U.S. crude oil producers increased the amount and share of production covered by financial hedges in Q2 2020 (9/30/2020)

According to the U.S. Energy Information Administration’s (EIA) analysis of financial disclosures from 77 publicly traded U.S. crude oil producers, financial hedging activity in the second quarter (Q2) of 2020 increased year on year from the second quarter of 2019. As of their second quarter filings, these 77 companies entered into hedging contracts covering 673 million barrels of crude oil for the next four quarters, compared with the 583 million barrels of coverage provided during the same time last year (Figure 1). These companies collectively accounted for 3.9 million barrels per day (b/d), or 36% of total U.S. crude oil production, in Q2 2020. Crude oil producers enter into hedging contracts to lock in a specific price or range of possible prices that they will receive when selling their oil production in the future, thereby minimizing exposure to changing prices and increasing the stability and predictability of revenues. If these companies produce at the same levels they averaged during Q2 2020, these hedges would cover 47% of production during the following year, up from 41% during the equivalent period in Q2 2019. ... More »

In 2020, increased propane, other HGL exports contribute to continued strong product exports despite reductions in major transport fuels (9/23/2020)

In the first half of 2020, the United States exported 5.4 million barrels per day (b/d) of petroleum products, a slight increase of 48,000 b/d (1%) from the first half of 2019. The increase in exports occurred despite global demand declines because of responses to the outbreak of the 2019 novel coronavirus disease (COVID-19). Increased exports of petroleum products from the United States came primarily from propane and other hydrocarbon gas liquids (HGL), while exports of other refined products, including gasoline, distillate, and jet fuel, decreased in the first half of 2020 compared with the first half of 2019. ... More »

First half 2020 U.S. crude oil exports increase year over year despite declines beginning in March (9/16/2020)

U.S. net imports of crude oil (imports of crude oil minus exports of crude oil) declined in the first half of 2020 compared with the first half of 2019. However, monthly net imports increased in May and June 2020 as U.S. exports declined and imports increased. U.S. crude oil exports in the first half of 2020 were higher than in the first half of 2019 despite declining since the record high in February 2020 (Figure 1). Monthly crude oil imports declined sharply in April before increasing in May and June, but U.S. crude oil imports in the first half of 2020 were much lower than levels seen during the same period in 2019. The decline in trade volume (falling exports since March and declining in imports in April) came as responses to the spread of the 2019 novel coronavirus disease (COVID 19) reduced petroleum demand. ... More »

OPEC+ production cuts between January and August 2020 contributed to global oil market rebalancing (9/10/2020)

As global demand for petroleum liquids declined significantly in March and April 2020, global oil inventories increased at record levels, rising by an average of 5.9 million barrels per day (b/d) in the first quarter and 7.2 million b/d in the second quarter of 2020. As a result of the lower demand and ample global oil inventories, global crude oil prices fell in March and April to record lows. In response to these market conditions, on April 15, members of the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+) agreed to reduce crude oil production. The OPEC+ agreement called for a decrease in crude oil output by a combined 9.7 million b/d in May and June, a combined decrease of 9.6 million b/d in July 2020, and a combined decrease of 7.7 million b/d in August (not accounting for compensation cuts for under-complying countries). Compared with January levels, OPEC+ production fell by an estimated 5.9 million b/d in May, 7.9 million b/d in June, 7.1 million b/d in July, and 5.6 million b/d in August. U.S. Energy Information Administration (EIA) data show that OPEC production in May decreased by 6.0 million b/d from April, which was the largest monthly production decline on record. Between January and July 2020, OPEC crude oil production decreased by 5.7 million b/d. The non-OPEC partner countries reduced their production by 2.8 million b/d in July from production levels in January 2020. EIA data for non-OPEC producers include crude oil and condensate production. ... More »

Lowest U.S. average regular gasoline retail price heading into Labor Day weekend since 2004 (9/2/2020)

The U.S. average regular gasoline retail price as of the Monday before Labor Day weekend is $2.22 per gallon (gal) this year, the lowest level for this time of year since 2004 (Figure 1). The Labor Day holiday is typically the end of the summer driving season, the time when gasoline demand is usually greatest during the year. Because of responses to the 2019 novel coronavirus disease (COVID-19) and efforts to mitigate its spread, however, monthly U.S. gasoline consumption (as measured by product supplied) has remained less than the previous five-year (2015-19) range since March. The low price going into Labor Day 2020 reflects continued weak gasoline demand following a summer that saw reduced commuter and recreational travel activity. ... More »