Last updateWed, 18 Jul 2018 2pm


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. 

ExxonMobil, BASF Form Gas Treating Alliance

ExxonMobil Catalysts and Licensing LLC and BASF Corporation have signed an alliance agreement to jointly develop new gas treating solvents and process technologies for use in natural gas processing and petroleum refining. Under this new agreement, BASF will market and license technologies developed from this collaboration, along with FLEXSORBTM and OASE technologies. The alliance aims to increase capacity, reduce energy consumption and meet tighter sulfur specifications. 

Oil & Gas Exploration Activity Picking Up in 2018

According to the latest State of Exploration Report from Westwood Global Energy Group, there’s renewed optimism for exploration in 2018, driven by higher oil prices and improving exploration performance. The cost of exploring has fallen more than 50% since 2013/14 and there are fewer companies competing for acreage. The geology economic to explore increases considerably above $60/b and in the first quarter of 2018 the oil price averaged $67/b. Success rates have improved as lower exploration budgets have led to companies being more selective.

For 2018, exploration drilling is expected to increase by 12% and budgets by 7%, with around 60 high impact wells planned globally for the remainder of 2018 focused in the Atlantic margins, Gulf of Mexico and the Caribbean. 

East Coast Refiners Turn to Texas for Cheaper Oil

“U.S. East Coast refiners are shipping more shale oil from the Gulf Coast thanks to heavy discounts for West Texas crude and are also looking to bring more via rail, but supply bottlenecks are making it difficult to secure more barrels,” Reuters  reports.

“Pipelines from west Texas to the Gulf Coast are full, and developers will not finish new lines until next year. Rail terminals are nearly all dedicated to bringing supplies to shale producers such as the huge volume of sand used to extract oil from the ground. In the last seven years, crude has gone to the East Coast by rail in just one month - June of last year.” 



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