U.S. propane prices and crude oil prices re-link as exports increase (2/28/2018)

As the saying goes, eventually the solution to low prices is low prices. The U.S. propane market's transition from balancing via imports to balancing via exports is a recent example. In 2017, U.S. propane exports averaged 905,000 barrels per day (b/d), a level high enough to balance U.S. propane markets and re-establish the link between U.S. and global propane prices (Figure 1). This change followed several years in which U.S. propane prices were significantly lower than elsewhere in the world because U.S. propane production had increased significantly, outpacing domestic demand and export capacity. Sustained lower propane prices in the U.S. encouraged investments to expand export capacity, leading to the eventual re-linkage of U.S. prices with global markets. ... More »

Planned U.S. refinery outages through first half of the year should not constrain availability of transportation fuels (2/28/2018)

The U.S. Energy Information Administration's (EIA) latest analysis of planned refinery outages for December 2017 through June 2018 finds that such outages are not likely to cause a shortfall in the supply of petroleum products including gasoline, jet fuel, and distillate fuel, relative to expected demand, either nationally or within any U.S. region. EIA reached this conclusion despite the current high level of U.S. gasoline demand, which in 2017 was as high as or higher than in any past year. ... More »

Planned U.S. refinery outages through first half of the year should not constrain availability of transportation fuels (2/22/2018)

The U.S. Energy Information Administration's (EIA) latest analysis of planned refinery outages for December 2017 through June 2018 finds that such outages are not likely to cause a shortfall in the supply of petroleum products including gasoline, jet fuel, and distillate fuel, relative to expected demand, either nationally or within any U.S. region. EIA reached this conclusion despite the current high level of U.S. gasoline demand, which in 2017 was as high as or higher than in any past year. ... More »

Economic indicators can inform non-OECD liquid fuels consumption forecasts (2/14/2018)

Increases in economic activity are typically associated with growth in petroleum and other liquids consumption. EIA lowered the 2018 oil-consumption-weighted Gross Domestic Product (GDP) growth forecast in countries outside the Organization for Economic Cooperation and Development (OECD) in the February 2018 Short-Term Energy Outlook (STEO) from the January STEO, but growth expectations for those countries remain higher than all 2017 STEO forecasts. In the February STEO, EIA expects global petroleum and other liquid fuels consumption to grow by 1.7 million barrels per day (b/d) in 2018, with 1.3 million b/d of that growth coming from non-OECD countries (Figure 1). Because oil consumption data can be lagged or incomplete, the use of frequently released economic indicators can be useful for confirming stronger or weaker periods of economic growth and inform oil consumption forecasts. ... More »

EIA raises crude oil price forecast for 2018 by nearly $3 per barrel; 2019 global supply and demand balances largely unchanged (2/7/2018)

EIA’s February Short-Term Energy Outlook (STEO) raises forecast crude oil prices in 2018 by nearly $3 per barrel (b) compared with the previous STEO. Average monthly Brent prices have increased for seven consecutive months, and, on January 11, spot prices moved higher than $70/b for the first time since December 2014. EIA forecasts Brent spot prices will average about $62/b in both 2018 and 2019, compared with an average of $54/b in 2017. EIA expects West Texas Intermediate (WTI) crude oil prices to average $4/b lower than Brent prices in both 2018 and 2019 (Figure 1). The upward revision to 2018 prices results in higher U.S. crude oil production throughout the forecast. However, with relatively little production growth from members of the Organization of the Petroleum Exporting Countries (OPEC) and higher global consumption, the global oil balances remain largely unchanged from the forecast last month. ... More »