03262019Tue
Last updateTue, 26 Mar 2019 2pm

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U.S. Specialty Chemicals Market Starts 2019 on Mixed Note

The American Chemistry Council (ACC) reported that U.S. specialty chemicals market volumes started 2019 on a mixed note, rising 0.3% in January after a 0.5% gain in December, and a 0.3% gain in November. All changes in the data are reported on a three-month moving average (3MMA) basis.

During January, the overall specialty chemicals volume index was up 5.2% on a year-over-year 3MMA basis. The index stood at 115.3% of its average 2012 levels in January. 


Expect Record High U.S. Crude Oil Production Through 2020

The U.S. Energy Information Administration’s (EIA) February 2019 update of its Short-Term Energy Outlook (STEO) forecasts that U.S. crude oil production will average 12.4 million barrels per day (b/d) in 2019 and 13.2 million b/d in 2020. If realized, both of these forecast levels would surpass the record high of 11.0 million b/d set in 2018, keeping the U.S. as the world’s largest producer of crude oil. Overall U.S. crude oil production increases are largely the result of continued production growth in the tight-oil formations in the Permian region, as well as the expectation for 19 new projects to start in 2019 and 2020 in the Federal Offshore Gulf of Mexico. 

Power Blocks in Combined-Cycle Plants Getting Bigger

Since 2014, the average size of a natural gas-fired combined-cycle power block has increased significantly. The average combined-cycle power block installed between 2002 and 2014 was about 500 MW. After 2014, power block capacity increased, reaching an average of 820 MW in 2017. Power blocks have increased in size as the performance of combined-cycle units has continued to improve, and current and projected natural gas prices and supply provide a competitive advantage for the combined-cycle technology. The most common configuration involves two combustion turbines supporting one steam turbine. 

U.S. Petroleum Industry Again Has Historic Month

Coming off a remarkable December, the energy industry kicked off 2019 with record-setting numbers. The American Petroleum Institute’s latest Monthly Statistical Report (MSR) shows the U.S. natural gas and oil industry set multiple records in January, including the strongest gasoline demand (8.9 million b/d) for the month January on record since 1945. There was also record U.S. production of crude oil (11.9 million b/d) and natural gas liquids (NGLs) (4.9 million b/d). 

Oil Price Drop Won’t Cause Sector Collapse in 2019

By many accounts, 2018 was a good year for the U.S. oil sector. U.S. oil production grew by 1.6 million barrels per day—a record annual increase—and by year-end, the U.S. was the world’s No. 1 crude oil producer.

Results from the recent Dallas Fed Energy Survey suggest that a dramatic contraction in activity, as occurred during the last bust, appears unlikely. While activity levels plateaued in fourth quarter 2018, and uncertainty about the outlook is up dramatically, capital spending in 2019 is likely to remain close to prior-year levels, precluding a dramatic contraction in activity. 

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