Page 10 - NorthAmOil Week 44 2020

NorthAmOil COMMENTARY NorthAmOil

The outcome of the
election could have
implications for drilling
on federal land.

This would serve to keep global crude prices that Biden’s policy on Iran could be bearish for
depressed for longer, according to Rystad. How- oil prices as it could result in up to 2mn bpd of
ever, it also noted that Biden wanted to pass a non-US supply returning to the market. The
hefty economic relief package, which would bank added, however, that the feasibility and
boost oil demand in the US in the short term timeline of any new deal with Iran was unclear
and that if he were to normalise relations with – and arguably more challenging without Con-
China, this would also raise demand. gressional support – and supply would likely not
Energy data firm Enverus, meanwhile, com- return to the market all at once.
mented that “Biden’s energy and climate policy On a domestic level, Morgan Stanley believes
proposals represent downside risk for the US oil that an outright ban on oil and gas production
and gas industry relative to status quo under a on federal land is unlikely given the impact
Trump administration”. It noted that many of such a move would have on employment and A Biden
Biden’s proposed policies that have implications tax revenue. However, it anticipates that infra-
for oil and gas did not require Congressional structure permitting – already a challenging presidency is
approval. process – could become even more onerous for expected to result
companies trying to push through new pipe-
What next? lines and export terminals. However, while in additional
Investment bank Morgan Stanley said in a Morgan Stanley noted that this could lead to US
November 4 note that with results pointing to a infrastructure capacity constraints over time, oversight of the
“divided government” – with the Democrats fail- it pointed out that significant excess pipeline
ing to win the Senate – this implied a “more con- capacity exists in the most productive oil basins industry.
structive” backdrop for energy compared with today given the production declines caused by
pre-election expectations. This, the investment the industry downturn.
bank continued, meant that legislative options to Further results are anticipated in the com-
constrain the oil and gas industry may effectively ing hours and days. The process is complicated
be off the table. by the fact that an unprecedented number of
Morgan Stanley still believes that there is people across the US – 97.1mn by November 2
potential for stricter oil and gas regulations – voted by mail given concerns over the corona-
under a Biden presidency, while Trump – who virus (COVID-19) pandemic. And if any of the
has sought to deregulate and spur energy pro- Trump campaign’s legal challenges hold up in
duction in the US – would pursue a status quo court, this could prolong the road to a definitive
energy policy. result further still. For now, the US – and its oil
Like Rystad, Morgan Stanley also warned and gas industry – remains on edge.™

P10 www. NEWSBASE .com Week 44 06•November•2020