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This week, the Biden administration moved to raise royalties and other fees for oil and gas exploration companies on public lands.
The rule proposed by the US Department of the Interior would raise the minimum royalty rate for federal drilling rights by more than a third, to 16.67%. From the previous 12.5% paid by oil and gas companies for a century.
Bonding requirements will rise for the first time since 1960, to $150,000 per lease from $10,000, to help clean up drilling sites after completion or shut down abandoned wells, and will increase minimum fees that companies pay to lease and acquire land, to reduce speculation on leases that companies can hold for up to a decade without drilling.
The new fees will ration increases made in the Climate Act to reduce inflation after they expire.
Inland officials are also working on a new rule that they say will prioritize conservation on par with energy development, mining and recreation, and which would hold promise. Radically changing how the government manages public lands.
Crude oil recorded a fourth consecutive weekly gain amid expectations of contracting supply in the second half of 2023, with indications that Russia is cutting crude exports as it finally joins Saudi Arabia in an effort to balance global markets.
Prices also got a boost as China, the world’s largest crude importer, said it would implement new measures to boost its flagging economic recovery.
The Nymex Crude Oil (CL1:COM) contract has expired at the nearest maturity month for September delivery +2.3% To $77.07 a barrel this week, the highest settlement value since April 25, September Brent Crude (CO1: COM) closed the week +1.5% to $81.07 a barrel.
Meanwhile, US natural gas snapped a two-week losing streak, with the first-month Nymex August (NG1:COM) contract ending the week. +6.8% At $2.173/million British thermal units.
ETFs: (NYSEARCA: USE), (BNO), (UCO), (SCO), (DBO), (USL), (DRIP), (GUSH), (USOI), (NRGU), (UNG), (UGAZF), (BOIL), (KOLD), (UNL), (FCG)
energy sector (New York: XLE) The week is over +3.5%It leads all 11 industry groups on Standard & Poor’s.
Top 5 gainers in energy and natural resources over the past 5 days: (ADES) + 57.2%(DFLI) + 39.1%(PVL) +16.5%(WPRT) +16.3%(GTE) +12.9%.
The 5 largest losses in energy and natural resources over the past 5 days: (MTR) -24.8%(Customer Service Representative) -12.9%(EOSE) -12.5%(DKL) -10.6%(ADSE) -9.2%.
Source: Barchart.com