AT Oil DA - Michigan 7 2023 BEJJP

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2AC – Oil Prices Low
Prices low – fears of recessions and rate hikes.
Laura Sanicola 23, reports on oil and energy, including refineries, markets and renewable fuels, 7/3/2023, “Oil settles lower as economic jitters outweigh supply cuts,” https://www.reuters.com/markets/commodities/oil-prices-slip-global-economic-slowdown-fears-2023-07-03/, oj
Oil prices settled down 1% on Monday as worries about a slowing global economy and possible U.S. interest-rate hikes outweighed supply cuts announced for August by top exporters Saudi Arabia and Russia.
Brent crude futures settled down 1%, or 76 cents, at $74.65 a barrel while U.S. West Texas Intermediate crude settled down 1.2%, or 85 cents, to $69.79.
Saudi Arabia on Monday said it would extend its voluntary cut of one million barrels per day (bpd) for another month to include August, the state news agency said.
But prices moved lower after business surveys showed global factory activity slumped in June as sluggish demand in China and in Europe clouded the outlook for exporters.
Fears of a further economic slowdown denting fuel demand grew on Friday as U.S. inflation continued to outpace the central bank's 2% target, stoking fears of more rate hikes.
Higher U.S. interest rates could strengthen the dollar, making oil more expensive for buyers holding other currencies.
"Oil is facing serious economic headwinds and the market is trying to make sense of what additional crude cuts mean in that context," said John Kilduff, partner at Again Capital LLC in New York.
Economic slowdown weakened energy demand. Efforts to decrease supply fail.
Brian Swint 23, reporter covering central banks, energy, and markets, 7-6-2023, “Exxon Stock Is Slipping. Oil Prices Are Falling.,” https://www.barrons.com/articles/russia-saudi-arabia-oil-exxon-94a296c3, oj
Oil prices slipped on Thursday as concerns about energy demand weighed against recent promises from Russia and Saudi Arabia to lower production.
Saudi Arabia and Russia, two of the world’s biggest producers of crude, tried to goose prices at the start of the week by announcing an extension of their voluntary output cuts. That comes on top of other pledges from the Organization of the Petroleum Exporting Countries to reduce global oil supply.
It hasn’t worked. Concerns that demand for energy is weakening were reinforced on Wednesday by data showing China’s services sector expanded at the slowest pace in five months in June.
It’s down now.
AB 23, Arab News, 7-17-2023, “Oil Updates — crude prices fall over 1% ahead of US Fed rate decision,” https://www.arabnews.com/node/2320056/business-economy, oj
Oil prices declined on Monday ahead of a US Federal Reserve meeting as investors tried to gauge the central bank’s appetite for further rate hikes, while concerns about China’s fuel demand growth and rising Russian crude supply weighed on the market.
Brent crude futures fell 89 cents, or 1.19 percent, to $73.90 a barrel by 9:23 a.m. Saudi time. US West Texas Intermediate crude was at $69.33 a barrel, also down 1.20 percent.
Both benchmarks notched their second straight weekly decline last week as disappointing China economic data raised concerns about demand growth in the world’s largest crude importer, offsetting a boost in prices from Saudi Arabia pledging to cut production by 1 million barrels per day in July.
The Fed’s rate hikes have strengthened the greenback, making dollar-denominated commodities more expensive for holders of other currencies and weighing on prices.
Oil prices low – dropped over 1.5% on demand fears after weak Chinese data
Arathy Somasekhar 07/17, Reporter at Reuters News, nominated for Journalist of the Year award, covering the world's largest crude market and the energy industry as global fuel demand reaches record levels and oil prices rally to multi-year highs, 07/17/23, “Oil dips over 1.5% on demand fears after weak Chinese data,” https://www.reuters.com/business/energy/oil-slips-after-libya-resumes-output-china-data-eyed-2023-07-17/#:~:text=LONDON%2C%20July%2017%20(Reuters),Libyan%20output%20also%20pressured%20prices. //SBM
HOUSTON, July 17 (Reuters) - Oil dropped by more than 1.5% on Monday after weaker than expected Chinese economic growth raised doubts over the strength of demand in the world's second biggest oil consumer, and a partial restart of halted Libyan output also pressured prices.
China's gross domestic product (GDP) grew 6.3% year-on-year in the second quarter, compared with analyst forecasts of 7.3%, as its post-pandemic recovery lost momentum.
"The GDP came in below expectations, so will do little to ease concerns over the Chinese economy," said Warren Patterson, ING's head of commodities research.
Brent crude settled down $1.37 or 1.7%, at $78.50 a barrel and U.S. West Texas Intermediate crude closed $1.27, or 1.7%, lower at $74.15 on a second straight day of losses for both contracts.
Hedge fund buying has slowed as a result of ideas that demand could have been overstated after the weak numbers from China, said Dennis Kissler, senior vice president of trading at BOK Financial.
Oil briefly rose after a Reuters news alert on Saudi Arabia extending a voluntary output cut. The alert was subsequently withdrawn because it repeated news published on June 4.
Oil also came under pressure on Monday from the resumption of output at two of three Libyan fields shut last week. Output had been halted by a protest against the abduction of a former finance minister.
Meanwhile, Russian oil exports from western ports are set to fall by 100,000-200,000 barrels per day (bpd) next month, a sign that Moscow is making good on a pledge for supply cuts in tandem with Saudi Arabia, two sources said on Friday.
U.S. shale oil production is also set to fall to nearly 9.40 million bpd in August, which would be the first monthly decline since December 2022, data from the Energy Information Administration showed on Monday.
Oil prices low – decrease of over 2% in past week, consumer confidence increase, political stability
Stephanie Kelly 06/27, New-York-based correspondent covering the U.S. crude market and member of the energy team since 2018 covering the oil and fuel markets as well as federal policy around renewable fuels, 06/27/23, “Oil prices drop over 2% on interest rate hike worries,” https://www.reuters.com/markets/commodities/oil-nudges-higher-supply-worries-offset-concerns-about-demand-2023-06-27/ //SBM
NEW YORK, June 27 (Reuters) - Oil prices slumped over 2% on Tuesday on signals that central banks may not be done with interest rate hikes, while industry data showed lower U.S. crude and gasoline inventories during the peak summer driving season.
Brent crude futures settled down $1.92, or 2.6%, at $72.26 a barrel. U.S. West Texas Intermediate (WTI) futures dropped $1.67, or 2.4%, to $67.70.
Both contracts are trading broadly within a $10 range traced since early May. Oanda analyst Craig Erlam said prices were mainly at the mercy of "the ever-changing expectations for interest rates."
European Central Bank President Christine Lagarde said on Tuesday that stubbornly high inflation will require the bank to avoid declaring an end to rate hikes. Higher interest rates can weigh on economic activity and oil demand.
"Despite concerns for the slowing economy in Europe, they are going to put the pedal to the metal with interest rates and that puts pressure to the downside," said Phil Flynn, an analyst at Price Futures Group.
In the United States, U.S. consumer confidence increased in June to the highest level in nearly 1-1/2 years amid renewed labor market optimism.
But the upbeat data suggested the Federal Reserve will likely have to continue raising interest rates to slow demand in the overall economy. The U.S. central bank, which has raised its policy rate by 500 basis points since March 2022, signaled this month that two additional rate hikes were warranted this year.
U.S. inventory data from the American Petroleum Institute industry group showed on Tuesday that U.S. crude oil and gasoline inventories fell last week, according to market sources citing the data.
Crude stocks fell by about 2.4 million barrels in the week ended June 23, according to the sources, who spoke on condition of anonymity. Gasoline inventories fell by about 2.9 million barrels.
U.S. government data on stockpiles is due on Wednesday.
Brent's six-month backwardation - a price structure whereby sooner-loading contracts trade above later-loading ones - reached its lowest since December and was barely positive, indicating shrinking concern about supply crunches.
For the two-month spread , the market is in shallow contango, the opposite price structure, indicating that traders are factoring in a slightly oversupplied market.
The market, meanwhile, has shrugged off the aborted mutiny by mercenary group Wagner in Russia over the weekend, with Russian oil loadings having remained on schedule.
"The latest geopolitical flare-up quickly pales into insignificance compared to persistent macroeconomic considerations," said PVM's Tamas Varga.
This is the case despite Saudi Arabia's pledge to reduce output from July.
Much depends on whether Chinese oil demand picks up in the second half, with Premier Li Qiang saying China will take steps to invigorate markets but providing no details.
Oil prices down – rising global supplies decreased barrel by $3
CNBC 06/12/23, the world leader in business news and real-time financial market coverage, 06/12/23, “Oil prices settle down 4% on jitters ahead of US Fed meeting,” https://www.cnbc.com/2023/06/12/oil-edges-lower-ahead-of-fed-meeting.html //SBM
Oil prices fell by around $3 a barrel on Monday after analysts highlighted rising global supplies and concerns about demand growth just ahead of key inflation data and a U.S. Federal Reserve meeting later this week.
Brent crude futures fell $2.95, or 3.9%, to settle at $71.84 a barrel, their lowest since Dec. 2021.U.S. West Texas Intermediate (WTI) crude fell $3.05, or 4.4%, to settle at $67.12 a barrel.
Goldman Sachs cut its oil price forecasts early on Sunday, citing higher-than-expected supplies later this year and through 2024. The bank’s December crude price forecast now stands at $86 a barrel for Brent, down from $95, and at $81 a barrel for WTI, down from $89.
“Goldman capitulating on their bullish price forecast appears to have been the catalyst to kickstart selling today,” said Kpler analyst Matt Smith.
The revision comes at the start of a busy week for the U.S. Federal Reserve, which meets on Wednesday. While the Fed is expected to leave interest rates unchanged this month, investors are concerned that rate hikes are likely to resume next month, said UBS analyst Robert Yawger.
The Fed’s rate hikes have strengthened the dollar, making commodities denominated in the U.S. currency more expensive for holders of other currencies and weighing on prices.
“The Fed meeting and inflation pressures remain key issues for the market this week,” said Rob Haworth, senior investment strategist at U.S. Bank Asset Management.
“The more likely hold on interest rates means investors will closely track Fed Chair Powell’s press conference for the expected path for interest rates,” Haworth said.
Also weighing on investors’ minds, oil demand recovery has been muted in China, the top importer of crude oil and refined products.
“Chinese demand has shown no signs of materializing, and it could be as much as 2 million barrels a day, so it is a significant amount. There are definitely fears that OPEC and IEA will cut their demand forecasts,” Yawger said.
The Organization of Petroleum Exporting Countries and the International Energy Agency will each release their monthly market updates on Tuesday.
Last week, both Brent and WTI posted a second straight weekly decline after disappointing Chinese economic data erased the price boost from Saudi Arabia’s pledge to cut production in July.
2AC – Oil Unsustainable
Oil unsustainable—nonrenewable, expensive, and destroys the environment
Jane Marsh 22, Editor-in-Chief of Environment.co where she covers topics related to climate policy, renewable energy, the food industry, and more, 08/24/22, “Why is Oil a Nonrenewable Resource?” https://environment.co/why-is-oil-a-nonrenewable-resource/#:~:text=Oil%20is%20an%20unsustainable%20resource,to%20produce%20endless%20energy%20supplies. //SBM
What is a Renewable Resource?
Oil is an unsustainable resource because it is nonrenewable. Renewable resources are nondepletable and have fewer environmental impacts. The Earth naturally replenishes renewable resources, which reduces adverse exploitation effects.
Environmentalists rely on the sun, wind and water to produce endless energy supplies. Natural weather patterns can support power development without degrading the atmosphere. Renewable energy is significantly more sustainable than oil because it produces zero emissions.
After exploring the features of renewable resources, individuals may question, “Why is oil a nonrenewable resource?” Oil is depletable because it comes from a finite liquid mixture of hydrocarbons beneath Earth’s surface. Individuals may never replenish oil wells, which limits future generations’ abilities to access the resource.
Where is Oil Found?
Oil comes from wells, which tap into reservoirs. The reservoirs look like regular rock formations where tiny droplets of oil reside. America is one of the world’s top oil mining countries, with 31 states extracting the nonrenewable resource.
Drilling is an expensive practice, so oil manufacturers must have a deep understanding of the area. Professionals use geophones to calculate how much oil is inside subsurface rock formations. The technology measures soundwaves to determine how porous each rock is.
Wells can produce oil for between 20 and 40 years. Drilling professionals can no longer use wells after they deplete their resources. Draining wells of their oil creates adverse environmental effects.
The Oil Industry’s Environmental Impacts
Extracting oil from historic rock formations generates and displaces pollution. Mining for oil creates surface-level and atmospheric pollution. Consumers process oil through a combustion process to produce energy.
Individuals power their vehicles, light, heating and cooling systems, medical devices and other appliances with oil. Producing energy from fossil fuels creates greenhouse gas emissions, which degrade the environment. Oil is one of the leading causes of the enhanced greenhouse effect.
The effect increases evaporation and causes adverse biodiversity impacts. Oil extraction practices also cause water pollution from spills. Broken and mismanaged rigs may leak tons of oil into local water sources.
Polluting aquatic ecosystems with oil can cause biodiversity loss. Mining also degrades natural spaces by distributing soil conditions and habitats. Environmentalists must distribute low-impact energy sources to consumers and improve global sustainability levels.
Oil industry derails the global economy— unpayable US debt, global peak, and 2008 recession prove
Nafeez Ahmed 20, Bestselling author, investigative journalist, international security scholar, policy expert, film-maker, strategy & communications consultant, and change activist, focus of work is to catalyse social change in the public interest by harnessing radical, systemic approaches to understanding the interconnections between the world’s biggest problems, while developing and highlighting holistic strategies for social transformation, 02/04/20, “Government Agency Warns Global Oil Industry Is on the Brink of a Meltdown,” https://www.vice.com/en/article/8848g5/government-agency-warns-global-oil-industry-is-on-the-brink-of-a-meltdown //SBM
A government research report produced by Finland warns that the increasingly unsustainable economics of the oil industry could derail the global financial system within the next few years.
The new report is published by the Geological Survey of Finland (GTK), which operates under the government’s Ministry of Economic Affairs. GTK is currently the European Commission’s lead coordinator of the EU’s ProMine project, its flagship mineral resources database and modeling system.
The report was produced as an internal research exercise for the Finnish government, which until 2019 held the Presidency of the Council of the European Union.
Signed off by GTK’s director of scientific research Dr Saku Vuori, the report is written by GTK senior scientist Dr Simon Michaux of the Ore Geology and Mineral Economics Unit. It conducts a comprehensive global assessment of scientific research into the state of the global oil industry with goal of determining how the risks of a global supply gap could impact mining and mineral production.
The peer-reviewed report calls for the European Commission to consider oil as the world’s most important "critical raw material." Despite offering a scathing critique of conventional peak oil theory, the report arrives at the shock conclusion that the economic viability of the entire global oil market could come undone within the next few years.
Oil, oil everywhere, too costly to drill
The plateauing of conventional crude oil production in January 2005 was one of the triggers of events leading to the 2008 global financial crash, according to the report. As debt built-up in the subprime mortgage sector, the crude oil plateau drove up the underlying energy costs for the entire economy making that debt more difficult to repay—and eventually resulting in catastrophic defaults. The report warns that “unresolved” dynamics in the global energy system were only temporarily relieved due to "Quantitative Easing"—the creation of new money by central banks. A correction is now overdue, it warns.
The report says we are not running out of oil—vast reserves exist—but says that it is becoming uneconomical to exploit it. The plateauing of crude oil production was “a decisive turning point for the industrial ecosystem,” with demand shortfall being made up from liquid fuels which are far more expensive and difficult to extract—namely, unconventional oil sources like crude oil from deep offshore sources, oil sands, and especially shale oil (also known as "tight oil," extracted by fracking).
These sources require far more elaborate and expensive methods of extraction, refining and processing than conventional crude mined onshore, which has driven up costs of production and operations.
Yet the shift to more expensive sources of oil to sustain the global economy, the report finds, is not only already undermining economic growth, but likely to become unsustainable on its own terms. In short, we have entered a new era of expensive energy that is likely to trigger a long-term economic contraction.
The coming crash
‘Quantitative Easing’ or QE as it’s often known in shorthand, consists of massive programs of money creation through central banks purchasing government debt. But the report warns that the scale of QE could pave the way for another financial crash as oil markets become unstable, most likely within half a decade.
The role of QE in propping up the oil industry and wider global economy was not anticipated in traditional peak oil theory, which failed to predict the low oil prices endangering profitability. The report concludes that: “The era of cheap and abundant energy is long gone… Money supply and debt have grown faster than the real economy. Debt saturation and paralysis is now a very real risk, requiring a global scale reset.”
Although the world therefore needs to urgently transition away from fossil fuels, it may well be too late to do so in a way that avoids an economic crisis. And doing so will require industrial civilization as we know it to be fundamentally transformed:
“To phase out petroleum products (and fossil fuels in general), the entire global industrial ecosystem will need to be reengineered, retooled and fundamentally rebuilt," the report notes. "This will be perhaps the

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