Winter storm left many Texas gas stations dry
In Texas, 1 in every 7 gas stations is without fuel a week after the historic freeze crippled refineries and trucking.
Shortages are most acute in Lubbock, El Paso and Odessa in West Texas, GasBuddy analyst Patrick DeHaan said in an email.
The winter storm led to diesel fuel shortages and created impassable roads that halted or delayed fuel deliveries. A large tanker can haul about 10,000 gallons of fuel — enough to fill 400 pickups.
The Texas Food & Fuel Association urged motorists to show restraint and avoid “panic buying.”I
In response to the potential supply crisis, Gov. Greg Abbott issued a temporary waiver for refiners to make fuel in compliance with any seasonal specification. Traditionally, the industry is required to make cleaner fuel in the spring and summer to curb pollution, while winter-grade gasoline is cheaper to produce.
Exuberant traders predicting $100 oil
While oil’s dizzying collapse is still fresh for many traders, rumblings are starting to emerge that by the end of next year, prices could again top $100 a barrel.
Azerbaijan’s Socar Trading predicts that global benchmark Brent could hit triple digits in the next 18 to 24 months, and Bank of America sees potential spikes above $100 over the next few years on improving fundamentals and global stimulus. Speculators are also getting in on the action, increasing bets in the options market that oil will reach the vaunted level by December 2022.
The views are ultra bullish, but they highlight increased confidence in the oil market after Brent rallied more than 200 percent following its hitting an 18-year low during the pandemic.
Demand has bounced back in key Asian markets, while the Organization of the Petroleum Exporting Countries and its allies are withholding barrels and a lack of investment is keeping shale supplies at bay. Goldman Sachs Group last week lifted its third quarter forecast by $10 to $75 a barrel.
The $100 mark occupies a special place in the minds of many traders, as oil hovered around that level for several years in the early part of the last decade as strong demand from emerging markets enticed drillers into ever more expensive locales.
That era ended in 2014, when U.S. shale companies proved that they could pump massive amounts at far lower costs.
Forecasts for $100 are far from the current consensus. The median analyst forecast compiled by Bloomberg has Brent staying below $65 a barrel through 2025.
Exxon takes oil sands off the books
Exxon Mobil erased almost every drop of oil sands crude from its books in a sweeping revision of worldwide reserves to depths never before seen in the company’s modern history.
Exxon counted the equivalent of 15.2 billion barrels of reserves as of Dec. 31, down from 22.44 billion a year earlier, according to a regulatory filing Wednesday. The company’s reserves of the dense, heavy crude extracted from Western Canada’s sandy bogs dropped by 98 percent.
In practical terms, the revision clipped Exxon’s future growth prospects until oil prices rise, costs slide or technological advances make it profitable to drill those fields. Exxon has enough reserves to sustain current production levels for 11 years, down from 15.5 years a year ago, based on Bloomberg calculations.
The pandemic-driven price crash that rocked global energy markets was the main driver of Exxon’s reserve downgrade, along with internal budget cuts that took out a significant portion of its U.S. shale assets. The oil sands have historically been among the company’s highercost operations, making them more vulnerable to removal when oil prices foundered.
The reserves accounting doesn’t mean Exxon is closing up shop or walking away from Canada because the company can bring the reserves back onto its ledger as crude prices rise.
Exxon previously flagged that low prices could wipe as much as one-fifth of its oil and gas reserves from its books, but steep cuts in drilling expenditures also imperil the assets it’s able to keep on the books.
CEO Darren Woods has prioritized high-return projects such as offshore oil in Guyana, shale in the Permian Basin and chemical and gas operations along the Gulf Coast in order to defend the company’s dividend.