Record setting U.S. energy production highlights 2018 Q3 energy outlook but energy exports suffer under new trade and tariff policies (includes August monthly statistical report)
202.682.8114 | firstname.lastname@example.org
WASHINGTON, September 20, 2018 – Today the American Petroleum Institute released its industry outlook for the third quarter of 2018. The report shows the U.S. celebrated another new record for crude oil production of 10.8 million barrels per day (MBD) over the past two months. but U.S. petroleum exports decreased by 1.3 million barrels per day since June. The overall United States’ petroleum trade balance went from net imports of 2.9 MBD in June to 4.54 MBD in August, which is more than a 56 percent increase in two months.
“Placing constraints on exports of American-made energy works against America’s energy future,” said API Chief Economist Dean Foreman. “While the picture is still a bit muddied, it seems to be getting clearer – the trade war appears to be limiting the United States’ access to crude export markets. As we produce more energy here at home, the U.S. needs markets for its products in order for our economy to continue to grow. There’s no question that the 1.6 MBD increase U.S. petroleum net imports, which undid a full year’s worth progress, is a setback to the United States’ goal of energy dominance.”
The administration’s trade and tariff policies involving steel that the energy sector relies on also are raising concern. Prices of many tubular and specialty steel products, which are main inputs to pipelines, refineries and natural gas liquefaction and petrochemical facilities, increased by more than 25 percent as import tariffs were recently imposed on them.
The Q3 report also addresses key uncertainties for the economy and energy markets:
- Remarkable progress in production so far in 2018, but headwinds with lower consensus growth expectations, rising price inflation, interest rates, trade barriers & disputes, and financial market uncertainties – and a flight to safety in the US dollar that could trigger global credit downgrades.
- Global oil markets appeared at a slight deficit in Q3 2018, without further OPEC actions. With Asia Pacific accounting for the largest growth in U.S. petroleum exports this year, the recent drop-off in U.S. petroleum exports warrants monitoring
- U.S. natural gas quietly achieved 12 percent annual growth in Q3, but appears demand was limited by potential coal & nuclear power subsides, global LNG market conditions, escalating trade disputes, and improved competitiveness by renewables.
Separately, the latest API Monthly Statistical Report (MSR) showed a record 18 million barrels a day of refined products produced for the month of August. U.S. liquid fuels production remained up by more than 2.0 MBD year-over-year in August, and the United States continued to supply virtually all global oil demand growth and compensate for production losses in some OPEC nations.
In August, U.S. petroleum demand, led by motor gasoline, distillate and refinery feedstocks, grew by 250 thousand barrels per day from July to 20.8 million barrels per day. This was the strongest demand for any month since August 2007 and reflected solid economic growth, industrial activity, and consumer confidence.
“The backdrop for petroleum demand and the end of the summer driving season appeared to be solid in August, and indicators of the business climate, consumer sentiment, and employment conditions were strong,” said Foreman.
September MSR highlights:
- U.S. petroleum demand accelerated to 20.8 million barrels a day
- Gasoline demand notches its third highest August on record since 1945.
- Strongest jet fuel demand year-to-date since 2001.
- U.S. crude oil and gasoline prices declined on strong production and the U.S. dollar.
- Solid indictors despite rising price inflation.
- U.S. petroleum inventories stable in the 5-year range.
For more information on the monthly reports, please visit our Energy Tomorrow blog and API website, where the reports are now available to view and share and please see detailed analysis of API’s Industry Outlook here.
API is the only national trade association representing all facets of the oil and natural gas industry, which supports 10.3 million U.S. jobs and nearly 8 percent of the U.S. economy. API’s more than 600 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 47 million Americans.
File Size: 1.4 MB
File Size: .5 MB
File Size: .1 MB