What to Watch

Oil Gains on Falling U.S. Inventory

Oil prices surpassed three-year highs Wednesday morning, boosted by declining U.S. crude stockpiles and ongoing turmoil in major oil producing regions.

Brent crude, the global benchmark, was up 0.4% at $69.06 a barrel on London’s Intercontinental Exchange . On the New York Mercantile Exchange, West Texas Intermediate futures were trading up 0.7% at $63.37 a barrel.

The American Petroleum Institute, an industry group, released data late Tuesday showing an 11.2 million barrel decrease in crude supplies for the week ended Jan. 5.

The Energy Information Administration releases its official stock data later on Wednesday.

Energy Journal Exclusive

Iran Complains About High Oil Prices

 Oil prices have not been so high since May 2015. But for cash-strapped Iran, that’s bad news, writes Benoit Faucon.

A wave of unrest in the key Middle-East crude producer, driven by low-oil-revenue and persistent U.S. sanctions, have helped push global oil prices above $68 a barrel as traders speculate the unrest will spread to its oil industry.

On paper, high oil prices could help resolve grievances raised by protesters in Iran, such as unemployment and poverty, by filling the country’s coffers.

But Iranian Minister of Petroleum Bijan Zangeneh complained Tuesday that buoyant prices could soon hurt Middle-East oil producers by boosting costly U.S. shale producers.

“Members of the Organization of the Petroleum Exporting Countries (OPEC) are not keen on increased Brent crude prices to above $60 per barrel because of shale oil,” he said in remarks carried by Iran’s oil-ministry news agency Shana.

Indeed, even with the current oil-price spike, the International Energy Agency last month raised its forecast for U.S. crude production growth to 390,000 barrels a day in 2017 and 870,000 barrels next year.

Energy News

Carl Icahn Pushes SandRidge to Make Board Changes

Less than two weeks after Oklahoma-based SandRidge Energy Inc. caved in to investors’ wishes to terminate a deal to buy Bonanza Creek Energy Inc.,activist investor Carl Icahn is urging the oil-and-gas exploration firm to make changes to its board.

Tullow Oil Tiptoes Back Into Exploration

Tullow Oil is cautiously reviving its search for new oil-and-gas resources in Africa and Latin America, its chief executive said, warning that the sector will need to walk a fine line to balance spending discipline with a desire to grow, Reuters reports. The firm, which grew rapidly earlier this decade, has emerged from one of the longest downturns in the sector’s history with a $3.5 billion debt pile.

“Oil exporters have made significant structural reforms since the oil price crash in 2014, which helps them manage an oil price of $45, and improves their credit ratings if oil stays around $70″

Charlie Robertson, Global Chief Economist at Renaissance Capital

Aramco Is Said to Seek $2 Billion From Japan’s Export Agency

 Saudi Arabian Oil Co. is seeking a $2 billion loan from Japan’s export-credit agency, Bloomberg reports, as competition for a role in potentially the world’s largest initial share offering heats up. Japanese lenders are jostling for position to arrange the loan as a way of getting closer to Aramco and potentially win a role in the IPO, sources said. The U.K. government agreed to a $2 billion loan guarantee for Aramco in November.

WSJ Energy In-Depth

Trump Administration Says New Drilling Won’t Be Allowed Off Florida Coast

 Trump administration officials are looking to rally support for a proposal to expand offshore drilling in waters along the U.S. coast, but had to backtrack on plans to open up Florida’s waters for exploration after pushback from fellow Republicans in the state, writes Timothy Puko.

Interior Secretary Ryan Zinke said he made the decision to take Florida off the table Tuesday evening after meeting with Florida Gov. Rick Scott, one of several Republicans who had denounced plans to lease coastal waters there to drillers for the first time in more than 30 years.

The administration hasn’t backed down from the rest of its proposal, which it has planned to sell to opponents over the next 18 months.

But skeptics think it could take more than two years to finalize the plan and that it will face challenges from state leaders in the courts and in Congress.

Big Number

40

U.S. President Donald Trump has made it clear he wants to boost the energy industry and remove red tape. With the exception of when regulators quashed a White House move that would have kept some struggling coal and nuclear plants running, the administration has made inroads in its deregulation drive.

Harvard Law School maintains an online “Environmental Regulation Rollback Tracker” with 40 entries like the Stream Protection Rule, Uranium Extraction Water Quality Standard and Greater Sage Grouse Protection under threat or already repealed.