Take You Higher - Crude Prices Up, Crude and Gas Production at Record Highs, More Midstream Infrastructure Needed

Seems like just about everything to do with energy markets is up these days.  Crude oil prices are back to the levels of late 2014.  Crude production hit a 10.6 MMb/d record volume last week, while lower-48 natural gas has been bouncing around an 80 Bcf/d record level. Exports of crude, gas and NGLs are at all-time highs.  But all those hydrocarbon molecules must find their way from the wellhead to market, and in several high-growth regions, that is becoming increasingly problematic, as midstream infrastructure struggles to keep up. In our recent School of Energy, we examined these developments, considering their impact on production trends, domestic demand and the outlook for growth in export volumes. Did you miss it?  Not a problem. We taped the whole conference, and School of Energy Online is now available in 12 hours of streaming video, along with all the Excel models, slides, and graphics that we use to tie energy markets together. Today, in this unabashed advertorial, we review some of the highlights of the conference.

If you are a trend-follower, you should like Figure 1, which shows U.S. crude oil price, production and exports since 2016. From the depths of despair two years ago, crude oil prices have almost tripled, from $26/bbl in February 2016 to $68/bbl on Friday (April 27). U.S. crude oil production has ramped up 25%, from 8.5 MMb/d in mid-2016 to 10.6 MMb/d in the Energy Information Administration’s (EIA) most recent numbers.  And crude oil exports have skyrocketed from about 0.5 MMb/d in 2016 to 2.3 MMb/d last week. It’s a similar story for production and exports of natural gas and natural gas liquids, although the prices of those commodities have not shot up like oil.

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