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
Posted February 28, 2018
Posted February 16, 2018
U.S. crude oil production scored a perfect “10” in January – make that 10.2, to be precise, as in 10.2 million barrels per day (mbd). That record production, combined with a new high for refinery throughput and 6.3 mbd of crude oil and refined product exports, narrowed the price difference between U.S. and international crude prices last month and underscored the global impact of U.S. energy. All of this data and more may be found in API’s Monthly Statistical Report for January.
Posted January 30, 2018
For the first installment of my API Chart of the Month series, let’s look at a pair of charts that show the strengthening of U.S. trade positions for petroleum – crude oil and refined products – and natural gas – supported by trade pacts such as the North American Free Trade Agreement (NAFTA). This is especially timely given the possibility trade will come up during tonight’s State of the Union address.