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OIL AND GAS
White House called on to act on oil exports
by Daniel J. Graeber
Washington (UPI) Sep 16, 2015


Oil rallies, though low growth persists
New York (UPI) Sep 16, 2015 - Crude oil prices opened strong in Wednesday trading after signs of dwindling stockpiles and indication the White House would keep U.S. oil behind closed doors.

West Texas Intermediate, the U.S. benchmark price for crude oil, gained 3 percent to $45.59 per barrel at the opening of trading in New York. Brent gained 3.1 percent to $49.29 per barrel.

The U.S. Energy Information Administration and the Organization of Petroleum Exporting Countries in separate reports said North American crude oil production would likely drop under pressure of a weak oil economy.

Crude oil prices are down more than 50 percent from last year, despite Wednesday's early session rally. Lower prices means less spending on production, though global demand is also down because of weak economic growth outside the United States.

Shale oil industry supporters have called for an end to a ban on crude oil exports, arguing that it would translate to a form of economic stimulus while increasing U.S. leverage overseas. White House spokesman John Earnest said there's little support for legislative action, however.

"This is a policy decision that is made over at the Commerce Department," he said.

Prices were supported further by data from the American Petroleum Institute showing a 3.1 million barrel decline in crude oil inventories for the week ending Sept. 11. A more formal release on inventories will be published late Wednesday by the EIA.

Wednesday's rally may be short-lived against the background of anemic global economic growth. Chinese economic growth is slowing despite government efforts to slow the decline. Ratings agency Standard and Poor's, meanwhile, lowered its credit outlook for Japan, which has struggled to emerge from economic recession.

In Europe, Eurostat, the European Union's statistics office, said employment was flat and inflation was low.

"European Union annual inflation was 0.0 percent in August 2015, down from 0.2 percent in July," it said. "A year earlier, the rate was 0.5 percent."

If the White House opposes legislative action to overturn a ban on oil exports, the onus is on the executive branch to take action, an industry group said.

A House energy committee pushed ahead with legislation that would end a ban on crude oil exports enacted when Arab members of the Organization of Petroleum Exporting Countries stopped shipping oil to the United States in the 1970s. In what industry supporters describe as an era of energy abundance brought on by U.S. shale oil deposits, Republican leaders in the House say U.S. policies are out of date.

White House spokesman John Earnest said ending the ban is a matter for the Commerce Department, saying the office of President Barack Obama does not support legislative action.

Neal Kirby, a spokesman for the Independent Petroleum Association of America, said if the White House opposes such action, it should take the initiative itself.

"The administration should then take action to allow our own, U.S. producers equal access to the same global markets that it will soon be authorizing for the Iranians," he said in response to emailed questions. "Failing to do so would be a major missed economic opportunity for both the American people and U.S. businesses."

A report from the U.S. Energy Information Administration finds removing the ban would bring modest relief for U.S. consumers in terms of gasoline prices, already at historic lows, and lead to an increase in U.S. crude oil production of around 450,000 barrels per day by 2025.

Those in the refinery sector have expressed reservations about ending the ban. While supporters tout economic benefits and the potential for overseas leverage against Russia and potentially Iran, opponents say many of the stated benefits are overblown.

"We have maintained all along that this is a risky policy change," Jay Hauck, executive director of the Consumers and Refiners United for Domestic Energy, said in an emailed statement. "The losers will be American consumers, businesses, and national security."

Groups like Hauck's say U.S. allies overseas need fuel, not crude oil, because many foreign refineries aren't configured to process the lighter grade of crude oil found in U.S. shale deposits.

Last year, the U.S. Bureau of Industry and Security, a division of the Commerce Department, authorized two U.S. companies, Pioneer Natural Resources and Enterprise Products Partners, to ship an ultra-light form of oil called condensate from the U.S. market. Processing steps mean condensate doesn't qualify as crude oil under the terms of U.S. law.

In early August, the Commerce Department granted a request from Mexican energy company Petroleos Mexicanos, known also as Pemex, to swap as much as 100,000 barrels of U.S. crude oil per day for Mexican refining. The deal forbids the re-export to other nations.

A report last week from the U.S. Energy Information Administration said seasonal factors offshore and weak economics onshore are expected to lead to a decline in U.S. crude oil production. In a short-term market report, EIA said total crude oil production will decline 4.3 percent from expected full-year 2015 levels to 8.8 million bpd by 2016.

The White House spokesman suggested House leaders were putting party interests first, which he said were often aligned with those in the oil industry.


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OIL AND GAS
Upton: U.S. oil policies should match shale era
Washington (UPI) Sep 15, 2015
As the full House Energy and Commerce Committee considers lifting a ban on U.S. crude oil exports, a congressman said it's time policies match the shale era. By a voice vote last week, the Republican-led House Subcommittee on Energy and Power advanced legislation that would lift the ban on crude oil exports. The full House Energy and Commerce Committee considers the measure late ... read more


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