Increasing US oil output not 'like a Fed Ex overnight delivery,' expert explains
Ines Ferré
Ines Ferré·Markets Reporter
Wed, March 9, 2022, 3:33 PM
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The recent meteoric rise in oil prices has created pressure for U.S. oil producers to pump more crude — and quickly. But the process takes time.
"People think it’s like Fed Ex overnight delivery, but it’s more like a Wells Fargo stagecoach," strategist Andy Lipow tells Yahoo Finance.
The oil industry has pointed the finger at the Biden administration for tight regulation and slower permitting processes to drill. Meanwhile the government points back at producers for profiting from high prices and not increasing enough output.
“There is not a lack of places to drill. This is not a lack of access to oil,” White House press secretary Jen Psaki said on Tuesday.
"The Biden administration doesn’t have that many more levers to pull" amid the current energy crunch, says RBC Capital's Managing Director Michael Tan says.
“They’ve already released strategic barrels twice in the past four months,” Tan told Yahoo Finance Live. “They’re trying to talk to Venezuelans to try to get them to bring more barrels on. It’s a pretty desperate scenario to be perfectly honest.“
Tan says U.S. producers have immense shale resources right here in the U.S.
“A lot of it is a function of timing,” said Tan. "Part of it has to do with the policy we’ve been living with for a number of years, but part of it is also we’re not able to search fast enough,” he added.
“To be able to secure rigs, to be able to hire frack crews, to be able to secure equipment, to drill the well, to complete the well — assuming that permitting is in place — that’s a six month period,” he added.
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