US to become net oil exporter in November: EIA

US to become net oil exporter in November: EIA

US to become net oil exporter in November: EIA 

Imports projected to meet 8% of US demand this year

US net oil exports to average 550,000 b/d in 2020

The US will become a net oil exporter for the first time on a monthly basis in November, with crude and refined product exports exceeding imports by 220,000 b/d, the Energy Information Administration said Tuesday.


EIA sees the US continuing to be a net oil importer on an annual basis in 2019, with imports exceeding exports by an average of 620,000 b/d. Then the US will flip to annual net exporter in 2020, with exports exceeding imports by 550,000 b/d.

The US snagged the net oil exporter title for all of one week last November, driven by a surge of 3.2 million b/d in crude exports that pushed crude and product exports above 9 million b/d, according to S&P Global Platts Analytics.

The growth of the Gulf Coast refining sector made the US a net exporter of refined products in 2011. Rising crude exports since 2015 have made the overall net oil exporter status possible.

Still, US crude imports will continue to exceed crude exports by 4.43 million b/d in 2019 and 4.4 million b/d in 2020, EIA said.


EIA's Annual Energy Outlook 2019 predicted in January that foreign oil would meet just 7.5% of US demand this year.

A decade ago, EIA forecast in its 2009 AEO that foreign crude would meet 44% of US demand in 2020. Imports met 60% of US consumption in 2006 and were projected to fall to 50% by 2010, according to the 2009 report. That was before the US tight oil revolution got underway in earnest.

EIA's projections have accelerated as US oil production growth keeps beating expectations.

Even just two years ago, EIA's 2017 AEO forecast the US remaining a net importer through 2050, with foreign oil meeting 17.7% of national consumption that year. Last year's AEO predicted the US would gain net exporter status in 2029 - nine years later than the current forecast.

President Donald Trump praised the net oil exporter milestone in his State of the Union speech to Congress in February, albeit before it actually happens.

"The United States is now the number one producer of oil and natural gas anywhere in the world. And now, for the first time in 65 years, we are a net exporter of energy," Trump said at the time.

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The US will maintain oil production despite falling prices, says deputy energy secretary

  • Despite low oil prices, shale producers in the U.S. will continue to produce 12 million barrels a day — which are all-time highs — throughout next year, and perhaps going up to as high as 13 million barrels, U.S. Deputy Energy Secretary Dan Brouillette told CNBC on Wednesday.
  • While shale drillers in the U.S. have been said to face obstacles on growing output, and the number of operating oil rigs have declined this year, Brouillette said that production is not actually the biggest problem.
  • Meanwhile, Chinese tariffs on U.S. natural gas will not put a dent in the country’s ambitions to be a top energy exporter, he indicated, citing high demand from the rest of Asia.
  • The U.S. will maintain its oil production — or even ramp it up higher — despite low energy prices and slowing economic growth, Deputy Energy Secretary Dan Brouillette said Wednesday.

    Shale producers in the U.S. will continue to produce a record 12 million barrels a day throughout next year, he said, citing projections from the Energy Information Administration. They may even go up to as high as 13 million barrels, he added.


    “U.S. production numbers are going to continue for quite some time,” Brouillette told CNBC.

    U.S. West Texas Intermediate (WTI) crude futures have fallen almost 20% since reaching their 2019 peaks in late April, as oil prices were dragged down by intensifying fears of an economic downturn that’s started to impact oil consumption.

    But Brouillette rejected fears that oil demand would be hit amid slowing growth.

    “Growth is slowing down slightly ... over the course of early 2019. But I suspect that as the economy begins to rev up, we’ll start to see that demand pick up as well. And it’s going to be good news for oil producers,” he said.

    On Wednesday, Brent crude futures were at $61.34 per barrel, and U.S. crude futures were at $52.40 per barrel — off this year’s highs of around $74 and $66 per barrel in April.

    Even though shale drillers in the U.S. have been said to face obstacles on growing output amid a wave of belt-tightening that’s cutting billions of dollars from budgets, and the number of operating oil rigs have declined this year, Brouillette said that production is not actually the biggest problem.

    “Our biggest challenge in the United States is not maintaining production, it’s actually getting the product to market. We are developing infrastructure ... at a rapid pace, but we need to do more. We need more pipeline capacity in order to have the oil and the gas reach these export markets,” he said.

    In fact, Brouillette said, there will be increased production, not falling output, in the U.S.

    Last year, the global appetite for natural gas grew at the fastest pace since 2010. Most of that supply is expected to come from the U.S., amid its ambitions to be a top liquefied natural gas (LNG) exporter.

    American gas output surged by 11.5% in 2018 — marking the fastest growth since 1951, according to the International Energy Agency. Currently, Australia and Qatar are the top two exporters of LNG, which is a form of the fuel chilled to liquid for transport by sea.

    But amid the trade war, Chinese tariffs on U.S. natural gas could put Washington’s ambitions on hold, with the Asian giant accounting for a large share of global demand and taking the spot as the world’s number 2 importer for LNG.

    Brouillette dismissed that notion, however, pointing to high demand from the rest of Asia.

    He said that sales to South Korea and Japan look “very, very large” relative to China. With Mexico numbers added to that tally, “the future looks pretty bright,” he added.

    “We still see continued LNG export growth all throughout the world,” Brouillette added.

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Big Oil’s growing shale footprint may stabilize US oil outlook: BP’s Dale

US tight oil production could become less sensitive to price volatility in the coming years as more cash-rich oil majors pile into the sector and commit to new development spending, BP’s chief economist Spencer Dale said.

Over the last two years, the concentration of investment spending by the top 10 US tight oil producers has started to rise, edging up to 50% from 45%, according to BP’s latest Statistical Review of World Energy, indicating that recent shale acquisitions by oil majors is feeding through to spending plans.

Uncertainty over longer-term global oil demand, the falling costs of drilling and fast development times for US shale have underpinned a strategic shift by many oil majors to prioritize shorter cycle returns from shale developments.

Major acreage holders in the key Permian US shale Basin include the supermajors Chevron and ExxonMobil with the scale of Occidental’s shale stake set to grow sharply following its recent $33-billion deal for Anadarko. Both BP and Shell have said they are looking to grow their production and footprint in US shale and unconventional oil projects.

“Big Oil has increased its footprint and the incentives for consolidation to exploit the benefits of scale and contiguous acreage have increased,” Dale said, presenting the Statistical Review.

“The intuition here is large oil companies have bigger balance sheets and so are able to smooth through variations in oil prices and capital and may make production less sensitive [to prices],” he said.

US production of tight oil and natural gas liquids from shale plays has bounced back from the 2014 oil prices slump, jumping by a record 2.2 million b/d last year, according to BP.

Continued IOC expansion into shale plays means the majors now make up some 18% of shale drilling activity in the US, Citi Group’s head of commodities research Ed Morse said last month.

With the role of oil majors in the US shale sector growing, Morse said some industry watchers are underestimating the growth potential of shale developments. The US could be producing more than 29 million b/d of oil and other liquids within just six years, over 50% more than current levels, Morse told an S&P Global Platts event.

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Citing a “growing mismatch” between hope and action, BP executives released the company’s annual Statistical Review of World Energy featuring slow progress on climate change and rapid growth in energy demand and emissions of carbon dioxide.

The report also noted that the US recorded the largest-ever annual production increases by any country for oil and natural gas, “the vast majority” coming from onshore shale plays.

Global energy demand grew by 2.9%, and carbon emissions grew by 2% in 2018, “faster than at any time since 2010-11,” BP said in a press release.

“There is a growing mismatch between societal demands for action on climate change and the actual pace of progress,” said Chief Economist Spencer Dale, citing the increases in energy demand and carbon emissions. “The world is on an unsustainable path.”

Natural gas consumption and production increased 5% last year and accounted for 40% of global energy demand growth.

Consumption of renewable energy grew by 14.5%, near the record increase of 2017, but still accounted for only one third of the increase in total power generation.

Global oil consumption grew by 1.5%.

The record production increments in the US were 2.2 million b/d for oil and 86 billion cu m for the year for natural gas.

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