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Energy Tomorrow Blog

The Oil Futures Rebound

crude markets  crude oil  demand 

Dean Foreman

Dean Foreman
Posted May 21, 2020

After crude oil futures prices plunged into negative territory for a day last month, there was a good deal of speculation that the same thing could happen this month. Some even pointed to the April futures meltdown as a “doomsday” scenario for U.S. natural gas and oil.

Well, a number of things happened on the way to oil’s “doomsday.”

At the outset, let’s note that what happened with futures in April didn’t repeat this month. Oil futures prices for June delivery of West Texas Intermediate crude, whose contracts expired Tuesday, closed at $32.50 per barrel – about 300% higher than they did for those contracts a month ago. Let’s explore why.

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Why Import Oil? Saudi Cargoes Help U.S. Refiners

saudi arabia  crude oil  refiners  imports  consumers 

Mark Green

Mark Green
Posted May 5, 2020

News reports of a “flotilla” of oil tankers from Saudi Arabia, sailing to the U.S. with more than 40 million barrels of crude oil in their holds for delivery this month, has many Americans questioning why the U.S. – the world’s largest oil and natural gas producer – imports any oil when oversupply associated with the government response to COVID-19 has a number of U.S. operators hurting financially.

Some think President Trump should send the oil fleet home or impose import tariffs. It’s a new chapter in an old debate over why the U.S. imports oil when our domestic production is among the globe’s leaders. In the case of this imported Saudi oil, the answer has much to do with the supply needs of the U.S. refining system.

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Creativity, Innovation and Expertise Help Address Storage Challenge

crude oil tankers  storage tanks  standards  spr 

John Siciliano

John D. Siciliano
Posted April 30, 2020

Meeting short-term crude oil storage challenges has our industry looking at a number of measures to safely route and handle the surplus resulting from the demand decline tied to global efforts to slow the spread of COVID-19.

API President and CEO Mike Sommers told CNBC that the industry is thinking outside the box to find “creative solutions” to ship and store an historic amount of oil beyond its usual means.

To be sure, there also are separate infrastructure challenges in getting crude oil to where there is storage. Many pipelines in the nation’s transportation network are full up or contracted – partly reflecting the country’s infrastructure needs that pre-date COVID-19. That’s a subject for a separate post. The fact remains industry is focused on finding storage as markets rebalance between supply and demand.

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Innovative Technologies Give Energy Operators Staying Power

us energy security  technology  innovation  crude markets 

Sam Winstel

Sam Winstel
Posted March 31, 2020

Despite challenging public health, geopolitical and economic circumstances, the U.S. energy industry remains positioned at the leading edge of technology and innovation. Historically, America’s natural gas and oil companies have overcome unexpected and uncertain events with safe, reliable and resilient operations – and gone on to play an important role in rebuilding the domestic economy and strengthening national security.

And there’s evidence this will happen again. That’s why we’ve said, don’t bet against this industry.

Mark Mills, a senior fellow at the Manhattan Institute, wrote recently that today’s industrial digital technologies could help us weather this market downturn and eventually access more of our abundant energy resources. 

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API Opposes Government Intervention in Response to Market Downturn

crude markets  us energy security  opec  trade 

Sam Winstel

Sam Winstel
Posted March 25, 2020

There seems to be no shortage of flawed ideas in response to ongoing crude oil market instability.

Last week, a U.S. senator asked the Commerce Department to impose tariffs on imported crude oil, and a Texas state energy regulator called for statewide oil production quotas – isolating measures that don’t serve the interests of American consumers and don’t help our industry do its job of supplying the country with needed energy.

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Don’t Bet Against U.S. Natural Gas and Oil

crude markets  us energy security  oil prices 

Mark Green

Mark Green
Posted March 17, 2020

Much of the news surrounding the U.S. natural gas and oil industry is fairly challenging right now: some of the lowest global crude oil prices in years; world energy demand, which already was slowing, has been further affected by the coronavirus; Russia and Saudi Arabia, the world’s No. 2 and No. 3 oil producers, plan to increase output, launching a price war that also might be aimed at clawing back market share lost to U.S. shale producers in recent years.

Even so, don’t bet against the U.S. natural gas and oil industry. Ours is an industry of innovation and technological expertise that historically has risen to overcome serious circumstances, playing a key role in building U.S. economic strength and increasing the nation’s global security.


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Oil Exports, Lower Net Imports, Greater Energy Security

crude oil exports  oil imports  us energy security 

Mark Green

Mark Green
Posted October 4, 2019

The latest figures on U.S. crude oil exports show growing U.S. energy leadership, while the continued decline in net oil imports signals strengthened American energy security – with both stemming from the revolution in U.S. production. Charts from the U.S. Energy Information Administration (EIA) help illustrate.

First, EIA reports that U.S. crude oil exports rose to average 2.9 million barrels per day (b/d) in the first half of this year – an increase of 966,000 b/d over the same period in 2018. U.S. crude oil exports set a record in June of 3.2 million b/d, and EIA's graph vividly reflects the sea change in the United States’ oil exporting posture.


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The U.S. as Global Oil Growth Supplier

global energy demand  crude oil supplies  iea  us energy security 

Jessica  Lutz

Jessica Lutz
Posted June 19, 2019

Another big indication of the global impact of the U.S. energy revolution comes in the International Energy Agency’s (IEA) oil market report and its outlook for 2020, which says the United States will be responsible for virtually all of this year’s increase in oil supply. …

The fact that the U.S. is projected to fill this role is significant in terms of global market stability and the world’s security – that is, the United States as this growth supplier, versus less stable and/or less friendly regimes.  


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U.S. Energy Exports and Geopolitical Transformation

us energy security  crude oil exports  lng exports  state department 

Mark Green

Mark Green
Posted March 21, 2019

Earlier this year we noted federal projections that U.S. liquefied natural gas export capacity would reach almost 9 billion cubic feet per day (Bcf/d) in 2019, with exports averaging 5.1 Bcf/d. Add to that crude oil and other liquids, and the U.S. Energy Information Administration (EIA) projects that the U.S. will export more energy than it imports by 2020 – for the first time since the 1950s.

The numbers take on even more significance as the context for U.S. energy leadership around the world. At the CERAWeek conference earlier this month, U.S. Secretary of State Mike Pompeo talked about the unique opportunity for U.S. energy to transform geopolitical realities and in the process make Americans safer.

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Unintended Consequences in Alberta's Limits on Crude Output

alberta canada  crude oil  refiners  trade  production 

Dean Foreman

Dean Foreman
Posted February 19, 2019

A profound shift has taken place in North American oil markets over the past few months that’s now affecting trade between the United States and its biggest crude oil supplier, Canada.  

It involves supplies of heavier crude oil – important for the manufacture of a multitude of everyday products consumers use, from local road surfaces to the roofing for their houses. While the U.S. is producing domestic crude at record levels, there’s still a need for heavier crudes.

With heavy oil from Venezuela declining for years, the importance of close ties with Canada and especially the oil-producing province Alberta has increased. Unfortunately, Alberta’s decision to limit oil production appears to be advancing uneconomic outcomes, where some U.S. refiners signaled they’ll shift away from Canadian heavy crude oil and seek supply elsewhere. 


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