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Nov 11 - By Liz Hampton
U.S. Energy Markets Editor
Hello Power Up readers! Oil prices are down 2% today as the dollar has crept higher and China's stimulus plan disappointed investors who were eying a bump in fuel demand growth. This comes after a 2% decline on Friday, though both crude benchmarks ended last week slightly higher.
On Monday, Brent crude futures are trading around $73.29 a barrel, down $1.48, and West Texas Intermediate crude $(WTI)$ futures are around $68.78 a barrel, down $1.60. The dip in prices comes even as more than a quarter of U.S. Gulf of Mexico oil production was offline in the aftermath of Storm Rafael.
Henry Hub natural gas futures are up nearly 10% today, trading at $2.928 per million British thermal units; however, spot prices for Henry Hub have plunged to a 25-year low as warmer weather clips heating demand. In West Texas, Waha natural gas prices are trading in negative territory due to lack of takeaway capacity.
Trump set to roll back oil regulations
It's been just under a week since we learned the outcome of the U.S. presidential election and we are now starting to get a glimpse of how a second Trump presidency may look for the energy patch.
President-elect Donald Trump has vowed to roll back regulations that hinder oil and gas drilling and wants to keep prices for things like gas down for consumers. This comes as he has promised to impose tariffs on imported goods.
Experts say there is not a ton that Trump's administration can do to roll back some of the clean energy benefits of the Inflation Reduction Act because the law would be near impossible to repeal. Still, Trump is hardly aboard the clean energy bandwagon, as early signals from within the transition team show.
On Friday, a report came out that Trump's transition team is preparing an executive order and proclamations on withdrawing from the Paris climate agreement when he comes into office in January. President Joe Biden signed the U.S. up for the agreement on his first day of office in 2021 after Trump withdrew from it in his first term in 2017.
Trump is also looking to shrink some national monuments to allow for more drilling and mining, and revoke a waiver that lets some states, like California, have tighter pollution standards.
The Trump administration is also anticipated to end a pause on liquefied natural gas export permitting, something applauded by the LNG industry. This includes projects like Commonwealth LNG, which has been waiting for a permit for its $10 billion facility for more than 18 months.
Meanwhile, Trump is eyeballing North Dakota Governor Doug Burgum as his "energy tsar," according to other media reports. Burgum's state is the third largest oil producer in the U.S., with output totaling nearly 1.2 million barrels per day.
The new role of "energy tsar" would help with Trump's push for deregulation. Former Energy Secretary Dan Brouillette is also being considered.
ESSENTIAL READING
U.S. oil refiners this quarter will run plants above 90% of processing capacity as inventories have declined, and gasoline and diesel demand improves, Erwin Seba reports. Top refiner Marathon Petroleum, which operates 16% of the nation's capacity, will run its 13 plants at 90% of capacity.
The European Union may consider replacing Russian liquefied natural gas $(LNG)$ imports with those from the United States, according to European Commission President Ursula von der Leyen.
Britain's energy market regulator has proposed new regulations for grid companies aimed at cutting down the backlog of renewable projects waiting to connect. There are more than 730 gigawatts waiting for connection, far above the 220-225 GW of projects estimated to need connection by 2030.
India's Adani Power has continued to reduce electricity to neighbor Bangladesh as it seeks to recover more than $800 million in dues. This month, supply has been cut to 700-750 megawatts from around 1,400-1,500 MW in early August.
The Biden administration bought its last batch of oil for the Strategic Petroleum Reserve, it said on Friday, after selling a record amount from it in 2022 to counter rising fuel prices, Timothy Gardner exclusively reported.
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(Editing by Marguerita Choy)
((liz.hampton@thomsonreuters.com))
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