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Daily Standup Top Stories
Why did Saudi Arabia raise prices to the Asia market while increasing OPEC+ production quotas?
Earlier this week, I published an article titled “What does the OPEC+ increase of 411,000 mean to the United States?” I was asked about Saudi Arabia’s increase in the Asia market and how it would impact […]
Senate Votes To Overturn Stringent Biden-Era Appliance Rules, Sending Bills To Trump
The Senate voted to overturn two Biden-era appliance rules, sending bills to Trump to undo overly strict energy efficiency and appliance standards. This week, the Senate voted to undo two Energy Department rules for appliances […]
Peak Shale May Be Here Says Diamondback CEO
Before oil prices started plunging last month, most banks and research firms had forecast US shale production would grow this year and next before plateauing later in the decade. Diamondback Energy trimmed its own full-year […]
Highlights of the Podcast
00:00 – Intro
01:48 – Why did Saudi Arabia raise prices to the Asia market while increasing OPEC+ production quotas?
04:42 – Senate Votes To Overturn Stringent Biden-Era Appliance Rules, Sending Bills To Trump
09:20 – Markets Update
10:54 – Peak Shale May Be Here Says Diamondback CEO
13:15 – Outro
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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.
Diamond Michael Tanner [00:00:00] So it’s another rollback of some of these pretty crazy regulations that have happened at the federal level. We all know California is doing their fair share best to attempt to hold on to some of the regulations they passed as a state. But at the Federal level, a lot of that stuff is getting unwind. I mean, here’s my take on this. The market should decide. And this is where I always go back to the market. The invisible hand of the market should demand this. And what I mean by that is if people want energy efficient appliances and they demand energy efficient, appliances, then companies will just make energy efficient appliances.
Michael Tanner [00:00:45] What’s going on everybody? Welcome into the Thursday, May 8th, 2025 edition of the daily energy newsbeat standup. Here are today’s top headlines. First up, why did Saudi Arabia raise prices to the Asian market while also increasing OPEC plus production quotas? A really super interesting breakdown about two kind of countervailing points I wanted to touch on. Then we’ll move into Senate votes to remove and overturn stringent Biden-era appliance rules and sends the bill to President Trump’s desk. I will then jump over and quickly cover what happened in oil and gas markets today while touching on another great article that just ran in response to Diamondback’s earnings. Peek shale may be here says diamond back CEO. We will cover all that in a bag of chips guys. As always, I am Michael Tanner. Stu is having a much, much deserved day off. So I’m rocking a solo show. Let’s kick it off.
[00:01:48] All right. Why did Saudi Arabia raise prices to the Asian market while increasing OPEC plus production quotas? Super, super interesting countervailing points. So as we know last week, Saudi Arabia and OPEC plus decided to increase oil production by about 411,000 barrels, which was a lot stronger and much more bold than they had expected. Obviously they were unwinding as and they’ve been unwinding this production on an ongoing basis, but this decision to raise output by 411 thousand barrels is about triple what with the expected volume put back on and. And really the the reason they did that was to punish over producers like Kazakhstan and Iraq to stay at their quotas lower oil prices if you put out more supply prices go down and then your other nations are then like oh okay well maybe we’ll trim back now because it’s maybe not quite as profitable for us to drill now the interesting part though is then the official selling price, which is released by Saudi Arabia on a monthly basis to the majority of their markets. They’re Asian O.S.P., is it called. They raised by 20 cents to over $1.40 over the Oman-Dubai benchmark. And that is basically their price that they sell to the Asian markets, this O. S. P. Unbelievable, which kind of goes against the countervailing wisdom. If prices are going to drop, why are you then raising your prices to the Asian markets? Well, there’s a couple things that could be going on here. One is Asia is their strongest market. OK. And part of the reason why they’re doing this is that there could possibly be. Some refining value adjustments that need to happen according to that market. You know, reading some of this stuff in here. So basically there’s, you know, Saudi Arabia’s market. I’ll read the number four line. It is basically, there’s four reasons here about raising their price. Kind of the fourth one down. Historically Saudi Arabia has adjusted prices to maintain competitiveness in Asia, its largest market. The price increased despite OPEC plus how our output could be a preemptive To counter rising supply from other producers, Russia’s return to the Asian market post-sanctus and secure long-term contracts with Asian refiners. These mirrors past strategies for Saudi Arabia will balance price and volume to obtain market dominance. So that’s the other side of the coin there is the fact that they wanna make sure that they show up their Asian market and by slightly increasing the price. They hope to capitalize on that. Now, the question is, will it work? Who knows? And that remains to be seen, but super interesting. Saudi Arabia is really making some moves here. And so I think this will be a fascinating thing to follow.
Michael Tanner [00:04:42] All right, let’s jump to the next one here. Senate votes to overturn stringent Biden era appliance rules, sending the bill to Trump. I’m going to read straight from the article. The Senate on Wednesday voted to overturn to Biden era appliance rules sending the bills to president Trump. Undo overly strict energy efficiency and appliance standards, the vote was 52 to 46. And basically what these requirements were, was that these appliances and certain appliances were supposed to meet specific standards in order to get that energy efficient label. You know, if there’s a variety of things that are on this list, mainly dishwashers, heat pumps, dehumidifiers, air conditions, anything that has a gas-fired turbine was really impacted by this. And you know, the quote from Craig Goldman, he’s a Republican here in the great state of Texas, our bill repeals burdensome and costly biting administration regulations on commercial refrigeration equipment that would drive up prices on consumer goods. Americans want common sense policies and freedom from government overreach instead of far left policies that increase the cost of living. And I’m proud to be delivering on results that will support small business and hard working Americans. So it’s, it’s another rollback of some of these You know, pretty crazy regulations that have happened at the federal level. We all know California is doing, uh, doing their fair share best to attempt to hold on to some of the regulations they passed as a state. But at the Federal level, a lot of that stuff is getting unwind. I mean, here’s my, here is my take on this. The market should decide. And this is where I always go back to the market, the invisible hand of the market should demand this. And what I mean by that is, if people want energy efficient appliances, and they demand energy efficient appliance, then companies will just make energy efficient appliances. And if that becomes the standard that people wanna live by, then they will do that. It’s not like this is a huge pollution area anyway. It’s like my refrigerator is a big polluter. You know what I means? It’s using slightly more electricity. And in aggregate, when you add up all the refrigerators, it’s still not as much as chat GPT data center is using or what’s going on over there at Colossus in Memphis by Elon Musk. I mean, we love Elon Musk, don’t get me wrong, but let’s not be naive and think that that Colossos data center is energy efficient. But now here they’re trying to regulate my refrigerator. It’s a little bit like. You know, you, you the Titanic is sinking and you’re trying to rearrange the chairs on the floor. It’s like we’ve got bigger problems here than somebody’s refrigerator. So I’m in favor of this move. If, if people and consumers demand energy efficient appliances, then these people will just keep making them. So I think it’s a stupid rule. I’m glad this was overturned and we will be able to get back to just again, the pure supply and demand.
Michael Tanner [00:07:32] All right. Let’s jump over and cover oil prices. But before we do that, let’s quickly pay the bills. As always, thank you for checking us out here on the world’s greatest website, www.energynewsbeat.com. The best place for all your energy and oil and gas news. Stu and the team do a tremendous job making sure that website stays up to speed. Everything you need to know to be the tip of the spear when it comes to the energy and the oil and gass business. Go ahead and hit that description below for all links to the timestamps. Links to the articles. You can also check us out on Substack, theenergynewsbeat.substack.com, the best place to stay up to show with us and get all of our custom content. We appreciate all of paid subscribers. There, you make this show possible. Also, thank you, Reese Energy Consulting for supporting the show. We love them over there, guys. We’ve been screaming every day on the show if you are in the upstream or midstream business and you have not worked with Reese Energy Consulting or Utilize, I highly recommend it. From oil and gas marketing on the up street side to LNG, fuel marketing to anything on the midstream side, guys, Reese Energy Consulting can and will help you out. Let them know that Energy Newsbeat sent you and they will give you a 45,000% discount on your services. That’s a joke, but definitely let them know you heard about us through Energy News Beat. And finally, guys. It’s never too early to start thinking about 2025 investments. We’re already halfway. We’re almost halfway through 2025 so you better be Starting to think about your investments guys, the best way, dip your toe if you’re interested in getting into the oil and gas space. We have all the info at investinoil.energynewsbeat.com. If you do want to think about investing in the oil and gas base, we’ve got great resources kind of show you all the ins and outs and can hook you up with anything you need in that space guys. Again, that’s investin oil.energy newsbeat. Com or check out the link in the description.
Michael Tanner [00:09:20] Let’s just go ahead and quickly look at the top line indices. We’ve got four tenths of a percentage point. Up on the S&P 500. NASDAQ was up about three tenths of a percentage point, two and 10 year yields. The two year yields was actually flat, 10 year yields dropped by about six tenths of a percent point. Dollar index up about four tenths or percentage point. Bitcoin fairly flat, $97,000 up about 3 percentage points. For the week though, crude oil is down about $1.50 today, down to $57.94 as we record this, about $5.30 here on the… Here on the seventh, natural gas stayed fairly flat, $3.61 on the day, slightly rise, it was about $3 55 when the market opened. So nothing too crazy. I mean, really the only interesting thing that happened today on the overall market side is the US Fed decided to hold rate steady, which was fairly, fairly chill. We did see EIA crude oil inventories drop and that was very unexpected, was very You know, nothing too, too crazy happened there. Let me make sure I can go find it. I forget what the, yeah, here we go. Crude inventories dropped by about 2 million barrels compared to the expectations of about 833 million bill draw, but again, nothing impacted the markets there. So cruel inventories are becoming a little bit less and less, you know, talked about, we did also see that gasoline inventories rose unexpectedly last week, which isn’t a bad thing for gas prices, but it does negatively impact. Potential oil prices as summer demand may not be quite quite there from what they’re expecting.
Michael Tanner [00:10:54] Last article I want to cover here guys peak shale may be here says Diamondback CEO This is really interesting so Travis Stice who’s the outgoing CEO long-time CEO of Diamondback He wrote a great great kind of letter that talked about a bunch of different stuff And basically what he mentioned was hey, I think we’re at peak oil in the Permian And it’s pretty interesting. So to give you guys a quick idea, they, Diamondback specifically, have trimmed down their own full year production forecast, saying that it expects onshore oil rigs across the entire US industry to drop by somewhere around 10% by the end of the second quarter and fall further in the months after. This is the quote from Travis Stice himself. This will have a meaningful impact on our industry and country. We believe we are at a tipping point. For US oil production. This comes on the heels of them saying, we are also heading into a place where they are going to drop three rigs and drop one frac rig. And the reason they’re dropping rigs is because these tariffs have increased steel prices so much, it doesn’t quite make sense to even duck some of their wells, which I think is… Kind of insane when you think about it. Another quote that he had was, today the geological headwinds outweigh the tailwinds provided by improvements in technology and operational efficiency. Interesting, geological headswinds, what’s that code for? We’re running out of good rock. So if we’re running of good Rock, price of drilling a well isn’t actually gonna drop enough to where we can duck a well in low oil prices. That means oil production is going to legitimately fall off a cliff. And so sure, the swing back to 80, $100 oil is probably going to happen, but man, they’re poking out for some tough, tough times here. You know, and so this is, this is an interesting quote here, Tim Rezvan. He’s an analyst at KeyBank and we can’t help but wonder if the last quote, letter to stockholders written by outgoing CEO Travis Dice was intended as much for government leaders in Washington, which is interesting. He’s f- Definitely writing something that maybe is not for… I think we all in the industry know this, but it’s sometimes people in the business or in Washington do know this. So very, very interesting. Diamondback CEO sees production falling. I tend to agree with them guys.
Michael Tanner [00:13:15] But with that, I’m going to go ahead and cut us off and let you get out of here and finish up your Thursday. Appreciate everybody checking us out here on this gorgeous, gorgeous Thursday. You will hear some sort of long form podcast tomorrow. If you haven’t listened to David Blackman, Stu. Doomberg on our podcast. Highly recommend checking that out for your Friday listening. And then on Saturday, you’ll hear the weekly recap. We’ll take Sunday off, and we will be back in the chair on Monday. For Stuart Turley, guys, I’m Michael Tanner. We’ll see you tomorrow, folks.
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