Daily Energy Report
Williston recovering, Sanctions waiver for Iraq, US Crude inventories, LNG competition, EU’s 12th sanctions pkg, TX crude quality, China renewables boom, Venezuelan oil, EU methane deal, and more.
Chart of the Day: Finally, Williston’s oil production is recovering!
Figure (1) above shows oil production in the Williston Basin. After more than three years of weak performance, production has started increasing.
EOA’s Main Takeaways
Although the Williston extends to Eastern Montana and South Dakota, most of its oil production is in North Dakota. All the recent increases were in North Dakota. It remains to be seen if the recent trends of increases will continue, and if it does whether it will surpass 2019 production levels. The reason for our doubts is the large decline in well completions in October in North Dakota. Well completions decreased from 129 in September to 96 in October. The rig count has been declining throughout the year. It declined from 42 at the beginning of the year to 32 recently.
Story of the Day
The Biden administration has prolonged a sanctions waiver for Iraq, permitting continued electricity purchases from Iran for four more months. This decision allows Iraq access to about $10 billion held in escrow for Iranian electricity without facing U.S. sanctions repercussions. Critics argue that such waivers enable Iran to allocate domestic funds towards destabilizing proxy groups in the region.
EOA’s Main Takeaways
This is a routine extension. It has been taking place for years! But the media ignored the fact that the waiver explicitly allows Iraq to pay Iran so long as the money is spent on food and humanitarian items. A few months ago, Iran and Iraq signed a barter agreement that circumvented US sanctions since barter does not go through any banking system.
Here is the problem that no one is talking about: Iran wants to keep Iraq dependent on its exports of gas, gasoline, and electricity. Its cronies in Iraq are destroying all efforts to reduce Iraq’s dependence on energy imports from Iran. US policies are ensuring that Iraq remains dependent on Iran! If the US is serious about helping Iraq and limiting Iran’s influence, it will help Iraq produce more electricity, natural gas, and gasoline!
News of the Day
The EIA did not publish the inventory data last week because of maintenance. Today it released the data. It shows an increase of 17.5 mb in the last two weeks. The increase last week was 3.6 mb to 439.4 mb.