Posted July 6, 2018
Earlier this week we looked at the summer variation in gasoline prices, due mainly to increased driving as well as fuel specifications that have added to the cost of gasoline. As the 2018 summer driving season approaches its midpoint, let’s check the data on gasoline prices and, separately, take a deeper look at why prices in any one state have tended to be higher (or lower) than the national average.
According to the American Automobile Association, the nationwide average price for regular gasoline was $2.85 per gallon on June 28, a decrease of 12 cents per gallon since May 28.
Remember, gasoline and diesel fuel prices tend to track the price of crude oil, because crude oil currently makes up more than half of the cost to make the fuels. The U.S. Energy Information Administration (EIA) reported that crude oil made up 56 percent of the price of gasoline in May, the agency’s most recent analysis.
Posted June 21, 2018
The API Industry Outlook for the second quarter of 2018 is one of the things that’s new at API. If you follow energy markets, you’ll appreciate an incisive view of the economy at home and abroad as well as markets for crude oil, natural gas and petrochemicals.
Beyond nice-to-know “macro factors,” here are things to know and understand about trade barriers that could affect economic activity and prices where you work and live.
Posted June 14, 2018
With Wall Street Journal headlines such as “Trans-Atlantic Oil-Price Spread Soars as Supply Glut Disappears,” it might be hard to remember that the United States’ domestic oil production stood at a record 10.5 million barrels per day (mb/d) in April, and the nation’s petroleum trade balance is in its best position in 50 years. This has reinforced U.S. energy security, lowered the trade deficit and boosted economic growth.
That said, given our country’s much improved energy outlook, some may question why we’re still importing crude oil and refined products. And, while we’re still importing oil, why do we export domestic crude – especially when prices have risen at the pump? Why don’t we just keep American oil at home? ...
Answers are found in an understanding of basic market realities.
Posted May 22, 2018
Washington is known for partisan political skirmishing, so it’s not surprising that a group of Senate Democrats is trying to score political points against this year’s tax reform legislation by suggesting that lowering the corporate income tax rate has been linked to the recent rise in gasoline prices.
Let’s straighten them out on a couple of important things about gasoline prices, which have nothing to do with tax reform.
First, per-barrel costs for crude oil – the No. 1 factor in the cost of producing gasoline and diesel – have risen due to a tighter global oil supply/demand balance and lower inventories compared to last year. Second, with a strong economy, U.S. petroleum demand has run at its highest levels since 2007 and was up by more than 750,000 barrels per day in April, compared with one year ago. Next, as they do every year around Memorial Day, the start of the summer driving season, Americans are traveling more, which could raise demand further. Finally, although gasoline prices have increased recently, they’re still lower than where they were four years ago, largely because of increased domestic oil production.
Posted May 10, 2018
The facts that crude oil prices are up 9 percent since the end of March and that crude oil currently accounts for 57 percent of the consumer’s price for gasolinemean that consumers have felt the impact at the pump of relatively large and sudden changes. As domestic crude oil prices recently increased above $70 per barrel for the first time since November 2014, let’s revisit current oil market fundamentals and other factors that have elevated prices.
By understanding the drivers of prices, American consumers may be more aware of how U.S. policy outcomes – such as more domestic natural gas and oil production, a strong U.S. dollar, low price inflation, avoidance of tariffs, quotas and other protectionist measures that undermine free trade, and peaceful international relations – could help put downward pressure on crude prices that ultimately benefits consumers.
Posted April 26, 2018
During recent visits to three universities, my goal was to have conversations with students who might be part of the next generation of the energy workforce – talking with them about energy, global markets, the potential for rewarding careers and the advanced technologies we use to safely and responsibly develop the energy our country needs to grow its economy and increase its security.
I visited with 110 graduate and undergraduate students at the University of Pennsylvania, Tulane (photo below) and Rice universities – many of whom hope to work in the energy industry, and others who recognize the ways energy affects careers in manufacturing, finance, trading and other fields.
Posted April 19, 2018
American consumers take a keen interest in energy prices, for the health of their pocketbooks as well as their livelihoods and security. More than 10.3 million people directly or indirectly support the industry, and tens of millions more people own or work for businesses that depend on having abundant and affordable energy.
What happens in energy markets also is important to our business literacy and understanding of how the United States’ role in global commerce has evolved thanks to the energy renaissance. Not so long ago, many energy-intensive U.S. industries were hollowed out as jobs moved offshore. Thanks to American innovation, today the high availability and low prices of natural gas, natural gas liquids (NGLs) and oil have stimulated demand and investment while also helping to improve efficiency and return energy-related CO2 emissions to near their 25-year lows.
Posted April 2, 2018
The summer driving season is arriving, so it’s a good time to take stock of recent market dynamics that have raised per-barrel costs for crude oil and consequently gasoline and diesel fuel.Nationwide, the American Automobile Association (AAA) reports that average prices currently are $2.64 per gallon for gasoline (up from $2.54 a month ago) and $2.95 per gallon for diesel fuel (unchanged from last month). While there is nothing particularly special about these figures from an economic perspective, consumers take notice when fuel prices are on the rise. Let’s look at the factors that have affected pump prices in recent years.
Posted March 15, 2018
Posted March 12, 2018