Louisiana’s refineries process vast amounts of domestic crude oil — much of it from the offshore U.S. Gulf — and imported oil from Canada and other countries. The refineries also play a critically important role in supplying refined product to the Southeastern U.S and the Mid-Atlantic states.
Each of Louisiana’s three refining regions has its own sources for crude oil and its own way of delivering that oil to refineries. Today, we look at crude oil flows and supply/demand balances in the southwestern and northwestern parts of the Bayou State — and how the status quo may be in for changes.
Crude oil sourcing for the three refining regions in Louisiana couldn’t be more different from each other. In today’s RBN blog, we examine crude oil flows into and out of the Bayou State, assess supply/demand balances, and explore why is could be increasingly important to understand those balances.
After setting an annual record of 4.1 MMb/d in 2024, U.S. crude exports started off this year relatively strong, but cracks soon began to show, with volumes falling all the way to 3.2 MMb/d in July, one of the weakest months since 2023. But just when it seemed the momentum was gone, Gulf Coast exports rebounded to near 3.9 MMb/d in August and are topping 4.1 MMb/d so far in September. In today’s RBN blog, we look at how shifts in production, imports and refinery runs have impacted U.S. crude exports.
Refineries in Europe, Latin America, Russia and China are facing a host of issues that could ultimately benefit U.S. refiners. Europe has high operating costs and political pressures. Attacks have damaged Russia’s refineries, and the country continues to get blasted with steeper sanctions. China’s aging plants are closing and there are no new large-scale projects on the horizon. Latin America lags in capacity growth. In today’s RBN blog, we look at how these global issues are boosting opportunities for U.S. refiners.
The U.S. refining industry has undergone a number of changes in recent years and more turbulence looks likely as global economic and trade patterns shift and energy transition moves forward. For some refineries, this has led to closures due to weak profits, rising regulatory costs and declining demand for products, particularly gasoline. But other refineries have prospered — and even invested in expansions — while the U.S. industry as a whole has evolved into the most competitive system in the world. Overall, the prospects have been very regionally (and even facility) specific. As detailed in the most recent Future of Fuels report from our Refined Fuels Analytics (RFA) practice, this regional differentiation will continue and shift over the coming years. In today’s RBN blog, we’ll discuss what we expect for the U.S. refining industry — where closures will likely take place, where the industry might actually add capacity, and the reasons for those actions.
The forward curve for natural gas supports 2019 production growth that is likely to far outpace expected gains in gas demand. This impending supply/demand imbalance suggests that gas prices will be pressured lower. Lower gas prices will boost demand, but there are real limits to how much demand can rise in the short term. What will really be needed to balance the market is for producers in at least a few plays — the Marcellus and Utica among them — to rethink and rework their 2019 production plans. Which raises the questions, how much will production growth need to be cut, and where will the bulk of the pruning occur? Today, we continue our review of key themes and findings in East Daley Capital’s newly updated “Dirty Little Secrets” report on the midstream sector.
Natural gas production growth in the U.S. Northeast—the primary driver of U.S. production growth in recent years—has slowed dramatically in the past few months, up no more than 1 Bcf/d year-on-year, compared with growth in increments of 3 and 4 Bcf/d in previous years. Despite the slowdown, the regional balance continues to lengthen, with supply growth outpacing demand. Yet, regional gas prices, specifically at key supply hubs, which previously were struggling under the weight of oversupply coupled with limited access to growing demand markets, are strengthening. Is this the beginning of the end of takeaway constraints and distressed supply pricing in the region? Or will constraints reemerge this summer? Today, we provide an update of Northeast gas supply/demand balance.
U.S. LNG exports via Cheniere Energy’s Sabine Pass LNG export facility are poised to be a major demand driver of the domestic natural gas market in 2017. Pipeline deliveries to the terminal have more than tripled since mid-2016 and are set to climb further as more liquefaction capacity ramps up. With two liquefaction trains already operational, the Federal Energy Regulatory Commission last month approved Train 3 to begin operations and also green-lighted the start-up of Train 4 commissioning. Today, we provide an update of Sabine Pass’s export activity and its potential effect on U.S. gas demand this year.
At this time last year, the U.S. natural gas market was exiting an extremely bearish winter, the gas storage inventory was nearly 500 Bcf higher, and prompt month prices for the CME/NYMEX Henry Hub natural gas futures contract were more than $1.00/MMBtu lower. The question on our minds then was how far would production have to decline or how much demand was likely to show up to prevent storage capacity constraints by fall. In either case, the overarching sentiment was that prices would have to remain relatively low to balance the market. Now we’re exiting an almost equally mild winter, but a combination of lower production and higher exports has drawn down storage to well below year-ago levels, and the question occupying the market is more along the lines of, just how bullish could the market get this year? Today, we wrap up our look at injection season storage scenarios for the next seven months.
