Dallas Fed survey shows mounting alarm among Texas drillers at the administration’s energy strategy

https://www.ft.com/content/192de972-4661-40ce-a649-6a5476ae5c18

(http://www.autoadmit.com/thread.php?thread_id=5704570&forum_id=2#48811604)

(http://www.autoadmit.com/thread.php?thread_id=5704570&forum_id=2#48812555)

The executives, shielded by anonymity, bluntly criticized Trump in their responses to a survey conducted by the Federal Reserve Bank of Dallas from March 12 to March 20.

(http://www.autoadmit.com/thread.php?thread_id=5704570&forum_id=2#48821437)

A double whammy of presidential policies — more OPEC output and historic trade levies — are sending fossil stocks tumbling.

President Donald Trump campaigned on a promise to “drill, baby, drill” and help the American oil and natural gas industry. Executives loved it — the industry gave more than $75 million to Trump’s campaign and its affiliated groups.

Now the trade is blowing up in their faces. This week, the president accomplished two of his biggest goals — and the result has slammed the oil industry and imperiled its near-term future. The U.S. oil and gas industry has now stopped growing — and may even lurch into a recession — and there’s no sign yet that Trump or any of the oilmen surrounding the president have noticed.

The double whammy began on Wednesday, when Trump announced eye-watering tariffs on dozens of countries and trading blocs around the world. The tariffs amount to the largest tax hike on Americans since 1968, according to J.P. Morgan, and they have triggered a meltdown in global markets

Since Wednesday, the West Texas crude oil benchmark has fallen by roughly 14%. A barrel of oil now trades at about $62. That is well below the $65 level that oil producers need in order to turn a profit drilling new wells nationwide, according to the most recent Dallas Fed survey of energy companies. It’s so low that it could essentially prohibit any new drilling activity in the United States for the time being.

These two policies have essentially frozen the U.S. oil industry for now, according to Rory Johnston, a longtime oil analyst and the author of the Commodity Context newsletter.

“You’re probably seeing more pauses of initial investment intention than the initial Covid shock. It’s really bamboozling,” Johnston told me. “Everything else is really, really starting to grind to a halt, and you’re not seeing anyone jumping over themselves to ‘drill, baby, drill,’ despite the White House’s claims.”

The week has seen brutal sell-offs for major oil companies and the smaller independents. As of Friday afternoon, shares of Diamondback Energy, a Texas-based oil exploration firm, had lost 20% of their value since Monday. The Dallas-based Matador Resources lost 22% in the same time. The oilfield services giant Halliburton is down 20% on the week and 50% in the past 12 months. Nabors, another oilfield service provider, is down 30% in just the past five days.

https://heatmap.news/energy/tariffs-bad-for-oil-companies#

(http://www.autoadmit.com/thread.php?thread_id=5704570&forum_id=2#48821452)