The EIA’s weekly petroleum report showed U.S. crude oil refinery inputs falling below their previous week’s numbers at 15.0 million barrels per day, around 220,000 less per day than last week. Gasoline production also decreased in the last week, averaging 9.0 million barrels per day.
Imports continue to decline, as over the last four weeks imported crude stands at 7.8 million barrels per day, approximately 1.1 million barrels per day less than this time last year. Distillate fuel imports are also down from this time last month, with 136,000 barrels per day being imported, as opposed to the 223,000 per day at the end of April. Moreover, the amount of gasoline being supplied is down 2.4 percent from last year, at 8.6 million barrels per day.
The energy picture in the U.S. continues to move towards a surging domestic industry, with imports on the decline, and the issue of exports becoming a key issue on the U.S. policy scene.
OPEC is apparently, and unsurprisingly, not thrilled with the rise in U.S. oil solvency, and a meeting in Vienna on Friday will see the member countries meet to discuss the ramifications of a more energy productive U.S. African countries such as Nigeria and Algeria experience near-total dependency on oil exports, and are expected to push for production cuts in a bid to keep prices high.
However, Saudi Arabia is less concerned about the U.S. oil surge, and although possessing the ability to cut its production, it is expected not to do so. To do so would result in increased tension between OPEC members, specifically the countries able to withstand lower prices, versus the more exposed countries such as Algeria.
Iran is particularly hard pressed for higher prices, as new sanctions from the U.S. hamper its economy, and forcing it to essentially get more for less on what it is able to trade. Ninety dollars per barrel or less will put Iran and other countries in a precarious scenario, with Venezuela’s oil minister stating that his country would push for a cut in production if oil dips below $100 per barrel.
Meanwhile, the U.S. government has not decided how it wants to approach the exporting of surplus energy, with Energy Secretary Ernest Moniz calling for a review of the situation. At issue is the effect exports will have on prices and domestic supply, and whether or not approving more exports for U.S. companies will be in the best interest of the domestic energy situation. However, momentum appears to be in the realm of exporting, with Freeport LNG receiving permission recently to export up to 1.4 billion cubic feet a day of natural gas to countries without a free-trade agreement with the U.S. Before Moniz’s swearing in, the Department of Energy had previous determined that increased exports were in the best interest of the U.S.
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