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Houston Port Now a Net Exporter of Crude Oil

The U.S. port district of Houston-Galveston in Texas recently began exporting more crude oil than it imported for the first time on record. Crude oil exports from the Houston-Galveston port district have increased since the restrictions on U.S. crude oil exports were lifted at the end of 2015.

Ongoing efforts to expand crude oil export infrastructure at the ports of Houston and Corpus Christi have allowed for increased export flows. The only other port district that has seen significant crude oil export volumes recently is the U.S. port district of Port Arthur, which includes the Texas ports of Port Arthur, Sabine, Beaumont and Orange. 


U.S. Specialty Chemicals Start 3rd Quarter Slow

The American Chemistry Council (ACC) reported that U.S. specialty chemicals market volumes started the third quarter on a modest note, increasing 0.2% in July after a 0.4% gain in June, and a 0.3% gain in May. All changes in the data are reported on a 3-month moving average (3MMA) basis. Volumes had declined in January, when weather played a role in the slow start to the year. More recently, performance chemistry appears to reflect the strength in manufacturing.

The overall specialty chemicals volume index was up 4.8% on a year-over-year (Y/Y) 3MMA basis. The index stood at 113.3% of its average 2012 levels in July. This is equivalent to 7.72 billion pounds. On a Y/Y basis, there were gains among 22 market and functional specialty chemical segments. Compared to last year, volumes were down in 6 segments. 

ACC: Tariffs Could Harm Manufacturing Supply Chain

Testifying on Section 301 tariffs for the second time in less than a month, American Chemistry Council (ACC) director of international trade, Ed Brzytwa, called on policymakers today to remove all 1,505 chemicals and plastics products, valued at approximately $16.4 billion, from U.S. ‘List 3’, or force the industry to sustain unintentional, long-term consequences that would disadvantage the U.S. as a leading supplier of chemicals and give China a chance to usurp U.S. market share. In his oral testimony, Brzytwa also expressed frustration that the Administration had not removed 152 chemicals and plastics imports from U.S. ‘List 2’ and cautioned that additional tariffs on imports from China would invite further retaliation and send U.S. manufacturing into a tailspin from which it may not be able to fully recover. 

U.S. Cuts Oil Output Outlook

The U.S. Energy Information Administration (EIA) forecasts total global liquid fuels inventories to decrease by 0.2 million b/d in 2018 compared with 2017, followed by an increase of 0.3 million b/d in 2019. This outlook of relatively stable inventory levels over the forecast period contributes to a forecast of monthly average Brent crude oil prices remaining relatively stable between $70/b and $73/b, from August 2018 through the end of 2019. EIA estimates that U.S. crude oil production averaged 10.8 million barrels per day (b/d) in July, up 47,000 b/d from June.

“Because crude oil production is forecast to be lower in 2018, it lowered the overall output forecast for 2019,” said Tim Hess, a product manager for the EIA’s Short-Term Energy Outlook. “The lower forecast for output this year reflects slightly slower than expected growth in middle quarters of this year, possibly related to pipeline constraints out of the Permian basin that have reduced wellhead prices in the region.” 

Mexico to Spend $11 Billion on Refineries

“Mexican President-elect Andres Manuel Lopez Obrador said his administration will invest more than $11 billion to boost refining capacity in order to curb growing fuel imports,” Reuters  reports.

Lopez Obrador told reporters “his government plans to invest $2.6 billion to modernize existing domestic refineries owned and operated by national oil company Pemex and spend another $8.4 billion to build a new one within three years.” 

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