US pumps more fossil fuel but prices sore to $110

US pumps more fossil fuel but prices sore to $110

As oil prices surged above $110 a barrel, the US-built five oil rigs this week, signalling some acceleration in domestic fossil fuel output.

According to Baker-Hughes, an oil and gas services company, the total number of oil rigs in the United States increased to 557 this week. That represents a steady increase from 552 last week, 549 the week before, and 548 three weeks ago.

For the fourth week in a row, the Permian Basin, where new production is most expected to emerge, gained zero.

The number of natural gas rigs operating in the United States increased by two to 146.
Oklahoma added a total of two rigs. In Pennsylvania, two more were added. The number of rigs in Louisiana increased by four. The number of oil rigs in Texas and Alaska both decreased by one.

More rigs, more fossil fuel

The continuous reduction in Canadian rigs, which is common for this time of year, negated some of the gains in US production. The number of oil rigs in Canada has decreased by three, while natural gas has decreased by one.

The Biden administration has stated that it wants increased domestic oil production, but it has refused to sell new federal land leases until lately. Even as it announced the move, the government made it clear that it despises fossil fuel businesses and sees them as threats to the public good.

COVID and Ukraine

The pricing changes this week follow a significant decline in US gas production in 2020, when gas, oil, and other fossil fuel extraction all but ceased.
The gas sector plummeted off a cliff in the middle of the pandemic says analyst who adds that during the pandemic, many smaller gas producers that had started up during the fracking boom went out of business.

But larger corporations reduced production to maintain their margins. That ended when the world economy began to pick up last fall with demand returning, but supply is still catching up.

As for the Ukraine war, the reality is different from what the official US government version says.

The United States’ record exports of liquefied natural gas are helping to keep domestic supplies low. The United States became the world’s largest exporter of fossil fuel earlier this year.

While President Biden has promised to provide more gas to Europe to replace Russian gas, it is unclear where that additional gas would come from, given nearly all of the United States’ LNG shipments have already been sold.

Almost all of the world’s liquefied natural gas is sold under contract, and these agreements can last for decades. There is just a little amount of LNG that can be rerouted from one place to another.

The war is having a huge impact on natural gas prices in Europe, but it’s a tiny part of the overall picture. It has a very tiny effect in the US.