TrimTabs Investment Research has predicted the price of crude oil will not reach $200 per barrel because the U.S. economy would be broken before that happened.“If oil prices hit $200 per barrel, America’s oil bill would be equal to a staggering 23% of the after-tax income of all Americans who pay taxes,” said Charles Biderman, CEO of TrimTabs. In a research note to its clients, which include many of the world’s largest hedge funds, TrimTabs said recently that, given that the U.S. consumes about 21 million barrels of oil per day, at $200 per barrel, the cost of oil would reach $1.5 trillion annually! This staggering sum would be equal to 23% of the $6.5 trillion in after-tax income of all Americans who paid individual income taxes in the past 12 months. TrimTabs pointed out that when oil prices averaged $70 per barrel in 2007, America’s oil habit cost a bit more than $500 billion, or 8% of after-tax income. “At $135 per barrel, America is already spending $1 trillion per year on oil, which is equal to 15% of after-tax income,” Biderman said. “Such massive spending on oil alone is completely unsustainable.” TrimTabs also urged the Commodity Futures Trading Commission to boost the margin requirements on oil futures to at least 25%. “The current margin requirements of no more than 7.5% must be increased to stem the speculation that has inflated oil prices,” said Biderman. “Stratospheric oil prices are destroying the U.S. economy.” Biderman disagreed with claims by large oil futures exchanges that high margin requirements would drive trading offshore. “What really worries officials of the New York Mercantile Exchange and the Intercontinental Exchange is that higher margin requirements would prick the oil bubble, reducing the huge revenue streams of their exchanges and traders,” said Biderman. He expressed skepticism that if the CFTC reduced margin requires, Dubai, where the volume of oil futures trading is a small fraction of the volume on the NYMEX and the ICE, would allow itself to become the dominant market for oil futures trading because of the political pressure such a move would attract. --Leslie Haines, Editor in chief, Oil and Gas Investor, email@example.com
2023-10-06 - Development includes 1.5 mtpa of carbon capture per year, and project aims for net zero emissions.
2023-11-14 - Exxon Mobil is eyeing gross production of 620,000 bbl/d offshore Guyana in the Stabroek Block in the first half of 2024 with the start-up of its third project Payara, which has a production capacity of 220,000 bbl/d.
2023-09-12 - Woodside Energy is making a massive bet offshore Mexico at the large, high-quality conventional resource Trion development, checking key production, climate and financial boxes for both Mexico and partners Woodside and Petroleos Mexicanos.
2023-10-26 - Aker BP’s subsea tieback in the Kobra East & Gekko project is the second of three tiebacks the company has planned to send production to the Alvheim FPSO in the North Sea.
2023-09-18 - Here’s a roundup of the latest E&P headlines, including an awarding of blocks from Lease Sale 259 and the start of production from a new well.