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 31, 2018
In a recently released report, the U.N. Conference on Trade and Development digs into the factors that have made the U.S. energy dominance possible, and – specifically – the role of natural gas in energy dominance.
Posted May 24, 2018
Let’s add some needed perspective in the ongoing discussion of U.S. gasoline prices – even as Washington politicians try to exploit them for their own agendas. The latest political play: Senate Democrats want the president to cajole other nations into producing more oil to increase supply in hopes of moderating things at the pump.
Certainly, increasing global crude supply is important, because in the past doing so has put downward pressure on the cost of crude, the No. 1 factor driving gasoline prices.But, since we’ve seen how much lower and less volatile prices have been the past four years, thanks to the growth of U.S. oil production, wouldn’t it be smarter to encourage greater oil production here at home? Senate Energy Committee Chairwoman Lisa Murkowski
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 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 September 8, 2017
With the impacts of Hurricane Irma still to be seen, today’s energy infrastructure network, innovations, technology and knowledge appear to have gained from past big-weather events allow some cautious optimism. That’s the conclusion of a pair of energy experts who briefed reporters during a conference call designed to provide context to the efforts of industry and communities to meet the challenges of a major storm.
Posted July 26, 2017
Nationally, the average price of a gallon of gasoline the third week of July was $2.392 – about 42 percent lower than the national average price at the same time in 2008, according to the U.S. Energy Information Administration. Retail gasoline prices haven’t been “sticky,” as Sen. Charles Schumer said on ABC’s “This Week,” suggesting that some sort of anti-Adam Smith force has kept them from decreasing. Yet, as we can see, they have decreased significantly over a time period that coincides with accelerated U.S. crude oil production (thanks, fracking).
Posted December 28, 2016
Posted November 23, 2016
Historically and culturally, Thanksgiving is this country’s calendar cue to be thankful, to be grateful, from household to household. As President Lincoln said in his 1863 proclamation creating the holiday, it’s a day to recognize the “blessings of fruitful fields and healthful skies.” This year is no different. Americans can give thanks for a number of things. The American Farm Bureau Federation tells us that the average cost of a Turkey Day feast for 10 this year is $49.87, a 24-cent decrease from last year’s average. (Alas, there’s no reported decrease in the remorse a number of us will feel from feasting a bit too much.)