Despite tight supply, US refiners export most gas in three years
S E E D E D C O N T E N T
While President Biden is fretting about high gasoline prices, even going as far as asking OPEC+ to raise oil output, U.S. refiners are exporting the most gasoline in three years.
Shipments of the fuel in the first eight months of the year rose to 802,000 barrels a day, the highest for the period since 2018, before the pandemic started. At the same time, American drivers are paying the highest prices at the pump since 2014. Overseas demand is only set to increase going forward as Mexico, the top importer of U.S. gasoline, is still in the early stages of recovering from the pandemic.
The high rate of gasoline exports shine a light on the wider global oil demand picture and underscore the limitations the Biden Administration has in keeping retail prices in check. U.S. Energy Secretary Jennifer Granholm said the government is “looking at” a release of crude from the Strategic Petroleum Reserve. But that would only temporarily resolve the underlying tightness in the crude market, according to oil consultancy Energy Aspects.
“The White House itself has limited options in what it can actually do,”said Krista Kuhl, a Houston-based oil consultant with FGE. One of which being an emergency release of crude supplies from the Strategic Petroleum Reserve. An emergency release has only happened three times in the almost 50 years since the SPR was created.
Most U.S. gasoline exports go to Latin America. Refiners shipped 139,000 barrels a day to Brazil, the highest volume in data going back to 1945. Mexico, America’s biggest foreign buyer of gasoline, still hasn’t recovered to pre-Covid levels but should in the next two years as its economy bounces back from the pandemic.
Pain at the pump isn’t just a U.S. problem. Prices south of the border are also high because the U.S. dollar is so strong that it’s making imports suddenly more expensive. Gasoline prices in Brazil went up 46% this year and are the highest in data going back to 2013. In Mexico, gasoline prices are so high that some Mexicans might drive into the U.S. to fill up their tanks when the borders reopen on Monday.
The pull from Latin America is expected to remain strong despite the uneven post-pandemic recovery in the region, says Felipe Perez, a strategist at IHS Markit Ltd. Brazil, he says, is recovering faster than Mexico due to a “sizable” stimulus package and gas demand is expected to return to 2019 levels before the end of the year ahead of the summer in the Southern Hemisphere.
Mexico, which was experiencing an economic slowdown before the pandemic hit, and didn’t enact a stimulus package, should return to 2019 levels only at the end of 2023, Perez said. Despite the slowdown, Mexico remains the biggest foreign buyer of U.S. gasoline.
Higher gasoline prices in the U.S. shouldn’t hurt demand for now, says Urvish Patel, a London-based analyst with FGE. “This could be exacerbated if a further slowdown in manufacturing activity as a result of supply chain disruptions depresses trucking and economic activity, as has been the case in Europe recently,” he said.
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it's price gouging by the oil companies, plain and simple. they're floating in inventory.
Maybe those far left commies one keeps hearing about will nationalize the refineries.
I read long ago there hasn't been a new refinery built in the usa in over 30 years. supply and demand, manipulated...
Got to watch out of those "commies". LOL
And currently, 550 wells are operating in the US. Prior to the pandemic 700 plus were operating. OPEC is pumping less now than before the pandemic.
the exploration biz in my state folded up and moved on 2 years ago.
It's interesting the focus is entirely on export of gasoline , while ignoring the import of gasoline ...which is higher.
Then there is this...
It was developed with an eye on a 90 day backstop of supplies, but current sits north of 500 days (based on 2021 net imports/exports).
It is something the President can decide to release and even entertained this idea a couple of months back, but chose not to. In this era of green energy and COP26, it might not be the politically responsible thing to do, nor would it be popular with energy majors, by depressing crude prices.
It does beg the question... what is to be done with that 612M barrels of crude sitting in those salt mines?
I favor a incremental drawdown to "0" over the next 10 years.
before the price bottoms out?
Such a thing would require one of two scenarios, imo. A global economic slowdown, which is not desired... or promises being kept, which are not very likely, imo. Case in point would be the resistance to reduction of the SPR by so many in both political camps. You would be led to believe that it is extremely difficult, which is not true. It would only roil the markets a bit, not unlike China's recent pulling from their SPR.
The optimism and euphoria of actually achieving emissions targets, crashes against "the rubber meets the road" reality. Everyone hopes for the best, but continues to prepare for the worst. Apparently, gambling on hope is a loser's game.
Never heard of oil and gas contracts? Much of what is being pumped right now in the US is already bought and paid for; which is the reason they need to find new oil deposits and develop them.
Biden has done a lot to diminish the development of new wells.
Oil companies only run wells so long as they are profitable. Making them harder to run and maintain makes the decision to shut them down that much easier.
Even leftist MSN knows that Biden is to blame for the increase in oil and gas prices; of course making an enemy out of Saudi Arabia doesn't help.
The leftist MSN is Liz Peek? That was almost funny.
As usual, that is a load of BS.
This is a worldwide problem and not limited to the US.
Gas prices skyrocket as the global energy crisis worsens
By Matt Egan , CNN Business
Updated 12:02 PM ET, Tue October 12, 2021
New York (CNN Business)The cost of energy was dirt cheap in the spring of 2020 as roads and airports sat nearly empty during the height of the Covid-19 pandemic.
$100 oil in the cards?
Record coal prices in China
OPEC in the driver's seat
Meanwhile LNG exports broke records 4 times during the new Administration and they don't include new pipelines
to Mexico which are adding and will continue to add increasing NG exports
Natural Gas Exports to Mexico on the Fast Track (enverus.com)
The refineries probably got 5 cents a gallon more than they could have in the USA.