Posted on 11/07/2018 9:11:14 AM PST by dangus
The U.S. will become a net exporter of oil if our production of oil increases again as much as it has since last December. It's increased TWO MILLION barrels per day, or over TWENTY PERCENT.
What truly astounded me when I saw this week's data was that the price of oil has been crashing. That tends to depress production by making more expensive means of oil production less profitable. And well, I've never heard oil professionals put it in such terms, but not extracting oil is one way creating a reserve; you never want to sell a non-spoiling commodity at a low point in its price. (If I'm wrong about that, and there's someone in the industry who can correct that, please let me know. But the main point is that oil production goes up less quickly or down more quickly when oil prices drop.)
Three weeks ago, the U.S. produced 10.9 million barrels of oil per day. That was down slightly from 11.2 million a few weeks earlier. But last week, the U.S. produced 11.6 million barrels of oil. As in a single week, we smashed our record oil production by almost half a million barrels of oil in one week!
Last week, we imported about 2.1 million barrels of oil, while slightly building up our oil reserves. Our four-week average of oil imports is actually below 2 million, even though our average production over that time was more than half a million barrels of oil less than it was last week. So we'll probably become a net exporter of oil if we increase our oil production by another two million barrels.
Prior to the Brazilian election, I thought we could easily do that in two years. Now, Brazil looks to be rapidly expanding THEIR oil production, which will reduce the price, and thus whether more expensive production techniques will remain profitable. So I was beginning to hedge my bets inside my own mind about whether we'd reach that. But can you imagine if we became net exporters of oil before the next presidential elections?
1) Our economy would no longer be vulnerable to increases in the cost of oil. That means that if the Saudis or Iranians or Russians want to play hardball, we can go tell them to drill themselves.
2) Of course, there's the direct effect on the trade balance. Suppose we import 5 million fewer barrels of oil after the first four Trump years. Even at only $60 a barrel, that's $109 billion dollars lower trade deficit.
3) Then there's the indirect effect. As it is, we either have to ship manufactured products, or we have to ship the oil used to build them; either way we have to pay for shipping, whether we build at home or build overseas. Not any more.
4) ... and of course, reducing the price of domestic production is always a further boon to the economy.
Good info; thanks!
>> We consume in the range of 19 million barrels a day. We produce less than 12 million barrels per day. <<
Not really. Of what we “consume,” 6 million barrels are for export products (such as gasoline, chemical products, etc.) Our net imports of oil are less than 2 million barrels per day, lately.
But it’s worth noting that until we reach 19 million barrels, cheap oil will be beneficial for our economy. As opposed to OPEC nations, Russia, Mexico, etc., which root for expensive oil.
It looks like we both got some numbers wrong.
I think this is the data source you used:
https://www.eia.gov/petroleum/supply/weekly/pdf/table1.pdf
My claim that we consume around 19 mbd of crude oil came from the EIA summary for 2017, which was 19-20 mbd.
I'm thinking now that EIA’s 2017 number was for crude oil PLUS natural gas liquids and all the other liquids.
Your statement that we imported 2.1 mbd of crude oil last week, and that the four week average is less than 2 mbd, is not what EIA’s data chart says.
The chart says that Net Imports of crude were 5.1 mbd last week, and the four week average was 5.3 mbd.
In other words, we would need to increase our domestic production of crude almost 50% to reach energy independence.
“Oil prices crashing??????
Could have fooled me.”
Have you bought gas this week? In my area the price per gallon is down .20 or more this week
I buy gas and diesel weekly (125 round trip to work every day) and gas has been $2.79/gal here in NH for about a month or more.
Diesel has kept going up slowly since Oct and now is $3.25/gal and has been for about 3 weeks (tough on the wallet when you have a 52 gal tank on the truck).
Nope. My numbers were correct. Look at the last row, “Net Imports of Crude and Petroleum Products.” 2,106 thousands barrels per day. The difference between that number and the 5.1 million you’re seeing is that in addition to importing 5.1 million barrels of oil (net), we EXPORT 3.028 million barrels of oil products (net), such as gasoline.
IOW: We import a net of 5.1 million barrels of oil, but 3.028 million barrels are not for the domestic market, but for exporting refined products. We refine oil for other countries because the oil we produce is usually unnecessarily sweet, so it can be blended with other nation’s sour stuff, and, well, we’re really good at it.
Gas prices are affected by what tax is on each gallon and where you live. Some states charge 45-50 cents per gallon. Refiners are required to make different blends depending on the region of the country. If that blend is in short supply, up goes the price.
IF the frikking EPA would standardize on one blend for the whole country, we wouldn’t see such fluctuations.
Here in Oklahoma City say $2.15 at a Seven Eleven yesterday.
Location is probably the reason you’re not seeing price reduction. It’s been fairly stable in TN since the summer 2.49-2.59 a gallon. The last two weeks it dropped rapidly
Looks like the Gas Station owners are keeping it up high for extra profits.
They were trying to foment discontent during the run-up to the election. Now that the blue ripple has died out, there is no longer any need.
ALL my comments have been about crude oil.
You are combining crude oil exports with the exports of natural gas liquids, ethanol, and other renewable fuels.
Almost 50% of our domestic production of petroleum liquids is exported.
As far as I know, all of our gasoline, jet fuel, and heating oil comes from crude oil - which is why I focus on crude.
As I said before, our net import of crude oil is 5.1 mbd to 5.3 mbd.
It’s not how big your tank is, it’s how much you’re driving
Bump
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