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Energy Tomorrow Blog

API MSR: U.S. Petroleum Demand and Imports Higher, Supply Languished

monthly-stats-report  oil and natural gas production  consumers  imports 

Dean Foreman

Dean Foreman
Posted October 15, 2021

API’s new Monthly Statistical Report (MSR), based on U.S. petroleum primary market data through September, reinforced a combination of developments that has been recurrent so far in 2021 – that is, demand outpaced supply, inventories fell and, consequently, imports and prices rose. 

 

Historically, this combination of factors has also led to further market tightening, which could put additional upward pressure on costs and prices.

 

The underlying drivers come back to the basics of demand, which reached a record high for the month of September at 20.6 million barrels per day (mb/d), and supply that has remained muted due to the industry’s continued financial, work force and supply chain constraints, coupled with a lack of policy support as we discussed here.

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Energy Costs, Consumers and Increasing U.S. Production to Help Demand-Supply Mismatch

eia  white house  domestic oil production  consumers 

Mark Green

Mark Green
Posted October 15, 2021

News item #1: Because energy demand has continued to significantly outpace supply, the U.S. Energy Information Administration (EIA) expects U.S. households will spend more money on heating costs this winter compared to last winter – for electricity, natural gas, propane and heating oil.

News item #2: Again, largely due to the demand-supply mismatch that’s further tightened energy markets and put upward pressure on prices, White House officials continue to wrestle with the impacts of higher consumer energy costs, including gasoline.

News item #3: Coal use has climbed, complicating U.S. efforts to reduce carbon dioxide emissions. Bloomberg reports U.S. power plants are projected to burn 23% more coal this year, the first increase since 2013, driven by higher natural gas prices. …

Taking all of this in, let’s make this point: There’s affordable, reliable energy available in the U.S., right now – American natural gas and oil.

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Coal’s 2021 Resurgence and What It Could Mean for Emissions, Consumers

coal  natural gas  electricity  consumers  emission reductions 

Dean Foreman

Dean Foreman
Posted October 1, 2021

Natural gas prices have entered rarified territory due to demand outpacing production and supply, creating headwinds for the Biden administration’s emissions reduction goals and potentially impacting the energy cost savings consumers have enjoyed since the U.S. energy revolution launched more than a decade ago.

Prices in Asia Pacific (Japan-Korea) settled at $29.20 per million Btu (mmBtu) on Sept. 27 – their highest on record since 2012. Meanwhile, U.S. natural gas prices of nearly $5.50 per mmBtu at Henry Hub were relatively inexpensive compared with international ones but rose to their highest for the month since 2008. Natural gas prices like these are unusual for the fall, before there’s reason to believe the approaching winter could be particularly cold. 

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Front Burner: Foes of Natural Gas Focus on Stoves, Furnaces in New Buildings

natural gas benefits  consumers  heat 

Mark Green

Mark Green
Posted September 27, 2021

Initiatives in more than two dozen U.S. cities to phase out or straight-up ban natural gas service in new homes and buildings could set up Americans for one heck of a stomach punch. And we’re not just talking figuratively.

The Wall Street Journal reports that several dozen U.S. municipalities, including New York and Denver, have either passed or proposed measures that restrict or ban natural gas in new buildings or those that have had substantial renovation. The gut punch for Americans comes in what that reality would look and feel like – heat pumps and electric appliances in place of natural gas-fueled furnaces, water heaters, ovens and stoves.

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Price Inflation Could Imperil the Economic Recovery

consumers  prices  energy costs 

Dean Foreman

Dean Foreman
Posted September 1, 2021

One of the great stories of the U.S. energy revolution is that, as it broke productivity records, it ultimately imposed downward pressure on the prices for energy and other goods and services, benefiting U.S. household budgets.

 

Yet, so far in 2021, prices have risen for energy and most other goods – and could bring unfavorable surprises for macroeconomic policies and households alike.

 

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API MSR: Highest Petroleum Demand Since 2019; Imports and Prices Rose in July

monthly-stats-report  demand  consumers 

Dean Foreman

Dean Foreman
Posted August 19, 2021

As the summer driving season motors on, we’re watching not only the impacts of seasonally higher gasoline prices on U.S. households, but also costs in other areas affecting family budgets – and whether those costs are seasonal or longer-lasting. This is the context for API’s new Monthly Statistical Report (MSR), based on July data.

   

As we discussed here, U.S. consumers have benefitted recently from fuels and products derived from relatively inexpensive domestic crude oil and natural gas – well below international price levels. This was due to abundant domestic crude oil production. 

That’s changed now. Domestic production is lower, partly due to the aftereffects of the 2020 COVID-19 recession as well as the delay or cancellation of energy projects that take years to complete.  In this sense, the pulse of U.S. petroleum markets is vital, and API’s primary data can offer a leading perspective.

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We Need More U.S. Oil, Not an Import-More-Oil Strategy

president  opec  crude oil production  gasoline prices  consumers 

Mark Green

Mark Green
Posted August 11, 2021

The White House has big problems with its continued calls for more crude oil production from OPEC – even as it is discouraging U.S. production.

Rising domestic gasoline prices are a political problem for President Biden. … The administration’s political dilemma is that since April 2020, when EIA reported the per-gallon cost of gasoline was $1.938, prices rose to $3.231 last month. The safe assumption is that most Americans have noticed the 66.7% increase at the pump.

The White House response last month was to plead with OPEC to produce more crude oil – and that’s because the cost of crude oil is the No. 1 factor in the retail cost of gasoline. More supply means more downward pressure on crude costs and retail prices.

On Wednesday, President Biden doubled down on the approach, saying the administration wants OPEC to reverse production cuts made during the pandemic to lower prices for consumers. … Therein lies a big energy policy problem.

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High Court Supports Certainty in Natural Gas Pipeline Approval Process

natural gas pipelines  ferc  consumers 

Mark Green

Mark Green
Posted July 7, 2021

To serve consumers, support economic growth and help protect the environment, the U.S. needs more natural gas pipeline infrastructure. Last week’s U.S. Supreme Court decision – that states do not have an outsized authority to block federally approved projects from obtaining the land for those pipeline routes – is a significant step forward for those purposes.

The decision underscores the authority of the Federal Energy Regulatory Commission (FERC) under the federal Natural Gas Act (NGA) to review and approve pipeline projects that demonstrate a public necessity and cross state lines, such as the 116-mile PennEast natural gas pipeline from Pennsylvania to New Jersey.

The NGA delegates the federal government’s eminent domain authority to private parties once FERC has approved and certified the pipeline project, which allows those who invest in and build pipelines to have regulatory certainty and a clear permitting process. 

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Q&A: The Demand/Supply Dilemma, Consumer Impacts and the Need for Sound Policy

demand  supply  us energy security  production  consumers  gasoline prices 

Mark Green

Mark Green
Posted July 1, 2021

In recent weeks API Chief Economist Dean Foreman has noted the return of petroleum demand, as economies strengthen in the U.S. and globally, to a level that’s outpacing supply (see here). In the Q&A that follows, Dr. Foreman discusses the impacts of the supply-demand mismatch on American consumers and markets, as well as the consequences of the Biden administration’s energy policy signals.

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The Energy Infrastructure Opportunity

infrastructure  pipelines  consumers  jobs  us energy security 

Mark Green

Mark Green
Posted June 1, 2021

U.S. Energy Secretary Jennifer Granholm continues voicing support for our nation’s pipeline network, which is critically important to Americans’ everyday lives, the economy, national security and environmental progress.

Granholm last month said pipelines are “the best way to go” to deliver fuels after a cyberattack disrupted service on the Colonial fuels pipeline. Last week she said her department wants to build more pipes, particularly to transport low-carbon fuels. 

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