policy is 50% psychology,” he has said, exposing that part of the CDU’s economic agenda is to spread optimism and hope that this, in itself, will give companies confidence to invest.

But businesses weighing up whether to invest in Germany aren’t really looking for vibes. They want stability, clarity, a plan.

The conservatives, the SPD, and the Greens all seem equally unwilling to face the real problems for fear of alienating a key electorate.

One elephant in the room? The looming baby boomers’ retirement will drown public finances.

Germany’s politicians, however, still hope to get elected without answering the inconvenient questions.

A reckoning awaits.

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Exclusive – The European Commission will call for an “unprecedented” reduction of red tape to boost the bloc’s faltering economy over the coming five years, according to a draft of the EU executive’s much-vaunted Competitiveness Compass, seen by Euractiv.

Tech – Here is everything the new Competitiveness Compass has in mind for tech, from regulating space and quantum industries to AI and European cloud services.

Health – Matteo Salvini, Italy’s deputy prime minister, has proposed a bill to withdraw Italy from the WHO, following Donald Trump’s executive order on Monday.

Agrifood – A one-month suspension of fishing in the Bay of Biscay to avoid accidental catches of cetaceans kicked off this week, prompting heightened controversy and ramping up pressure for monetary compensation.

Across Europe 

Czechia – A Czech working document outlining proposals to deepen the EU integration of Ukraine and Moldova is gaining support among other member states.

Germany – German election frontrunner Friedrich Merz on Thursday outlined his future foreign policy in stark contrast to the current government, promising a focus on fighting an axis of autocracies in a new era of systemic conflict.

Greenland – If the chronically online MAGA disciples who descended upon Nuuk last week knew anything about Greenland before they landed, it was likely from Qupanuk Olsen’s TikTok videos.

(MM)

Source: Euractiv.com

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