Last updateFri, 27 May 2016 2pm


U.S. Still Top Producer of Petroleum, Natural Gas Hydrocarbons

The U.S. remained the world's top producer of petroleum and natural gas hydrocarbons in 2015, according to U.S. Energy Information Administration estimates. U.S. petroleum and natural gas production first surpassed Russia in 2012, and the U.S. has been the world's top producer of natural gas since 2011 and the world's top producer of petroleum hydrocarbons since 2013.

For the U.S. and Russia, total petroleum and natural gas hydrocarbon production, in energy content terms, is almost evenly split between petroleum and natural gas. Saudi Arabia's production, on the other hand, heavily favors petroleum. 

Why $50/Barrel Oil Means Stability to U.S. Producers

The rise to $50-per-barrel oil means a return to stability, particularly for domestic shale producers, according to Dan K. Eberhart, CEO, Canary, LLC. At this level, companies that saw the value of their product drop more than 75% in less than two years might have the confidence to resume drilling activities – and the resources to begin repairing ailing balance sheets.

ITG Investment Research concluded that in a few areas in the Eagle Ford shale and Permian Basin in Texas, drilling was possible even if crude prices dropped to $25 per barrel. However, a period of sub-$50 prices squeezed operating costs and idled rigs, although efficiency gains allowed production to increase even as the rig count continued to fall. 

Oil Industry Expects Cuts for Record Third Straight Year

According to Statoil ASA, “[g]lobal crude supplies will start to dwindle in as little as two years, boosting prices, as the industry cuts investment to weather the worst market collapse in a generation,” Bloomberg reports.

“Despite signs the supply glut is easing, companies are preparing for a prolonged downturn. The industry reduced capital spending by 24% last year and is expected to cut it by another 17% to about $330 billion this year, the International Energy Agency said in February. Oil fields require constant investment to maintain production, and in 2016, for the first time in years, drillers will add less oil from new fields than they lose through natural decline in old ones, according to Oslo-based Rystad Energy AS.”  

House Approves Overhaul of Toxic Substances Control Law

The U.S. House of Representatives, by a vote of 403-12, passed a reform of the nation's chemical safety law, the Toxic Substances Control Act of 1976 (TSCA). It enables the EPA to regulate the thousands of chemicals manufactured each year and used in common household items -- including known carcinogens and highly toxic substances, like formaldehyde, asbestos, lead, flame retardants and BPA. The Senate is expected to vote later this week and the White House has indicated that the president will sign the bill, hopefully by Memorial Day. 

Petrochemical Boom in Gulf Contributing to Global Plastics Glut

A surge in new plastics chemical capacity coming from low-cost producers in North America (specifically the U.S. Gulf Coast), the Middle East and China is driving the global market for key plastics polyethylene (PE) and polypropylene (PP) to oversupply, which will pressure margins for producers and change the global competitive landscape, according to new analysis from IHS.

IHS estimates that more than 24 million metric tons (MMT) of new PE capacity will be added globally during the 2015 to 2020 timeframe –more than one-third of that, approximately 8 MMT--will come from the U.S., which will significantly increase the U.S. net-export position for PE and PP and other chemicals, rebalancing the global chemical trade flows that have favored the Middle East for decades. 


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