It’s August 18, 2017. Gas prices are at about $2.90/MMBtu, and oil prices are at about $47/bbl.
Earlier this week a Libyan oil terminal was closed by local protesters. If the protest is lengthy, it could affect oil prices.
Hurricane Harvey has wreaked havoc in south Texas, including Houston, one of the oil and gas capitols of the world. Destruction has shut down refineries and raw production, with the net effect on the oil and gas industry still undetermined. While one would think that the price of oil would rise considerably, it has not. Fracking should be able to provide the raw materials, and there has been a glut of gasoline for most of this year. The price of gasoline has gone up some, and will probably continue to do so. But the price of oil seems like it will remain steady. It could even go down some if it takes a long time to get the refineries back online.
Libya never ceases to produce news about oil and gas. This time the Libyan navy seized a tanker because they suspect the tanker was smuggling oil.
Nuclear energy is on the decline, with yet another nuclear power plant being put to rest.
I just happened to speak with a lawyer from Dallas today. He said that some of the gas stations in Dallas have run out of gas. That should only be a temporary problem, as the U.S. has had a glut of gasoline for most of the year. We got a little low just before August, but that encouraged European suppliers to send plenty our way. Of course, the trick is getting it from the Northeast to Houston.
It’s likely that we are at the beginning of a new oil “supercycle”. This article in Arab News discusses the last two, the possible new one, and makes some suggestions for how OPEC should apprach the new supercycle reality.
Here’s your daily dose of contrarian thinking. Everybody thinks that electric vehicles are going to be oil and gas killers in the near future, but someone did a back-of-the-napkin calculation and the numbers show that ten years from now EVs are going to only need about 0.76 Bcf/d of natural gas to produce the electricity necessary to power them. To put that number into perspective, two new pipelines proposed for this area, the Mountain Valley Pipeline and the Atlantic Coast Pipeline, will each move 1.5 Bcf/d, and the under-construction Rover Pipeline will move 3.25 Bcf/d. The U.S. currently burns a little over 72 Bcf/d, and is expected to burn a little over 75 Bcf/d in 2018. So under 1 Bcf/d is not that much in the grand scheme of things. Of course, demand for EVs could really take off, or it could not. Guess we’ll see.
Probably the best summary of how the oil and gas industry has been affected by Hurricane Harvey can be found in this article at RBN Energy.
Libya’s crude production has dropped 30% because militants have blocked pipelines.
September 1, 2017: Oil prices are at about $47/bbl and gas prices are at just over $3/MMBtu. Also, the price of gasoline here in Buckhannon has gone from $2.29 to $2.55/gallon since Hurricane Harvey hit, an increase of 26 cents.