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Energy Tomorrow Blog

Why the U.S. Must Import and Export Oil

crude oil exports  refineries  gasoline prices  energy policy 

Dean Foreman

Dean Foreman
Posted June 14, 2018

With Wall Street Journal headlines such as “Trans-Atlantic Oil-Price Spread Soars as Supply Glut Disappears,” it might be hard to remember that the United States’ domestic oil production stood at a record 10.5 million barrels per day (mb/d) in April, and the nation’s petroleum trade balance is in its best position in 50 years. This has reinforced U.S. energy security, lowered the trade deficit and boosted economic growth.

That said, given our country’s much improved energy outlook, some may question why we’re still importing crude oil and refined products. And, while we’re still importing oil, why do we export domestic crude – especially when prices have risen at the pump?  Why don’t we just keep American oil at home? ... 

Answers are found in an understanding of basic market realities.

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The economic—and environmental—case for natural gas

gasoline prices  crude oil  gasoline blends  gasoline taxes  consumers 

Jessica  Lutz

Jessica Lutz
Posted May 31, 2018

In a recently released report, the U.N. Conference on Trade and Development digs into the factors that have made the U.S. energy dominance possible, and – specifically – the role of natural gas in energy dominance. 

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Gasoline Prices and Perspective

gasoline prices  crude oil  gasoline blends  gasoline taxes  consumers 

Mark Green

Mark Green
Posted May 24, 2018

Let’s add some needed perspective in the ongoing discussion of U.S. gasoline prices – even as Washington politicians try to exploit them for their own agendas. The latest political play: Senate Democrats want the president to cajole other nations into producing more oil to increase supply in hopes of moderating things at the pump.

Certainly, increasing global crude supply is important, because in the past doing so has put downward pressure on the cost of crude, the No. 1 factor driving gasoline prices.

But, since we’ve seen how much lower and less volatile prices have been the past four years, thanks to the growth of U.S. oil production, wouldn’t it be smarter to encourage greater oil production here at home? Senate Energy Committee Chairwoman Lisa Murkowski

thinks so.

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The Facts on Gasoline Prices

gasoline prices  crude oil prices  taxes  oil and natural gas production 

Dean Foreman

Dean Foreman
Posted May 22, 2018

Washington is known for partisan political skirmishing, so it’s not surprising that a group of Senate Democrats is trying to score political points against this year’s tax reform legislation by suggesting that lowering the corporate income tax rate has been linked to the recent rise in gasoline prices.

Let’s straighten them out on a couple of important things about gasoline prices, which have nothing to do with tax reform.

First, per-barrel costs for crude oil – the No. 1 factor in the cost of producing gasoline and diesel – have risen due to a tighter global oil supply/demand balance and lower inventories compared to last year. Second, with a strong economy, U.S. petroleum demand has run at its highest levels since 2007 and was up by more than 750,000 barrels per day in April, compared with one year ago. Next, as they do every year around Memorial Day, the start of the summer driving season, Americans are traveling more, which could raise demand further. Finally, although gasoline prices have increased recently, they’re still lower than where they were four years ago, largely because of increased domestic oil production.


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Global Energy Market Trends and the Role of U.S. Policies

crude oil prices  global markets  gasoline prices  oil production  access 

Dean Foreman

Dean Foreman
Posted May 10, 2018

The facts that crude oil prices are up 9 percent since the end of March and that crude oil currently accounts for 57 percent of the consumer’s price for gasolinemean that consumers have felt the impact at the pump of relatively large and sudden changes. As domestic crude oil prices recently increased above $70 per barrel for the first time since November 2014, let’s revisit current oil market fundamentals and other factors that have elevated prices. 

By understanding the drivers of prices, American consumers may be more aware of how U.S. policy outcomes – such as more domestic natural gas and oil production, a strong U.S. dollar, low price inflation, avoidance of tariffs, quotas and other protectionist measures that undermine free trade, and peaceful international relations – could help put downward pressure on crude prices that ultimately benefits consumers.

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American energy achieving the impossible – API’s Monthly Statistical Report

Economy  crude oil production 

Dean Foreman

Dean Foreman
Posted April 19, 2018

American consumers take a keen interest in energy prices, for the health of their pocketbooks as well as their livelihoods and security. More than 10.3 million people directly or indirectly support the industry, and tens of millions more people own or work for businesses that depend on having abundant and affordable energy.

What happens in energy markets also is important to our business literacy and understanding of how the United States’ role in global commerce has evolved thanks to the energy renaissance. Not so long ago, many energy-intensive U.S. industries were hollowed out as jobs moved offshore. Thanks to American innovation, today the high availability and low prices of natural gas, natural gas liquids (NGLs) and oil have stimulated demand and investment while also helping to improve efficiency and return energy-related CO2 emissions to near their 25-year lows.

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Fuel Costs and the Driving Season

crude oil prices  gasoline prices  supply  consumers 

Dean Foreman

Dean Foreman
Posted April 2, 2018

The summer driving season is arriving, so it’s a good time to take stock of recent market dynamics that have raised per-barrel costs for crude oil and consequently gasoline and diesel fuel.

Nationwide, the American Automobile Association (AAA) reports that average prices currently are $2.64 per gallon for gasoline (up from $2.54 a month ago) and $2.95 per gallon for diesel fuel (unchanged from last month). While there is nothing particularly special about these figures from an economic perspective, consumers take notice when fuel prices are on the rise. Let’s look at the factors that have affected pump prices in recent years.

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Comparing Price Volatility in Equities, Crude Oil

crude oil  oil markets 

Dean Foreman

Dean Foreman
Posted March 15, 2018

The U.S. Energy Information Administration (EIA) recently noted that for the first time in since 2008, S&P 500 Index’s implied volatility briefly surpassed that of crude oil in February. In this context, “volatility” is a measure of the rate and magnitude of variations in prices. EIA’s observation could be important if it suggests stock prices are about to fall, like they did during the 2008-2009 financial crisis.

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Energy, Pump Prices and Consumers

consumers  gasoline prices  oil production  crude oil prices 

Mark Green

Mark Green
Posted July 26, 2017

Nationally, the average price of a gallon of gasoline the third week of July was $2.392 – about 42 percent lower than the national average price at the same time in 2008, according to the U.S. Energy Information Administration. Retail gasoline prices haven’t been “sticky,” as Sen. Charles Schumer said on ABC’s “This Week,” suggesting that some sort of anti-Adam Smith force has kept them from decreasing. Yet, as we can see, they have decreased significantly over a time period that coincides with accelerated U.S. crude oil production (thanks, fracking).

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Safety a Core Mission of U.S. Pipeline Network

infrastructure  pipelines  pipeline safety  crude oil  refineries 

Mark Green

Mark Green
Posted May 19, 2017

To mark #InfrastructureWeek, we’ve posted on the broad energy and economic opportunities that come from building new infrastructure or by expanding existing infrastructure. We’ve also highlighted the essential role of infrastructure in ensuring that the benefits of America’s energy renaissance reach all across the country, helping U.S. consumers. Let’s end the week with a word about infrastructure safety, focusing on pipelines.

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