US President Joe Biden lifted the moratorium on oil and gas drilling on federal lands. Starting this week, about 144,000 acres of land will be leased, that is, 80% smaller than what was announced earlier. In addition, the Ministry will raise rates for new leases to 18.75% and bidders will be required to comply with strict environmental standards. But Frank Macchiarola, senior vice president of the American Petroleum Institute, said these new terms could discourage investment in oil and natural gas on federal lands.
In any case, OPEC and the International Energy Agency (IEA) revised their forecasts for the better, suggesting that prices finally have significant downside potential. They noted that OECD members were consuming less oil than previously expected, so demand for the year is now down to 260,000 bpd.
In terms of production, there is a strong increase in the first quarter, led by non-OPEC producers.
OPEC's latest monthly oil market report says global demand will be 480,000 bpd lower than previously expected, in part because economic growth slowed down due to the tense geopolitical situation in Ukraine and quarantine in China. Most likely, this revision will prompt the group to change its plans, especially if supply depletes due to sanctions. If OPEC increases production, the US will probably be satisfied as prices are currently very high.
Last month, the group already increased output by 67,000 bpd, but Saudi Arabia was noticeably short of its quota.
OPEC also revised its US oil production forecast for this year, and history shows that when it rises, the group will take steps to counter it. It is only a matter of time before OPEC makes a move.
