Trump wants more oil, American oil has reservations.

Two dollars took the slow last week, after the information that the Biden government intends to apply a ban on new offshore drilling in the US just before the power was delivered to . Now Brent oil that concerns Europe is trading for $76/varelli, leaving behind the range of $70 – 75 in which it has been for a long time. Donald Trump’s coming to the White House is a two-cut knife for all producers and creates unforeseen market conditions. As you know, the new president has announced that he will remove regulatory restrictions on drilling and wants in exchange for higher production than domestic companies. CORVERSE However, oilists do not express enthusiasm for Trump’s intentions, although they publicly express their support. In a recent survey carried out by the Federal Reserve of Dallas, they stated concerned about ejecting their operating costs in recent years. The dominant slogan after the pandemic’s “break” was to limit spending. As a result, the number of drilling in the US was limited, but the efficiency of the average drilling was enhanced. The industry is currently more measured and careful with new investments than in the past decade. At the same time, in the dominant U.S. land basins a major change of ownership has taken place, as the large oil companies purchased works and land from the smaller ones. In turn, this development brings American production closer to bank requirements, exerting restrictions. CORVERSE Another pressure is the natural maturation of shale deposits in the US, most of which are thought to have now spent half their lifetime. The industry has put its hopes in new technologies, such as injecting CO2 into the deposits to last longer years. But this is an open bet for now. It is worth recalling that shale production requires continuous investment to be maintained. Experts estimate that if investments were theoretically discontinued for one year, this production would be reduced by 30 – 35%. Based on the above, one realizes that Trump’s goal of increasing production from 13 to 16 million barrels/day is not at all easy to achieve in technical terms. Then there is the financial aspect, since producers do not want to see prices collapse. Factor X is of course OPEC+ that has its own goals. The alliance has currently extended its production cut-off agreement. If in the coming months higher prices prevail over $80, this may be an incentive for Saudi Arabia and the other members to open the barrels. In such a case the incentive for American companies will be even lower.