Over the past few months, there has been a drastic increase in U.S. shale producers’ race to acquire drilling permits from the Federal Government. This is due to the upcoming November presidential elections and concerns that a win by Joe Biden could mean a crackdown on oil and gas exploration. According to Reuters, “As of August 24, producers have received 974 permits for new wells on federal land in the Permian, compared with 1,068 for all last year and 265 in 2018, according to data firm Enverus. In the 90 days up till August 24, producers received 404 permits in the Permian, compared with 225 and 11 The scramble for permits comes due to the ongoing coronavirus pandemic.”
Oil prices are edging lower today to $40.58/barrel as bearish sentiment is continuing to mount over concerns of a possible resurgence of COVID-19 cases over the holiday weekend and paring the pause in the incredible rally in equities.
The U.S. Gulf Coast was hit by Tropical Storm Cristobal yesterday, causing offshore oil production to shut down by almost 24%, equating to more than 430,000 barrels per day. According to the U.S. Bureau of Safety and Environmental Enforcement (BSEE), this was a 140,000 barrel per day improvement compared to June 9th. Occidental Petroleum, BP, and Shell were some of the companies who evacuated employees ahead of the storm. There were a total of 188 platforms and rigs evacuated by those operators. Since the last update, 61 of the 643 platforms had still been evacuated in the Gulf of Mexico. Cristobal battered southern Mexico and shut down ports over the past week, before moving through the Gulf of Mexico and depositing heavy rainfall from Louisiana to Florida.