The emergence of shale technology particularly in the U.S., is dramatically the conventional rules of the global oil markets, says Oliver Appert, president of the World Energy Council French Committee. “For the last 40 years, OPEC has been the major player in setting global oil prices because of its location within OPEC countries, most specifically in the Middle East. It has been the swing producer, increasing its production when markets are tight, and reducing quotas when there is over supply, ” Appert observes. “However in the last few years, with the advent of non-conventional shale oil and gas production in the U.S., the dynamics of the global market could be about to dramatically change.”
Every two years, oil production in the U.S. has increased by 2mmbbld, the equivalent of Norway, because of increased shale supplies. As a result, oil supplies are surpassing demand by 1 mmbbld to 2 mmbbld. Against this background, OPEC held meetings in November 2014 and June 2015 where it decided to maintain its level of production in order to keep its market share, which has led to the price of oil dropping by 50%. After the oil shock in 1973, OPEC took a leadership position, but today when we look ahead, it is possibly to see that OPEC will no longer hold a dominant position. With the role of shale producers in the U.S. becoming more predominant, they may become the swing producers in selling global market prices,” Appert says.
Petroleum product prices in the U.S., including gasoline prices, would either be unchanged or slightly reduced by the removal of current restrictions on crude oil exports, finds a new report by the Energy Information Administration (EIA). EIA notes the recent rise in domestic crude oil production from 5.4 mmbbld in 2009 to 8.7 mmbbld in 2014, and the prospect of continued supply growth, has sparked interest in the question of how the relaxation or removal of current policies which restrict but do not ban exports or crude oil produced in the U.S. might affect markets for both crude oil and petroleum products over the next decade. Without export restrictions the study projects increased domestic production, higher crude oil exports, reduced product imports, and slightly lower gasoline prices to U.S. consumers compared to cases that maintain current crude oil export restrictions.
The EIA also reported that as of Sept 11 U.S. propane inventories, at 97.7 mmbbl, reached the highest level in the 22 years it has collected weekly statistics. The record stock pile accumulations was achieved despite exports rising by 33.3 mmbbld between the first half of 2014 and the first six months of the year. EIA noted that as production of propane and other hydro carbon gas liquids has grown, the ability to transport, store, and export the commodities has expanded. During the first half 2015, production of propane at natural gas plants was 31.3 mmbbl, or 172,000 bbld, higher than during the first six months of 2014. This is a good sign for the coming winter of 2015 and 2016 as far as the price and availability of propane in the Pacific N.W.
McMinnville Gas in preparing our delivery drivers for Oct first time fills for the coming winter. Any will call and cash before delivery customers should contact the office about your needed propane fall fill ups. Your prior planning will prevent any special delivery charges and out of gas situations if any harsh winter snows do occur. Contact out salesman Ryan Buller if you need information on additional heating needs or replacement heaters in your homes, Our servicemen are busy setting tanks and preparing customers equipment for the up and coming winter season. Any customers who have balances on the books will not be receiving gas until these balances are cleared. Contact our CSR’s Susan and Davida about any questions you have with budget, balances owing and service requests. Thank you for your past business, here’s looking to a new successful coming winter.
Cordially, John Buller and Sons