Powell Says Economy is in Solid Position, Despite Uncertainty: The Fed Decides
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Yahoo
23 minutes ago
- Yahoo
Q&A: US ‘energy independence' more a political concept than a practical goal
US hydrocarbon production has steadily increased over the past couple of decades, driven by more sophisticated technology, an expansion of oil and gas infrastructure and a favourable regulatory environment. The Permian Basin remains the largest oil-producing shale play in the US, with global demand and geopolitical shifts continuing to support growth and competitiveness in the region, according to recent research from Offshore Technology's parent company, GlobalData. The region's crude oil production averaged 5.6 million barrels per day (mbbl/d) during the first quarter of 2024 (Q1 2024), accruing benefits from a dense pipeline network and Gulf Coast infrastructure. GlobalData oil and gas analyst Ravindra Puranik said: 'Europe's strategic shift away from Russian energy exports has resulted in key changes to the global energy supplies. This is anticipated to benefit the US shale oil and gas drillers, as well as LNG [liquefied natural gas] producers who are positioned to reap from these evolving supply chain dynamics." With this revolution in hydrocarbons, the US has been the world's biggest producer (as well as a substantial importer) for almost a decade, now extracting well over 13mbbl/d of crude oil. How will it maintain that position and what longer-term strategic issues does the country face? Mason Hamilton, vice-president of economics and research at the American Petroleum Institute (API), shares his insights with Offshore Technology. Ed Pearcey (EP): How has the US overtaken nations such as Saudi Arabia and Russia to become the world's largest oil and gas producer? Mason Hamilton (MH): This has been decades in the making. This goes back to the start of fracking technology, which was pioneered in the early 1950s by the US Department of Energy. Then, there was horizontal drilling technology. Those two were separate technologies and had separate pathways. In the past 20 years, those two technologies have been combined to give us a revolution and unlock a lot more of the resources already underneath our feet. Gas exports, particularly to Europe, have gone up quite substantially over the past five years. Collectively, Europe is the top destination for our LNG exports, particularly Germany, [which] has turned away from Russian gas. [The volume of US LNG exports to Germany reached 28.17 billion cubic feet in April, up from zero in 2022]. I believe in Q1 2025, [the US] also set a record high in the amount of LNG exports to places other than Europe, such as Asia and South America. EP: Are there any areas in the US that are primed for exploitation? MH: With acquiring resources, three main questions crop up: what's the available resource out there? Is there access to it? And, at what price can we get it? Alaska has a lot of potential. We saw the Willow project [an oil drilling initiative on the plain of the North Slope of Alaska in the state's National Petroleum Reserve, situated entirely on wetlands] with ConocoPhillips not too long ago. That was a big development there. There is also a lot of activity going on in federal lands. One of the of underlying themes that people are not aware of is that, since 2019, it is actually New Mexico that has seen the largest oil and gas production growth, not Texas. A huge chunk of the New Mexico production comes from federal lands in just three different counties. In fact, there is one county in the south-eastern corner of New Mexico, Lea County, that produces more crude oil than the five smallest OPEC [Organization of the Petroleum Exporting Countries] members. It produces over a million barrels a day. That growth was driven by access to and use of federal lands. If you look at the trends since the pandemic, the driving force that was really apparent post-Covid is increasing hydrocarbons production on federal lands. So, I would definitely say federal lands can be exploited further, because that is seen in the data. EP: Is the US nearing full energy independence? Doesn't the US still import certain types of crude oil? MH: Under Biden, there was a period of confusion and contention for us. Not only do we need continued certainty on access, but it is written into the law – that both onshore and offshore quarterly or yearly lease sales must be held – but in some years, they [the Biden administration] just didn't do it. We need to be clear – the term 'energy independence' is more or less a political slogan. From my perspective, the US is an active importer and exporter of energy, and an active trading partner when it comes to energy resources, whether that is electrons, petroleum, coal or so on. I think the terms 'energy security' and 'energy independence' are being used interchangeably. What we are really talking about is increased imports. I think between six and seven million barrels a day [we import], and I think 70% of that comes from Canada, while the second-largest imports origin point is Mexico. It is not like US is going far afield to get access to imported barrels – they are coming from North America. The marginal barrel, yes, probably does come from the Middle East, but far less than it did in the early 2000s or the 1980s or even 1970s, when we saw big gas lines during the energy crisis. In terms of energy security, yes, we are probably more energy secure now than in the past, but the term energy independence is just confusing – a misnomer. EP: Is there enough refinery capacity in the US? It needs to build more infrastructure such as refineries and storage facilities, so is that being worked on? MH: The US has not built any new major transportation, fuel-producing refineries since the late 1970s – but despite that, and despite many refineries closing over the past 30 years, the US has more refining capacity today than it did in the 1980s. That is because the refineries that we do have left have been heavily invested in, modernised and are equipped with the latest technology, meaning we can squeeze out every extra molecule. The US refinery fleet is one of the most modern in the world. Only last year, China managed to reach the same amount of refining capacity that we currently operate. The refining crown of the world is currently split between the US and China. China may have slightly more capacity, but US refineries run at a higher utilisation rate, typically in the 80% range, and sometimes even 90%. China simply does not achieve those kinds of run rates. The question of whether we need more refining capacity is not the right one. It should be 'Are we maximising the existing kit in the fleet that we have available?' I would flag one issue: we are losing refineries on the West Coast of the US, particularly in California, because of a very harsh regulatory environment, a harsh market environment, and other economic challenges such as refineries consuming a lot of electricity at a time when electricity prices in California are very high. With refinery closures in California, that market has become tight to the point where all of a sudden they must call up somewhere far, far away to get replacement supplies of gasoline. Could we build another refinery? Well, that depends on where it is, as the US is not one unified market for petroleum products, but five separate regions, namely the East Coast, Midwest, Gulf Coast, Rocky Mountain and West Coast. Nobody, as far as I know, is proposing a new greenfield refinery, but more refineries are being invested in, expanded upon and improved constantly. However, building a new refinery poses another question: do you build a refinery next to the source of demand, or do you build it next to the source of supply? EP: Are there any other markets, apart from Europe, to whom the US is looking to export its hydrocarbons? MH: It really depends on the product you are talking about. For LNG, Europe is a wide-open market. Increasingly, natural gas is going towards Europe. Then there are places such as India and South East Asia that are of interest. Some countries in South East Asia are on the cusp of needing to import energy rather than export, as their economies are growing, and their traditional fossil fuel resources and reserves have been depleted. Countries that come to mind are Malaysia, Indonesia, Thailand and Vietnam. They have significant energy resources; their production is now maybe on a downturn, but they have vibrant economies and still need power. Closer to home, South America is always a big market for us. In terms of Central and South America, a large portion of US petroleum product exports such as transportation fuels, gasoline and diesel go to Central and South American countries. In fact, over 50% of US gasoline exports go to one country: Mexico. Diesel is the most diverse US export product across all the energy commodities, because it goes to a long list of countries. So yes, the US is always looking to develop new markets in different places. "Q&A: US 'energy independence' more a political concept than a practical goal" was originally created and published by Offshore Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
New York Post
25 minutes ago
- New York Post
JPMorgan predicts Fed will cut rates in September — and four total times this year
JPMorgan is now predicting the Federal Reserve will begin cutting interest rates when it next meets in September — and four times overall before the end of the year — as pressure mounts to ease monetary policy. The nation's largest bank, led by Jamie Dimon, expects a quarter-point cut after the Fed's two-day meeting on Sept. 16-17, followed by three more cuts of the same size at their remaining meetings — which would bring the benchmark rate down to a range between 3.25% and 3.5%. JPMorgan's earlier projection was that the Fed would wait until December to start lowering rates. Advertisement 4 Fed Chair Jerome Powell speaks at a July 30 press conference as political pressure mounts over interest rate policy. JPMorgan is predicting rate cuts as soon as next month. The bank's analysts pointed to signs of weakness in the labor market, including a softer jobs report and rising jobless claims, as the main reason for the accelerated timeline. The unemployment rate in July ticked up to 4.2%, from 4.1% the previous month. Market pricing also reflects growing confidence in a September move. Advertisement Traders now price in a 89.2% chance of a rate cut in September, compared with 37.7% last week, according to CME Group's FedWatch tool. President Trump has repeatedly pressured Fed Chair Jerome Powell to lower rates, arguing that cheaper borrowing costs are necessary to boost economic growth and lower the government's interest expenses. On Thursday, Trump nominated Stephen Miran, his current chief economic adviser, to fill a temporary seat on the Federal Reserve's governing board, replacing outgoing Governor Adriana Kugler. Advertisement Miran's confirmation before the Sept. 16–17 policy meeting remains uncertain, but JPM said his presence could increase divisions within the rate-setting committee. 4 People wait in line to attend a job fair in Los Angeles as labor market data show signs of weakness ahead of the Fed's September meeting. AFP via Getty Images Miran is viewed as a strong supporter of Trump's economic agenda and has consistently favored lower interest rates. Some of Miran's earlier proposals have included shortening the terms of board members and increasing presidential authority over the Fed. Advertisement If confirmed, Miran would serve through January 2026, giving Trump time to decide whether to nominate him for a full 14-year term or consider him for other leadership roles at the Fed, including the chairmanship. A Bloomberg News report from Thursday cited sources as saying that Trump aides consider Fed Governor Christopher Waller as the top contender to succeed Powell, whose term ends next May. 4 President Trump gestures during an Oval Office meeting on Aug. 7 amid tensions with Powell. Yuri Gripas/UPI/Shutterstock Trump has made no secret of his frustration with Powell's refusal to start slashing rate despite the administration's calls for steep reductions. Powell has warned that cutting too quickly could allow inflation to flare up again — especially given the inflationary effects of Trump's new tariffs and expansive fiscal policies. The disagreement has turned personal. Trump has repeatedly derided Powell in public, calling him a 'moron,' a 'numbskull,' and one of his 'worst appointments.' 4 JPMorgan expects a quarter-point cut in September, followed by three more cuts of the same size at later meetings. Who is Danny – He has urged Powell to resign and has even shown lawmakers a draft letter dismissing him, though he later said he did not plan to fire Powell before his term ends. Advertisement In July, tensions escalated when Trump visited Fed headquarters and engaged in a visibly strained exchange with Powell over cost overruns in a $2.5 billion renovation project. Trump suggested those overruns could be grounds for dismissal. Although the Supreme Court has indicated a Fed chair cannot be removed over policy disagreements alone, Trump's comments fueled speculation that he might try to use management issues as a pretext for removing Powell. Treasury Secretary Scott Bessent, who has been ruled out as a candidate for Fed chair, told MSNBC's 'Morning Joe' on Thursday that the president 'repeatedly said he's not going to fire' Powell.
The Verge
25 minutes ago
- The Verge
Mini Ikea stores will be opening inside select Best Buy locations this year
Ikea has announced that it's opening mini retail experiences in a handful of Best Buy stores in the southern US later this year. It's the first time Ikea's products and services will be available through another US retailer, saving shoppers from having to visit and navigate the chain's warehouse-sized stores which aren't as plentiful in the US as Best Buy locations. Although Ikea has had a strong push into offering its own smart home products in recent years including lights and plugs, its new shop-in-shops won't be focusing on electronics like the Apple-branded shops already located in most Best Buy stores. Instead, they're designed to lure shoppers who are already at Best Buy to purchase appliances like fridges and washing machines into potentially redesigning their kitchens and laundry rooms. 'By bringing together our home furnishing expertise, products, and services with Best Buy's leadership in appliances and technology, we're creating a one-stop destination where customers can design their dream kitchen, storage solutions or laundry space with ease,' said Rob Olson, chief operation officer, Ikea US, in a press release. You won't be able to walk out of Best Buy with a new Billy bookcase, but you will be able to sit down with an Ikea rep in a mini showroom environment who can help you find new home furnishings and then order Ikea products for delivery. The Ikea shop-in-shops will be 1,000-square-feet in size and will launch at 10 Best Buy locations in Florida and Texas including Daytona Beach, South Austin, and Mesquite. Ikea hasn't announced plans to open more than the initial 10 next year, but it seems like an easier way for the Swedish home furnishings chain to expand its presence since it currently has just 52 locations in the US while Best Buy has over 1,000. Posts from this author will be added to your daily email digest and your homepage feed. See All by Andrew Liszewski Posts from this topic will be added to your daily email digest and your homepage feed. See All Ikea Posts from this topic will be added to your daily email digest and your homepage feed. See All News Posts from this topic will be added to your daily email digest and your homepage feed. See All Smart Home Posts from this topic will be added to your daily email digest and your homepage feed. See All Tech
