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Last Updated: April 19, 2018
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Headline crude prices for the week beginning 16 April 2017 – Brent: US$71/b; WTI: US$66/b

  • Military action is Syria boosted crude oil prices last week, as the industry fretted that the US-led strikes on Syrian chemical weapons targets could spill over in a long-lasting conflict between the US and Russia.
  • Brent jumped as high as US$73/b and WTI to US$68/b as American, British and French missiles struck Syrian targets; but by the end of the week, it was clear that the strikes had stopped, leading to a more muted start to the week.
  • The US-China trade spat also continues, with China targeting American sorghum exports with a 141.7% duty in response to the US banning sales of equipment to a Chinese telco company. Though smaller in scale than previous threats, this also shows that the risk of a trade war is there.
  • As prices abated from last week’s high at the start of this week, Iran’s Oil Minister Bijan Zangeneh stated that US$60/b is a ‘good price’ for oil, adding that the market should focus on stability and not volatility. He believes US$70/b Brent is ‘too high’, given that it encourages additional American shale drilling.
  • Previously confined to Saudi Arabia and Russia, other OPEC members like the UAE are speaking up about the benefits of a long-term alliance between OPEC and the 24-country NOPEC block led by the Russia.
  • Kuwait kept open the possibility of extending the current supply agreements – which expires December 2018 -  depending on ‘the strength of market conditions’.
  • American output continues to rise, with the EIA predicting a 125,000 barrel climb in May, while US crude inventories came in lower.
  • Seven new oil rigs entered service in the US last week, bringing the total active rig count up to 1008, as drillers continued to respond to strong price signals.
  • Crude price outlook: Prices should ease given that military tensions are abating, with Brent likely to move down to US$70/b and WTI/Shanghai to US$64/b.

Headlines of the week


  • Fresh off selling stakes in key oilfields to international partners to revitalise its upstream, ADNOC will be launching its first ever oil and gas auction, offering six blocks – two offshore, four onshore.
  • Kenya’s National Oil Corporation has tapped Schlumberger to create a development plan for oil reserves discovered in the Lokichar basin in 2012, to be used to evaluate work by Tullow and Maersk in the area.
  • Kinder Morgan Canada has suspended almost all work on the US$5.8 billion expansion of the Trans Mountain pipeline, connecting Alberta to British Columbia, as the resource transport industry complains about challenges to building new infrastructure in Canada.
  • Repsol has struck oil in Gabon, reporting encouraging assessments from the Ivela-1 well in the Luna Muetse block, part of the Lower Congo Basin.
  • Canada will be offering 16 new offshore blocks in an upcoming auction round, include the first ever licence from Newfoundland & Labrador.


  • Just after its joint venture with Petronas in Malaysia’s RAPID refinery has been confirmed, Saudi Aramco is now looking to take a stake in a massive oil refinery in India’s western coast. Aramco could take some 50% of the 1.2 mmb/d joint venture project between India’s three state oil firms .
  • Uganda has enlisted a consortium, which includes General Electric, to build and operate a US$3-4 billion 60 kb/d oil refinery in western Uganda, that could make use of crude reserves discovered in the Albertine basin.

Natural Gas/LNG

  • BP is moving ahead with the second phase of the giant Khazzan natural gas field in Oman, with Ghazeer planned to produce some 1 bcf/d of gas and around 35,000 b/d of condensate by 2021.
  • The US LNG export industry is heating up. With Cheniere’s Sabine Pass and Dominion Energy’s Cove Point now operational, Texas LNG aims to be next, having signed 8 non-binding sales deals with potential buyers – 5 in China, 2 in Southeast Asia and 1 in Europe – for its Brownsville project.
  • China is cutting the revenue tax for its shale gas sector by 30% in a bid to increase development of unconventional resources.
  • Egypt remains a hotbed of new discoveries, as SDX Energy announced its struck gas at the Ibn Yunus-1X well in the onshore South Disouq block.
  • India’s GAIL will be purchasing an additional 500,000 tons or 8 LNG cargos from Russia’s Gazprom in the 2018/19 period, beginning May.
  • Although Germany is still pushing for the Nord Stream 2 gas pipeline to go ahead, Angela Merkel has now stated that the project will not pass unless clarity is given on ‘Ukraine’s role as a transit route for gas.’
  • ExxonMobil is reportedly in talks with Qatar in a deal that could see the latter investing ExxonMobil’s American shale resources, which would be the first time a Middle Eastern country invested significantly in US shale.
  • PTTEP has officially been handed the SK410B and SK316 shallow water blocks in Sarawak, as the Thai first pushes further into international upstream, having already taken a 10% stake in MLNG Train 9.
  • Chevron is proceeded with its planned second stage of the Gorgon LNG project in Australia, beginning to drill new subsea wells to expand supply.

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The United States consumed a record amount of renewable energy in 2019

In 2019, consumption of renewable energy in the United States grew for the fourth year in a row, reaching a record 11.5 quadrillion British thermal units (Btu), or 11% of total U.S. energy consumption. The U.S. Energy Information Administration’s (EIA) new U.S. renewable energy consumption by source and sector chart published in the Monthly Energy Review shows how much renewable energy by source is consumed in each sector.

In its Monthly Energy Review, EIA converts sources of energy to common units of heat, called British thermal units (Btu), to compare different types of energy that are more commonly measured in units that are not directly comparable, such as gallons of biofuels compared with kilowatthours of wind energy. EIA uses a fossil fuel equivalence to calculate primary energy consumption of noncombustible renewables such as wind, hydro, solar, and geothermal.

U.S. renewable energy consumption by sector

Source: U.S. Energy Information Administration, Monthly Energy Review

Wind energy in the United States is almost exclusively used by wind-powered turbines to generate electricity in the electric power sector, and it accounted for about 24% of U.S. renewable energy consumption in 2019. Wind surpassed hydroelectricity to become the most-consumed source of renewable energy on an annual basis in 2019.

Wood and waste energy, including wood, wood pellets, and biomass waste from landfills, accounted for about 24% of U.S. renewable energy use in 2019. Industrial, commercial, and electric power facilities use wood and waste as fuel to generate electricity, to produce heat, and to manufacture goods. About 2% of U.S. households used wood as their primary source of heat in 2019.

Hydroelectric power is almost exclusively used by water-powered turbines to generate electricity in the electric power sector and accounted for about 22% of U.S. renewable energy consumption in 2019. U.S. hydropower consumption has remained relatively consistent since the 1960s, but it fluctuates with seasonal rainfall and drought conditions.

Biofuels, including fuel ethanol, biodiesel, and other renewable fuels, accounted for about 20% of U.S. renewable energy consumption in 2019. Biofuels usually are blended with petroleum-based motor gasoline and diesel and are consumed as liquid fuels in automobiles. Industrial consumption of biofuels accounts for about 36% of U.S. biofuel energy consumption.

Solar energy, consumed to generate electricity or directly as heat, accounted for about 9% of U.S. renewable energy consumption in 2019 and had the largest percentage growth among renewable sources in 2019. Solar photovoltaic (PV) cells, including rooftop panels, and solar thermal power plants use sunlight to generate electricity. Some residential and commercial buildings heat with solar heating systems.

October, 20 2020
Natural gas generators make up largest share of U.S. electricity generation capacity

operating natural-gas fired electric generating capacity by online year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Based on the U.S. Energy Information Administration's (EIA) annual survey of electric generators, natural gas-fired generators accounted for 43% of operating U.S. electricity generating capacity in 2019. These natural gas-fired generators provided 39% of electricity generation in 2019, more than any other source. Most of the natural gas-fired capacity added in recent decades uses combined-cycle technology, which surpassed coal-fired generators in 2018 to become the technology with the most electricity generating capacity in the United States.

Technological improvements have led to improved efficiency of natural gas generators since the mid-1980s, when combined-cycle plants began replacing older, less efficient steam turbines. For steam turbines, boilers combust fuel to generate steam that drives a turbine to generate electricity. Combustion turbines use a fuel-air mixture to spin a gas turbine. Combined-cycle units, as their name implies, combine these technologies: a fuel-air mixture spins gas turbines to generate electricity, and the excess heat from the gas turbine is used to generate steam for a steam turbine that generates additional electricity.

Combined-cycle generators generally operate for extended periods; combustion turbines and steam turbines are typically only used at times of peak load. Relatively few steam turbines have been installed since the late 1970s, and many steam turbines have been retired in recent years.

natural gas-fired electric gnerating capacity by retirement year

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Not only are combined-cycle systems more efficient than steam or combustion turbines alone, the combined-cycle systems installed more recently are more efficient than the combined-cycle units installed more than a decade ago. These changes in efficiency have reduced the amount of natural gas needed to produce the same amount of electricity. Combined-cycle generators consume 80% of the natural gas used to generate electric power but provide 85% of total natural gas-fired electricity.

operating natural gas-fired electric generating capacity in selected states

Source: U.S. Energy Information Administration, Annual Electric Generator Inventory

Every U.S. state, except Vermont and Hawaii, has at least one utility-scale natural gas electric power plant. Texas, Florida, and California—the three states with the most electricity consumption in 2019—each have more than 35 gigawatts of natural gas-fired capacity. In many states, the majority of this capacity is combined-cycle technology, but 44% of New York’s natural gas capacity is steam turbines and 67% of Illinois’s natural gas capacity is combustion turbines.

October, 19 2020
EIA’s International Energy Outlook analyzes electricity markets in India, Africa, and Asia

Countries that are not members of the Organization for Economic Cooperation and Development (OECD) in Asia, including China and India, and in Africa are home to more than two-thirds of the world population. These regions accounted for 44% of primary energy consumed by the electric sector in 2019, and the U.S. Energy Information Administration (EIA) projected they will reach 56% by 2050 in the Reference case in the International Energy Outlook 2019 (IEO2019). Changes in these economies significantly affect global energy markets.

Today, EIA is releasing its International Energy Outlook 2020 (IEO2020), which analyzes generating technology, fuel price, and infrastructure uncertainty in the electricity markets of Africa, Asia, and India. A related webcast presentation will begin this morning at 9:00 a.m. Eastern Time from the Center for Strategic and International Studies.

global energy consumption for power generation

Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)

IEO2020 focuses on the electricity sector, which consumes a growing share of the world’s primary energy. The makeup of the electricity sector is changing rapidly. The use of cost-efficient wind and solar technologies is increasing, and, in many regions of the world, use of lower-cost liquefied natural gas is also increasing. In IEO2019, EIA projected renewables to rise from about 20% of total energy consumed for electricity generation in 2010 to the largest single energy source by 2050.

The following are some key findings of IEO2020:

  • As energy use grows in Asia, some cases indicate more than 50% of electricity could be generated from renewables by 2050.
    IEO2020 features cases that consider differing natural gas prices and renewable energy capital costs in Asia, showing how these costs could shift the fuel mix for generating electricity in the region either further toward fossil fuels or toward renewables.
  • Africa could meet its electricity growth needs in different ways depending on whether development comes as an expansion of the central grid or as off-grid systems.
    Falling costs for solar photovoltaic installations and increased use of off-grid distribution systems have opened up technology options for the development of electricity infrastructure in Africa. Africa’s power generation mix could shift away from current coal-fired and natural gas-fired technologies used in the existing central grid toward off-grid resources, including extensive use of non-hydroelectric renewable generation sources.
  • Transmission infrastructure affects options available to change the future fuel mix for electricity generation in India.
    IEO2020 cases demonstrate the ways that electricity grid interconnections influence fuel choices for electricity generation in India. In cases where India relies more on a unified grid that can transmit electricity across regions, the share of renewables significantly increases and the share of coal decreases between 2019 and 2050. More limited movement of electricity favors existing in-region generation, which is mostly fossil fuels.

IEO2020 builds on the Reference case presented in IEO2019. The models, economic assumptions, and input oil prices from the IEO2019 Reference case largely remained unchanged, but EIA adjusted specific elements or assumptions to explore areas of uncertainty such as the rapid growth of renewable energy.

Because IEO2020 is based on the IEO2019 modeling platform and because it focuses on long-term electricity market dynamics, it does not include the impacts of COVID-19 and related mitigation efforts. The Annual Energy Outlook 2021 (AEO2021) and IEO2021 will both feature analyses of the impact of COVID-19 mitigation efforts on energy markets.

Asia infographic, as described in the article text

Source: U.S. Energy Information Administration, International Energy Outlook 2020 (IEO2020)
Note: Click to enlarge.

With the IEO2020 release, EIA is publishing new Plain Language documentation of EIA’s World Energy Projection System (WEPS), the modeling system that EIA uses to produce IEO projections. EIA’s new Handbook of Energy Modeling Methods includes sections on most WEPS components, and EIA will release more sections in the coming months.

October, 16 2020