Energy Tomorrow Blog
Posted October 8, 2021
Connecting some of the dots in the U.S. Energy Information Administration’s new International Energy Outlook released this week, we see projections for continued global energy demand growth and increasing use of renewable energy, supported by natural gas and oil out to the year 2050.
EIA’s projections underscore a point we’ve been making for some time – that natural gas and oil are the world’s leading energy sources today and will be tomorrow.
Posted October 7, 2021
The fundamentals of natural gas demand outpacing supply have driven prices to their highest for the season since 2008, and some analysts expect a natural gas supply crunch with potentially wide impacts this winter – including potential market tightening that could significantly affect household budgets and perhaps could risk physical hardship for some.
In such a context, many Americans may have a hard time figuring out what’s happening and how it affects them: If natural gas prices have soared, why hasn’t production risen more quickly to meet post-pandemic energy demand and moderate the conditions driving up costs? And another one: Why is the U.S. still exporting liquefied natural gas (LNG)?
Posted September 22, 2021
Economics and energy market data for the third quarter of 2021 were marked by divergences. That’s the main thrust of API’s quarterly Industry Outlook for Q3 2021 and Monthly Statistical Report (MSR) with primary data for August.
Demand for oil and natural gas has risen strongly along with the economic recovery, as we discussed here. At the same time, global oil and natural gas investments have fallen to record lows so far in 2021, (see here). Consequently, supplies have failed to keep pace with demand and generally resulted in lower inventories, higher U.S. imports and the strongest prices for crude oil, gasoline and natural gas since 2014.
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.
Posted July 21, 2021
It’s great for the U.S. economy that, with urban re-openings and the onset of the summer driving season, petroleum demand returned to over 20 million barrels per day (mb/d) in June, according to API’s primary data presented in our latest Monthly Statistical Report (MSR).
However, domestic oil supplies have not been able keep pace, and consequently U.S. crude oil imports and consumer prices have suddenly risen, which ultimately could contribute to the list of expenses stressing household budgets, such as higher costs for housing, vehicles and many other goods and services.
Posted July 8, 2021
The Biden administration says it is keeping a close eye on the OPEC+ talks on crude oil production because, as White House Press Secretary Jen Psaki said, it wants “Americans to have access to affordable and reliable energy at the pump.”
Unfortunately, the U.S. is mostly a spectator as OPEC+ debates crude oil supply, which continues to be outpaced by demand, putting upward pressure on crude costs. Because the cost of crude is the biggest factor in gasoline prices, U.S. pump prices have reflected this mismatch between demand and supply.
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.
Posted June 17, 2021
The expectations and real prospects for global and U.S. economic recovery – and energy markets along with them – have accelerated and appear bright. That’s the overarching point in API’s quarterly Industry Outlook for Q2 2021 and Monthly Statistical Report (MSR), echoing what we have said since the third quarter of last year (see here, here and here).
Yet, while API’s primary data for May 2021 show the recoveries in U.S. economic growth and petroleum demand have continued to go hand-in-hand, potential record global oil demand growth this year and the next, per the U.S. Energy Information Administration (EIA), could be overshadowed by the lowest industry-wide real capital expenditures on record for any quarter, by API estimates.
Demand up and capital investment down by record amounts is a concerning combination.
Posted May 20, 2021
API’s primary data for April 2021 evidenced momentum for the broader U.S. economic recovery, as petroleum demand and refining activity rose, supply remained solid and leading economic indicators pointed higher.
The April headline figure was that total U.S. petroleum demand of 19.6 million barrels per day (mb/d) rose by 2.5% from March and to within 3.5% of its level in April 2019, which was its highest for the month in 11 years.
Contemplate that for a second: For all of the dislocation and continuing issues with recovery from COVID-19 pandemic, total petroleum demand in April was within a sliver of where it was that record-setting April of 2019.
Posted April 15, 2021
API’s primary data for March 2021 suggest that petroleum markets demonstrated a measured recovery following the winter emergency disruptions that affected oil supply, trade and inventories beginning in mid-February.
Notably, total U.S. petroleum demand of 19.1 million barrels per day (mb/d) decreased seasonally but showed resounding strength in rural gasoline demand that increased by 632,000 barrels per day over February.