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For now, gas prices are right around where they were last year, at $3.49 per gallon

OPEC+ oil cuts probably won’t move gas prices — but this wild card could

Thousands of miles away from Americans budgeting for their summer road trips. OPEC+ leaders decided Sunday to stick with crude-oil production cuts lasting through 2025. This is while laying out a plan to begin phasing out another tier of output curbs beginning in the fourth quarter.

Though crude-oil prices are easily the top cost inside a gallon of gas. Drivers at the pump shouldn’t expect big price moves as a direct result of the OPEC+ decision, gas experts say.

Gas-price increases could hinge on what type of hurricane season comes to the Gulf Coast. Its oil refineries later this summer they note. Weather forecasters have been bracing for a very active hurricane season.

Americans have been holding their breath on upcoming expenses, with many looking to road trips as affordable summer fun.

But first, put it in reverse to see what the Organization of the Petroleum Exporting Countries and its allies decided at its Sunday meeting.

OPEC+ agreed to extend two different production cuts totaling 3.66 million barrels day through 2025. These curbs were supposed to conclude at the end of this year but were widely expected to be rolled over into next year.

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Source: Market Watch

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American oil and gas companies have cut back on methane emissions even as production reached record heights, a new analysis shows.

US oil and gas industry is emitting less carbon than it used to

The US oil and gas industry continues to extract record amounts of fossil fuels, despite climate activists’ calls to ​“keep it in the ground.” But while oil and gas extraction has increased in recent years, the carbon emissions from that industrial activity have actually fallen, a new analysis has found.

Even as fossil gas production rose by 40 percent from 2015 to 2022, methane emissions from gas extraction fell by 37 percent, according to a study of Environmental Protection Agency data published today by climate nonprofits Ceres and the Clean Air Task Force. That finding suggests that when energy companies want to, they can effectively reduce emissions of methane, a potent greenhouse gas with 82 times the global warming potential of carbon dioxide over 20 years, and 30 times the warming potential over 100 years. Overall greenhouse gas emissions, which count the industry’s considerable carbon dioxide releases, also fell, but by a more modest 14 percent.

There’s a clear playbook for tackling the planet-warming emissions that result from combusting fossil fuels in power plants or vehicles. But the extraction of those fuels happens farther from public view, and adds up to a major source of industrial emissions. Indeed, oil and gas extraction and refining emitted more greenhouse gases into the atmosphere than any other industrial subsector last year, the Rhodium Group reports. And while power and transportation emissions are falling, heavy industry is on track to become the largest emitting sector within the next decade.

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Source: Canary Media

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Hess Corp approved the company’s $53 billion merger with the No. 2 U.S. oil company Chevron, according to preliminary results of the vote.

Hess shareholders approve merger with Chevron

Hess shareholders on Tuesday approved the company’s $53 billion merger with the No. 2 U.S. oil company Chevron. This is according to preliminary results of the vote.

The merger required a majority vote. It is to approve the deal by a majority of Hess’ 308 million shares outstanding to pass. The company did not immediately provide the vote tally.

Chevron offered to acquire Hess last October in a move to gain a foothold in oil-rich Guyana’s lucrative offshore fields. The deal has been stalled by an ongoing review by the U.S. Federal Trade Commission and clouded by an arbitration claim filed by Hess’ partner in Guyana, Exxon Mobil and CNOOC.

The result is a win for Hess CEO John Hess. It puts to rest claims by some shareholders who wanted additional compensation for the delay in closing the sale. Exxon’s arbitration could push the deal’s closing into 2025.

“Assuming Chevron wins the arbitration from Exxon or finds a settlement, the transaction is now going to happen,” said Mark Kelly, an analyst with financial firm MKP Advisors.

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Source: Oil & Gas 360

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Global oil demand is set to grow for at least another decade. Goldman Sachs now expects global oil demand to peak in 2034, at around 110M bpd.

Oil demand to grow until 2034 as per Goldman Sachs

Global oil demand is set to grow for at least another decade. This is according to Goldman Sachs analysts, who see slowing momentum of electric vehicle sales. It is keeping oil product demand robust until 2034.

Analysts at the Wall Street bank raised their forecast of oil demand in 2030 to 108.5 million barrels per day (bpd). It is from 106 million bpd that is previously expected in a report carried by Reuters.

Goldman Sachs now expects global oil demand to peak in 2034, at around 110 million bpd. This will be followed by years of plateau oil demand until around 2040. It is according to the bank’s analysts led by Nikhil Bhandari.

“We expect peak oil demand to occur by 2034 at 110 million bpd. Subsequently, we project a moderate compounded annual growth rate (CAGR) demand decline of 0.3% till 2040.” This is what analysts at Goldman Sachs wrote in the report.

Most of the world’s global oil demand growth will come from emerging markets in Asia, led by China and India, say the analysts, echoing the views of all other forecasters who expect these two economies to be the top contributors to oil demand growth globally in the coming decade.

Separately, Goldman Sachs has recently said in a report that “Sales momentum for electric vehicles (EVs) is slowing globally, and hybrids (HEVs) and plug-in hybrids (PHEVs) are proving more competitive than first thought.”

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Source: Oil Price

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US natural gas prices are set for structural upside over the next 20 years as incremental demand from data centres and AI has prompted a gas generation renaissance.

High demand sends LNG prices climbing around the world

Mexican Crude Production Collapses Ahead of Elections – High demand sends LNG prices climbing around the world!

– Providing a somber reflection on Mexico’s upstream industry before the June 2 general election, crude production by Mexico’s state oil company Pemex fell below 1.5 million b/d for the first time in over 40 years.

– April’s crude output of 1.474 million b/d represents an almost 200,000 b/d year-over-year drop. It marks a new trough for the country! This is the lowest point since Mexico started producing from the giant Cantarell field and tapped into its prolific offshore waters in the late 1970s.

– The Lopez Obrador government forbade new hydrocarbon bidding rounds. It has instructed Pemex to focus on onshore and shallow-water fields rather than investing into higher-risk projects.

– Higher condensate production from onshore assets such as Ixachi or Quesqui offset some of the declines in total supply figures, however not enough to halt the tide of legacy declines.

Could AI Gas Demand Lift US Natural Gas Prices

– US natural gas prices are set for structural upside over the next 20 years as incremental demand from data centres and AI has prompted a gas generation renaissance.

– According to WoodMackenzie, the growth in US natural gas demand could amount to as much as 30 BCf/d, pushing Henry Hub futures above $4 per mmBtu by 2035 and closer to $6 per mmBtu by 2045.

– Electricity demand from data centers currently adds up to 11 GW of generation, but this should…

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Source: Oil Price

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The EIA said on Monday that American shale output from the top-producing regions would soar to a six-month high in June.

American Shale output hits heading for 6-month high in June

The U.S. oil output hit an all-time high in the final two months of 2023. It is with year-over-year growth clocking in at over 1 million barrels per day. This is what the Energy Information Administration (EIA) said on Monday. Basically, the American shale output from the top-producing regions would soar to a six-month high in June.

This was during the monthly Drilling Productivity Report released on Monday. the EIA said production in the top basins in the American shale. Its patch would hit 9.85 million barrels per day–a volume not seen since December.

Shale output accounting for some 75% of total U.S. oil production and well productivity. It improved by the day, output has a clear path for increasing.

According to the EIA, the production per new drilling rig in the Permian basin should hit 1,400 bpd in June, compared to 1,386 in May, which also represents the highest monthly output per single rig since late 2021. Overall, output in the Permian Basin is expected to rise to 6.19 million bpd for a total rise of nearly 18,000 bpd. By comparison, Eagle Ford output in Texas is poised to reach 1.11 million bpd–a record since last December, while output in the Bakken will increase just barely.

In December last year, U.S. crude oil production rose from 11 million bpd in July to 13.3 million bpd. This is as producers took advantage of higher oil prices coming off a pandemic.

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Source: Oil & Gas 360

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OPEC estimates that global oil demand rose by 2.4M bpd in 1Q24. For the full year, total world oil demand is anticipated to reach 104.5M bpd.

OPEC remains optimistic about global oil demand growth

A resilient global economy early this year has additional upside potential in the second half with the possible easing of monetary policies. OPEC said on Tuesday, keeping its 2024 and 2025 outlook of robust oil demand unchanged from last month. In its closely-watched Monthly Oil Market Report (MOMR) out today. OPEC maintained its forecast from the April report. Which sees global oil demand growth by 2.25 million barrels per day (bpd) this year. And by another 1.85 million bpd next year.

OPEC estimates that global oil demand rose by 2.4 million bpd in the first quarter of 2024. For the full year, total world oil demand is due to reach 104.5 million bpd. Driven by “strong air travel demand and healthy road mobility, including trucking, as well as industrial, construction, and agricultural activities in non-OECD countries.”’

Petrochemical capacity expansions in China and the Middle East are also set to boost demand growth this year, according to the cartel.

“The global economy showed resilience in 1Q24, with key economies demonstrating stable growth that, in certain instances, surpassed initial projections,” OPEC said.

The organization kept its world economic growth forecasts for 2024 and 2025 at 2.8% and 2.9%, respectively, but slightly raised its estimates of the U.S. economy this year and next. OPEC now expects the U.S. economy to grow by 2.2% this year, up from 2.1% in last month’s report, and by 1.9% next year, up by 0.2 percentage points compared to the April assessment.

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Source: Oil & Gas 360

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The IER has just released its latest annual North American Energy Inventory report showing that North America has 1.66 trillion barrels of technically recoverable resources, and at current rates of consumption, the report calculates that it would take 227 years to deplete it all.

Report: America has up to 227 years of oil & gas remaining

Latest Oil & Gas Remaining or The Annual North American Energy Inventory

The Institute for Energy Research (IER), a free market think tank focusing on energy. Has just released its latest oil & gas remaining or the annual North American Energy Inventory. The report shows that North America has 1.66 trillion barrels of technically recoverable resources. And at current rates of consumption, the report calculates that it would take 227 years to deplete it all.

The report provides valuable insights into the current state of fossil fuel reserves. Particularly focusing on coal – renowned for being one of the most abundant fossil fuels available. It highlights that the proved reserves of coal stand. At a level that could potentially meet the global demand for over four centuries at the consumption rates witnessed in 2022.

The Significant Supply of Coal and its Enduring Presence

This substantial figure underscores the significant supply of coal and its enduring presence in the global energy mix. Contrary to the notion of imminent depletions such as “peak oil” or “peak gas”. The report challenges these concerns when it comes to coal. Urging against heeding the radicalized left’s rhetoric that often perpetuates such fear-mongering narratives.

The extensive longevity of coal reserves as indicated in the report serves as a compelling reminder of the need for a balanced and evidence-based approach to discussions around fossil fuels. By debunking the myth of an impending “peak coal,” the report encourages a more nuanced understanding of the energy landscape, emphasizing the importance of rational analysis over sensationalized claims.

In a time where energy security and sustainability are paramount considerations. The enduring reserve capacity of coal presents an opportunity for thoughtful consideration and strategic planning in meeting the world’s energy needs for the foreseeable future.

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Source: Marcellus Drilling News

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Discover strategies for preserving primary residence status in a 1031 exchange. Maximize tax benefits with expert insights and careful planning.

How to preserve primary residence status in a 1031 Exchange

DISCLAIMER: We are not financial advisors. The content on this website is for educational purposes only and merely cites our own personal opinions. In order to make the best financial decision that suits your own needs, you must conduct your own research and seek the advice of a licensed financial advisor if necessary. Know that all investments involve some form of risk and there is no guarantee that you will be successful in making, saving, or investing money; nor is there any guarantee that you won’t experience any loss when investing. Always remember to make smart decisions and do your own research!

A 1031 exchange presents a lucrative opportunity for real estate investors to defer capital gains taxes by reinvesting proceeds from the sale of one property into a like-kind property. However, for individuals who also use their property as a primary residence, navigating the rules to preserve primary residence status can be complex. In this comprehensive guide, we delve into the strategies and considerations for preserving primary residence status in a 1031 exchange, providing valuable insights for homeowners looking to optimize their tax planning and investment strategies.

Understanding the Basics of a 1031 Exchange

Before exploring strategies to preserve primary residence status, it’s essential to grasp the fundamentals of a 1031 exchange. Also known as a like-kind exchange, a 1031 exchange allows real estate investors to defer capital gains taxes on the sale of investment or business property by reinvesting the proceeds into another property of equal or greater value. This tax-deferral strategy is authorized under Section 1031 of the Internal Revenue Code and can be a powerful tool for building wealth and maximizing investment returns.

Defining Primary Residence Status

Refers to the property that an individual occupies as their main home or dwelling. It is typically the place where the individual resides for the majority of the year and has established legal and financial ties, such as voter registration, driver’s license, and mailing address. Primary residence status can confer certain tax benefits, including exemptions from capital gains taxes on the sale of a home up to certain thresholds ($250,000 for individuals, $500,000 for married couples filing jointly) under the Internal Revenue Code Section 121.

Preserving Primary Residence Status in a 1031 Exchange

Preserving primary residence status while engaging in a 1031 exchange requires careful planning and adherence to IRS guidelines. Here are key strategies and considerations to help homeowners navigate this process:

Intent and Use: To preserve, homeowners must demonstrate their genuine intent to use the property as their primary residence both before and after the exchange. This includes occupying the property for the requisite amount of time each year and maintaining consistent records of residency, such as utility bills, bank statements, and tax filings.

Minimum Occupancy Requirement: The IRS does not specify a minimum occupancy requirement in the context of a 1031 exchange. However, homeowners should aim to occupy the property for at least 6-12 months following the exchange to establish continuity of use and avoid potential scrutiny from tax authorities.

Documentation and Evidence: It’s essential for homeowners to maintain comprehensive documentation and evidence supporting including proof of occupancy, utility bills, property tax records, and any other relevant documentation that establishes the property as their main home.

Professional Guidance: Given the complexity of tax laws and regulations governing 1031 exchanges and primary residence status, homeowners should seek professional guidance from qualified tax advisors, real estate attorneys, and certified public accountants (CPAs) with expertise in real estate transactions and tax planning.

Structuring the Exchange: Depending on the specific circumstances and goals of the homeowner, there are different ways to structure a 1031 exchange to preserve primary residence status. For example, homeowners may consider completing the exchange within a designated timeframe to minimize the period of non-occupancy or explore alternative strategies such as a reverse exchange or a delayed exchange.

Potential Risks and Compliance Considerations

While preserving primary residence status in a 1031 exchange can offer tax benefits and financial advantages, homeowners must ensure full compliance with IRS regulations to avoid potential risks and penalties. Failure to meet the requirements or engaging in fraudulent activities to manipulate residency status can result in adverse consequences, including tax audits, fines, and legal liabilities.

 

Preserving primary residence status in a 1031 exchange requires meticulous planning, documentation, and adherence to IRS guidelines. By understanding the strategies and considerations outlined in this guide, homeowners can navigate the complexities of tax planning and real estate investment effectively while maximizing the benefits of a 1031 exchange. With careful attention to detail and professional guidance, individuals can optimize their tax savings and investment outcomes while preserving the integrity of their primary residence status.

 

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Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May.

US crude oil recovers losses after surprise stockpile decline

Crude oil futures rose Wednesday, recovering losses from earlier in the session as U.S. crude inventories fell.

Oil prices found support after U.S. commercial crude stockpiles declined by 1.4 million barrels in the first week of May, according to official data from the Energy Information Administration. The decline was a surprise compared to industry data that indicated a 509,000 barrel buildup.

Prices have come under pressure as of late on rising inventories with U.S. stockpiles surging in the last week of April.

“Oil market indicators have turned softer in recent weeks, and prices have declined from recent peaks,” Morgan Stanley analysts said in a research note. “The oil market is not tight now, but we see seasonal strength ahead in coming months.”

Here are Wednesday’s closing energy prices:

  • West Texas Intermediate – June contract: $78.99 a barrel, up 61 cents, or 0.78%. Year to date, U.S. crude oil has risen 10%.
  • Brent July contract: $83.58 a barrel, up 42 cents, or 0.51%. Year to date, the global benchmark has risen 8.5%.
  • RBOB Gasoline – June contract: $2.53 per gallon, down 0.46%. Year to date, gasoline futures are up about 20%.
  • Natural Gas-  June contract: $2.19 per thousand cubic feet, down 0.91%. Year to date, gas is down 13%.

Oil prices have fallen more than 7% since reaching their April highs when traders bid up prices on fears that Iran and Israel would go to war. Investors have largely sold off the war premium since then, with Morgan Stanley removing $4 per barrel of risk from its oil price forecast for the year.

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Source: CNBC

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