Shale patch sees limited impact from Biden’s unusual oil release

(Bloomberg) – The Biden administration’s coordinated and unprecedented attempt to bring oil prices under control by allowing one of the largest cuts ever to U.S. crude reserves has sparked a collective shrug from the shale zone.

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Industry players generally agreed that this move would have a limited effect on lowering gasoline prices – which was President Joe Biden’s ultimate goal with the planned release of 50 million barrels of crude from the stockpile. American, known as SPR. China, Japan, India, South Korea and the UK will also release oil from their reserves.

Bryan Sheffield, Managing Partner at Formentera Partners

The post was factored into oil prices weeks ago, but now it’s “old news,” Sheffield said by email. If this move succeeds in lowering oil prices, it could discourage producers from increasing production and ultimately exacerbate the “bottleneck problems” created by high demand and insufficient supply, a he declared.

Peter Sutherland, President of Henrietta Resources LLC

“To be fair, the White House had a limited toolbox, and it was the best option available, although it will have the unintended consequence of higher oil prices later on. It really shows how concerned the administration is about inflation next year and halfway through. We believe these stocks will keep prices under control until spring, but could backfire as early as next summer. “

Randy Ollenberger, Analyst at BMO Capital Markets

“The politically motivated publication could have a short-lived and limited impact on the oil market given the imminent start of the winter heating season and the concomitant increase in demand,” Ollenberger said in a note to investors. “In addition, the OPEC + group could postpone its planned production increase, mitigating the impact of the SPR exit.”

Ed Longanecker, President of the Texas Independent Producers and Royalty Owners Association

“The Biden administration knows that any impact from an SPR release is a temporary and inadequate quick fix to deal with rising energy prices,” Longanecker said in a statement. He called for the construction of US pipelines and the export of more US oil to keep prices lower.

“Short-sighted political decisions like an SPR publication or asking OPEC to increase production will have serious and lasting implications for our national security, economy and environment,” he said.

Leslie Beyer, Managing Director of the Energy Workforce & Technology Council

“We appreciate that the Biden administration recognizes that rising fuel prices pose a significant threat to the US economy, but an SPR release will only be a short-term solution,” Beyer said in a statement.

“The current energy crisis is the result of misguided energy policies that increase the cost of fuel and discourage energy production in the United States. The Biden administration should adopt energy policies that stimulate the production of the cleanest and most reliable energy in the world, to ensure that America maintains energy independence and security. “

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