The American Petroleum Institute (API) released its industry outlook for the third quarter of 2018. The report shows the US achieved another new record for crude oil production of 10.8 million barrels per day (MBD) over the past two months. However, US petroleum exports decreased by 1.3 million barrels per day since June.
Overall, US’s petroleum trade balance went from net imports of 2.9 MBD in June to 4.54 MBD in August, which is a 56% increase in two months.
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Nevertheless, API Chief Economist Dean Foreman, said that the ongoing trade war between the US and China, limits US’s access to crude export markets.
While the picture is still a bit muddied, it seems to be getting clearer – the trade war appears to be limiting the United States’ access to crude export markets.
Namely, prices of many tubular and specialty steel products, which are main inputs to pipelines, refineries and natural gas liquefaction and petrochemical facilities, increased by more than 25% as import tariffs were imposed on them.
The Q3 report also addressed key uncertainties for the economy and energy markets:
- Remarkable progress in production so far in 2018, but headwinds with lower consensus growth expectations, rising price inflation, interest rates, trade barriers & disputes, and financial market uncertainties – and a flight to safety in the US dollar that could trigger global credit downgrades.
- Global oil markets appeared at a slight deficit in Q3 2018, without further OPEC actions. With Asia Pacific accounting for the largest growth in U.S. petroleum exports this year, the recent drop-off in U.S. petroleum exports warrants monitoring.
- U.S. natural gas quietly achieved 12 percent annual growth in Q3, but appears demand was limited by potential coal & nuclear power subsides, global LNG market conditions, escalating trade disputes, and improved competitiveness by renewables.
In addition, the latest API Monthly Statistical Report showed a record 18 million barrels a day of refined products produced for August. US liquid fuels production remained up by more than 2.0 MBD year-over-year in August, and the US continued to supply virtually all global oil demand growth and compensate for production losses in some OPEC nations.
During August, US.petroleum demand increasedy 250 thousand barrels per day from July to 20.8 million barrels per day.
As for September, MSR says that the following are the month’s highlights:
- U.S. petroleum demand accelerated to 20.8 million barrels a day;
- Gasoline demand notches its third highest August on record since 1945;
- Strongest jet fuel demand year-to-date since 2001;
- U.S. crude oil and gasoline prices declined on strong production and the U.S. dollar;
- Solid indictors despite rising price inflation;
- U.S. petroleum inventories stable in the 5-year range.
You may see more details in the PDF herebelow
