Week Recap: What’s Behind OPEC+’s Bold Move to Increase Oil Supply?

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Video Transcription edited for grammar. We disavow any errors unless they make us look better or smarter.

Michael Tanner: [00:00:00] I’m not saying a recession is coming, but the sentiment that a recession is coming is loud and clear with these tariffs, specifically what’s going on with China right now. So it’s going to be a very interesting, a couple of weeks for prices. So are you still holding fast to your $80 prediction? I am, and it’ll eventually swing back. The question is what the question is when though. [00:00:19][19.8]

Stuart Turley: [00:00:20] Exactly i am right there with you cuz on end and when you take a look at demand if india is now the world’s largest importer any take a look at those numbers in the end twenty twenty three india imported four point six million barrels per day of crude that is a thirty six percent increase. [00:00:40][20.8]

Michael Tanner: [00:00:49] What’s going on everybody? Welcome into a special Saturday, May 10th, 2025 edition of the Daily Energy Newsbeat Standup. Weekly recap, where we go ahead and cover all of the. Top stories from the week. It’s been a long week, guys. A lot of great stories. Peak oil production. We covered some great stuff Monday, Tuesday. So this will be a great show. The team’s got some great, great articles lined up. I’m gonna go ahead and jump over and let them dive in. But guys, just before we do that, real quick, check us out at energynewsbeat.com. Description below for all links to the timestamps. Check us out on Substack, theenergynewsbeat.substack.com Thank you to Reese Energy Consulting for being a vaunted, vaunted sponsor of the show. We appreciate your guys’ support, check them out, reeseenergyconsulting.com. And then as always, investinoil.energynewsbeat.com if you guys are trying to get started on your 2025 investment. Please consider oil and gas, even with prices low, you do get a sweet, sweet tax deduction. So if you want more info on how to get involved with the oil and gasoline investing business, I hit invest in oil.energynewsbeat.com and we will get you all the info. But I’m gonna go ahead and turn it over to the team. Guys, you will hear this. We’ll go ahead, and you will take Sunday off. We’ll be back in the chair Monday, but I’m going to kick it over the team, we’ll see you Monday. [00:02:04][75.1]

Stuart Turley: [00:02:05] Why Spain’s rooftop solar powers weren’t spared from the blackout. Michael, this is really critical. And I really enjoyed this article from Bloomberg when there were 55 to 60 million people without power last week when we were talking about this and Robert Bryce and David Blackman and I had a great podcast talking about this, but this article from Bloomberg brought up a great point today. The experience for the solar panels on the roof, the predicament may have come a surprise to thousands of Spanish households who now have rooftop solar. But the problem of the number of installations surged in 2018 on tax using from energy solar panel was canceled. Since then, residential solar capacity has shot up from 300 megawatts to 2,400 megawatte according to the Bloomberg NEF data. Here’s the problem. Just because you have ROOFTOP SOLO, or… And it’s not tied to a local backup storage system. It means when the grid goes down, the grid goes down and this creates more of a non inertia, what’s called non inertia to the grid and the grid operators just basically are having really a hard time trying to balance the grid, Michael. It is just amazing. I find it hilarious that people are- [00:03:37][92.6]

Michael Tanner: [00:03:37] we’re gonna go through all this crazy setup to get solar deployed. You think that you’re then throwing up these panels so you’re off grid, so that in situations like this, you’ll be fine. It turns out no, is this, this isn’t a cost cutting move by the way, right? This is a, it’s really the better way for these solar panels to operate is actually connecting them to, you know, through the grid. So there’s almost, it kind of like an interconnect which basically then renders them useless in whatever happens, because we still haven’t figured out what happened here yet, whether it was a malfunction somewhere internally, cyber attack. [00:04:11][33.9]

Stuart Turley: [00:04:12] I think it was I think was a combination of all the above and we have a podcast tomorrow on or today on the energy realities and we’re covering it with some folks from what logic out of the UK and they’ll bring some Katherine is one of our guests there. So what I’ve learned Michael is when putting together my microgrid I’ve got twin propane Generators, I’ve got batteries. I’ve gotta win But it’s expensive and I can manually pull my compound off of the grid so that I can run independently. It’s expensive micro grids are here to stay. Oh, you need them. Why is grid inertia important? And this is articles actually from Gene Nelson. He’s a PhD and I reached out to him to get him on the podcast. Inertia refers to a system’s capacity to resist change. For a power grid, the great synchronous inertia counters a bill at greater ability to resist frequency changes. Michael, when you put one solar panel or one wind turbine, it changes the grid frequency. This is something that Meredith Angwin, who wrote the book, shorting the grid, who’s been on the podcast wrote about, but this article really covers it very Nice, he goes. A simplified example of each pair of the DCPP’s generators have rotating components which weigh in excess of a million pounds 500 tons a piece. DCPP turbines rotate 30 times per second and the rotating magnetic fields induce the 60 cycle per second the hurt or the AC voltage and keeps it current If you don’t have natural gas, nuclear, you don’ have these frequencies. Frequencies matter to the grid. You, again, it wouldn’t matter in the old days, Michael. You just sit there and say, we need another 15% for another power plant. And boom, there’s our backup, our recovery and everything else. This is critical for a grid. And they’ve bro, they’ve thrown physics and fiscal responsibility out in the states of Hawaii, California, do Jersey, Germany, physics and fiscal matter to the grid. This is an excellent article. [00:06:42][150.1]

Michael Tanner: [00:06:43] Yeah. And I love this, the, the last set or the, the first sentence and start the last paragraph synchronous generation provides a muscle for a power grid. It proposed theoretical model for grid reforming, huge energy storage spices that mimics mimic. The functionality of large synchronous generators, and the best part, these proposed devices do not exist yet. So it’s all intertwined. And it’s one of the, Stu, I love some of the stuff that you’re doing with the substack now breaking down these articles in a much more cohesive way, kind of adding that color on top, because yeah, that’s what you see right here. Exactly. It’s, it’s becoming to the point where the train is moving so far down the tracks outside of some man holding on for dear life on either side. That’s about our only hope at this point. [00:07:27][43.7]

Stuart Turley: [00:07:27] Or your man is holding a bus with a shot and he’s got one arm from the bridge and he holding Yeah, that’s exactly what’s happening to the grid right now and the grid’s gonna [00:07:36][9.4]

Michael Tanner: [00:07:36] is that OPEC plus decided that they were going to add another 411,000 barrels to the market basically in a tit for tat show to Iraq and Kazakhstan. Is that the other one, Stu? Yes, that is. Yeah. So Iraq and Kazakstan have been blamed for overproduction. And so now the way to punish them for overproducing is add more barrels to market in order to drive the price down. I mean, it’s really diabolical what they do here. They’re, they’re able to, you know, quote unquote, punish Iraq and Kazakhstan, but also go back to originally what they’re planning is lower oil prices does bring back more market share to them. I think it’s going to be fascinating that meeting was moved up and happened on Saturday, which was supposed to happen on Monday. It’s super interesting. No one knows why they rescheduled, but obviously getting that policy and that 114,000 barrel number thrown out on Saturday allows the market to digest. Maybe it’s not as big of a drop as people expect, but I mean, it’s a bloodbath out there, Multiple, multiple people that I trust when it comes to just kind of forward-looking price signals, they think we’re going to see low 50s with this number. They think that oil might trade down to 50, and I’ve got a big, big friend of mine who says he wouldn’t be surprised if for a little bit we see a four-handle on oil for a bit as the market is kind of absorbing, especially with the sentiment around the upcoming. I’m not saying the recession is coming, but the sentiment that a recession is coming is loud and clear with these tariffs, specifically what’s going on with China right now. So it’s going to be a very interesting couple of weeks for prices. Are you still holding fast to your $80 prediction? I am. It’ll eventually swing back. Absolutely. The question is when though. [00:09:21][104.7]

Stuart Turley: [00:09:22] Exactly. I am right there with you because on end and when you take a look at demand, if India is now the world’s largest importer, and you take a look of those numbers in in 2023, India imported 4.6 million barrels per day of crude. That was a 36% increase oil demand though is 5.4 million. And you take a look at China. Imported 11.1 million. So China is now going through major trade issues right now. And if China can remain somewhat level and India continues on its growth path, we’re going to see global demand remain stable. If we see that formula play out and I think you’re going see. The trading block shift to Europe and what’s going to happen. China is going to be absorbing some of the manufacturing out of Europe. Instead of the U S China will be just fine, but it’s going to be the European that’s going to become a subservient trading block to China and not the U.S. This is huge and positive. Make sense. [00:10:41][79.0]

Michael Tanner: [00:10:41] I mean, we didn’t quite get an answer in there, but I enjoy the statistics. No, no, no. It was a great non-answer in the terms of ultimately what you’re seeing is steady demand and these lower oil prices are going to cause a fall in supply. If oil supply specifically, if in the United States falls below 12 million barrels for the year, you’re going to see prices in early 2026 rocket back. And, you know, there’s going to be nothing that, that, you know, President Trump or. [00:11:13][31.7]

Stuart Turley: [00:11:13] Josh young, yes, Josh young with bison interest, great friend of the show, absolutely nailed it most wonderfully when he said the longer the prices hover in the lower margin, they will spring like a rubber band to the higher side and go even higher. So, Josh Young is right in his formulation on this. [00:11:37][23.8]

Michael Tanner: [00:11:37] No, it just, just, and, and he’s one of many people that I’m hearing from this sentiment as well. So it’s going to be, it’s gonna be really, really fascinating, you know, again, to, to quickly touch on Saudi’s warning of more oil supply, unless, unless cheats fall in line. I mean, I would not want to hurt. [00:11:54][16.4]

Stuart Turley: [00:11:53] I would not want to hurt those cats. [00:11:55][2.0]

Michael Tanner: [00:11:55] No, it’s actually one of the funnier, I assume that was created by Grok, Stu’s favorite buddy now, but if you haven’t had a chance, go take a look at that. They’re trying to corral OPEC as hard, it’s about as hard as herding cats. But yeah, so obviously they’ve come in and agreed the 411,000 barrels in June, but the real question is, are they going to do more than that if there’s continues to be overproduction and. Whether or not they’re using this overproduction as a cover to increase production or lower oil price to appease the United States government and people in the government who want lower oil prices so that there may be eventually other deals that take place. That remains to be seen. I’m not saying anything, but Stu’s smiling because he knows what’s going on. And I’ll just take a quick tangent here, Stu, because I’ve got time here. I’ve So I want to ask you about this. So Chris Wright, he’s out in Saudi yesterday tweeting up a storm about how he’s at the first well that was ever found there. Ironically, the first well in Saudi was actually found by an American company that has since been taken over. But he knows better than anybody that in this low price environment. The industry gets disrupted, and sometimes in a good way, but it comes at the expense of people. Layoffs are coming. You see oil hit to the 40s. We’re going to see rig count, frack count spread fall off a cliff. We’ll touch on that in a second here. That just dropped. I mean, it’s, I wonder how he’s balancing these two things as of mine. I mean obviously he serves at the pleasure of the president. President Trump has come out and said he wants lower oil prices. So I guess that’s what you have to do. Maybe he saw he was able to sell all his Liberty stock before he came secretary energy was able do a tax free, which is convenient because now all of a sudden those, those margin, those, you know, that, that valuations going just down a little bit, especially if we see a four So, it’s really interesting to see him step into this role and, you know, obviously he understands what’s going on, but I just think the dynamic is fascinating. [00:14:04][128.6]

Stuart Turley: [00:14:05] Uh, I agree. And I still think that I’m still a permable oil is only going to hang out here for so long, but the answer to the question is how long we’ve got to get through this trading block change, you’re getting right side is by Trump on the tariffs and trading blocks are huge. And once we get past that, it will shoot through the roof, uh, because there’s not enough investment in oil and gas, the difference between the The Iranians and the United States, you know what the difference is? Michael, the return shareholder returns on private and public gets back and the discipline that are great oil and gas, private and public are giving money back to investors. We will recover faster than they will be able to recover faster. So we are able to spin off and spin up. Yes, it is jobs. it is down. But it is a capitalism at work at its finest and it’s all about well economics, Michael, you are one of the best well economic guys that I know out there and you know, when you drill a well and it has got good economics, you go in and say, I’m going to be doing this. Well, if not, we’re still going to have rigs. And you’ve said this where it’s cheaper to drill now, but just leave them as a pud. [00:15:28][83.5]

Michael Tanner: [00:15:28] Yeah, so you’re not, you’re not adding barrels. [00:15:30][2.0]

Stuart Turley: [00:15:31] Dropping oil prices boosts odds of Ukraine peace deal, Trump says. I’ll tell you what, I disagree with this article. The article first comes out from Bloomberg and President Donald Trump said that the sliding price of oil is intensifying pressure on Russia and boosting the odds for a deal they end the war in Ukraine. I think Russia, with the price of oil now, oil has gone down. I think we’re in a good position to settle, Trump told reporters in the Oval Office on Monday. They want to settle. Ukraine wants to settle if I weren’t president, nobody would be settling. And I agree with that. That statement, but I believe that he is still misled by his team. He does not have the right information with him around him. President Putin has gotten by an increased of 4.2 percent, I think somewhere around that range, GDP growth year on year by even selling at lower oil prices below market to keep his cash flow going. And I’ve included in this article the list of crude oil exports from 2021 through 2025 so far, and we’re on track. And so when you sit back and take a look at 47% in January through March, 47% of the key market is China, 38% is India, and EU is only 6% of his business. So. When you sit back and take a look at where 2020 was, Europe was 50% of his business and China was 30%. Netherland and Germany between the two of them was 25%. So the numbers don’t add up. President Putin has done a great job moving his business to the Asia market and EU is going to be no longer relevant as a trading block if they continue with their current policies. George McMillan has said it best and he’s basically said Putin is prosecuting the war against the city of London and the city Paris, not President Trump. He’s not stiffing President Trump by not ending the war. He’s trying to end the war against the city of London and the city of Paris on those people that have been prosecuting and tried to bankrupt. President Putin. So when you take a look at how all this is playing out, it is President Trump really needs a new advisor and General Flynn, I believe would be the best one, but he hadn’t called me and asked for my opinion yet, but I would vote for President or for General Flynn in about two and a half seconds. [00:18:23][171.4]

Stuart Turley: [00:18:24] What’s the future of U.S. Crude oil? Have we hit peak production? Excuse me, this is a great article from the Crude Truth Substack, Ray Trevino. With PECOS operating over there, I agree that a single basin output does not divine the country’s energy production capabilities. So has the United States hit peak oil and gas production, or is it just one basin that has hit that? I agree with Ray Trevino that we’re not done yet. The United States will find a way and let’s get California under control. Ray in his article really took a look at what was written in oilprice.com. Charles Kennedy wrote this article out and he says Charles Kennedy from Oil Price says energy flows intelligence Kepler forecasts that U.S. Crude oil supply growth will slow for the rest of 2025 and into 2026 with peak as early as this year attributes this revised forecast to WTI crude oil price is falling below $60 per barrel. Which is testing the breakeven point for many US shale oil producers. With WTI, the main benchmark crude is near breakeeven at the new well levels. And if you look at the chart that we’ve had and we’ve talked about in the past, it’s from the great Dallas Reserve Fed of Dallas. You look at other shale plays at $59 breakeaven. Permian Midland 62, Permian Delaware Basin is 64, Oklahoma Scoops stack is around 65, Other is 66, but Permian Basin Other is up around 70 depending on the water volume. Water is becoming a critical issue as you’re having to pump more of the water in and getting more water back out and less oil. As some of your moving on to the second tier problems in the Permian. I don’t believe the United States has hit peak oil yet. We still have a lot of oil going on in Alaska. In fact, Gavin Newsom, let me just point out this point that RT is making in this and that is California. Was energy independent before Gavin Newsom. The refineries, as Mike Umbro told me, Mike Umbreau pointed out that the refinerys in Alaska, refineris are capable of in California of using Alaskan crude. Why are we importing 70% of the fifth largest economy in the world is a real Question that we need to ask our leadership why. And if I was a California citizen I’d be asking why did we have these constant elections up there. U.S. Cut forecast oil output just before crude’s latest plunge. In this story I took a look at U. S. Oil and gas storage where we are on our total U.S. Crude stocks. Where I took a look at also our storage, our demand, and as well as everything else. So if we take a look, at US oil stocks were 457 million barrels, a decrease of 12.7 million barrels from the previous week in Cushing in the key storage hub, 682,000 barrels, approximately 34 million barrels compared to a decrease of 86,000 barrels the previous week. The SPR is still down but as we take a look at this I calculated out the differences of demand versus production. Whether or not production is going to fall and keep falling and in the last part of this I came in with this final conclusion here and there’s a lot of data in here so we would appreciate you going in and taking a look. Saying hey either that’s good data or it’s not but the bottom line the EIA has revised some of its prediction on oil and gas prices and we’re seeing reports that vary from 50 to 60 dollars if OPEC follows through with this production increase to the prediction of the US declines could roll to 90 dollars so there’s a huge mix of what’s going to happen if the US is at peak oil production and it starts rolling back we’re going to see oil going in going higher today we had some articles discussing Saudi Arabia’s budget requirement which we just talked about about the 90 dollar oil and I think that there’s some publications that it should be around the 80 dollar oil. And I’ve been saying this for a very long time coming down and trying to say I think that it is going to be in an $80 world is where it’s going to kind of level out now. Win is going be according to the tariffs. And as Josh Young has said, the longer it stays down low, the higher it’s gonna go and then it’ll drop back down. So I think we are often running at the races here. [00:23:48][324.0]

Stuart Turley: [00:23:48] 18 US states suing Trump over shutdown of wind projects. This is absolutely hysterical. Let’s see where the story came from. I went ahead and added This is from America Offshore Renewables, and I added where all of the electrical per state, what they were paying and how much these wind farms have added into their electrical mix. And if you wanna take a look at these 18 states, they have higher energy costs because of wind and solar. And if are like New York, You’ve got an average cost of 22.96 kilowatt per hour due to high dense urban demand taxes and offshore wind investment. Arizona is 12 cents per kilowatt hour. Because it only has some wind and some solar but it’s got nuclear sitting there and then you take a look at California 25.70 cents per kilowatt hour due to renewable mandate grid updates and urban demand and they import 70 percent of their oil unbelievable bad management But when you take a look at the America’s Offshore, the the states were New York, Massachusetts, Arizona, California, Colorado, Connecticut, Delaware, the District of Columbia, Illinois, Maine, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Rhode Island, and Washington State. If you sit back and take a look at it, those are the Democrat run states that are poorly run and you pig pile on a lawsuit. So that you can do more wind energy and have higher energy costs. You really can’t buy this kind of entertainment. If you live in those states, you may want to look at moving, your energy bills are just going to go up. [00:25:50][121.6]

Michael Tanner: [00:25:50] Why did Saudi Arabia raise prices to the Asian market while increasing OPEC plus production quote a super, super interesting countervailing point. So as we know last week, Saudi Arabia and OPEX 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 411,000 barrels is about triple what was the expected volume put back on and really 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 other nations or 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 by 20 cents to over one dollar and 40 cents 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, okay? 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 is 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. [00:25:50][0.0][1534.1]

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