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API Monthly Statistical Report ‘MSR’, Released 10/15/2021. API Statistics Department & Office of the Chief Economist
For Notable Chart Details and Data By Section See PDF Link Below:
https://www.api.org/-/media/Files/News/2021/10/API_Monthly%20Statistical%20Report_09_2021.pdf
EXECUTIVE SUMMARY
API’s primary data on U.S. petroleum markets for 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. Notably, U.S. petroleum demand set a record high for the month of September of 20.6 million barrels per day (mb/d), including the highest refining and petrochemical demand for other oils – intermediate products in refining and petrochemicals – ever for the month. Meanwhile, domestic crude oil production fell to 10.7 mb/d, due in part to the prolonged Gulf Coast impact of Hurricane Ida. Despite some monthly slowing of U.S. refining throughput, crude oil inventories fell to their lowest for any month since September 2018. And U.S. petroleum net imports increased to 1.7 mb/d, led by higher crude oil imports and lower refined product exports.
The economy and therefore oil demand have appeared to remain on track. API’s Distillate Economic IndicatorTM suggested continued growth of U.S. industrial production and broader economic activity.
CONTENTS
Demand
• U.S. petroleum demand (20.6 mb/d) a record for September
– Motor gasoline demand (9.2 mb/d) fell minimally at the end of the summer driving season.
– Solid distillate demand exceeded 4.0 mb/d.
– Jet fuel demand decreased seasonally but continued to close its gap versus 2019.
– Marine shipping sustained residual fuel oil demand.
– Other oils’ demand of 5.6 mb/d a record for September.
Prices & Macroeconomy
• Highest gasoline prices for September since 2014.
• Leading indicators suggest industrial and economic growth, but heightened consumer concerns.
Supply
• U.S. crude oil production (10.7 mb/d) in September hampered by Gulf Coast storms.
International trade
• Highest U.S. petroleum net imports since September 2018.
Industry operations
• Refinery inputs and capacity utilization – monthly changes relatively stronger than in 2017-2020.
Inventories
• Lowest crude oil inventories for any month since September 2018.
PETROLEUM FACTS AT A GLANCE - October 2021 RELEASE:
1. Total U.S. supply of crude oil, natural gas liquids and other liquids in September 2021: 17,164,000 b/d, down by 64,000 b/d compared with September 2020 (September 2020: 17,228,000 b/d) [API]
2. U.S. crude oil production in September 2021: 10,689,000 b/d (of which 445,000 b/d was Alaskan) (September 2020: 10,868,000 b/d). U.S. production of natural gas liquids in September 2021: 5,453,000 b/d (September 2020: 5,308,000 b/d). [API]
3. Total petroleum products delivered to the domestic market in September 2021: 20,584,000 b/d (September 2020: 18,415,000 b/d). [API]
4. U.S. petroleum exports in September 2021: 7,269,000 b/d (September 2020: 8,135,000 b/d). [API]
5. U.S. petroleum trade balance expanded by 2,451,000 b/d to imply September 2021 net
WTI $83.46/bbl +1.58%, November Contract, 10/18/2021, 8:00 am CDT
https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 10/15/2021 Close:
Crude Oil ($/barrel) Percent Change
WTI 82.39 +1.2
Brent 84.67 +1.0
Louisiana Light 83.49 +1.2
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
‘Oil prices climb as COVID recovery, power generators stoke demand’, By Noah Browning, October 18, 2021, 6:13 AM CDT
https://www.reuters.com/business/energy/oil-prices-climb-highest-years-covid-recovery-power-generators-stoke-demand-2021-10-18/
Summary:
* Brent touches highest since Oct 2018, WTI highest since Oct 2014
* Gas, coal prices encourage switch to oil products for power
* China cuts independent refinery oil import quotas
LONDON, Oct 18 (Reuters) - Oil prices hit multi-year highs on Monday buoyed by recovering demand and high natural gas and coal prices encouraging users to switch to fuel oil and diesel for power generation.
Brent crude oil futures were up 59 cents, or 0.7%, to $85.45 a barrel by 0900 GMT, after hitting $86.04, their highest level since October 2018.
U.S. West Texas Intermediate (WTI) crude futures climbed 90 cents, or 1.1%, to $83.18 a barrel, after hitting a $83.73, their highest since October 2014.
Both contracts rose by at least 3% last week.
"Easing restrictions around the world are likely to help the recovery in fuel consumption," analysts at ANZ bank said in a note, adding that gas-to-oil switching for power generation alone could boost demand by as much as 450,000 barrels per day in the fourth quarter.
Cold temperatures in the northern hemisphere are also expected to worsen an oil supply deficit, said Edward Moya, senior analyst at OANDA.
"The oil market deficit seems poised to get worse as the energy crunch will intensify as the weather in the north has already started to get colder," he said.
"As coal, electricity, and natural gas shortages lead to additional demand for crude, it appears that won't be accompanied by significantly extra barrels from OPEC+ or the U.S.," he said.
Prime Minister Fumio Kishida said on Monday that Japan would urge oil producers to increase output and take steps to cushion the impact of surging energy costs on industry.
Chinese data showed third-quarter economic growth fell to its lowest level in a year hurt by power shortages, supply bottlenecks and sporadic COVID-19 outbreaks.
China's daily crude processing rate in September also fell its lowest level since May 2020 as a feedstock shortage and environmental inspections crippled operations at refineries, while independent refiners faced tightening crude import quotas.
‘DOE Affirmed Much More Oil And Natural Gas’
‘President Biden’s Department Of Energy Just Affirmed Much More Oil And Natural Gas’ October 13, 2021 EDT, Judge Clemente, Forbes Contributor
Link to Forbes article including charts and the audio version of this article:
https://www.forbes.com/sites/judeclemente/2021/10/13/president-bidens-department-of-energy-just-affirmed-much-more-oil-and-natural-gas/?sh=5b2caa45a7fc
“We believe it is highly unlikely that oil demand will decline meaningfully over the next decade, even with a stronger push by world governments toward net-zero emissions. However, global supply could fall well short of demand over the next five years amid growing pressures to slow investment, setting the stage for an unprecedented spike in oil prices,” BMO Markets, October 2021
The U.S. Department of Energy’s International Energy Outlook 2021 was just released on October 6. It’s a long-range forecast (2020-2050) that comes from our National Energy Modeling System (NEMS). Along with the International Energy Agency’s World Energy Model, NEMS is the most vital energy outlook of them all - not from the Sierra Club, not from ExxonMobil, not a Koch conspiracy.
Importantly coming under President Biden’s Department of Energy (i.e., under an administration that has the most aggressive renewable energy and electric car agenda in American history), our latest modeling still confirms what all previous administrations have: oil and natural gas will remain the foundation of our gigantic energy complex.
In fact, under the baseline scenario (which, importantly, avoids speculation and models out current policy and technological trends) oil and gas consumption are projected to surge (see graphs).
Given all that we keep hearing from most of the media and our politicians, experts modeling “more oil and gas” must come as a complete shock.
Or, maybe not so much: after more than a decade of Herculean gains for renewables and nearly six years after the Paris Climate Agreement, oil and gas still supply ~65% of the world’s energy and ~70% of U.S. energy.
Even in the U.S., where incremental energy needs are nowhere near what they are globally, demand for oil and gas is expected to rise 3.5 million b/d (+19%) and 4.6 trillion cubic feet (+15%) from 2020-2050, respectively.
Contrary to what we keep hearing, a projected oil and gas boom is completely logical.
It’s a really big world out there, and it’s only getting bigger: from 2020 to 2050, the U.S. Department of Energy has the world adding another 1,935 million people and $87 trillion in economic expansion.
No wonder then that the U.S. Department of Energy has global energy demand rising another 47% over the next 30 years, with hard-to-displace oil staying the world’s most crucial fuel.
Ultimately, this constant, rapidly moving train of “more” is why the oil and gas companies don’t have to vigorously promote the use of their own products like renewables and other competitors do.
The current global energy crisis of “shortages everywhere” is showing that we’re not even able to power and fuel ourselves today, let alone the devastation of what “more” could bring if we seek to quickly slash the use of our most essential energy sources, namely oil and gas.
Just imagine what tomorrow will bring: the world is a worsening 85% poor (i.e., non-OECD) and understandably wants access to the same energy options that made us Westerners so rich and long-living.
Even the primary oil major that strongly promotes a shift to renewables (despite losing money on them) is about to be proven so wrong.
I always said that BP’s prediction of peak oil demand in 2019 was more based in public relations than fact - I’m afraid that the demonization of oil is making some of its sellers say things that they probably know aren’t true.
Oil and gas companies, you see, sell products that are so essential to our daily lives that they don’t have to promote themselves like renewables and other competitors do.
A real shocker, I know: the U.S. Department of Energy reports that oil demand will hit record levels next year, at 101.5 million b/d.
We are already seeing a global energy crisis and skyrocketing prices as the “we must stop investing in oil and gas” fantasy is violently colliding with reality: rebounding demand from Covid-19 for indispensable sources of energy.
We’ve been seeing consistent $6 per MMBtu natural gas in the U.S. and over $35 in Europe.
Asian gas prices hit an eye-popping $56 last week.
Note: self-sufficiency thanks to the American shale revolution (which apparently many of our politicians now want to stop) is exactly why our gas prices aren’t so dangerously high as they are in the importing regions of Asia and Europe.
Far too many have confused Covid-19 energy demand destruction with a change in consumer behavior.
But, it’s really as simple as you think.
The 2020 drop in oil and gas demand (coal as well) had little to do with the Energy Transition but with the lockdowns and economic destruction caused by Covid-19.
Indeed, the International Energy Agency’s recent call to stop new oil and gas development to meet 2050 net-zero carbon goals will do little to reduce demand but will cause a huge supply shortfall to spike prices and economic dislocation.
We’re already seeing the devastating repercussions of “not producing” in the name of climate.
After years of under-investment in new supply, 2020 saw another 35% drop in oil and gas CAPEX (capital expenditures) spending to produce more, meaning that an even more dire situation looms on the horizon.
Exhibit-a: Despite a surge in gas demand and soaring prices, Europe is currently decommissioning its largest gas field, Groningen, eight years earlier than initially planned.
For example, a lack of wind has left UK’s huge wind capacity idle, so gas prices and power rates have ballooned as a result.
Many short-sightedly celebrate as climate stigmatization has banks afraid to loan oil and gas money.
All of this is actually terrible for the Energy Transition.
We’re walking a very fine line here with oil and gas in particular when it comes to this transformation of the world’s energy complex.
If we don’t invest in new oil and gas supply, we’re sure to bring a less reliable energy system, more volatility, and higher prices - truly a deadly concoction that will make the Energy Transition politically untenable.
Today’s surging cooling, heating, and food prices are a humanitarian catastrophe and are already creating a great “rethink” so early on in our Energy Transition path.
We’re seeing this now with protests and votes against overbearing (or at least the people are deeming it that way) climate policies in Europe, the center of the climate change movement.
Potentially making the “deep electrification” that we seek to fight climate change politically impossible, we’re losing electricity security, as shown in Europe now, Texas in February, and California last August.
With airplanes, heavy trucking, and petrochemicals compensating for any lost demand from electric cars, the impact of climate change policies on oil needs are more likely to materially impact oil demand growth, not on absolute demand itself (see BMO quote above).
While I do think that a case could be made that global oil demand will peak in the 2030s and then plateau (i.e., don’t believe those telling you of a looming precipitous drop in oil use), it’s not realistic to speculate the same thing for natural gas.
Most ironically, more gas, not less, will be needed as we build-out wind and solar capacity, which explains why our greenest state, California, is now building five new gas plants to “avoid blackouts.”
Intermittent wind and solar are surely a huge part of our energy-climate solutions but more dependable and flexible gas will stay an indispensable tool for balancing electricity markets, and gas is an input for a variety of other uses, such as industrial manufacturing.
Let’s just take the PJM Interconnection, the largest wholesale power market in the U.S., serving over 65 million customers across 13 states and the District of Columbia.
In PJM, S&P Global reports that “reliability needs” have some 22,000 MW of new gas-fired generation in the queue from 2021 through 2026, compared to 14,385 MW for solar and 9,445 MW for wind.
In all-important Asia, gas will be crucial to shift away from King Coal: coal still generates ~65% of China’s power and ~70% of India’s power.
I do think that what we’re seeing now in devastated Europe especially, being forced to turn to much higher emission fuel oil and coal because of gas shortages, is bringing to light what I deem as the Energy Transition’s most important truth.
And that is this: natural gas is undeniably a centerpiece strategy and must not be under-appreciated.
While the International Energy Agency has inexplicably changed its tune this year, it has been telling us for decades that many trillions of dollars in upstream (E&P) oil and gas investments are needed for supply to adequately meet new demand in the coming decades.
With COP26 in Glasgow just weeks ago, this all explains why our major energy-climate goal is to not to “get rid of” oil and gas but to make their production, transport, and use as clean as possible.
You make an excellent point regarding gas. Most of Delek Group’s fields are natural gas. But how high can those natural gas profits go when you are already locked into contracts? Moreover, Delek Group increases their profits by acquisitions and sales of producing assets or E&P. However, they must use caution when balancing the allocation of assets. For example, being mindful of governmental regulations on monopolies lead to the recent $1 billion sale of Delek Drilling’s Tamar holdings to comply with the Israeli government’s move to open the market to more competition. Delek Group being the majority owner of Delek Drilling will receive the lion’s share of the September 2021 announced $100 million dividend payout. Perhaps Delek Group will decide to allocate a portion of that to GOM exploration (Tau). https://en.globes.co.il/en/article-after-abu-dhabi-sale-delek-drilling-to-distribute-100m-dividend-1001385272
If an oil and gas company is not in the acquisition or exploration mode, they are only depleting their assets with sales. Literally they would be going out of business one day at a time. Good thing Delek’s and Gulfslope’s company philosophy includes heavy doses of exploration. I find it to be one of their most important characteristics. You know the old saying, “No guts, no glory” or happy shareholders without exploration.
Would like to see Delek and Gulfslope pull it together and issue a news release by EOY or at the very least beginning of 1Q22. There will be plenty of takers willing to buy those GSPE shares if and when there is any tax-loss selling.
When it is all said and done, no “basement trader” will dictate GSPE’s fate through manipulation. Gulfslope Energy will be in charge of that when they drill the GOM super basin or not. IMO, Gulfslope’s prospects continue to offer strong economic and operational viability.
More interesting reading on this topic if you missed it: https://investorshub.advfn.com/boards/read_msg.aspx?message_id=165828142
Mrs. Smith
The Total US Oil and Gas Rig Count reflects 543 rigs an increase of 10 rigs. The 10/15/2021 GOM Offshore Rig Count increased by 1 rig from the previous week and is currently showing 11 rigs.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
WTI $82.28/bbl - November Contract, (1 day delay)
https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 10/14/202 Close
Crude Oil ($/barrel) Percent Change
WTI 81.43 +0.9
Brent 83.86 +0.4
Louisiana Light 82.51 +1.0
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
October 2021 OPEC Monthly Oil Market Report “MOMR”, Released October 13, 2021
10/2021 MOMR PDF: https://momr.opec.org/pdf-download/res/pdf_delivery_momr.php?secToken2=accept
10/2021 MOMR VIDEO: https://players.brightcove.net/34306109001/default_default/index.html?videoId=6276927453001
WTI $81.40/bbl November Contract, 10/14/2021 05:51 am CDT: https://oilprice.com/oil-price-charts/45
LLS $82.15/bbl Wholesale Spot Price, 10/12/2021 close: https://www.eia.gov/todayinenergy/prices.php
OIL MARKET HIGHLIGHTS
Oil Market Highlights Crude Oil Price Movements
Crude oil prices rebounded m-o-m in September, gaining about 5%, supported by robust oil market fundamentals amid a slow restart of US oil production, further recovery of oil demand and a drop in inventories, along with easing COVID-19-related mobility restrictions in several Asian countries. Moreover, worries about natural gas and coal shortages in Europe and Asia boosted sentiment for higher oil demand. The OPEC Reference Basket (ORB) value rose by $3.55 or 5.0% m-o-m in September to settle at $73.88/b. Year-to-date (y-t-d), the ORB was up by $26.21, or 64.5%, to average $66.83/b compared with the same period last year. The ICE Brent front-month rose $4.37, or 6.2%, m-o-m in September to average $74.88/b, while NYMEX WTI increased by $3.83, or 5.7%, m-o-m to average $71.54/b. Consequently, the Brent/WTI spread widened further in September to $3.34/b, its highest point since last April. The market structure of all three major oil benchmarks – Brent, WTI and Dubai – remained in backwardation. However, the Brent forward curve strengthened, while WTI and Dubai backwardation flattened slightly. Hedge funds and other money managers boosted bullish wagers in September as oil prices rose to multi-year highs, as the risk of a natural gas and coal shortage urged speculators to bet on higher oil prices.
World Economy
Global economic growth forecasts for both 2021 and 2022 remain unchanged from the last month’s assessment at 5.6% and 4.2%, respectively. Given somewhat slowing 3Q21 momentum, the US economy forecast for 2021 is revised down slightly to 5.8% from 6.1%, while the forecast for 2022 remains unchanged at 4.1%. Euro-zone economic growth is revised up to 5% from 4.7% for 2021 and to 3.9% from 3.8% for 2022, after a strong rebound in 2Q21. The forecast for Japan is revised down to 2.6% from 2.8% for 2021, due to ongoing COVID-19-related social-distancing measures in 3Q21, while the forecast for 2022 remains at 2%. After a strong recovery in the first half of the year, China’s economy is seen to slow somewhat, leaving the growth forecast at 8.3% in 2021 and 5.8% in 2022, representing a 0.2 percentage point downward revision for both years. Meanwhile, India’s 2021 growth forecast is unchanged at 9% for 2021 and 6.8% for 2022, although downside risks prevail. Russia’s forecasts are revised up from 3.5% to 4% for 2021 and from 2.5% to 2.7% for 2022, benefitting from the more stable oil market. Brazil’s growth forecast remains unchanged for both 2021 and 2022 at 4.7% and 2.5%, respectively. The ongoing robust growth in the world economy continues to be challenged by uncertainties, such as the spread of COVID-19 variants and the pace of vaccine rollouts worldwide, as well as ongoing global supply-chain disruptions. Additionally, sovereign debt levels in many regions, together with rising inflationary pressures and potential central bank responses, remain key factors requiring close monitoring.
World Oil Demand
World oil demand is estimated to increase by 5.8 mb/d in 2021, revised down from 5.96 mb/d in the previous month’s assessment. The downward revision is mainly driven by lower-than-expected actual data for the first three quarters of this year, despite healthy oil demand assumptions going into the final quarter of the year, which will be supported by seasonal uptick in petrochemical and heating fuel demand and the potential switch from natural gas to petroleum products due to high gas prices. Both OECD and non-OECD figures are adjusted lower, with the downward revision in OECD regions focused in 1H21, while the non-OECD revision is concentrated in 3Q21.The world is expected to consume 96.6 mb/d of petroleum products this year. For 2022, world oil demand growth is unchanged at 4.2 mb/d. As a result, global demand next year is seen averaging 100.8 mb/d. Demand is anticipated to be supported by healthy economic momentum in the main consuming countries and better management of the COVID-19 pandemic.
World Oil Supply
Non-OPEC liquids supply growth in 2021 is revised down by 0.3 mb/d from the previous month’s assessment to now stand at 0.7 mb/d. The revisions were driven mainly by a downward adjustment in 3Q21 due to factors such as production outages in the US Gulf of Mexico caused by Hurricane Ida; maintenance in the Tengiz field in Kazakhstan; and a force majeure in Canada at the Suncor oil sands site. The impact of the Hurricane led to a downward revision in US liquids supply in 2021 from growth of 0.1 mb/d to a contraction of 0.1 mb/d. The main growth drivers for 2021 supply growth continue to be Canada, Russia, China, Norway and Brazil. Similarly, the non-OPEC supply growth forecast for 2022 is revised up by 0.1 mb/d due to the base change to now stand at 3.0 mb/d. Russia and the US are expected to be the main drivers, followed by Brazil, Norway, Canada, Kazakhstan, Guyana, and other countries in the DoC. OPEC NGLs are forecast to grow by 0.1 mb/d in both 2021 and 2022 to average 5.2 mb/d and 5.3 mb/d, respectively. OPEC crude oil production in September increased by 0.49 mb/d m-o-m, to average 27.33 mb/d, according to available secondary sources.
Product Markets and Refining Operations
Refinery margins further extended their upward trend in September globally, with solid support coming from the middle of the barrel. The tightness in product balance caused by supply side constraints in previous months was exacerbated by the start of peak refinery maintenance season amid lower product exports from China. Middle distillates were the main margin driver in all regions, while in Asia this upside was outpaced by robust fuel oil performance. Meanwhile, gasoline markets weakened as their crack spreads stepped down from post- pandemic highs registered the previous month, due to a less optimistic demand outlook as peak driving season approached its end.
Tanker Market
Dirty tanker rates remained soft in September amid a continued imbalance between tonnage supply and demand, keeping rates at low or even loss-making levels. Meanwhile, some positive signs are emerging for the final quarter of the year, as loading schedules should see a 20% increase in waterborne Russian exports and 10% increase in North Sea flows, amid ongoing planned upward adjustments in OPEC production. However, a sustained recovery in the tanker market could take as long as 12 months to materialize to allow for a return in demand from emerging and developing markets and sufficient scrapping to reduce the overhang in tonnage availability.
Crude and Refined Products Trade
Preliminary data shows US crude imports in September recovering from a slight dip the month before to average a healthy 6.4 mb/d, while US crude exports averaged 2.6 mb/d in September, continuing an alternating pattern of rises and dips, this time on the lower side. After four months of relatively muted levels, China’s crude imports jumped to 10.5 mb/d in August, pushed higher by the arrival of storm-delayed cargoes, although policy- led uncertainties continued to impact China’s trade flows. India’s crude imports finally saw a recovery, after following a general downward trend since December 2020, to average 4.1 mb/d in August. Tanker tracking data show India’s crude imports remaining steady in September. Japan’s crude imports continued to recover from low levels, reaching their highest point since April 2020 at 2.7 mb/d in August. The country’s crude and product imports are expected to see a boost from demand in the power sector for fuel oil as well as crude for direct burning, amid reports of a restart of oil-fired power units.
Commercial Stock Movements
Preliminary August 2021 data showed that total OECD commercial oil stocks fell by 19.5 mb m-o-m to stand at 2,855 mb. This was 363 mb lower than the same time one year ago, 183 less than the latest five-year average and 131 mb below the 2015-2019 average. Within components, OECD commercial crude stocks fell by 23.0 mb m-o-m in August, ending the month at 1,362 mb. This was down by 102 mb compared with the latest five-year average, and 87 mb below the 2015-2019 average. By contrast, OECD total product inventories rose by 3.2 mb m-o-m in August to stand at 1,493 mb. This was 81 mb lower than the latest five-year average and 43 mb below the 2015-2019 average. In terms of days of forward cover, OECD commercial stocks fell by 0.1 days m-o-m in August to stand at 62.5 days. This was 12.3 days lower than the same period in 2020, 2.5 days below the latest five-year average and 0.3 days below the 2015-2019 average.
Balance of Supply and Demand
Demand for OPEC crude in 2021 is revised up by 0.1 mb/d from the previous month’s assessment to stand at 27.8 mb/d, around 5.0 mb/d higher than in 2020. Demand for OPEC crude in 2022 was also revised up by 0.1 mb/d from the previous month’s assessment to stand at 28.8 mb/d, around 1.0 mb/d higher than in 2021.
2021 OPEC “WOO” World Oil Outlook 2045, Released 9/28/2021
https://woo.opec.org/chapter.php?chapterNr=205
WTI $80.95/bbl November Contract, 10/13/2021 23:02 pm CDT: https://oilprice.com/oil-price-charts/45
LLS $82.15/bbl Wholesale Spot Price, 10/12/2021 close: https://www.eia.gov/todayinenergy/prices.php
KEY ASSUMPTIONS:
The COVID-19 pandemic has affected the global economy in multiple ways
The impact of the pandemic and the response mechanisms that have been developed, will have a considerable impact on medium-term economic growth. It is too early to judge the full consequences, but some trends and dynamics can already be discerned. An important trend that began beforehand, but was accentuated during the pandemic is the move towards a more localized and less intertwined global economy. Another important consequence of the pandemic has been rapidly rising global debt levels. Fiscal and monetary stimulus including guarantees account for around $24 trillion. The challenges related to escalating debt levels have become an increasing concern, particularly given the active talk around inflation in 2021 and the potential for rising future interest rates and tax levels. Adding to this is the drop-off in travel and tourism and how long this continues, as well as the potential for improving productivity from the pandemic-induced drive towards digitalization and artificial intelligence (AI).
GDP growth is projected to average 3.1% p.a. over the forecast period (2020–2045), slowing from 3.8% p.a. in the medium-term to 2.7% p.a. from 2035–2045
After the 2021 recovery, with gross domestic product (GDP) growth forecast at 5.5%, it is expected that growth will slow to around 4% in 2022 and then move back to levels slightly above 3%. It is then anticipated to move slightly higher to reach 3.2% at the end of the medium-term period in 2026. In OECD economies, growth is forecast to materialize more at the beginning of the medium-term period due to pent-up demand and the massive fiscal stimulus to counter the impacts of the pandemic. The medium-term growth outlook in developing countries is anticipated to be relatively diverse with the highest growth rates projected for India and China. Global GDP growth between 2020 and 2045 is expected to increase at an average rate of 3.1% per annum (p.a.) Global growth through to 2045 will be largely driven by non-OECD countries. These are expected to expand by 3.9% p.a. on average, on the back of improving labour productivity and a growing working age population, even as the pace of GDP growth begins to slow in the long-term.
The global economy in 2045 will be more than double the size it was in 2020
Based on 2017 purchasing power parity (2017 PPP), global GDP is projected to rise from around $125 trillion in 2020 to almost $270 trillion in 2045. China and India combined are expected to account for 37% of global GDP in 2045. The Organisation for Economic Co-operation and Development (OECD) is set to account for slightly less, at 34%.
Significant demographic trends will accompany future population growth
The global population is expected to reach 9.5 billion people by 2045. Future demographic trends are marked by an ageing population, a rising working-age population and increases in urbanization and migration rates. The global working-age population (15–64) is projected to rise by around 900 million throughout the projection period, driven by non-OECD countries. However, the relative share of the global working-age population to the world’s total population is anticipated to drop from 65% in 2019 to 63% in 2045. By 2045, approximately 66% of the world’s population is projected to be urbanized. The OECD is projected to experience a rise in its net migration rate of approximately 4.7% by 2045, whereas the developing world is projected to undergo an outflow of population.
Recent changes in energy policies focus on accelerating energy transition
There is growing awareness among policymakers in many countries that there is a need to accelerate actions to address climate change, which have recently resulted in ambitious new policy intentions to achieve net-zero emissions by 2050. Several major countries and regions – including the European Union (EU), the United States (US), Japan, the United KIngdom (UK), Canada and Brazil – have proposed roadmaps to meet these goals, with China targeting carbon-neutral growth by 2060.
At the same time, there is increased public acceptance of products and services with a lower environmental footprint, and a state of technology development that offers solutions – even if they come at a higher cost. These trends are being observed at a time when the post-COVID-19 recovery plans in some major economies provide significant sources of funding that could accelerate the energy transition.
ENERGY DEMAND:
Global energy demand is set to increase from 275.4 mboe/d in 2020 to 352 mboe/d by 2045
Non-OECD primary energy demand is expected to constitute well over 70% of global primary energy demand in the long-term, growing from 174 million barrels of oil equivalent a day (mboe/d) in 2020 to 252 mboe/d in 2045. This growth is mainly attributable to increasing populations and growing economies in Asia, Africa and the Middle East.
For the OECD region, energy demand is set to flatten in the long-term. This underscores a further decoupling from economic growth due to structural changes and a policy push that continues to place increasing emphasis on energy efficiency and the deployment of low-carbon energy technologies.
After a partial recovery from the impact of the COVID-19 pandemic, energy demand in the region is set to peak in the medium-term before declining to around 102 mboe/d by 2045, reaching a level similar to that seen in 2020.
Oil is forecast to remain the fuel with the largest share of the global energy mix until 2045
Primary oil demand is set to increase in the long-term from 82.5 mboe/d in 2020 to 99 mboe/d in 2045. Despite decelerating oil demand growth in the second part of the forecast period and strong growth in other energy sources, such as other renewables, gas and nuclear, oil is expected to retain the highest share in the global energy mix during the entire period. In 2020, oil accounted for 30% of global energy requirements. Alongside post-pandemic oil demand recovery, the share of oil is anticipated to gradually increase to a level of more than 31% by 2025, before it begins a decline and reach 28% by 2045.
‘Other renewables’ and natural gas are projected to contribute most to future incremental energy demand
Demand for other renewables is projected to expand from 6.8 mboe/d in 2020 to 36.6 mboe/d in 2045, representing the single-largest incremental contribution to the future energy mix. Moreover, it is also the fastest-growing energy source with its share in the global primary energy mix above 10% in 2045, up from just 2.5% in 2020. This is driven by falling costs and policies focused on reducing emissions. Gas demand is expected to increase by 21.6 mboe/d between 2020 and 2045. This brings total gas demand to 85.7 mboe/d in 2045, thus becoming the second-largest fuel in the energy mix.
More stringent policies are set to reduce coal demand by almost 12 mboe/d duringthe forecast period
Medium- to long-term coal demand is forecast to drop meaningfully across all OECD regions. This is most dramatic in OECD Europe, where it falls by 5.5% p.a. over the forecast period. China’s coal demand is expected to slow to a plateau in the medium-term and then see a significant drop in the longer-term. At the global level, demand for coal is set to decline by almost 12 mboe/d, primarily due to measures targeting emissions reduction.
OIL DEMAND:
Oil demand is projected to reach a level of 104.4 mb/d by 2026
The global oil demand increase over the medium-term period (2020–2026) is estimated at 13.8 million barrels a day (mb/d). However, almost 80% of this incremental demand will materialize within the first three years (2021–2023), primarily as part of the recovery process from the COVID-19 crisis. OECD oil demand is expected to increase by almost 4 mb/d in the period to 2026. However, all of this increase will not be sufficient to return to pre-COVID-19 demand levels. Non-OECD demand is anticipated to increase by almost 10 mb/d over the medium-term, with around half of this increase needed to offset the demand decline in 2020. Using 2019 as the base year for comparison would result in incremental demand of 4.4 mb/d in 2026.
Global oil demand is expected to increase by 17.6 mb/d between 2020 and 2045
Global oil demand is forecast to rise by 17.6 mb/d between 2020 and 2045, growing from 90.6 mb/d in 2020 to 108.2 mb/d in 2045. Long-term projections highlight a contrasting demand picture between continued growing demand in the non-OECD and declining demand in the OECD. This trend is set to start already in the medium-term, before intensifying over the long-term. Indeed, OECD oil demand is projected to peak at levels around 46.6 mb/d in 2023, before it starts a longer-term decline towards a level of 34 mb/d by 2045.
In contrast, oil demand is set to continue to grow in the non-OECD region. Driven by an expanding middle class, high population growth rates and stronger economic growth potential, oil demand in this group of countries is expected to increase by 25.5 mb/d between 2020 and 2045, reaching a level of 74.1 mb/d in 2045. It needs to be noted, however, that almost 5 mb/d of the projected demand increase in the non-OECD will be needed to recover lost demand in 2020.
Global oil demand set to plateau during the second half of the outlook period
Projections highlight the front-loaded pattern for future demand growth. Annual oil demand growth averages 2.6 mb/d during the first five years of the forecast period. Average annual growth is then expected to slow significantly during the second five-year period to 0.6 mb/d, and further to 0.3 mb/d during the period from 2030–2035. After that, projections indicate virtually no growth, hinting at a relatively long period of plateauing oil demand at the global level.
Significant demand increase projected to come from road transportation and aviation sectors
The transportation sector is forecast to be the major contributor to future incremental demand, adding 13 mb/d between 2020 and 2045. More than 90% of this increase is projected to come from the road transportation and aviation sectors, each contributing around 6 mb/d, though a large part of these increases is due to the sharp demand decline in these two sectors in 2020. However, adjusting long-term projections for the demand decline in 2020, the petrochemical sector remains the largest source of incremental demand to 2045, similar to last year’s Outlook.
Long-term oil demand growth will be limited by growing penetration of electric vehicles (EVs)
The total vehicle fleet is expected to reach 2.6 billion by 2045, increasing by around 1.1 billion from the 2020 level. EVs are set to approach 500 million by 2045, representing almost 20% of the global fleet. Some growth is also projected for natural gas vehicles (NGVs), with an expected increase of 80 million projected between 2020 and 2045. As a result, internal combustion engine (ICE) vehicles are set to maintain their leading role in the composition of the global fleet. The outlook sees ICEs constitute about 76% of the global vehicle population by 2045, largely sustained by the fleet size increase in developing regions. These developments are expected to keep road transportation oil demand in a narrow range of 46 mb/d to 46.5 mb/d after 2025.
LIQUIDS SUPPLY:
Non-OPEC liquids to rebound in the medium-term
Non-OPEC liquids supply is set to continue its recovery and regain pre-pandemic levels in the course of 2022. As oil demand picks up again with the world economy expanding rapidly, in addition to the market stabilization efforts of OPEC and other participating countries in the DoC, fundamentals look set to remain stable and supportive, encouraging a return to upstream activity and investments. As such, non-OPEC total liquids supply is projected to rise from 62.9 mb/d in 2020 to 70.4 mb/d in 2026. The key contributors to growth are the US, Brazil, Russia, Guyana, Canada, Kazakhstan, Norway and Qatar.
US tight oil is a key driver of growth in the medium-term but peaks around 2030
Supportive market fundamentals should incentivize a return to growth for US tight oil production from 2022, which is expected to rise from 11.5 mb/d in 2020 to 14.8 mb/d in 2026. Tight oil output is expected to peak at 15.2 mb/d in the late 2020s, with US total liquids hitting a maximum of around 20.5 mb/d around the same time.
In the long-term, OPEC liquids supply to increase market share
In the long-term, after US liquids supply peaks, total non-OPEC liquids output is set to decline from a peak of 71 mb/d around 2030 to 65.5 mb/d in 2045, basically level with pre-pandemic 2019. As a result, OPEC liquids, which are expected to recover to pre-pandemic levels around the mid-2020s, rise further, increasing from 35.7 mb/d in 2030 to 42.7 mb/d in 2045. OPEC’s global market share rises from 33% at the nadir in 2020, to 39% in 2045.
Oil-related investment requirements total $11.8 trillion, 80% of which is needed in the upstream
Cumulative investment requirements in the oil sector amount to $11.8 trillion in 2021–2045. Of this, 80% or $9.2 trillion, is directed towards the upstream, the bulk of which is in North America, as US tight oil, in particular, drives medium-term non-OPEC supply growth. Downstream and midstream investment needs, in order to expand and maintain the associated refinery, storage and pipeline systems required to bring oil to market, necessitate another $1.5 and $1.1 trillion, respectively.
REFINING OUTLOOK:
The effect of strong distillation capacity additions is set to be offset by expected medium-term refinery closures of 4.5 mb/d
In the medium-term, 6.9 mb/d of new refining capacity is expected, in line with strong demand prospects in developing regions. Given global oil demand trends, this would lead to a distillation capacity overhang by 2026. However, during the ongoing rationalization wave, accelerated by the 2020 demand shock and the strategy shifts of some oil companies, around 4.5 mb/d of refining capacity could be shut in, mostly in developed regions. This should help balance out the downstream market in the medium-term.
Crude distillation capacity is expected to increase by 14 mb/d between 2021 and 2045, with a significant slowdown in the rate of required additions
Global refining distillation additions are projected at 14 mb/d between 2021 and 2045, of which 6.9 mb/d is in the medium-term (by 2026) and 7.1 mb/d beyond 2026. In line with oil demand patterns, almost 95% of the total additions is expected in developing regions, including the Asia-Pacific (6.4 mb/d), the Middle East (2.8 mb/d), Africa (3 mb/d) and Latin America (1 mb/d). However, the rate of distillation additions is expected to decelerate considerably throughout the outlook period with minor global additions beyond 2040.
Significant additions of secondary capacity will be driven by stricter product specifications and a shift to high quality products
At the global level, projections indicate the need to add some 7.1 mb/d of conversion units, 16.7 mb/d of desulphurization capacity and 4.7 mb/d of octane units in the period 2021–2045, to go with 14 mb/d of new distillation capacity. This is supported by stricter product specifications and a shift to higher-quality refined products.
OIL MOVEMENTS:
Global crude and condensate trade set to recover from the 2020 shock with a gradual long-term increase and significant regional shifts
After the drop in 2020, global crude and condensate trade is projected to reach levels above 38 mb/d in 2025 and 2030 and 40 mb/d and above from 2035 onwards. This is supported by increased oil demand in the Asia-Pacific and rising crude and condensate supply in the Middle East. In the longer-term, Middle East crude and condensate exports are projected to increase to almost 23 mb/d in 2045, up from 18.5 mb/d in 2019, and in line with rising demand for OPEC liquids. Consequently, the share of the Middle East in the global crude and condensate trade increases to 57% in 2045, from 48% in 2019.
Asia-Pacific crude and condensate imports are projected to grow in the long- term with an increasing share of imports from the Middle East
Asia-Pacific will remain the most important region in terms of crude and condensate imports in the long-term. The overall import volumes are expected to increase from around 23.5 mb/d in 2019 (22 mb/d in 2020) to almost 30 mb/d by 2045. The Middle East remains the main supplier to the Asia-Pacific, with flows increasing to above 19.5 mb/d by 2045, which is around 4.8 mb/d higher relative to levels seen in 2019.
FEATURED ARTICLE - OPEC October 2021 “MOMR” Monthly Oil Market Report. Released 10/13/2021
Winter Oil Market Outlook
Following the outbreak of COVID-19 and resulted lockdown measures in 2020, refined oil product consumption, along with refinery intakes, recovered considerably in 2021. As road transportation fuel demand picked up during the summer season this year, and petrochemical feedstock requirements increased, refinery intakes in August rose by 6.4 mb/d, compared with the same month a year earlier. This marks a significant measure ahead of the usual refinery maintenance season beginning in September, and corresponds to a hefty 10.5 mb/d increase relative to levels seen in May 2020. Despite this considerable recovery, intakes in August still remain nearly 2.5 mb/d below the pre-pandemic 2018-2019 average of 82 mb/d.
Refinery utilization rates in 2021 have been firmly supported by stronger product fundamentals with robust gasoline performance, mainly in the US and Europe, leading to strong conversion margins in recent months and, ultimately, solid improvement in refining economics.
The recovery in transportation fuels, as well as in the naphtha segment, was mostly driven by stronger consumption levels and robust economic activity amid improved mobility indicators. At the same time, cautious management of refinery intakes in an attempt to prevent product oversupply, amid a rise in unplanned outages during the hurricane season in the US, contributed to an increasingly stronger product balance and further supported product markets and refining economics in recent months.
These supply-side constraints ultimately drove product prices to soar to post-pandemic record highs, with gasoline prices in the US in reaching a multi-year record high of $99.50/b in July, compared with $52.51/b a year earlier and $88.55/b in July 2019.
Refinery offline capacity began its seasonal rise in September, up by 891 tb/d m-o-m, according to preliminary estimates. Based on historical data and announced maintenance plans, the rise in offline capacity is projected to peak at around 9.3 mb/d in October, compared with 6.1 mb/d seen in August, before the onset of maintenance.
At the same time, the renewed spread of COVID variants continues to pose a downside risk to product markets, despite the positive vaccination rollout progress, particularly with regard to air travel and jet fuel markets, the hardest pandemic-hit product segment, which has yet to fully recover.
Recently, soaring natural gas prices, which have reached record-high levels, particularly in Europe during September, have triggered a growing interest in switching from natural gas to liquid fuels at the industrial level, as energy companies attempt to drive down cost. Should this trend continue, fuels such as fuel oil, diesel, and naphtha could see support, driven by higher demand from power generation, refining and petrochemical use. On the other hand, record high natural gas prices have pushed electricity costs and, consequently, refining operational costs higher. This could weigh on refinery intakes and industrial production and partially offset the upside potential. Forecasts for a colder-than-average winter in 4Q21 could set the stage for positive support for heating oil markets, particularly in December, but this could be offset by seasonal weakness from other key products across the barrel, particularly gasoline.
Looking ahead, despite expectations of a seasonal pick-up in heating oil demand, as well as a potential switch from natural gas to liquid fuels, product markets are expected to see some weakness during the coming winter due to higher refinery throughput leading to ample supply. Although refineries are expected to increase run rates in line with seasonal trends to replenish stocks, any considerable growth in global intake levels could pose a challenge to product markets. Meanwhile, concerns of potential renewed COVID-19-related mobility restrictions during the winter could weigh on product markets and, consequently, refinery intakes. Thus, as oil markets continue to emerge from the COVID-19 pandemic, countries participating in the Declaration of Cooperation continue to maintain a vigilant watch over market fundamentals in an ongoing effort to support balance in oil market.
October 2021 EIA Short-term Energy Outlook STEO Forecast: Release Date: Oct. 13, 2021 | Forecast Completed: Oct. 7, 2021 | Next Release Date: Nov. 9, 2021
FULL REPORT WITH GRAPHS: https://www.eia.gov/outlooks/steo/pdf/steo_full.pdf
ALL FIGURES AND DATA: https://www.eia.gov/outlooks/steo/data.php?type=figures
Note: The EIA increased by 9.5% the “conservative” average price per barrel for WTI Crude in 2022 on their October 2021 STEO. They increased by 4% the average price per barrel for WTI Crude in 2021.
FORECAST HIGHLIGHTS:
Winter Fuels Outlook
We forecast that average U.S. household expenditures for all major home heating fuels will increase significantly this winter primarily because of higher expected fuel costs as well as more consumption of energy due to a colder winter. Average increases vary by fuel, region, and weather assumptions. Compared with last winter, we forecast propane expenditures will rise by 54%, heating oil by 43%, natural gas by 30%, and electricity by 6%. We expect space heating demand to generally be higher this winter based on forecasts from the National Oceanic and Atmospheric Administration (NOAA) that U.S. average heating degree days will be 3% higher than last winter (Winter Fuels Outlook). Altering our assumptions for a 10% colder-than-expected winter significantly increases forecast expenditures, while a 10% warmer-than-expected winter still results in increased expenditures, because of price increases.
Global liquid fuels
The October Short-Term Energy Outlook (STEO) remains subject to heightened levels of uncertainty related to the ongoing recovery from the COVID-19 pandemic. U.S. economic activity continues to rise after reaching multiyear lows in the second quarter of 2020 (2Q20). U.S. gross domestic product (GDP) declined by 3.4% in 2020 from 2019 levels. This STEO assumes U.S. GDP will grow by 5.7% in 2021 and by 4.5% in 2022. The U.S. macroeconomic assumptions in this outlook are based on forecasts by IHS Markit. Our forecast assumes continuing economic growth and increasing mobility. Any developments that would cause deviations from these assumptions would likely cause energy consumption and prices to deviate from our forecast.
Brent crude oil spot prices averaged $74 per barrel in September, up $4/b from August and up $34/b from September 2020. Brent spot prices have risen from their September average to more than $80/b in early October. Oil prices have increased over the past year as result of steady draws on global oil inventories, which averaged 1.9 million barrels per day (b/d) during the first three quarters of 2021. In addition to sustained inventory draws, prices increased after the October 4 announcement by OPEC+ that the group would keep current production targets unchanged.
We expect Brent prices will remain near current levels for the remainder of 2021, averaging $81/b during the fourth quarter of 2021, which is $10/b higher than our previous forecast. The higher forecast reflects our expectation that global oil inventories will fall at a faster rate than we had previously expected owing largely to lower global oil supply in late 2021 across a range of producers. In 2022, we expect that growth in production from OPEC+, U.S. tight oil, and other non-OPEC countries will outpace slowing growth in global oil consumption and contribute to Brent prices declining from current levels to an annual average of $72/b.
U.S. regular gasoline retail prices averaged $3.18 per gallon (gal) in September, up 2 cents/gal from August and almost $1/gal higher than in September 2020. Recent gasoline price increases reflect increasing crude oil prices outweighing falling gasoline wholesale margins. We forecast that retail gasoline prices will average $3.21/gal in October before falling to $3.05/gal in December.
Total U.S. crude oil production averaged 11.3 million b/d in July–the most recent monthly historical data point. We estimate that domestic production fell to 10.6 million b/d in September because of disruptions from Hurricane Ida. We forecast production will be 11.0 million b/d in October and rise to 11.3 million b/d in December. We forecast 2021 production will average 11.0 million b/d, increasing to 11.7 million b/d in 2022 as tight oil production rises in the United States. Growth will come as a result of operators increasing rig counts, which we expect will offset production decline rates.
Natural Gas
In September, the natural gas spot price at Henry Hub averaged $5.16 per million British thermal units (MMBtu), which was up from the August average of $4.07/MMBtu and up from an average of $3.25/MMBtu in the first half of 2021. The rising prices in recent months reflect U.S. natural gas inventory levels that are below the five-year average and continuing demand for natural gas for power generation use at relatively high prices.
We expect the Henry Hub spot price will average $5.80/MMBtu in fourth-quarter 2021, which is $1.80/MMBtu higher than we forecast in the September STEO. In the current forecast, Henry Hub prices reach a monthly average peak of $5.90/MMBtu in January and generally decline through 2022, averaging $4.01/MMBtu for the year amid rising U.S. natural gas production and slowing growth in LNG exports. We raised our Henry Hub price forecast through the end of 2022 compared with last month. The increase reflects a higher starting point for our price forecast that incorporates recent developments in U.S. and global natural gas markets. We forecast that U.S. inventory draws will be slightly more than the five-year average this winter, and we expect that factor, along with rising U.S. natural gas exports and relatively flat production through January will keep U.S. natural gas prices near recent levels before downward pressures emerge. Given low natural gas inventories in both U.S. and European natural gas storage facilities and uncertainty around seasonal demand, we expect natural gas prices to remain volatile over the coming months, with winter temperatures being a key driver of demand and prices.
We estimate that U.S. LNG exports averaged 9.3 billion cubic feet per day (Bcf/d) in September 2021, down 4% from August. Despite the recent monthly decline, these were the most U.S. LNG exports for September since the United States began exporting LNG from the Lower 48 states in February 2016. Even though September exports were a record for the month, they were limited by weather conditions, which led to the suspension of piloting services for several days at Sabine Pass, Cameron, and Corpus Christi. We expect that LNG exports will average 9.1 Bcf/d in October and then increase in the coming months. Cove Point LNG terminal is scheduled to complete its annual maintenance by mid-October and resume exports this month. Through this winter, LNG exports in the forecast average 10.7 Bcf/d as global natural gas demand remains high and several new LNG export trains–the sixth train at Sabine Pass LNG and the first trains at the new LNG export facility Calcasieu Pass LNG–enter service.
We estimate that U.S. natural gas inventories ended September 2021 at about 3.3 trillion cubic feet (Tcf), 5% less than the five-year (2016–20) average for this time of year. Injections into storage this summer have been below the previous five-year average, largely as a result of more electricity consumption in June due to hot weather, and increased exports even as domestic natural gas production has remained flat. We forecast that inventories will end the 2021 injection season (at the end of October) at almost 3.6 Tcf, which would be 5% less than the previous five-year average. We expect natural gas inventories to fall by 2.1 Tcf this winter, ending March at less than 1.5 Tcf, which would be 12% less than the 2017–21 average for that time of year.
We estimate dry natural gas production averaged 93.3 Bcf/d in the United States during the third quarter of 2021–up from 91.6 Bcf/d in in the first half of 2021. Production in the forecast rises to an average of 94.0 Bcf/d during the winter, and averages 96.4 Bcf/d during 2022, driven by natural gas and crude oil prices, which we expect to remain at levels that will support enough drilling to sustain production growth.
Electricity, coal, renewables, and emissions
We expect the share of electricity generation produced by natural gas in the United States will average 36% in 2021 and 35% in 2022, down from 39% in 2020. In 2021, our forecast share for natural gas as a generation fuel declines in response to our expectation of a higher delivered natural gas price for electricity generators, which we forecast will average $5.15/MMBtu compared with $2.39/MMBtu in 2020. As a result of the higher expected natural gas prices, the forecast share of electricity generation from coal rises from 20% in 2020 to about 24% in 2021 and 23% in 2022. For renewable energy sources, new additions of solar and wind generating capacity are offset somewhat by reduced generation from hydropower this year, resulting in the forecast share of all renewables in U.S. electricity generation to average 20% in 2021, about the same as last year, before rising to 22% in 2022. The nuclear share of U.S. electricity generation declines from 21% in 2020 to 20% in 2021 and 2022.
Electricity generation from coal-fired power plants has not increased as much in response to rising natural gas prices as it has in the past, or by as much as our models forecasted in recent STEOs. The lower price responsiveness of coal for electricity generation, which is likely the result of constraints on coal supply and low coal stocks, is contributing to upward pressure on natural gas prices. To reflect the lower price responsiveness of coal-fired electricity generation, we have lowered our forecast for U.S. coal generation for the fourth quarter of 2021 and the first half of 2022 by an average of 7 billion kWh (9%) each month, and we have raised our forecast for natural gas generation 5 billion kWh (5%) each month.
We forecast that planned additions to U.S. wind and solar capacity in 2021 and 2022 will increase electricity generation from those sources. We estimate that the U.S. electric power sector added 14.6 gigawatts (GW) of new wind capacity in 2020. We expect 17.1 GW of new wind capacity will come online in 2021 and 6.5 GW in 2022. Utility-scale solar capacity rose by an estimated 10.5 GW in 2020. Our forecast for added utility-scale solar capacity is 16.0 GW for 2021 and 18.3 GW for 2022. We expect significant solar capacity additions in Texas during the forecast period. In addition, we project that after increasing by 4.5 GW in 2020, small-scale solar capacity (systems less than 1 megawatt) will grow 5.8 GW and 7.8 GW in 2021 and 2022, respectively.
Coal production in our forecast totals 588 million short tons (MMst) in 2021, 53 MMst more than in 2020. We expect demand for coal from the electric power sector to increase by 84 MMst in 2021. Production growth is unlikely to match the increases in demand in the near term due to many coal mines operating at a reduced capacity and limited available transportation. In 2022, we expect coal production to increase by 34 MMst to 622 MMst, as the production and transportation constraints experienced in 2021 ease. Secondary inventories of coal at electric utilities decreased in the first half of 2021, and we forecast this trend will continue into the second half of 2021 and 2022.
We estimate that U.S. energy-related carbon dioxide (CO2) emissions decreased by 11% in 2020 as a result of less energy consumption related to reduced economic activity and responses to COVID-19. For 2021, we forecast energy-related CO2 emissions will increase about 8% from the 2020 level as economic activity increases and leads to rising energy use. We expect almost no change in energy-related CO2 emissions in 2022. We forecast that after declining by 19% in 2020, coal-related CO2 emissions will rise by 20% in 2021 and then fall by 5% in 2022. Short-term changes in energy-related CO2 can be affected by temperature. A recent STEO supplement examines these dynamics.
Well OK then. I guess we will not be hearing from you again. Not to worry, I book-marked this GSPE post for future reference, in case we need to LOL. In the meantime, congratulations on your 1/2-cent profit per share and good luck to you and your group.
Still Long and Chasing the Bigger Gulfslope Payout.
Mrs. Smith
October 2021 (MER) Monthly Economic Review
Source: Jack Kleinhenz, Ph.D., CBE Chief Economist National Retail Federation
Link To View Graphs: https://cdn.nrf.com/sites/default/files/2021-10/2021%20Oct%20MER.pdf
SYNOPSIS | Watch What Consumers Do – Not What They Say – as Economy Ploughs Ahead
With consumer spending accounting for roughly two-thirds of U.S. gross domestic product, all eyes are closely watching shoppers’ ability to drive the economy amid the recent rise in COVID-19 cases. And if consumer finances are any indication, there’s reason to be optimistic: Households remain in good shape, with consumers in the aggregate actually underspending relative to current income. Even though enhanced unemployment benefits have expired and are no longer providing a boost to personal income, the loss is easily offset by the savings stockpiled since the coronavirus pandemic began – the savings rate rose to 9.6 percent in July and remains noticeably above pre-COVID levels. Going forward, income growth should benefit from strong employment and wage growth. Child Tax Credit checks, which will continue through December, will also provide a bump.
Nonetheless, infections have become a major impediment to consumer confidence, and with good reason. The seven-day average of new cases reported by the Centers for Disease Control and Prevention soared from a pandemic low of just under 12,000 in June to about 160,000 at the beginning of September, with average daily deaths increasing from a low of about 200 in July to over 2,000 in mid-September – the highest tallies for cases and deaths in over six months. New cases dropped to about 95,000 by the end of September and deaths to about 1,300 but the numbers remain high and experts caution that further decline could be slow. More vaccination will help, but the United States has a long way to go with only 64 percent of those eligible receiving even one dose so far and only 55 percent fully vaccinated.
The COVID-19 situation has been a significant factor impacting the direction of the economy. According to the Federal Reserve’s latest “Beige Book” report, the deceleration in economic activity in late summer was largely attributable to a pullback in dining out, travel and tourism, reflecting safety concerns as households became more cautious due to the rise of the delta variant, and, in a few cases, international travel restrictions. Payrolls gains came in surprisingly low in August, rising by just 235,000 jobs – half the monthly average this year and less than one- a quarter of July’s 1.1 million – and confirming that the delta variant was hindering activity.
Monthly economic data from the just-completed third quarter suggests the economy lost momentum from its robust 6.6 percent annualized rate in the second quarter. The Federal Reserve’s Open Market Committee recognized the downdraft at its September meeting, saying the path of the economy continues to depend on the course of the virus and downshifting its forecast for economic growth this year to 5.9 percent from the 7 percent expected in June. Additionally, the committee now expects the unemployment rate to end 2021 at 4.8 percent, up from the 4.4 percent projected in June. Despite slower growth, the economy is still expanding and the committee raised its growth expectations for 2022 to 3.8 percent rather than the 3.3 percent projected in June.
Meanwhile inflation has heated up and remains a big question for the economy. Inflation measured both by the Consumer Price Index and Personal Consumption Expenditures Price Index (the Fed’s preferred inflation measurement) has surged since the fourth quarter of 2020. The August reading of the CPI was up 5.2 percent year-over-year and the PCE index was up 4.2 percent from a year ago, with higher prices largely reflecting supply chain shortages and distribution challenges. This trend is being felt by everyday shoppers and many consumers expect inflation to remain elevated. The Federal Reserve Bank of New York’s August Survey of Consumer Expectations found the public expects inflation over the next year to come to 5.2 percent, up one-third of a percentage point from the month before for the tenth 10th consecutive monthly increase and a new high.
Amid all of this, it should come as no surprise that consumer confidence as measured by the University of Michigan stood at only 71 in September, far below the pandemic peak of 88.3 in April. Yet August retail sales as calculated by NRF – excluding automobile dealers, gasoline stations and restaurants to focus on core retail – rose sharply, up 2.3 percent month-over-month and 12 percent year over year. That brought the first eight months of the year to a 15 percent year-over-year gain and is on track to meet NRF’s forecast of between 10.5 and 13.5 percent growth for the full year. That strong momentum shows there’s a big disconnect between consumer confidence and consumer spending at the moment and that the downdraft in confidence may well be a false scent. There’s a saying that you should never underestimate the American consumer – and its corollary is that you should watch what consumers do, not what they say.
Going forward, the labor market is playing an increasing key role in the economic outlook and the next two U.S. jobs reports are key. While August job gains were weaker than expected, there has been progress. The unemployment rate has fallen significantly, to just above 5 percent, and the upside surprise in the August jobs report was that wage growth accelerated to 4.3 percent on a year-over- year basis, That is a clear indication that demand for labor is still strong and that a lack of available workers – not a lack of jobs – remains the major hurdle to robust hiring. In fact, job openings were at a record 10.9 million in July. With the end of supplemental unemployment benefits taking away financial incentives to stay home and the reopening of schools easing childcare responsibilities for parents who want to get back to work, stronger growth should be on its way.
The Total US Oil and Gas Rig Count reflects 533 rigs an increase of 5 rigs. The 10/8/2021 GOM Offshore Rig Count decreased by 1 rig from the previous week and is currently showing 10 rigs.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
WTI $81.27/bbl - November Contract, 10/11/2021 12:04 pm CDT
https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 10/7/21 Close
Crude Oil ($/barrel) Percent Change
WTI 78.46 +1.0
Brent 82.34 +1.2
Louisiana Light 79.86 +1.0
https://www.eia.gov/todayinenergy/prices.php
EDITED
Mrs. Smith
WTI November Contract HITS 7 year HIGH this morning. OPEC+ is behaving exactly like I thought they would. Told you so.
‘Oil Prices Jump As OPEC+ Holds Firm On 400,000 Bpd Production Hike’, By Tsvetana Paraskova - Oct 04, 2021, 9:00 AM CDT
Oil prices jumped early on Monday after reports started to emerge that the Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ alliance recommended to the ministers to stick to the current plan and ease the cuts by 400,000 barrels per day (bpd) in November.
As of 9:21 a.m. EDT, just after a very short JMMC meeting ended and ahead of the full ministerial OPEC+ meeting, Brent Crude returned to $80 per barrel it had briefly hit last Tuesday. Brent was trading at $80.80, up by 1.85%.
The U.S. benchmark, WTI Crude, reached its highest level since the 2014 price crashed and traded at a more-than-seven-year high of $77.05, up by 1.75%.
The favored option for the OPEC+ group is to stick to the plan and increase the collective output by 400,000 bpd in November, the JMMC meeting decided, as per sources who spoke to media.
That’s the basic minimum the market was expecting.
OPEC+ decided in the middle of July that it would start returning 400,000 bpd to the market every month beginning in August until it unwinds all the 5.8 million bpd cuts. The group agreed to extend the existing deal from April 2020 through the end of December 2022.
Recent price strength and expected higher oil demand in the winter due to gas-to-oil switching with record-high natural gas prices in Asia and Europe had some observers and oil-consuming nations, including the U.S., to call on OPEC+ for a higher increase in production.
The JMMC, which recommends preferred action to the ministers, favors the plan as-is: easing the cuts by 400,000 bpd next month.
Earlier reports had indicated that an 800,000-bpd supply increase in November with no increase in December was also on the table.
At the end of the JMMC meeting and just ahead of the ministerial meeting, sources said, as carried by Amena Bakr, Deputy Bureau Chief and Chief Opec Correspondent at Energy Intelligence: “Look past your noses, there’s an oversupply expected in 2022. Easing by the planned 400k is the favored option so far.”
By Tsvetana Paraskova for Oilprice.com
Typo Correction: 10/1/2021 Rig Count increased 37.5% from the previous week and is currently showing 11 rigs. The Total US Oil and Gas Rig Count reflects 528 rigs an increase of 7 rigs, 3 of which were for GOM (LA) Federal waters. All of Gulfslope’s prospects are in GOM Louisiana offshore waters. The 22% did not appear correct and I was right, sorry.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
EDITED
WTI $76.01/bbl up 0.13% November Contract, 10/4/2021, 7:50 am CDT
https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 10/01/21 Close
Crude Oil ($/barrel) Percent Change
WTI 76.01 +1.1
Brent 79.40 +2.0
Louisiana Light 77.36 +1.0
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
The 10/1/2021 GOM Offshore Rig Count increased 22% from the previous week and is currently showing 11 rigs. The Total US Oil and Gas Rig Count reflects 528 rigs an increase of 7 rigs, 3 of which were for GOM (LA) Federal waters. All of Gulfslope’s prospects are in GOM Louisiana offshore waters.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
WTI $75.78/bbl - November Contract, 10/4/2021 00:21 CDT
https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 9/30/21 Close
Crude Oil ($/barrel) Percent Change
WTI 75.22 +0.2
Brent 77.81 -0.1
Louisiana Light 76.60 +0.4
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
Great News!
Mrs. Smith
Long ago I realized that a certain percentage of the population will consistently fail to see the forest for the trees. Furthermore, there is no use trying to engage them, because their confidence in their paradigm is high and since they feel they are already the most informed, they are too lazy to listen or learn. However all is not lost, experience has shown me that often times these people will come to the correct conclusion at their own pace and by their own path. Not all of them make it, but I do not worry about it. It is what it is.
I am not aware of any place in the world where renewables provide 100% of the energy required, and if they provide more than 20% of the total, there is the potential for massive failures . Over the last 9 months, electricity prices in Germany have increased 100% after they shut down many of their nuclear and coal-fired plants. The costs to build the new plants must be paid for by increasing the revenue from consumers. It is common knowledge that China is the world leader in manufacturing solar panels and windmills. Yet the fuel source for their new electric plants is coal. Maybe that is because wind and solar are not competitive or reliable.
U.S. emissions are declining, while China’s emissions are increasing, and India is not far behind. The world is asking the US and EU to make the sacrifice for the environment while allowing China and India to increase unabated. I am not willing to compromise my standard of living, so before anyone asks me to cut back my energy footprint, let me suggest there are more productive ways to use that time and effort.
Dopey Joe’s plan is for the U.S. to borrow 12 billion USD from China, then send it back to both China and India as foreign investment for ‘developing nations’ thus subsidizing their continued rising emissions, with our tax dollars being spent to pay back the principal and interest. No surprise. I never expected anything better from him. As for me, I will continue supporting GSPE drilling in the GOM. And GLTA.
Mrs. Smith
Offshore driller Kosmos Energy sheds frontier assets, weighs carbon intensity to confront energy transition
Interesting Podcast with Kosmos Energy and Platts Capital Crude: https://www.spglobal.com/platts/en/market-insights/podcasts/crude/092721-kosmos-energy-offshore-drillers-face-transition
Global oil demand will still be significant for years, even under the most ambitious energy transition. So which basins will continue to produce, and which others will be abandoned?
Offshore E&P company Kosmos Energy has answered those questions by halting its frontier exploration and selling those assets in the past two years. Its oil portfolio is now focused on two areas: West Africa and the Gulf of Mexico, and it aims to increasingly shift to natural gas.
Senior editor Meghan Gordon spoke with Mike Anderson, senior vice president for external affairs and sustainability at Kosmos Energy.
They talked about how offshore drillers are confronting the energy transition, the carbon intensity of different crude streams and the implications for the lack of investment happening right in the Gulf of Mexico.
They also looked at the energy disparity between developed and developing countries, and how world leaders might approach those tensions at COP26 in November.
EIA Weekly Petroleum Status Report, Data for week ending Sept. 24, 2021, Release Date: 9/29/21
Full ‘Status’ report including tables and graphs:
https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
WTI $75.63/bbl November Contract, 9/30/2021: https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 9/29/21 Close
Crude Oil ($/barrel) Percent Change
WTI 75.06 -0.5
Brent 77.86 -0.6
Louisiana Light 76.31
https://www.eia.gov/todayinenergy/prices.php
HIGHLIGHTS
U.S. crude oil refinery inputs averaged 15.4 million barrels per day during the week ending September 24, 2021 which was 67,000 barrels per day more than the previous week’s average. Refineries operated at 88.1% of their operable capacity last week. Gasoline production increased last week, averaging 9.9 million barrels per day. Distillate fuel production increased last week, averaging 4.6 million barrels per day.
U.S. crude oil imports averaged 6.6 million barrels per day last week, up by 87,000 barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.1 million barrels per day, 18.7% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 989,000 barrels per day, and distillate fuel imports averaged 300,000 barrels per day.
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) increased by 4.6 million barrels from the previous week. At 418.5 million barrels, U.S. crude oil inventories are about 7% below the five year average for this time of year. Total motor gasoline inventories increased by 0.2 million barrels last week and are about 3% below the five year average for this time of year. Finished gasoline inventories decreased while blending components inventories increased last week. Distillate fuel inventories increased by 0.4 million barrels last week and are about 12% below the five year average for this time of year. Propane/propylene inventories increased by 2.6 million barrels last week and are about 19% below the five year average for this time of year. Total commercial petroleum inventories increased by 10.9 million barrels last week.
Total products supplied over the last four-week period averaged 20.4 million barrels a day, up by 13.7% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.2 million barrels a day, up by 8.5% from the same period last year. Distillate fuel product supplied averaged 4.0 million barrels a day over the past four weeks, up by 12.3% from the same period last year. Jet fuel product supplied was up 64.0% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $74.18 per barrel on September 24, 2021, $2.09 above last week’s price and $34.12 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $2.263 per gallon, $0.027 less than last week’s price but $1.007 above a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $2.270 per gallon, $0.062 above last week’s price and $1.143 over a year ago.
The national average retail regular gasoline price was $3.175 per gallon on September 27, 2021, $0.009 per gallon less than last week’s price but $1.006 over a year ago. The national average retail diesel fuel price was $3.406 per gallon, $0.021 above last week’s price and $1.012 over a year ago.
Dallas Fed Energy Survey, Third Quarter - September 29, 2021
https://www.dallasfed.org/research/surveys/des/2021/2103.aspx#tab-results
https://www.dallasfed.org/research/surveys/des/2021/2103.aspx#tab-report
Expansion Continues in Oil and Gas Activity; Cost Pressures Building
What’s New This Quarter
Special questions this quarter ask about expectations for U.S. electric vehicle sales, purchases of carbon credits and/or carbon offsets, COVID-19-related operational delays and hiring challenges.
The ‘Energy Survey’ current index for Capital Expenditures on all firms rose roughly 1% to 37.1
Solid oil and gas sector growth continued in third quarter 2021, according to oil and gas executives responding to the Dallas Fed Energy Survey. The business activity index—the survey’s broadest measure of conditions facing Eleventh District energy firms—remained elevated but moved down from 53.0 in the second quarter to 44.3 in the third quarter.
Oil production increased but at a significantly slower pace, according to executives at exploration and production (E&P) firms. The oil production index remained positive but fell from 35.0 in the second quarter to 10.7 in the third. Similarly, the natural gas production index fell 16 points to 19.3.
For a second quarter in a row, costs rose sharply. Among oilfield services firms, the index for input costs increased to 60.8, a record high and indicative of significant cost pressures. Only one of the 47 responding oilfield services firms reported lower input costs this quarter. Among E&P firms, the index for finding and development costs advanced from 28.3 in the second quarter to 33.0 in the third. Additionally, the index for lease operating expenses increased, from 23.4 to 29.4.
It is also taking longer for companies to receive inputs. Among oilfield services firms, the index for supplier delivery time increased from 14.0 in the second quarter to 26.7 in the third, the highest reading since the survey’s inception in 2016. The index measuring delays in deliveries increased to 26.7, also a record high. Similarly, among E&P firms, the index for supplier delivery time increased from 4.0 to 10.5.
The equipment utilization index of oilfield services firms rose from 42.0 in the second quarter to 47.8 in the third. Operating margins continued to widen, with the index remaining positive at 21.8. The index of prices received for services rose from 30.0 to 42.2.
Labor market indicators improved in the third quarter. The aggregate employment index posted a third consecutive positive reading, increasing from 9.9 to 14.0. Employment growth continues to be driven primarily by oilfield services firms. The employment index was 25.5 for services firms versus 8.4 for E&P firms. The aggregate employee hours index remained positive but dipped from 24.0 to 19.0. The aggregate wages and benefits index increased, from 20.6 to 30.3.
Six-month outlooks improved, with the index remaining positive but declining from 71.9 last quarter to 58.9. After two quarters of declining uncertainty, the uncertainty index moved up from -19.6 to 4.3, suggesting a slight rise in uncertainty this quarter.
On average, respondents expect a West Texas Intermediate (WTI) oil price of $70 per barrel by year-end 2021; responses ranged from $42 to $90 per barrel. Survey respondents expect Henry Hub natural gas prices of $4.74 per million British thermal units (MMBtu) at year-end. For reference, WTI spot prices averaged $72 per barrel during the survey collection period, and Henry Hub spot prices averaged $5.22 per MMBtu.
Next release: December 29, 2021
2021 OPEC Annual Statistical Bulletin Released 9/30/2021
See OPEC PDF link below for Selected Tables on Oil trade, transportation and prices along with Graphs on Oil data for upstream, downstream, trade, transportation, exports by destination, and prices.
https://asb.opec.org/php/pdf_delivery.php?secToken2=2361d645590fa48eabb92b81624c137e35fe8c9b
OPEC launches its 2021 Annual Statistical Bulletin No 29/2021, Vienna, Austria, 30 Sep 2021
The Organization of the Petroleum Exporting Countries (OPEC) today launched the 2021 edition of its Annual Statistical Bulletin (ASB), via videoconference.
The launch was attended by HE Mohammad Sanusi Barkindo, OPEC Secretary General; Professor Thomas Lindner of the Executive Academy at the Vienna University of Economics and Business; as well as Members of Management at the Secretariat. It was livestreamed via the Organization’s website and official YouTube account.
In its 56th edition, the ASB continues to provide a wide range of data on the global oil and gas industry, in addition to key economic indicators, serving as a leading industry reference for reliable and timely information for various industry stakeholders, including policymakers, academics and industry analysts. The publication contains time-series data detailing key aspects of the petroleum industry, such as production, demand, imports, exports, exploration, transportation and refining.
It also features key statistics on the oil and gas activities in OPEC’s 13 Member Countries: Algeria, Angola, Congo, Equatorial Guinea, Gabon, IR Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, the United Arab Emirates and Venezuela.
In line with the Secretariat’s efforts to enhance access to the publication, this year’s ASB is available as an interactive version and a PDF on the OPEC website, as well as through a smart app compatible with iOS and Android platforms.
In his remarks, the Secretary General emphasized the crucial importance of data accuracy and transparency to supporting stability in the global oil market.
“We at OPEC are dedicated to enhancing data transparency through broad dissemination of accurate and timely oil and gas data, not only for the ASB, but for all of our publications,” he stated. “Indeed, maintaining transparency in all that we do underpins our core goal of establishing sustainable oil market stability.”
The opening remarks were followed by a panel discussion led by Ms. Boshra AlSeiari, Head of OPEC’s Data Services Department, focusing on the publication’s key highlights, including:
Total world crude oil production declined in 2020 by 6.15 million barrels per day (mb/d), or 8.2 per cent, as compared to 2019, to average 69.09 mb/d, marking a historical year-on-year drop notably after the outbreak of the COVID-19 pandemic. OPEC crude oil production declined sharply year-on-year by 3.72 mb/d, or 12.7 per cent, while crude production by non-OPEC countries fell by 2.43 mb/d, or 5.3 per cent.
With an average of 90.73 mb/d in 2020, world oil demand was heavily impacted by the COVID-19 pandemic and fell by a historic 9.30 mb/d y-o-y. OECD oil demand fell sharply in 2020, while in the non-OECD it declined for the first year in history. Oil demand in OPEC Member Countries was sluggish in 2020, losing 8.2 per cent y-o-y. Distillates and gasoline accounted for around 55.1 per cent of 2020 world oil demand with a steep downward trend, amid COVID-19 containment measures. Residual fuel oil requirements were about 7.1 per cent of total oil demand in 2020.
OPEC Member Countries exported an average of 19.70 mb/d of crude oil in 2020, a sharp decrease of about 2.78 mb/d, or 12.4 per cent, compared to 2019 and marking the fourth consecutive annual decline. Following the pattern in previous years, the bulk of crude oil from OPEC Member Countries – 14.43 mb/d or 73.2 per cent – was exported to Asia, particularly China and India. Considerable volumes of crude oil – about 3.13 mb/d – were also exported to OECD Europe in 2020, which, however, represents a decline compared with 3.74 mb/d recorded in 2019. OECD Americas imported 0.84 mb/d of crude oil from OPEC Member Countries, which was about 0.38 mb/d, or 31.1 per cent, less than the 2019 volumes.
Exports of petroleum products from OPEC Member Countries averaged 3.48 mb/d during 2020, down by around 0.40 mb/d, or 10.4 per cent, compared to 2019. Imports of petroleum products by OPEC Member Countries averaged at 1.52 mb/d in 2020, roughly 0.17 mb/d, or 9.8 per cent, lower than in 2019.
World proven crude oil reserves stood at 1,549 billion barrels at the end of 2020, increasing by 0.2 per cent from the level of 1,546 billion barrels recorded at the end of 2019. Proven crude oil reserves in OPEC Member Countries increased by 0.3 per cent to 1,237 billion barrels at the end of 2020, following a firm increase during 2019.
At the end of 2020, world proven natural gas reserves fell by 0.4 per cent to approximately 206.7 trillion standard cubic metres (cu m). Proven natural gas reserves in OPEC Member Countries stood at 73.74 tr standard cu m at the end of 2020, down 1.4 per cent from the level at the end of 2019.
World refinery capacity shrank by 0.3 m barrels/calendar day (b/cd) to stand at 101.1 m b/cd during 2020. The non-OECD region, particularly China, other Asia and the Middle East, recorded refining capacity additions. Refinery capacity in the OECD declined sharply in 2020, as compared to 2019. Globally, refinery throughput fell by a historic 9.1 per cent to reach 78.0 mb/d in 2020, amid bearish oil demand during the COVID-19 pandemic.
The OPEC Reference Basket averaged $41.47/b in nominal terms during 2020, down from $64.04/b in 2019, a strong decrease of $22.57/b, or 35.2 per cent. The volatility level was $12.55/b, or 30.3 per cent, relative to the yearly average.
Opec says India will be hooked on oil for years to come.
https://www.business-standard.com/article/economy-policy/opec-says-india-will-be-hooked-on-oil-for-years-to-come-121092901213_1.html
Indian motorists will struggle to move away from gasoline- and diesel-powered cars over the next quarter of a century, suggesting the nation’s push toward as electric vehicles may not be a complete success, OPEC said.
Diesel and gasoline will make up 58% of India’s oil demand in the next 25 years, from 51% now, according to the latest long-term report from the Organization of Petroleum Exporting Countries. The addition of 200 million passenger and commercial vehicles mean the two fuels will continue to dominate oil consumption in the world’s third-biggest oil consuming nation, it said.
India’s oil demand, which was battered by the coronavirus, is expected to reach its pre-pandemic level of 4.9 million barrels a day in 2021 before more than doubling to 11 million barrels by 2045. OPEC meets almost 71% of India’s crude oil requirements.
The projections from OPEC are at odds with Prime Minister Narendra Modi’s aim to make India energy independent in the coming decades through increased carbon efficiency and gas-based fuel usage and electricity-driven mobility.
Continued addiction to petroleum would mean greater dependence on imports for a country that already buys 85% of its oil from overseas.
President Biden's 'Green' Obsession Is Already a Disaster By Daniel Turner September 28, 2021
https://www.realclearenergy.org/articles/2021/09/28/president_bidens_green_obsession_is_already_a_disaster_796380.html
The green revolution in the left’s $3.5 trillion reconciliation is a matter of trade-offs and Americans will find the final numbers don’t balance.
We can argue the “existential threat” of climate change which will be here in 7 years, or 10 years, or is already here, depending on the rhetoric. We can scoff at John Kerry’s private jets, Bernie Sanders’ multiple homes, and question the credibility of the prophets of doom whose carbon footprints are ripe with hypocrisy. However, it’s more important to push all the politics aside and be pragmatists.
Forcing half of our electricity to be “carbon free” by 2030 necessarily entails a give and take. In this case, we need to give up the current state of life in America for the goals of the climate agenda. On the balance, this forced transition takes much more than it gives. That’s the reality the American people need to understand and the serious conversation we need to have. Yet it’s not happening, and the reason is very simple: Americans don’t know the consequences.
Show me a politician saying fossil fuels can be traded for renewable energy while keeping all other aspects of life (cost, reliability, national security) the same…and I will show you a liar.
Case in point: Germany. Our Deutsch allies are years ahead of America in pushing for a green agenda. They have closed 12 of its 19 nuclear power plants, with all 84 of their coal plants slated for extinction within the next decade. The green movement cheers this on as progress and leadership.
Sadly, they are utterly detached from reality.
Germans pay 37 cents per kilowatt hour for electricity, about triple what we pay in America. In simplest of terms, take your electric bill and triple it. Environmentalists will tell you this is what the people want. They’ll argue Americans will embrace and accept this sacrifice as part of the battle against climate change, but I maintain many have no idea this is what the future holds because politicians are not being honest.
America is already experiencing blackouts because of politically-charged green energy mandates. Parts of New York City this summer went dark. Same in New Mexico and California. Even energy-rich Texas experienced blackouts which tragically cost the lives of many people.
Simply put, renewable energy is incapable of producing the same amount of energy and cannot withstand the elements.
The green movement refutes this passionately, but facts are stubborn things. The rolling blackouts are a result of politicians pushing green energy mandates faster than the science and technology allow, and the consequences are deadly.
There’s also a national security component to energy, perhaps the most vital, and yet rarely discussed in serious terms. Europe is struggling to keep the power on and begging Russia to export more gas. In turn, Putin has cut gas exports from the typical rate of 81 million cubic meters (mcm) to around 20 mcm last month. Is it because Russia is running out of gas? No. It’s because Putin wants to see Europe dance for his pleasure. And they’re putting on a jig.
The Nordstream 2 pipeline between Russia and Germany, previously opposed by the Trump Administration under Germany’s NATO obligations, is now fully blessed by the Biden Administration..
While this relationship is bad news for Germany, America is entering into the same dangerous bargain with China. My organization, Power The Future, authored a study explaining how upwards of 70% of the renewable energy is manufactured in China. Even worse, in another study we explain how a whopping 95% of the rare earth mineral market, those mined metals and minerals necessary for wind and solar to function, is monopolized by China.
We are forgoing affordability for expensive electricity. We are forgoing reliability for blackouts. We are forgoing domestic energy for Chinese dependence. Yet these realities are never discussed.
The Biden green agenda is a matter of trade-offs. The American people have the right to know what is on the line: affordability, reliability, and national security.
We all deserve to know the full cost of Joe Biden’s “going green.”
After cleaning and polishing my crystal ball, the images were still fuzzy. But, I was able to make out that after the successful Tau 2 Mr. Seitz was preparing to drill the Corvette, and the stock was worth $2 a share.
Mrs. Smith
Okay. I just wanted to verify.
Thank you.
Mrs. Smith
Are you sure you wiped all the dust off your crystal ball? LOL,
Mrs. Smith
Typo correction: Someone(s)
The ‘Dallas Fed Energy Survey’ will be released Wednesday, September 29, 2021 which will include the oil and gas index for capital expenditures, both current and forecast.
Mrs. Smith
Could be someone wanting to establish a large position. Hard to do when volume is low. The only way to get large volume is to pay a little bit of a premium. The people that want out will have an incentive to sell. Presto! Instant large holding.
Big question, who and why, and what do they know?
Mrs. Smith
Good thing Gulfslope Energy “GSPE” is current on all their SEC filings. Gulfslope’s next filing will be their SEC form 10-K annual report for the fiscal year ended 9/30/2021 due at the end of December 2021.
The amendment to Rule 15c2-11 you reference on your attached post was Press Released by the SEC over a year ago on September 16, 2020.
https://www.sec.gov/news/press-release/2020-212
Excerpt
Washington D.C., Sept. 16, 2020 —
The Securities and Exchange Commission today adopted amendments to Exchange Act Rule 15c2-11, an important component of the over-the-counter (OTC) market regulatory structure. The amendments are designed to modernize the rule, which was last substantively amended nearly thirty years ago, including to recognize advances in communications technologies. The amended rule enhances disclosure and investor protection in the OTC market by ensuring that broker-dealers, in their role as professional gatekeepers to this market, do not publish quotations for an issuer’s security when current issuer information is not publicly available, subject to certain exceptions.
The Rule will become effective 60 days following publication of the amendments in the Federal Register. The Rule will have a general compliance date that is nine months after the effective date as well as a compliance date that is two years after the effective date regarding provisions to require an issuer’s financial information for the last two fiscal years to be current and publicly available.
Mrs. Smith
The 9/24/2021 GOM Offshore Rig Count Update report increased 100% from the previous week and is currently showing 8 rigs. The Total US Oil and Gas Rig Count reflects 521 rigs an increase of 9 rigs, 4 of which were for GOM Federal waters. All of Gulfslope’s prospects are in GOM Louisiana offshore waters.
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/WeeklyRigCountUpdate.pdf
http://www.dnr.louisiana.gov/assets/TAD/data/drill_weekly/ogj_rig_count.pdf
WTI $73.90/bbl November Contract, 9/24/2021 13:58 CDT
https://oilprice.com/oil-price-charts/45
Wholesale Spot Petroleum Prices, 9/23/21 Close
Crude Oil ($/barrel) Percent Change
WTI 73.43 +1.5
Brent 76.44 +1.2
Louisiana Light 74.26 +1.5
https://www.eia.gov/todayinenergy/prices.php
Mrs. Smith
Attached is an article which references Delek Group, a 75% working interest partner in the Tau prospect and a 24% Capital Shareholder in GSPE.
Note: As of 6/30/2021 Delek Group’s projected cash flow through 2023 had improved along with roughly 500 million U.S. dollars held in an account pledged to the debentures' trustee.
https://en.globes.co.il/en/article-after-abu-dhabi-sale-delek-drilling-to-distribute-100m-dividend-1001385272
’Delek Drilling to distribute $100m dividend’
After selling its stake in the Tamar field to Abu Dhabi's Mubadala Petroleum and record revenue from the Leviathan field, Delek Drilling is distributing profits.
Delek Drilling Limited Partnership (TASE:DEDR.L) notified the Tel Aviv Stock Exchange (TASE) this morning that after strong financial results for the first half of 2021, in which it reported record revenue and profits, and the sale of its 22% stake in the Tamar offshore oil field, the board of directors has approved the distribution of a $100 million dividend.
At the start of the month, Delek Drilling, controlled by Yitzhak Tshuva's Delek Group Ltd. (TASE:DLEKG), reported that it had signed a binding agreement to sell its 22% stake in Tamar to Mubadala Petroleum of Abu Dhabi for $1 billion. The sale was part of the government and court approved gas agreement requiring Delek Drilling to sell its stake in Tamar by the end of 2021.
In the second quarter of 2021, Delek Drilling's gas sales, after royalties, grew 58% to NIS 786 million. The increase was mainly due to higher production from the Leviathan gas field. Delek Drilling reported a NIS 174 million net profit in the second quarter of 2021, compared with a net loss of NIS 211 million in the second quarter of 2020.
Delek Drilling CEO Yossi Abu said, "After exceptional results so far in 2021 with record breaking revenue, mainly due to exports to Egypt and countries in the region, and after we met our commitments under the gas agreement to sell our stake in the Tamar field, the partnership's board has decided to distribute profits."
Published by Globes, Israel business news - en.globes.co.il - on September 23, 2021
U.S. Economic Activity Charts, Issued September 20, 2021, Federal Reserve Bank of Dallas
https://www.dallasfed.org/-/media/Documents/research/econdata/uscharts.pdf
Mrs. Smith
You certainly did.
Global demand for oil and natural gas has kept up with the rocketing economy. But supplies can not keep pace, which has propelled natural gas and gasoline prices higher. Natural gas recently set record levels.
The U.S. “EIA” Energy Information Administration forecasts this void to continue all the way through 2022, but could be filled by responding to higher prices with increased oil and gas drilling. The EIA’s latest angle on this potential supply shortage is that the U.S. could add new production of 1.8 million barrels per day of crude oil plus 6.0 billion cubic feet per day of marketed natural gas production.
Yes, OPEC could try to offset the difference, but I believe they would intentionally fall short of meeting global demand. In addition, too much has already been lost with the steep declines in oil and gas E&P investments.
In my opinion, even with the assistance of OPEC there still be a supply shortage creating higher prices unless there is a boost in investing for oil and natural gas drilling.
Mrs. Smith
Summary of Weekly Petroleum Data for the week ending September 17, 2021, Release date September 22, 2021
Full Report with Graphs/Tables: https://www.eia.gov/petroleum/supply/weekly/pdf/wpsrall.pdf
Data Overview: https://ir.eia.gov/wpsr/overview.pdf
HIGHLIGHTS
U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 3.5 million barrels from the previous week. At 414.0 million barrels, U.S. crude oil inventories are about 8% below the five year average for this time of year. Total motor gasoline inventories increased by 3.5 million barrels last week and are about 3% below the five year average for this time of year. Finished gasoline and blending components inventories both increased last week. Distillate fuel inventories decreased by 2.6 million barrels last week and are about 14% below the five year average for this time of year. Propane/propylene inventories decreased by 0.5 million barrels last week and are about 21% below the five year average for this time of year. Total commercial petroleum inventories decreased by 2.6 million barrels last week.
U.S. crude oil refinery inputs averaged 15.3 million barrels per day during the week ending September 17, 2021 which was 1.0 million barrels per day more than the previous week’s average. Refineries operated at 87.5% of their operable capacity last week. Gasoline production increased last week, averaging 9.6 million barrels per day. Distillate fuel production increased last week, averaging 4.5 million barrels per day.
U.S. crude oil imports averaged 6.5 million barrels per day last week, increased by 0.7 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.1 million barrels per day, 18.9% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 1.1 million barrels per day, and distillate fuel imports averaged 184,000 barrels per day.
Total products supplied over the last four-week period averaged 21.0 million barrels a day, up by 17.9% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.2 million barrels a day, up by 8.2%from the same period last year. Distillate fuel product supplied averaged 4.1 million barrels a day over the past four weeks, up by 13.2% from the same period last year. Jet fuel product supplied was up 70.4% compared with the same four-week period last year.
The West Texas Intermediate crude oil price was $72.09 per barrel on September 17, 2021, $2.27 above last week’s price and $31.00 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $2.290 per gallon, $0.017 less than last week’s price but $1.002 above a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $2.208 per gallon, $0.068 above last week’s price and $1.037 over a year ago.
The national average retail regular gasoline price was $3.184 per gallon on September 20, 2021, $0.019 per gallon more than last week’s price and $1.016 over a year ago. The national average retail diesel fuel price was $3.385 per gallon, $0.013 above last week’s price and $0.981 over a year ago.
BSEE Monitors Gulf of Mexico Oil and Gas Activities in Response to Hurricane Ida, Update 09/22/2021
NEW ORLEANS — Bureau of Safety and Environmental Enforcement (BSEE) activated its Hurricane Response Team as Hurricane Ida made its way through the Gulf. The Hurricane Response Team continues to monitor offshore oil and gas operators in the Gulf as they return to platforms and rigs after the storm. The team works with offshore operators and other state and federal agencies until operations return to normal.
Based on data from offshore operator reports submitted as of 11:30 CDT today, personnel are still evacuated from a total of 32 production platforms, 5.89 percent of the 560 manned platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and gas are produced. Unlike drilling rigs, which typically move from location to location, production facilities remain in the same location throughout a project’s duration.
All non-dynamically positions rigs are currently operating in the Gulf. Rigs can include several types of offshore drilling facilities including jackup rigs, platform rigs, all submersibles and moored semisubmersibles.
One dynamically positioned rig remains off location. This number represents 6.67 percent of the 15 DP rigs currently operating in the Gulf. Dynamically positioned rigs maintain their location while conducting well operations by using thrusters and propellers. These rigs are not moored to the seafloor; therefore, they can move off location in a relatively short time frame. Personnel remain on-board and return to the location once the storm has passed.
As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas, effectively shutting in production from wells in the Gulf and protecting the marine and coastal environments. Shutting in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.
From operator reports, it is estimated that approximately 16.18 percent of the current oil production in the Gulf of Mexico is shut in. BSEE estimates that approximately 24.27 percent of the gas production in the Gulf of Mexico is shut in. The production percentages are calculated using information submitted by offshore operators in daily reports. Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BSEE compares to historical production reports to ensure the estimates follow a logical pattern.
Facilities are currently being inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back online immediately. Facilities sustaining damage may take longer to bring back online.
Thank you, look at your VGER go!
Soon we will hear from the DOI/BOEM regarding the “Proposed Notice of Sale Package” on GOM lease sale 257.
Once we get the 2021 Fall/Winter GOM 257 lease sale under our belt, it should be smoother seas for GSPE.
Mrs. Smith
API Monthly Statistical Report ‘MSR’ released today, 9/22/2021. API Statistics Department & Office of the Chief Economist
For Data and Chart Details By Section See Link Below:
https://www.api.org/-/media/Files/News/2021/09/API_Monthly_Statistical_Report_Aug_2021.pdf
EXECUTIVE SUMMARY
In August, U.S. consumer sentiment experienced one of its sharpest drops on record since 1978, according to the University of Michigan’s consumer sentiment index. However, you would never know it from the strength of U.S. petroleum demand, which rose to 21.3 million barrels per day and exceeded its August 2019 level, which was among the strongest months in the past decade. Summer travel and freight transportation contributed positively to the monthly increase, but other oils – that is, intermediate products in refining and petrochemicals – led the rise (up 6.9% from July) and represented 27.9% of U.S. total petroleum demand.
By contrast, U.S. crude oil and natural gas liquids production fell in August despite the highest oil prices for the month since 2014. With demand that outpaced supply, crude oil inventories decreased to their lowest for the month since 2018 and to within 4.7% of the bottom of the five-year range. Additionally, the U.S. was a petroleum net importer in August and for five out of the past six months.
API’s Distillate Economic IndicatorTM suggested continued growth of U.S. industrial production and broader economic activity.
Other highlights:
– Summer driving sustained the highest gasoline demand in two years.
– Trucking drove the highest distillate demand since February 2020.
– Air travel demand propelled highest jet fuel demand since February 2020
Demand
• Strong U.S. petroleum demand (21.3 mb/d) pierced the top of the five-year range.
– Summer driving sustained the highest gasoline demand in two years.
– Trucking drove the highest distillate demand since February 2020.
– Air travel demand propelled highest jet fuel demand since February 2020.
– Solid marine shipping and residual fuel oil demand.
– Other oils demand of 5.9 mb/d a record for August.
Prices and Macroeconomy
• Highest gasoline prices for August since 2014.
• Leading indicators point towards industrial growth but consumer concerns.
Supply
• U.S. crude oil production and NGL production slipped in August.
International Trade
• U.S. petroleum net imports persisted in August.
Industry Operations
• Refinery inputs and capacity utilization edged down.
Inventories
•Lowest crude oil inventories for August since 2018.
PETROLEUM FACTS AT A GLANCE - SEPTEMBER 2021:
1. Total U.S. supply of crude oil, natural gas liquids and other liquids in August 2021: 17,603,000 b/d, up by 652,000 b/d compared with August 2020 (August 2020: 16,951,000 b/d) [API]
2. U.S. crude oil production for the month of August: 11,165,000 b/d (of which 409,000 b/d was Alaskan) (August 2020: 10,558,000 b/d). U.S. production of natural gas liquids in August 2021: 5,339,000 b/d (August 2020: 5,351,000 b/d). [API]
3. Total petroleum products delivered to the domestic market in August 2021: 21,282,000 b/d (August 2020: 18,558,000 b/d). [API]
4. Petroleum exports for the month of August: 8,274,000 b/d (August 2020: 8,550,000 b/d). [API]
5. U.S. petroleum trade balance expanded by 1,549,000 b/d to imply August 2021 net imports of 449,000 b/d (August 2020: 1,100,000 b/d net exports). [API]
https://www.api.org/-/media/Files/News/2021/09/Petroleum_Facts_at_a_Glance_August_2021.pdf
Crude oil inventories in Cushing, Oklahoma, are down more than 40% from start of 2021. Released 9/21/2021
https://www.eia.gov/todayinenergy/detail.php?id=49636
WTI $70.22/bbl September Contract 9/21/2021: https://oilprice.com/oil-price-charts/45
LLS $72.79/bbl: https://oilprice.com/oil-price-charts/45
Crude oil inventories in Cushing, Oklahoma, totaled 32.9 million barrels (excluding pipeline fill and stocks in transit by water and rail) in the week ending September 10, which is a 42% decrease since the beginning of the year. Crude oil inventories at Cushing are now 26% lower than normal, based on the previous five-year (2016–2020) average for that time of year. The Cushing storage hub is the crude oil delivery point for the NYMEX West Texas Intermediate (WTI) crude oil futures contract and is home to 14% of U.S. commercial tank and underground crude oil working storage capacity.
The storage withdrawals in Cushing are consistent with high crude oil inventory withdrawals elsewhere in the United States and globally in recent months. According to our latest Petroleum Supply Monthly, the decline of 35 million barrels (the equivalent of 1.2 million barrels per day) in June 2021 was the largest decline in U.S. crude oil inventory (including crude oil held in the Strategic Petroleum Reserve) since we began collecting this data in 1981. In general, inventories tend to decline when consumption exceeds production.
The 32.9 million barrels of crude oil in inventory on September 10 means Cushing had a storage capacity utilization of 43%. Before this year's decline in inventories, the most recent time that Cushing storage utilization had fallen that low was in late 2018, following disruptions on the Keystone Pipeline system (which extends from Canada through Cushing to export terminals on the Texas Gulf Coast) and after the Diamond Pipeline system (which runs from Cushing to Memphis, Tennessee) entered service.
Since April 2020, we have published U.S. crude oil inventory as a percentage of working U.S. storage capacity to calculate storage capacity utilization. To estimate current working storage capacity utilization, we compare weekly reported crude oil inventories with the latest available monthly refinery and tank farm storage capacity. The reported crude oil inventories exclude pipeline fill and estimated barrels in transit by tanker ship, barge, rail, or truck. These exclusions total 2.5 million barrels at Cushing in our latest estimate.
We base storage capacity utilization estimates on the ratio of reported inventories to working storage capacity, which we define as the difference in volume between the maximum safe fill capacity and the quantity below which pump suction is ineffective. Based on our latest Working and Net Available Shell Storage Capacity Report, Cushing has a storage capacity of 76.6 million barrels.
Something tells me ALL your posts are well-received.
Mrs. Smith