Permian Basin Producers Fight Back Against OPEC

Monday, July 18th, 2016 and is filed under Uncategorized

Permina Basin Investing

Permian Basin producers have begun a grassroots effort to restrict crude oil imports from foreign countries. This new effort is called the Panhandle Import Reduction Initiative.

Panhandle Import Reduction InitiativeThis new initiative seeks to break the stranglehold that the Organization of Petroleum Exporting Countries (OPEC) has over crude oil prices worldwide. OPEC’s policies since 2014 have been a major factor in the drop in crude oil prices to ten-year lows. According to researchers in Norway, OPEC’s efforts were a deliberate effort to shut down U.S. shale oil producers.

Now, Permian Basin producers are attempting to turn the tables on OPEC by limiting what countries can import crude into the U.S. According to organizers, only Canada and Mexico will be able to ship crude to the U.S. under their plan.

The Panhandle Import Reduction Initiative is set to launch this September at the Southeastern New Mexico Energy Summit in Carlsbad, New Mexico. Organizers of the initiative plan to give a presentation outlining their plan at the summit in Carlsbad and then take their efforts to the national level.

Daniel FineDaniel Fine, Center for NM Energy Policy, the associate director of the New Mexico Center for Energy Policy, who is working with the Permian Basin producers on the initiative said, “We want to organize public rallies with producers and field workers whose jobs are at stake. This is a grassroots effort in the basins where the oil bust has taken place.”

Cambridge Production owner Tom Cambridge said of the initiative, “It would break OPEC’s back with respect to price manipulation and lead to market prices set by U.S. supply and demand.”

Organizers of the initiative say that the restriction of crude imports would help stabilize the oil market, help the smaller oil companies compete, and put unemployed oil workers back to work.

Organizers plan to wait on the outcome of the November election to ask the new U.S. president to use his/her executive authority to restrict crude shipments from overseas. It remains to be seen how much support their efforts will receive both nationally and in Washington D.C.

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