Monthly Archives

January 1970

Despite narrowing Brent–WTI spread and lower production, U.S. crude oil exports remain high (7/14/2021)

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Following the rapid growth of U.S. crude oil production since 2010, the U.S. government lifted restrictions on crude oil exports in December 2015. Before the restrictions were lifted, exports were less than 0.5 million barrels per day (b/d), but subsequent U.S. production growth caused price spreads between international (Brent) and domestic (West Texas Intermediate, or WTI) crude oil benchmark prices to widen. WTI averaged $10 per barrel (b) less than Brent from 2011 to 2014. Since the policy change in 2015, U.S. crude oil exports have increased significantly and have averaged more than 3.0 million b/d since 2019, despite narrowing price spreads, significant price drops, reduced demand, and less production since early 2020, when the U.S. market began to react to the COVID-19 pandemic. Weekly export data from our Weekly Petroleum Status Report show a slight growth trend in crude oil exports since June 2021. As of the week of July 9, 2021, U.S. crude oil exports averaged 3.51 million b/d, and Brent and WTI spot prices averaged $76.13/b and $73.35/b. …Following the rapid growth of U.S. crude oil production since 2010, the U.S. government lifted restrictions on crude oil exports in December 2015. Before the restrictions were lifted, exports were less than 0.5 million barrels per day (b/d), but subsequent U.S. production growth caused price spreads between international (Brent) and domestic (West Texas Intermediate, or WTI) crude oil benchmark prices to widen. WTI averaged $10 per barrel (b) less than Brent from 2011 to 2014. Since the policy change in 2015, U.S. crude oil exports have increased significantly and have averaged more than 3.0 million b/d since 2019, despite narrowing price spreads, significant price drops, reduced demand, and less production since early 2020, when the U.S. market began to react to the COVID-19 pandemic. Weekly export data from our Weekly Petroleum Status Report show a slight growth trend in crude oil exports since June 2021. As of the week of July 9, 2021, U.S. crude oil exports averaged 3.51 million b/d, and Brent and WTI spot prices averaged $76.13/b and $73.35/b. …EIA: This Week in Petroleum

Brent crude oil price forecast to average $72 per barrel in the second half of 2021 (7/8/2021)

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In the July Short-Term Energy Outlook (STEO), we revised our forecast crude oil prices up in the second half of 2021 (2H21) and in 2022. We forecast that the Brent crude oil price will average $72 per barrel (b) in 2H21 and $67/b in 2022, each up $6/b from the June STEO forecast (Figure 1). Our expectation of tighter global oil markets contributed to our upward revision of crude oil prices. We revised global production down by 210,000 barrels per day (b/d) in 2H21, leading to larger forecast inventory draws in 2H21 and smaller forecast inventory builds in 2022. We completed our forecast on July 1, before the July 2 meeting between members of OPEC and several nonmembers (OPEC+). Participants at the meeting did not reach an agreement on oil production levels and were scheduled to reconvene on July 5; however, that meeting was subsequently canceled. After OPEC+ countries could not reach an agreement, Brent crude oil prices rose, increasing to $78/b in intraday trading on July 6, the highest price since October 29, 2018. As of July 7, members of OPEC+ had still not reached a production agreement, and the price of Brent fell, closing at $73/b as future production levels remained unknown. The uncertainty over future crude oil supply led to an increase in volatility on July 7. In the July STEO, we forecast that OPEC and its OPEC+ partners will continue to increase crude oil production beyond July in response to rising global oil consumption. …In the July Short-Term Energy Outlook (STEO), we revised our forecast crude oil prices up in the second half of 2021 (2H21) and in 2022. We forecast that the Brent crude oil price will average $72 per barrel (b) in 2H21 and $67/b in 2022, each up $6/b from the June STEO forecast (Figure 1). Our expectation of tighter global oil markets contributed to our upward revision of crude oil prices. We revised global production down by 210,000 barrels per day (b/d) in 2H21, leading to larger forecast inventory draws in 2H21 and smaller forecast inventory builds in 2022. We completed our forecast on July 1, before the July 2 meeting between members of OPEC and several nonmembers (OPEC+). Participants at the meeting did not reach an agreement on oil production levels and were scheduled to reconvene on July 5; however, that meeting was subsequently canceled. After OPEC+ countries could not reach an agreement, Brent crude oil prices rose, increasing to $78/b in intraday trading on July 6, the highest price since October 29, 2018. As of July 7, members of OPEC+ had still not reached a production agreement, and the price of Brent fell, closing at $73/b as future production levels remained unknown. The uncertainty over future crude oil supply led to an increase in volatility on July 7. In the July STEO, we forecast that OPEC and its OPEC+ partners will continue to increase crude oil production beyond July in response to rising global oil consumption. …EIA: This Week in Petroleum

Refinery closures contribute to decreased U.S. refinery capacity during 2020 (6/30/2021)

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U.S. operable atmospheric crude oil distillation capacity, the primary measure of refinery capacity in the United States, totaled 18.1 million barrels per calendar day (b/cd) at the start of 2021, down 0.8 million b/cd (4.5%) from 19.0 million b/cd at the start of 2020. According to our annual Refinery Capacity Report, the last time annual refinery capacity decreased was during 2017 (Figure 1). …U.S. operable atmospheric crude oil distillation capacity, the primary measure of refinery capacity in the United States, totaled 18.1 million barrels per calendar day (b/cd) at the start of 2021, down 0.8 million b/cd (4.5%) from 19.0 million b/cd at the start of 2020. According to our annual Refinery Capacity Report, the last time annual refinery capacity decreased was during 2017 (Figure 1). …EIA: This Week in Petroleum

U.S. distillate demand returned to 2019 levels earlier than gasoline and jet fuel demand (6/23/2021)

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A combination of increasing travel and economic activity in the United States has contributed to greater demand for gasoline, distillate, and jet fuel as identified in the product supplied data in our Weekly Petroleum Status Report (WPSR). Although demand has increased for all three of these products from their 2020 lows, the rate and extent of the growth has differed by product. According to the June 23 WPSR that includes data through June 18, the recent four-week average demand (measured as product supplied) for gasoline was 94% of its 2019 level for the same time of year, while distillate and jet fuel demand were 98% and 74% of their 2019 levels, respectively (Figure 1). In comparison, at their lowest points in 2020, gasoline product supplied fell to 56% of its corresponding 2019 level, while distillate and jet fuel demand fell to 80% and 31%, respectively, of their corresponding 2019 levels. …A combination of increasing travel and economic activity in the United States has contributed to greater demand for gasoline, distillate, and jet fuel as identified in the product supplied data in our Weekly Petroleum Status Report (WPSR). Although demand has increased for all three of these products from their 2020 lows, the rate and extent of the growth has differed by product. According to the June 23 WPSR that includes data through June 18, the recent four-week average demand (measured as product supplied) for gasoline was 94% of its 2019 level for the same time of year, while distillate and jet fuel demand were 98% and 74% of their 2019 levels, respectively (Figure 1). In comparison, at their lowest points in 2020, gasoline product supplied fell to 56% of its corresponding 2019 level, while distillate and jet fuel demand fell to 80% and 31%, respectively, of their corresponding 2019 levels. …EIA: This Week in Petroleum

U.S. exports of ethane and associated petrochemicals grow, reach new markets (6/16/2021)

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We forecast U.S. ethane exports to reach record highs in 2021, extending the trend of consistently rising exports of ethane and associated ethylene and ethylene derivatives since 2014. As one of only two countries with substantial ethane production capacity and export capability, the United States is positioned as both the largest global ethane consumer and exporter. The ability to produce ethane at low cost relative to other feedstocks used in the petrochemical industry has provided U.S. petrochemical manufacturers with a competitive advantage on the international market, allowing exports of products derived from ethane to grow. International chemical manufacturers are increasing their imports of ethane from the United States to take advantage of this low-cost feedstock. …We forecast U.S. ethane exports to reach record highs in 2021, extending the trend of consistently rising exports of ethane and associated ethylene and ethylene derivatives since 2014. As one of only two countries with substantial ethane production capacity and export capability, the United States is positioned as both the largest global ethane consumer and exporter. The ability to produce ethane at low cost relative to other feedstocks used in the petrochemical industry has provided U.S. petrochemical manufacturers with a competitive advantage on the international market, allowing exports of products derived from ethane to grow. International chemical manufacturers are increasing their imports of ethane from the United States to take advantage of this low-cost feedstock. …EIA: This Week in Petroleum

Recent forecast limits crude oil price increases because of growing global production (6/9/2021)

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In the June Short-Term Energy Outlook (STEO), we forecast that increasing global production of petroleum and other liquid fuels (driven by OPEC, Russia, and the United States) will limit price increases for global crude oil benchmarks Brent and West Texas Intermediate (WTI). Although global consumption will likely increase through 2022, we forecast production will increase more rapidly, ending the large global stock draws seen in the first two quarters of 2021. We forecast global stocks will remain nearly flat in the second half of 2021 and then increase in 2022 (Figure 1). We expect the increasing global petroleum stocks will limit upward crude oil prices in the coming months and contribute to lower crude oil prices later this year and into 2022. …In the June Short-Term Energy Outlook (STEO), we forecast that increasing global production of petroleum and other liquid fuels (driven by OPEC, Russia, and the United States) will limit price increases for global crude oil benchmarks Brent and West Texas Intermediate (WTI). Although global consumption will likely increase through 2022, we forecast production will increase more rapidly, ending the large global stock draws seen in the first two quarters of 2021. We forecast global stocks will remain nearly flat in the second half of 2021 and then increase in 2022 (Figure 1). We expect the increasing global petroleum stocks will limit upward crude oil prices in the coming months and contribute to lower crude oil prices later this year and into 2022. …EIA: This Week in Petroleum

Supply disruptions and increasing demand boosted U.S. petroleum product imports in March (6/3/2021)

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Imports of petroleum product into the United States increased in March 2021 as a result of increased demand, temporary unplanned refinery outages in the U.S. Gulf Coast, and high U.S. petroleum product prices compared with prices in Europe. According to our May Petroleum Supply Monthly (PSM), which includes complete petroleum product import data through March 2021, U.S. petroleum product imports averaged 2.5 million barrels per day (b/d) in March, the highest average for any month since July 2019 . According to data from our Weekly Petroleum Supply Report (WPSR), this increase in petroleum product imports continued through April and May, likely as a result of increasing petroleum product demand, high U.S. petroleum product spot price spreads compared with prices in Europe, and the Colonial Pipeline outage. The four-week rolling average for U.S. petroleum product imports was 2.7 million b/d as of the week ending May 21, 2021. …Imports of petroleum product into the United States increased in March 2021 as a result of increased demand, temporary unplanned refinery outages in the U.S. Gulf Coast, and high U.S. petroleum product prices compared with prices in Europe. According to our May Petroleum Supply Monthly (PSM), which includes complete petroleum product import data through March 2021, U.S. petroleum product imports averaged 2.5 million barrels per day (b/d) in March, the highest average for any month since July 2019 . According to data from our Weekly Petroleum Supply Report (WPSR), this increase in petroleum product imports continued through April and May, likely as a result of increasing petroleum product demand, high U.S. petroleum product spot price spreads compared with prices in Europe, and the Colonial Pipeline outage. The four-week rolling average for U.S. petroleum product imports was 2.7 million b/d as of the week ending May 21, 2021. …EIA: This Week in Petroleum

Higher Memorial Day gasoline prices reflect low inventories amid increasing demand (5/26/2021)

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Memorial Day weekend serves as the unofficial beginning of the U.S. summer driving season, when increased vehicle travel leads to more demand for gasoline. The American Automobile Association (AAA) expects more than 37 million people to take trips this Memorial Day weekend, traveling 50 miles or more from home between May 27 and May 31. This total marks a 60% increase from 2020, when only 23 million people traveled, the fewest since AAA began recording in 2000. The U.S. average retail price for regular gasoline on May 24, the Monday before the Memorial Day weekend, was $3.02 per gallon (gal), a decrease of 1 cent/gal over the previous week (the highest price since 2014), $1.06/gal higher than in 2020, and 38 cents/gal higher than the 2015-19 average. …Memorial Day weekend serves as the unofficial beginning of the U.S. summer driving season, when increased vehicle travel leads to more demand for gasoline. The American Automobile Association (AAA) expects more than 37 million people to take trips this Memorial Day weekend, traveling 50 miles or more from home between May 27 and May 31. This total marks a 60% increase from 2020, when only 23 million people traveled, the fewest since AAA began recording in 2000. The U.S. average retail price for regular gasoline on May 24, the Monday before the Memorial Day weekend, was $3.02 per gallon (gal), a decrease of 1 cent/gal over the previous week (the highest price since 2014), $1.06/gal higher than in 2020, and 38 cents/gal higher than the 2015-19 average. …EIA: This Week in Petroleum

EIA lowers India’s oil demand forecast because of increasing COVID-19 cases (5/19/2021)

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In the May Short-Term Energy Outlook (STEO), we revised down our second-quarter 2021 (2Q21) forecast for India’s consumption of petroleum and other liquid fuels by 0.3 million barrels per day (b/d) (6%) from the April STEO because of a significant increase in COVID-19 cases in that country. We revised total world consumption up slightly because of our upward revisions to consumption in both China and the United States, which more than offset the downward revision in India. The rapid increase in COVID-19 cases in India has led to various travel restrictions in certain regions, reducing consumption of transportation fuels such as gasoline and diesel. In the May STEO, we forecast petroleum consumption in India declined 0.4 million b/d (8%) to 4.7 million b/d from March to April. India’s petroleum consumption data, released after the May STEO’s publication, revealed a similar decline of 0.3 million b/d (6%) over the same period. Reduced travel is expected to continue affecting petroleum consumption through May and June, which we also revised down from the April STEO (Figure 1). We expect India’s petroleum and other liquids consumption to return to previously forecast levels by July, but the forecast is highly uncertain and depends on the current duration of the COVID-19 outbreak and associated travel restrictions. …In the May Short-Term Energy Outlook (STEO), we revised down our second-quarter 2021 (2Q21) forecast for India’s consumption of petroleum and other liquid fuels by 0.3 million barrels per day (b/d) (6%) from the April STEO because of a significant increase in COVID-19 cases in that country. We revised total world consumption up slightly because of our upward revisions to consumption in both China and the United States, which more than offset the downward revision in India. The rapid increase in COVID-19 cases in India has led to various travel restrictions in certain regions, reducing consumption of transportation fuels such as gasoline and diesel. In the May STEO, we forecast petroleum consumption in India declined 0.4 million b/d (8%) to 4.7 million b/d from March to April. India’s petroleum consumption data, released after the May STEO’s publication, revealed a similar decline of 0.3 million b/d (6%) over the same period. Reduced travel is expected to continue affecting petroleum consumption through May and June, which we also revised down from the April STEO (Figure 1). We expect India’s petroleum and other liquids consumption to return to previously forecast levels by July, but the forecast is highly uncertain and depends on the current duration of the COVID-19 outbreak and associated travel restrictions. …EIA: This Week in Petroleum

Cyberattack halts fuel movement on Colonial Pipeline (5/12/2021)

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Colonial Pipeline is a major mode of shipping for transportation fuels and other refined petroleum products that spans from the U.S. Gulf Coast to the East Coast. On Friday, May 7, the pipeline halted operations to contain the effects of a cyberattack. As of Wednesday, May 12, the pipeline had not resumed operations of its main lines, although some smaller lines are still operational. The company announced that it hopes to restore service by the end of the week. …Colonial Pipeline is a major mode of shipping for transportation fuels and other refined petroleum products that spans from the U.S. Gulf Coast to the East Coast. On Friday, May 7, the pipeline halted operations to contain the effects of a cyberattack. As of Wednesday, May 12, the pipeline had not resumed operations of its main lines, although some smaller lines are still operational. The company announced that it hopes to restore service by the end of the week. …EIA: This Week in Petroleum