In the first half of 2019, the United States exported an average of 5.47 million barrels per day (b/d) of petroleum products, an increase of 19,000 b/d (0.3%) from the first half of 2018 and the slowest year-over-year growth rate for any half year in 13 years. Two factors that likely contributed to lower exports were lower U.S. refinery runs in the first half of 2019 compared with the first half of 2018 and slowing global economic growth, which is limiting demand for petroleum products. In the first half of 2019, increased exports of propane and distillate offset decreased exports of all other petroleum products.
Distillate remained the largest U.S. petroleum product export in the first half of 2019, averaging 1.3 million b/d, an increase of 60,000 b/d (5%) compared with the first half of 2018. Distillate has many uses, including transportation, manufacturing, agriculture, and residential, and commercial activities.
Mexico was the largest destination for U.S. distillate exports during the first half of 2019, receiving 290,000 b/d, or 22% of total U.S. distillate exports. Aside from Mexico, U.S. distillate exports go mostly to Central and South America, including Brazil (13%), Chile (7%), and Peru (5%). U.S. distillate exports also go to Europe, mostly to the Netherlands (4%), which is a transshipment country for some of the U.S. distillate volumes.
Source: U.S. Energy Information Administration, Petroleum Supply Monthly
Propane was the second-largest U.S. petroleum product export in the first half of 2019, at 1.03 million b/d, an increase of 142,000 b/d (16%) from the first half of 2018. Propane is used as a space heating and transportation fuel and as a petrochemical feedstock. Most U.S. exports of propane are destined for use as a petrochemical feedstock, mainly at facilities in Asia and Europe.
Source: U.S. Energy Information Administration, Petroleum Supply Monthly
U.S. residual fuel exports declined the most between the first half of 2019 and the first half of 2018, falling by 74,000 b/d to average 258,000 b/d. In the first half of 2018, Singapore was the top destination for U.S. residual fuel exports, most likely to supply Singapore’s marine bunkering market. However, in the first half of 2019, trade press reported that Singapore’s bunker market was preparing for new international regulations that limit the sulfur content of marine fuels by drawing down higher sulfur residual inventories to make room for inventories that are lower in sulfur. As a result, average U.S. exports of residual fuel oil to Singapore decreased 68,000 b/d (80%) in the first half of 2019 compared with the first half of 2018.
EIA forecasts that continued growth in petroleum product exports, albeit slower than in previous years, combined with increasing U.S. crude oil exports, will result in the United States becoming a total petroleum net exporter. The U.S. Energy Information Administration’s (EIA) October 2019 Short-Term Energy Outlook forecasts this change to occur in the fourth quarter of 2019.
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In the U.S. Energy Information Administration’s (EIA) November Short-Term Energy Outlook (STEO), EIA forecasts that U.S. crude oil production will remain near its current level through the end of 2021.
A record 12.9 million barrels per day (b/d) of crude oil was produced in the United States in November 2019 and was at 12.7 million b/d in March 2020, when the President declared a national emergency concerning the COVID-19 outbreak. Crude oil production then fell to 10.0 million b/d in May 2020, the lowest level since January 2018.
By August, the latest monthly data available in EIA’s series, production of crude oil had risen to 10.6 million b/d in the United States, and the U.S. benchmark price of West Texas Intermediate (WTI) crude oil had increased from a monthly average of $17 per barrel (b) in April to $42/b in August. EIA forecasts that the WTI price will average $43/b in the first half of 2021, up from our forecast of $40/b during the second half of 2020.
The U.S. crude oil production forecast reflects EIA’s expectations that annual global petroleum demand will not recover to pre-pandemic levels (101.5 million b/d in 2019) through at least 2021. EIA forecasts that global consumption of petroleum will average 92.9 million b/d in 2020 and 98.8 million b/d in 2021.
The gradual recovery in global demand for petroleum contributes to EIA’s forecast of higher crude oil prices in 2021. EIA expects that the Brent crude oil price will increase from its 2020 average of $41/b to $47/b in 2021.
EIA’s crude oil price forecast depends on many factors, especially changes in global production of crude oil. As of early November, members of the Organization of the Petroleum Exporting Countries (OPEC) and partner countries (OPEC+) were considering plans to keep production at current levels, which could result in higher crude oil prices. OPEC+ had previously planned to ease production cuts in January 2021.
Other factors could result in lower-than-forecast prices, especially a slower recovery in global petroleum demand. As COVID-19 cases continue to increase, some parts of the United States are adding restrictions such as curfews and limitations on gatherings and some European countries are re-instituting lockdown measures.
EIA recently published a more detailed discussion of U.S. crude oil production in This Week in Petroleum.
The U.S. Energy Information Administration (EIA) forecasts that members of the Organization of the Petroleum Exporting Countries (OPEC) will earn about $323 billion in net oil export revenues in 2020. If realized, this forecast revenue would be the lowest in 18 years. Lower crude oil prices and lower export volumes drive this expected decrease in export revenues.
Crude oil prices have fallen as a result of lower global demand for petroleum products because of responses to COVID-19. Export volumes have also decreased under OPEC agreements limiting crude oil output that were made in response to low crude oil prices and record-high production disruptions in Libya, Iran, and to a lesser extent, Venezuela.
OPEC earned an estimated $595 billion in net oil export revenues in 2019, less than half of the estimated record high of $1.2 trillion, which was earned in 2012. Continued declines in revenue in 2020 could be detrimental to member countries’ fiscal budgets, which rely heavily on revenues from oil sales to import goods, fund social programs, and support public services. EIA expects a decline in net oil export revenue for OPEC in 2020 because of continued voluntary curtailments and low crude oil prices.
The benchmark Brent crude oil spot price fell from an annual average of $71 per barrel (b) in 2018 to $64/b in 2019. EIA expects Brent to average $41/b in 2020, based on forecasts in EIA’s October 2020 Short-Term Energy Outlook (STEO). OPEC petroleum production averaged 36.6 million barrels per day (b/d) in 2018 and fell to 34.5 million b/d in 2019; EIA expects OPEC production to decline a further 3.9 million b/d to average 30.7 million b/d in 2020.
EIA based its OPEC revenues estimate on forecast petroleum liquids production—including crude oil, condensate, and natural gas plant liquids—and forecast values of OPEC petroleum consumption and crude oil prices.
EIA recently published a more detailed discussion of OPEC revenue in This Week in Petroleum.
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.
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.