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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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Natural Gas and Oil – Today and Tomorrow

oil and natural gas  global demand  electric-grid  renewable energy 

Mark Green

Mark Green
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.

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Making Sense of Demand vs. Supply, Key Factors Affecting Production

oil and natural gas production  supply  demand  investments  economic recovery 

Dean Foreman

Dean Foreman
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)? 

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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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U.S. Must Learn From Europe’s Energy Struggles, Not Repeat Them

natural gas  wind  electricity  russia 

Mark Green

Mark Green
Posted September 29, 2021

Europe’s ongoing energy crisis (noted recently here) should give pause to U.S. policymakers who’re leading a head-long rush to a near future in which Americans’ daily lives and the U.S. economy will be virtually dependent on intermittent energy sources such as wind and solar.

We’ve made the case that dropping natural gas and oil from the U.S. energy portfolio, heavily relying on come-and-go energies, is unwise, bordering on foolishness. It’s disconnected from reality, a reality that’s playing out right now in Europe.

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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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Path to Progress – In Pennsylvania and Beyond

pennsylvania  natural gas  emission reductions  us energy security  climate  jobs 

API CEO Mike Sommers

Mike Sommers
Posted September 23, 2021

This week I addressed the Economic Club of Pittsburgh – in the heart of Pennsylvania’s natural gas and oil region – and I talked about the state’s critical importance to the larger U.S. energy picture and the key role our industry plays in meeting the challenge of supplying the energy that powers our nation and also in reducing emissions, toward a lower-carbon future.

Energy has transformed Pennsylvania and continues to do so. Pennsylvania’s natural gas and oil industry directly and indirectly supported nearly a half million jobs across the commonwealth’s economy in 2019. Our industry’s total economic contribution to Pennsylvania ranked among the highest in the nation, with more than $78 billion directed to the state’s GDP – including nearly $41 billion in labor income.

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On Climate, Industry is Focused on Meaningful Actions and Results

climate  emission reductions  the-environmental-partnership  tax increases 

Mark Green

Mark Green
Posted September 22, 2021

Three things to keep in mind as we mark Climate Week:

First, industry-led initiatives continue reducing greenhouse gas emissions; second, natural gas helps cut carbon dioxide emissions and address energy poverty; and third, the natural gas and oil industry continues to think strategically while acting tactically.

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Divergent Times for U.S. Oil and Natural Gas Demand, Supply

monthly-stats-report  supply  oil demand  imports 

Dean Foreman

Dean Foreman
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.

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