I almost could not believe what I was hearing. The President touting the boom in U.S. energy and manufacturing and said that we can't get in the way with needless regulation. During President Obama's Jobs Tour in Texas, the home of "Big Oil” and the heart and soul of the U.S. energy industry, the President embraced the industry that he had disparaged insulted and degraded. Perhaps the President is starting to realize that if it was not for the boom created by "Big Oil,” then perhaps our economy at this point would not be the brightest in the world but more look like the struggles ones they are having in the EU. The U.S energy Industry has been the one of the key ingredients that has allowed the rest of the economy to recover. Big oil and the shale gas revolution is the President’s secret weapon creating the headwinds that have improved the jobs number and the economy as a whole and without the boost that the energy industry has provided, the economy would be going backwards.
Not to mention the fact that the U.S. Energy industry has contributed more tax to the Federal Government than any other industry. In the top-10 list of companies paying the highest 2012 U.S. income taxes, U.S. oil industry companies took three of the slots. The top taxpayer was Exxon Mobil at $31 billion despite the fact they gave up their title of world's largest company to Apple for a time. Exxon Mobil paid more in tax than they took in U.S. profits. Number 2 (no, not Apple) Chevron, which paid a cool $20 billion in Federal taxes. Sixth was ConocoPhillips at $8 billion. That is about $60 billion in taxes among them, which is more than any other industry and more than the other seven companies on the list, including Apple and Microsoft, combined. Not to mention that Obama's favorite company GE paid zero in U.S. taxes.
On top of that the President is pushing for natural gas exports. He must have run the numbers and now realizes what a positive impact it will have on his economy. Without the U.S. Energy boom brought to you courtesy of "Big Oil,” the economy would be flatter than a pancake.
Speaking of exports the Financial Times reports that "Exxon Mobil and Qatar Petroleum have agreed to a deal making it possible for the UK to import liquefied natural gas from their proposed $10bn export project at Golden Pass in Texas, opening up a new source of potential gas supply for Britain. Exxon said the two companies had agreed to make capacity available at their South Hook receiving terminal at Milford Haven, south Wales, to take cargoes of LNG from Golden Pass, and would soon start negotiations on the commercial details of the plan. The sales would require US government approval."
The long term bull outlook for natural gas remains solid! Short term Bloomberg reports that U.S. natural gas inventories rose last week, according to the U.S. Department of Energy. Inventories rose 5%, or 88 billion cubic feet, to 1.865 trillion in the week ended May 3. A Bloomberg survey expected inventories to rise 86 billion cubic feet to 1.863 trillion cubic feet. It is pulling back as the S&P looks ripe for a pull back and strong supply. Gasoline got a boost on refinery rumors as well as the fact that the weekly jobless claims increased demand expectations.
The market is also watching the Brent-WTI spread. Robert Campbell of Reuters writes "For two years the dominant story in the North American oil market has been a shortage of pipeline capacity, leading to the buildup of gluts of oil as producers cannot get their crude to market. That era is coming to a rapid end.”