Production of Pandemic Essentials Helps Nation, Industry as 2021 Opens
Posted January 14, 2021
API’s latest Monthly Statistical Report (MSR) underscores the importance to industry of producing essential materials during the pandemic – including sterile packaging, medical plastics and antimicrobial coatings, including polymers.
Naphtha and gasoil in refining and petrochemicals increased 10.3% year over year (y/y) in December to a record-high of 5.9 million barrels per day (mb/d), or 31.3% of total U.S. petroleum demand. Again, industry benefited from this demand and in the process helped the nation respond to the pandemic. The technical term for that is “win-win.”
December also produced an important milestone – confirmation that the U.S. was a petroleum net exporter on an annual basis for the first time in more than 60 years. It’s remarkable given the headwinds of COVID-19 and increased pressure for nations to become self-reliant. The abundance, affordability and empowering nature of U.S. petroleum has helped cut through pessimism about global trade.
All of this has been made possible because the U.S. natural gas and oil industry resiliently maintained and even increased well productivity to record levels, per the U.S. Energy Information Administration. The U.S. produced 11.0 mb/d of crude oil and another 4.9 mb/d of natural gas liquids (NGLs) in December despite the 2020 COVID-19 recession and historically low drilling activity.
Other highlights from this month’s MSR, again, based on December data:
- U.S. petroleum demand slowed with relatively weak seasonal demand.
- Productivity gains sustained U.S. crude oil production of 11.0 mb/d while NGLs held steady (4.9 mb/d).
- Refinery throughput (14.6 mb/d, 79.3% capacity utilization) rose along with refining margins.
Separately, leading economic indicators continued to improve, including API’s D-E-I™ (distillate/diesel economic indicator), which bodes well for the beginning of what hopefully could be an auspicious 2021.
For details and further analysis, please see the full MSR, available at no cost for download on API’s website on the chief economist section of API’s website, linked here.
About The Author
Dr. R. Dean Foreman is API’s chief economist and an expert in the economics and markets for oil, natural gas and power with more than two decades of industry experience including ExxonMobil, Talisman Energy, Sasol, and Saudi Aramco in forecasting & market analysis, corporate strategic planning, and finance/risk management. He is known for knowledge of energy markets, applying advanced analytics to assess risk in these markets, and clearly and effectively communicating with management, policy makers and the media.
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