U.S. crude oil production forecast to decline until mid-2021 before returning to current levels (11/12/2020)

U.S. crude oil production forecast to decline until mid-2021 before returning to current levels (11/12/2020)
In the U.S. Energy Information Administration’s (EIA) November Short-Term Energy Outlook (STEO), U.S. crude oil production generally declines through the first half of 2021 and increases in the second half of the year. EIA expects that declining legacy well production will offset production from new wells in the first half of 2021, resulting in U.S. crude oil production declines. As more new wells come online later in 2021 (supported by forecast year-over-year crude oil price increases), forecast new well production reaches levels that exceed the legacy well declines, resulting in increasing crude oil production (Figure 1). ...

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EIA forecasts OPEC net oil export revenues in 2020 to be the lowest in 17 years (10/28/2020)

EIA forecasts OPEC net oil export revenues in 2020 to be the lowest in 17 years (10/28/2020)
The U.S. Energy Information Administration (EIA) expects that members of the Organization of the Petroleum Exporting Countries (OPEC) will earn about $323 billion in net oil export revenues in 2020, the lowest level in 18 years (Figure 1). EIA based this revenues estimate on forecast total petroleum liquids production—including crude oil, condensate, and natural gas plant liquids— forecast total petroleum consumption, and the crude oil price forecasts in the October 2020 Short-Term Energy Outlook (STEO). The expected decrease in export revenues compared with last year is driven by lower crude oil prices and lower export volumes. Crude oil prices have fallen as a result of lower global demand for petroleum products because of COVID-19 and associated mitigation efforts. Export volumes have also decreased as a result of high production disruptions in Libya, Iran, and, to a lesser extent, Venezuela and OPEC agreements to limit crude oil output in response to low crude oil prices. ...

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Crude oil tanker rates likely to remain low until petroleum demand increases (10/21/2020)

Crude oil tanker rates likely to remain low until petroleum demand increases (10/21/2020)
In March and April 2020, the reduced demand for crude oil and petroleum products because of responses to COVID-19 led to a sharp increase in global crude oil inventories. As onshore inventories increased, market participants turned to using oil tankers to store oil, which is typically more expensive than onshore storage. The drop in global oil demand and increased need for floating storage occurred at a time when global crude oil production (specifically from members of the Organization of the Petroleum Exporting Countries, or OPEC) and demand for crude oil tankers was high, driving up tanker rates. Tanker rates have declined significantly since peaking in March because crude oil production and demand are now more balanced. However, oil inventories in floating storage remain relatively high. ...

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Global crack spreads remain low amid slow oil demand recovery and high stocks (10/7/2020)

Global crack spreads remain low amid slow oil demand recovery and high stocks (10/7/2020)
In its latest Short-Term Energy Outlook (STEO), the U.S. Energy Information Administration (EIA) estimates that third-quarter 2020 global liquid fuels consumption averaged 94.2 million barrels per day (b/d), an increase from the second quarter but significantly lower than the same time last year. The slow recovery has contributed to low gasoline and diesel crack spreads and high petroleum product stocks in three major petroleum product trading and refining centers-the U.S. Gulf Coast, the Amsterdam-Rotterdam-Antwerp (ARA) region, and Singapore. Between April and September, the five-day moving average crack spread for each product in all regions, except for U.S. Gulf Coast gasoline, declined to their lowest levels since at least 2011 (Figure 1). September crack spreads remained significantly lower than their previous five-year (2015-19) averages. EIA has reduced its forecast for 2021 global consumption of petroleum and other liquids as a result of lowered expectations for economic growth in both 2020 and 2021, leading to a balanced global inventory outlook in 2021. ...

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

First-half 2020 U.S. crude oil exports increase year-over-year despite declines beginning in March (9/16/2020)
U.S. net imports of crude oil (imports of crude oil minus exports of crude oil) declined in the first half of 2020 compared with the first half of 2019. However, monthly net imports increased in May and June 2020 as U.S. exports declined and imports increased. U.S. crude oil exports in the first half of 2020 were higher than in the first half of 2019 despite declining since the record high in February 2020 (Figure 1). Monthly crude oil imports declined sharply in April before increasing in May and June, but U.S. crude oil imports in the first half of 2020 were much lower than levels seen during the same period in 2019. The decline in trade volume (falling exports since March and declining in imports in April) came as responses to the spread of the 2019 novel coronavirus disease (COVID-19) reduced petroleum demand. ...

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

Lowest U.S. average regular gasoline retail price heading into Labor Day weekend since 2004 (9/2/2020)
The U.S. average regular gasoline retail price as of the Monday before Labor Day weekend is $2.22 per gallon (gal) this year, the lowest level for this time of year since 2004 (Figure 1). The Labor Day holiday is typically the end of the summer driving season, the time when gasoline demand is usually greatest during the year. Because of responses to the 2019 novel coronavirus disease (COVID-19) and efforts to mitigate its spread, however, monthly U.S. gasoline consumption (as measured by product supplied) has remained less than the previous five-year (2015-19) range since March. The low price going into Labor Day 2020 reflects continued weak gasoline demand following a summer that saw reduced commuter and recreational travel activity. ...

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Flight data confirm changes in overall U.S. jet fuel consumption estimates (8/26/2020)

Flight data confirm changes in overall U.S. jet fuel consumption estimates (8/26/2020)
Global consumption of transportation fuels has trended lower during the past several months as a result of the spread of the 2019 novel coronavirus (COVID-19) and efforts to contain and mitigate it. Although total U.S. jet fuel consumption has been particularly affected by these measures, averaging 29% lower during the first five months of 2020 than during the same time last year, analysis of flight-level data provided by Cirium on commercial passenger flights suggests that demand for jet fuel in the United States is likely recovering faster than in most other major aviation markets. Increased demand for aviation services and the compartively low share of travel that crosses international borders in the United States are driving this relatively fast recovery. ...

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Aggregate and well-level data show magnitude and drivers of North Dakota's declining crude oil production (8/12/2020)

Aggregate and well-level data show magnitude and drivers of North Dakota's declining crude oil production (8/12/2020)
The sharp decline in petroleum demand caused by the 2019 novel coronavirus disease (COVID-19) and efforts to contain it has led to a similarly significant decline in the supply of petroleum in the second quarter 2020 and, by extension, crude oil production, both internationally and domestically. According to data from the U.S. Energy Information Administration (EIA), total U.S. crude oil production declined by 21.9% between December 2019 and May 2020, with the Federal Offshore Gulf of Mexico falling by 18.2%, Alaska by 16.0%, and the Lower 48 states (excluding North Dakota) by 19.4% (Figure 1). Although significant production declines were reported throughout much of the United States, North Dakota's reduction is particularly notable given its speed and severity; the state's production experienced a 41.6% decline between December 2019 and May 2020. ...

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COVID-19's impact on global commercial jet fuel demand has been significant and uneven (7/29/2020)

COVID-19's impact on global commercial jet fuel demand has been significant and uneven (7/29/2020)
Efforts to contain the 2019 novel coronavirus disease (COVID-19) have dramatically reshaped markets for key petroleum fuels, and consumption patterns for jet fuel have seen some of the largest changes. According to the International Energy Agency, global jet fuel demand averaged 8.0 million barrels per day (b/d) in 2019, which is less than both gasoil/diesel demand (28.9 million b/d) and gasoline demand (26.4 million b/d). But, air travel-and by extension jet fuel demand-has proved particularly vulnerable to the disruptions caused by COVID-19 mitigation efforts. As of July 29, 2020, of the 37 member states of the Organization for Economic Cooperation and Development (OECD), 32 are partially or completely closed to international air travel as a result of COVID-19 mitigation efforts. Only four remain free of restrictions, and one is in the process of reopening soon, according to data from travel company Booking Holdings Inc. In addition, air travel's high passenger density requirements, large share of nonbusiness travelers, and the long distances involved have further dampened demand. ...

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U.S. oil producers wrote down asset values, announced spending cuts in first quarter of 2020 (7/15/2020)

U.S. oil producers wrote down asset values, announced spending cuts in first quarter of 2020 (7/15/2020)
According to their publicly filed financial statements, 40 U.S. oil producers collectively wrote down $48 billion worth of assets in the first quarter of 2020. Low oil prices contributed to significant declines in revenue and the value of proved reserves for these companies. Writing down the value of an asset—also called an impairment—is a non-cash adjustment when a company formally acknowledges the value of an oil property has declined below the cost of developing it and the company updates the estimated fair value. First-quarter 2020 financial results also reveal steps many companies took to stabilize cash flows, including increased use of credit and announcements of significant cuts to capital expenditure budgets. ...

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