US oil: funding shortages, rising prices. But if you invest …
Most US oil and gas companies plan to increase their capital expenditures next year, as widely predicted by analysts in recent months. However, the capital available to the sector is steadily decreasing as banks continue to avoid the sector due to “Green” pressure, ESG, and as the Biden administration, with its green agenda and anti-oil policies, is discouraging investment in the shale oil sector.
These were some of the comments and views expressed in the Dallas Fed Energy Survey for the fourth quarter released this week, which showed the oil and gas industry's frustration with banks' limited funding availability and uncertainty. that the ecological policies of the US administration pose for the future of American oil and gas production.
The low availability of capital will eventually lead to higher oil and gas prices, US executives said in responding to the Fed survey.
Access to credit expansion on conditional loans has already been flagged as one of the biggest obstacles to the industry, along with the limited supply of skilled labor, by an executive in the previous survey for the third quarter.
In the fourth quarter, shale executives spared no criticism of the Biden administration's policies towards the industry. This follows months of US officials begging OPEC + for more oil production instead of turning to their own domestic companies, which, given certainty about future policies, might have been more willing to invest in drilling more wells and increasing of production, helping to tame the oil price rally. The problems, as we know, are political: the left Dem would put Biden on the cross if he abandoned the dogma of the ESG, that is, of the Green.
This plea by Biden to OPEC + on the one hand has not led to any increase in production, but has offended the domestic producers, and, indeed, it is incomprehensible to most, who do not live the politics of Washington, to understand how it is possible to ask abroad. a raw material that can be produced at home.
It must be said that the American economy is more dependent on direct market financing than that from the banking system which has become even more scarce due to pressure from environmental lobbies.
The results are generally predictable. “The tied capital will lead to significantly higher commodity prices. And it's not the administration's fault: this is a Wall Street charge and an environmental, social and governmental one, ”an executive said in comments accompanying the survey for the fourth quarter.
“While we are one of the best performing energy funds in America, investors are cutting our funding by 80%. We believe this is a double-edged sword: if it is happening to us, it is probably happening to everyone, ”added the manager.
"The political pressure that forces available capital to move away from the energy industry is a problem for everyone," noted another executive at an exploration and production (E&P) company.
“Banks consider loans to the energy sector as a" political risk ", the executive added.
At this time, shale executives also discover that the ESG trend, the push for the green agenda and the administration's anti-oil policies are key drivers of greater uncertainty in their operations and capital spending plans for the 2022 and beyond.
Due to uncertainties about the availability of capital and internal policies, some executives say they cannot provide detailed expectations on capital investments in 2022. This could lead to uncertainty about the supply and therefore the retail price of fuels in the US. A real misfortune, in view of the partial parliamentary elections.
Instead, now let's say a word from the point of view of personal profit: if there is demand for capital and limited supply, it is obvious that the result is an increase in returns. Those who enter it could make good profits, better than those who follow the instructions of the bankers …
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The article US oil: funding is scarce, prices are rising. But if you invest … it comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/petrolio-usa-scarseggiano-i-finanziamenti-prezzi-in-risalita-pero-se-investite/ on Mon, 03 Jan 2022 07:00:24 +0000.