Energy prices have climbed sharply this week as frigid temperatures brought on by the second polar vortex boosted demand for heating fuels across much of the US. NY crude futures were up about $2.50 this week to close at 96.73Wednesday; NY heating oil was up to nearly $3.04 a gallon; natural gas futures were up 40 cents per million to close at $4.60; and mid-west propane climbed into record territory as suppliers were unable to keep up with demand. On Tuesday spot heating oil in Boston was selling for 9 cents a gallon more than NY futures. Part of the propane shortage was caused by farmers using 300 million gallons to dry crops last fall, up from 65 million in 2012. There is a growing shortage of pipeline capacity in the Midwest to move propane as existing pipelines are being converted to move natural gas liquids and shale oil rather than distributing propane.
New York crude was also helped by the opening of the southern leg of the Keystone pipeline which is currently moving some 300,000 b/d from the Cushing, Okla. depot to Gulf Coast refineries. The pipeline should move about 520,000 b/d this year and has the capability of eventually moving 830,000 b/d.
The weekly stocks report was delayed until Thursday this week, but analysts expect that gasoline stocks will grow by about 1.7 million barrels while distillate stocks decline by 800,000 due to the frigid weather. US distillate stocks are already low due to high export demand. Analysts are worried that the unusually high demand for natural gas will outrun the ability of the pipeline network to transport the gas from the shale gas fields to the densely populated regions of the US.
The EIA revised upwards its global oil consumption for the 4th quarter of 2013 by 135,000 b/d and raised its forecast for global demand for 2014 to a record 92.5 million b/d, an increase of 1.3 million b/d over 2013. This is an increase of 90,000 b/d over the last month’s projection. The Agency is concerned that as most of the global increase in crude production is coming from US shale fields, the US’s ban on exports of its crude may make for tighter markets and higher international prices in the coming year.
The IEA also reported that OPEC production in December was down about 535,000 b/d from December 2012 but was up by 300,000 b/d from November 2013. Iraq, which is having all sorts of troubles, was the only OPEC country to register lower production in December.
There has not been much change in the Middle East this week. Libyan oil production is still holding at about 580,000 b/d. The Iraqis are still trying to figure out how to get al Qaeda out of Ramadi. The last time al Qaeda got into the place it took a major effort by US Marines who suffered many casualties in the fighting to get them out. Bombers continue to blow up Shiites around the country.
The Monteux peace conference on the Syrian conflict opened this week. It quickly broke down on wrangling over Western demands that Assad must go.
Related Articles
Jane Muncke: “Shutting Off The Plastic Tap: A Global Treaty To Regulate Petrochemical Pollution?”
In this special episode, Nate is joined by toxicologist Jane Muncke, who provides an in-depth analysis following the final day of discussions in Busan, South Korea. Together, they explore the complex intergovernmental negotiations that have defined the treaty process, as well as the environmental and health policies that have shaped these conversations in recent years.
December 18, 2024
China holds the world’s climate future in its hands
China has its own fate in its hands, as well as the rest of the world. We can hope it will take the needed actions that will give us a fighting chance to hold at 1.5°C, or near it.
December 17, 2024
How Community Solar Can Liberate You From Fossil Fuels
Local and rural cooperative utilities can use community solar to meet unique place-based clean energy needs.
December 16, 2024