05242018Thu
Last updateThu, 24 May 2018 12pm

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LNG, Ethanol Sellers Buoyed by China Trade Talk

“China's interest in reducing its trade surplus with the United States through increased energy imports could advance plans for U.S. liquefied natural gas (LNG) plants and ethanol sales, said analysts and energy executives involved in developing new LNG facilities.”

Reuters  reports that “more than two dozen proposed U.S. LNG plants waiting for customer commitments to reach a final investment decision, many of them looking to China for deals.” 


Chemical Activity Up as Pace of Growth Slows

The Chemical Activity Barometer (CAB) from the American Chemistry Council (ACC), rose 0.1% on a three-month moving average (3MMA) basis in May to 121.9. The barometer is up 3.9% on a 3MMA compared to a year earlier. The unadjusted CAB showed a second consecutive month of gains, up 0.2% in May and also up 3.9% year-over-year.

May production-related indicators gained as trends in construction-related pigments and related performance chemistries strengthened along with plastic resins used in packaging. U.S. exports also continued to rise. Equity prices, along with product and input prices also strengthened while inventory remained positive. 

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 2017, reaching a record high. The U.S. has been the world's top producer of natural gas since 2009, when U.S. natural gas production surpassed that of Russia, and the world's top producer of petroleum hydrocarbons since 2013, when U.S. production exceeded Saudi Arabia’s. Since 2008, U.S. petroleum and natural gas production has increased by nearly 60%.

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

U.S. Petroleum Demand Sustains Highest Levels in 11 Years

The American Petroleum Institute reported that the first four months of this year saw U.S. petroleum demand average 750 thousand barrels a day above the same period in 2017 despite higher prices, a sign of solid economic activity. April also saw the U.S. produce a record 10.5 million barrels per day of oil.

Strong global demand raised international oil prices by more than domestic ones. Domestic WTI crude oil prices averaged $66.25 per barrel in April, up by 5.6% from March and 29.7% versus April 2017. Meanwhile, international Brent crude oil prices continued to increase. 

Outside of U.S., Natural Gas Outlook Diminishing

The mood in the natural gas industry, at least outside the U.S., is not as optimistic as it once was. According to the International Energy Agency (IEA), demand has slowed considerably for most of the period since 2011, from an average of 2.8% per year between 2000 and 2010, to 1.4% per year from 2011-2016; lower prices squeezed revenues; traditional business models have been questioned without anyone being sure what will take their place; and the competitive landscape has become significantly more complex, as the traditional sparring partners for gas – coal and, to a lesser extent, oil – have been joined by the rising forces of renewables and energy efficiency. 

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