Since President Nixon was in office we’ve heard ‘ ….we (the USA) will become independent on foreign oil. We don’t need it; we have our own’. It sounded good then and it still sounds good – but will it happen.
Wednesday Saudi Arabia and Iran will meet for a scheduled OPEC meeting to discuss how much oil will be produced and establish the global price. For decades these two counties have not been able to broker a deal on the production of oil. Saudis have primarily regulated oil production and pricing for years. Since President Obama lifted the sanctions on Iran, Iran has become a major oil player again. The markets are speculating there will be no deal and Iran will spitefully dump oil on the market. The oil market prices are already lower from open.
With the continuance of some of the lowest oil prices even the Saudis are surely feeling the pain.
The Saudis are dealing with the glut of oil and low prices in many ways. We heard of an IPO on 5% of their national-government owned oil company, government workers’ salaries have been slashed and stipends to Saudi citizens has reduced and in some cases discontinued. So will this finally lead to the US being self-sufficient? Our crystal ball is cloudy today so no real read.
Now for the good news – over the next several months federal regulations will soften. And, natural gas market price is higher today at 3.26 spot price. And the better news?? Forget about OPEC issues because the US has now become the largest net producer of nat gas globally in more than 60 years!!! What does that mean? While we are not quite oil independent, but we are nat gas independent. (Forbes) Thanks to fracking, horizontal drilling and advanced technology. Japan, Europe (especially Poland) and the Norwegian counties anxiously await LNG from the US. Had the US not implemented these techniques the US could be waiting in line with these and other counties for nat gas from Qatar and Australia.
And even better news, the Appalachian Region now has 29 rigs with more ramping up to make that trek up north. Are you ready? Stay tuned for more updates and continued good news.