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Page added on June 15, 2019

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U.S. Oil Demand Was Scorching Hot Last Year

Consumption

The U.S. economy burned through an average of 20.46 million barrels of crude oil and related liquids each day last year, according to BP‘s (NYSE:BP) latest annual Statistical Review of World Energy. That was about 500,000 barrels per day (BPD), or 2.5%, more than 2017’s total, and the largest demand increase in more than a decade. Overall, America accounted for 20.5% of the world’s oil and related liquid consumption last year. (That includes liquid derivatives of coal and natural gas, as well as biodiesel and biogasoline products such as ethanol.)

What was interesting, though, is that the amount of oil the U.S. used to make fuels like gasoline fell last year. Here’s a look at what actually drove demand growth.

Multiple oil pumps at sunrise.

Image source: Getty Images.

Drilling down into what driving America’s growing oil demand

BP breaks oil demand into four categories:

  1. Light distillates, which are refined into things like gasoline.
  2. Middle distillates, which are the types of oil used to make jet fuel, heating kerosene, and diesel.
  3. Fuel oils, which are used as a marine bunker fuel for ships, as well as for home heating.
  4. Others, which are the types of oil that are turned into solvents, wax, and lubricants. This category also includes natural gas liquids (NGLs) like liquid petroleum gas (LPG) and ethane, which petrochemical companies use as the raw materials in manufacturing plastics and chemical products.

BP’s report found that one of America’s significant drivers of oil demand was in middle distillates; consumption rose by 3.8% to nearly 6 million BPD. That was due in part to strong economic growth, which drove demand for diesel to fuel 18-wheelers and other commercial vehicles. In addition, America is exporting increasing qualities of diesel and jet fuel to global markets where prices are higher.

BP’s report also showed that demand in the “other” category grew at an even stronger 7.2% pace to 4.6 million BPD. That was due mainly to the completion of new petrochemical complexes domestically. CP Chem, a joint venture between refiner Phillips 66 (NYSE:PSX) and oil giant Chevron (NYSE:CVX), was one of several companies that finished U.S. petrochemical expansion projects in early 2018. Phillips 66 and Chevron invested $6 billion into three facilities, one of which will crack ethane to produce 1.5 million metric tons of ethylene a year. Ethylene is the most common building block for plastics, which is what the other two CP facilities will convert it into.

While American refineries and petrochemical plants processed more oil and liquids to make diesel and petrochemicals, they refined less of it into products like gasoline and fuel oil. According to BP, oil used to make light distillates fell by 0.1% last year. That was due in large part to the increasing fuel efficiency of new vehicles. Meanwhile, the amount of oil used to make fuel oils fell by 5.9% due to warmer winter temperatures across the U.S., as well as the ongoing shift toward heating homes with cleaner-burning natural gas.

Refinery at twilight with a beautiful sky in the background.

Image source: Getty Images.

NGLs: America’s new hot commodity

One of the key findings of BP’s report is the growing demand for oil and liquids by petrochemical plants. BP’s chief economist Dale Spencer stated that “the increased importance of petrochemicals in driving oil demand growth was also evident in the global production breakdown, with products most closely related to petrochemicals accounting for around half of the overall growth in demand.”

America is a key driver of the rising demand for these liquids due to the recent completion of several petrochemical plants along the U.S. Gulf Coast — and more such facilities are on the way. ExxonMobil, for example, recently approved the construction of a $2 billion expansion of its chemical plant in Baytown, Texas. Meanwhile, Phillips 66 and Chevron are considering investing between $5 billion and $6 billion on another new U.S. petrochemical expansion project that would turn ethane into ethylene.

In addition to consuming NGLs domestically, American companies are exporting increasing volumes of not only these liquids but their end products. Midstream companies such as Energy Transfer (NYSE:ET) and Enterprise Products Partners (NYSE:EPD) are building new facilities for the purpose. Last spring, Energy Transfer partnered with China’s Satellite Petrochemical to construct a new ethane export facility along the U.S. Gulf Coast. It expects to compete the Orbit export terminal by the end of next year, which will enable it to ship 150,000 barrels of ethane per day to Satellite’s facilities in China. Meanwhile, Enterprise Products Partners is expanding its world-leading LPG export capacity, and is also building a facility to export ethylene. As these facilities enter service, they’ll drive further demand growth.

America is becoming a petrochemical powerhouse

While America’s demand for oil and related liquids reached new heights last year, it’s not because we’re consuming more gasoline. Instead, our rising appetite was mainly due to the completion of several new petrochemical plants that turn liquids like NGLs into the building blocks of plastics. With the second wave of petrochemical plants coming, and more export capacity under construction, U.S. demand should continue rising.

 

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17 Comments on "U.S. Oil Demand Was Scorching Hot Last Year"

  1. asg70 on Sat, 15th Jun 2019 7:29 pm 

    So much for PStarr’s “demand dearth”.

    LOL

  2. Duncan Idaho on Sat, 15th Jun 2019 8:24 pm 

    The US is still importing about 5 million barrels a day.
    Can anyone do the math?

  3. makati1 on Sun, 16th Jun 2019 12:35 am 

    Duncan, and some of that is from …Russia!

    https://www.forbes.com/sites/judeclemente/2019/04/18/does-the-u-s-import-oil-from-russia/#7e826e9b254e

    It averages about 500,000 bbls/day in 2019. Pretty bad when your supplier is also your”enemy”. It is needed to make that shale stuff usable, since the US is trying to take down its other heavy crude supplier, Venezuela. Tough being “energy independent” in a globalized world. LMAO!

  4. Shortend on Sun, 16th Jun 2019 12:53 am 

    More more more…when will it ever end!?
    When it does all HeLL will break loose.
    And it will end that is for certain.
    In the meanwhile we have the luxury to quibble about shit here.

  5. Davy on Sun, 16th Jun 2019 5:21 am 

    Arctic Basin Sea Ice
    https://tinyurl.com/y529odg4 faster than expected

  6. Shortend on Sun, 16th Jun 2019 5:32 am 

    Thanks Davy, that’s good, isn’t it?
    Since the sea ice is gone us super smart Smarties will be able to exploit more resources in ever harder to reach remote places of the planet! More, More, More
    Now go milk a goat…

  7. Davy on Sun, 16th Jun 2019 7:18 am 

    “Collapse: The Seneca Strategy” A Book By Ugo Bardi
    https://tinyurl.com/yybdv8va
    https://tinyurl.com/y4j7pytk doomstead dinner

    “My second book on the concept of “Seneca Collapse” (or Cliff, or Ruin, or the like) is nearly completed and it should be available from Springer before the end of the year. It is a sequel to my first book, “The Seneca Effect”, but this second one is thought as more easily readable “trade” book.”

    “I used “The Seneca Strategy” as a title because the book focuses on how to deal with collapses rather than on the physics of collapses. It proposes a strategy that’s based on the Stoic view of the world revisited under the lens of system dynamics. It is the idea that you don’t try to force systems to do what you want them to do, a concept that Jay Forrester termed “pushing the levers in the wrong direction.”

    “Table of Contents Six Things You Should Know About Collapse Collapse: An Introduction Models of Collapse Models of the Future: The Russian Roulette The Limits of Models. Nightfall on Lagash Why Models are not Believed: The Croesus Syndrome The Science of Collapse Complex Systems: The Goddess’ Wrath The Power of Networks: The Ghost in the Shell Living and Dying in a Complex Universe. The Story of Amelia the Amoeba. The Practice of Collapse The Collapse of Engineered Structures: For Dust you are and to Dust you Will Return Financial Collapses: Blockbuster goes bust Natural Disasters: Florence’s Great Flood Mineral Collapses: The Coming Oil Crisis? The Seneca Cliff and Human Violence: Fatal Quarrels Famines, Epidemics, and Depopulation: The Zombie Apocalypse The Big One: Societal Collapse Apocalypse: the collapse of the Earth’s ecosystem Strategies for Managing Collapse Technological Progress against Collapse. The Cold Fusion Miracle that Wasn’t Avoiding Overexploitation. Drill, Baby, Drill! Leadership Against Collapse: The Last Roman Empress Collapse as a Weapon: The Iago Strategy Deception as a Strategy: the Camper’s Dilemma Life After Collapse: The Seneca Rebound Conclusion: The Seneca Strategy”

  8. Davy on Sun, 16th Jun 2019 7:26 am 

    There are two aspects to my REAL Green Deep Adaptation. One is the hardware and energy side of a hybrid energy gathering effort combined with efficiency and conservation. The other is the behavioral side of adapting and mitigating decline. On the behavioral side the emphasis is on systems dynamics as a guide to a collapse process. There is the physics of collapse which is available across the web in multiple site locations. There is no shortage to the science of collapse. How to deal with collapse is less straight forward and often sensationalized and extreme. REAL Green Deep Adaptation starting point is individual and local. This does not mean uninformed and withdrawn, quite the contrary. RG stresses proactive research on the process as a daily exercise. Know what is happening in the greater world but keep perspective. Far too often we get absorbed into global events and lose our way locally.

    RG primary behavioral function is acknowledgement of the collapse process. This does not mean collapse is inevitable and the reason for this is we are unable to know this with certainty. It sees a collapse trajectory based upon scientific research. The time line is unknown and the degree and duration uncertain. The acknowledgement is more the understanding through systems dynamics that collapse is a normal process in ecosystems. The positive side of this adaptation is a better life with or without collapse. Also collapse may visit the younger generation and some of the older generation may never see collapse. RG says collapse is and always has been a human reality it is just recently the idea has been censored.

    Looking at the human ecosystem we see classic examples of thresholds being approached. The collapse process found in our current civilization then is a call to action for individual and local adaptation. This action is twofold with one being the mentality of preparing for collapse and the other is the lifestyle of this effort. The mentality seeks to incorporate the concept of sapience as the foundation of choosing what to embrace and what not to. Often it is what not to in this world of overwhelming possibilities that is the most important. Do not pollute your local and your individuality with clutter. Cleaning out the deadwood of distractions and unneeded things is a daily exercise which requires emotional sacrifice. The mentality of deep adaptation is one of relative sacrifice. This is a condition of living already in a collapsed world and not. It is about utilizing the status quo that is not collapsed to construct your bulk work against collapse that requires a way of life is collapsed. It is a collapse in place and beat the rush mentality. The dignity of this comes from respect, honesty and the resulting meaning. Relative efforts are key because extreme measures of leaving the status quo will hinder your ability to leave it. You must navigate a tricky way of life that embraces the status quo because of work, family, and citizenship but also the effort of collapsing in place that is contrary to the social narrative.

    Relative sacrifice also concerns the degree of embrace of conservation and efficiency measures in the cause of planetary health. RG is planet oriented as a spiritual add on to your higher power but this must be done relatively so one does not upend one’s life in the status quo that supports and nurtures your RG effort. Relative sacrifice says tailor adaptation efforts around your status quo meaning and individuals. RG will vary in the degree of effort that maximize the enhancement planetary health. It is planetary health that is the ultimate basis of an add on to your higher power. IOW your personal power springs from the ground bellow you and the life around you.

    The next step to the mentality of RG is hybridization through salvage and triage. A RG effort seeks to combine the new and the old ways of living and does this by focusing on salvage efforts of utilizing what you have in new ways. RG uses triage to eliminate those items that do not have long term use and do not contribute to a RG doomstead. Some items are out of place in one local but not another. Rid yourself of play toys but one RG local’s toy is another tools so this effort is relative. RG says make all your equipment and structures focused on RG efforts. RG leisure centers on the RG effort and focused on the local. It is influenced by relative sacrifice so a compromise of sorts is reached. Your family will push you into travel for leisure but show resistance by pushing local efforts instead.

    In regards to the old ways RG refers to efforts at lifestyles of pre-modern times before fossil fuels and modern machines. These times were more survival based as RG must be considering our current collapse process. We have a wealth of new ways and things the key is to triage out those with no future because of low durability and little value to survival in a collapsed world. Horde those tools and knowledge of both the old and new but use RG wisdom to pick and choose and relative sacrifice to fit this effort into your status quo world.

    RG behavior leads into the bricks and mortar of your RG local. Locality and individuality is the key here. There is no set templet for this part of RG. You are your own expert and your local should be the guide. Find out what is healthy about your local and enhance it with RG wisdom. Local efforts mean staying local in relative sacrifice. Your family and community will push you to leave your local so balance this tension. Eat and live local is your starting point. Build a RG monastery both abstract and physical. A library of knowledge and a shop of tools is the basis of this RG brick and mortar. It is the brick and mortar that begins the process of harvesting and gathering of low carbon solar energy that is found in both the living and nonliving world.

  9. Davy on Sun, 16th Jun 2019 8:01 am 

    I hope y’all enjoyed the above glimpse into my deranged mind.

    Think of it as ‘The Diary of a Lunatic’.

  10. Robert Inget on Sun, 16th Jun 2019 10:30 am 

    #1) 1.4% of that 20 MB p/d was EXPORTED.
    #2) SPR draws? Product imports? (gasoline)
    #3) In point of FACT every week EIA shows year over year deficits in product use of about .01%
    I attribute to electric and natural gas cars, busses.

    The biggest con today is lumping condensates
    (LNG) with crude oil, calling the entire mixture ‘crude storage’.
    In the past we exported that ultra light to Venezuela. VZ mixed that liquid gas with their
    tar like crude so it flowed through pipes.

    With VZ off the client list we naturally have a serous build of shale gas and liquids.
    Worse yet, we need to import heavy oil from Russia. Again, in the past, when we imported
    crude from Venezuela, at least one third was OUR own ultra light shale that is currently bloating storage at this very moment.

    There’s the RUB. Too much almost useless LNG
    and a shortage of uncut, habit forming, diesel.

    I say ‘habit’ because eating is habitual.

    Without diesel (not mentioned by BP) we will need to find substitutes and quickly.

    Refineries aren’t ‘hoarding’ as is being charged.
    Refineries are ‘stuck’ with condensates, not the heavy crude they were designed to process.

    Because of the difference in price between ‘Brent’ ($62.80) and WTI ($52.48) our ‘oil’ is attractively
    priced if USD goes lower. We should be able to export our way out of the current ‘glut’ provided
    we shut down all shale operations today.

    Quite the reverse is happening. Drillers are doing what they were told to do. “Drill Baby Drill”.
    Three new pipelines will be opening this year and next just to export all that gassy crude.

    Now, here’s the RUB.
    $50. is the break-even price for the gassy.
    Eight out of Ten companies are losing money @ $50. They have to sell at a loss to service the enormous debt taken on for endless drilling and fracking. ‘Endless’ because of extreme shale depletion rates.

    All above is gloomy, sure.
    Here’s more. Buying more heavy oil from Canada has been curtailed by their government for two reasons; No new pipelines south. No new pipelines East, (Eastern Canada pays Brent ($10+)prices), No new pipelines West, (for Asian export).
    ( my guess, WHEN, NOT IF new pipe is laid it goes West) (in many respects, China is closer)

    So, until Venezuela gets back on line we are stuck getting enough heavy oil from Russia. Even then,
    we will be buying oil from Russia, not in USD but
    a basket of currencies dominated by Chinese.`

    Forget about teaching your kids only Chinese, Russian also might be a good choice.

  11. Davy on Sun, 16th Jun 2019 5:40 pm 

    “It’s Going To Be A Train Wreck”: Farmers Say Corn Crop Far Worse Than USDA Estimates”
    https://tinyurl.com/y2qgcblh zero hedge

    “This year’s corn crop has been absolutely decimated by nonstop rain and unseasonably cool weather, according to a new report from Bloomberg. And while those caveats are widely known, farmers believe that already adjusted estimates for June are still going to be too optimistic.”

    “It’s going to be a train wreck,” McCune said. Corn farmers face unprecedented headwinds this year, including record rain that has flooded the midwest and stalled corn plantings. This has forced the US Department of Agriculture to cut its harvest estimates in its June report. This is only the fourth time since 2000 that the government has taken such action in the month of June.”

  12. makati1 on Sun, 16th Jun 2019 6:40 pm 

    Really? “…20.46 million barrels of crude oil and related liquids.” Related liquids. Hmm. Well, liars figure and figures lie.

    That is like saying I drank 25 gallons of Chivas Regal (25 year old scotch whiskey) when I really drank 25 gallons of Pabst Blue Ribbon beer. Both alcohol, but so very different!

    The dumbed-down tax serfs will not even notice the lie as they don’t think anymore. Not allowed to and it hurts too much.

    Amerika, you cannot lie yourself into being great. The rest of the world sees thru the propaganda bullshit and just turns away, laughing. GO TRUMP!

  13. pointer on Mon, 17th Jun 2019 8:28 am 

    We’re just a bunch of spoiled trust fund kids deeply entrenched in the notion that we are entitled to all of today’s conveniences. We waste our time mostly on entertainment, to a great extent by posting our opinions (we think of them as facts), not taking responsibility for anything, and rebuking anyone who suggests we take responsibility for anything. Eventually the trust fund will run out…

  14. JuanP on Mon, 17th Jun 2019 3:59 pm 

    Trump supporters already lining up for campaign kickoff more than 40 hours before rally
    Talk radio hosts Robert Patillo and RJ Harris discuss the current polls showing Democrats beating Donald Trump. Supporters of President Trump already have started lining up outside Orlando’s Amway Center for the president’s official re-election campaign kickoff rally – more than 40 hours before the event is scheduled to start. In a scene befitting a “Star Wars” premiere or new iPhone launch, Orlando-area media were reporting that the first Trump supporters began camping outside the arena as early as 2:30 a.m. Monday for Trump’s rally slated to start at 8 p.m. on Tuesday. “There’s going to be a bunch of people, and it’s going to be pretty intense,” Gary Beck, who was the first person in line on Monday morning, told local media. “The electricity is going to be high. It’s time for America to get back on its feet and be made better than it’s ever been before.” The president tweeted on Monday morning that his campaign has received more than 100,000 ticket requests for the event in an arena that only holds 20,000 people. “Big Rally tomorrow night in Orlando, Florida, looks to be setting records,” Trump tweeted. “Our Country is doing great, far beyond what the haters & losers thought possible – and it will only get better!”

  15. Davy on Mon, 17th Jun 2019 9:09 pm 

    Years ago they used to say there’s only two things needed during winter- heat and meat.

    Nowadays, I say there’s only two things I need year round- socks and cocks.

  16. More Davy Identity Theft on Tue, 18th Jun 2019 12:30 am 

    JuanP on Mon, 17th Jun 2019 3:59 pm

  17. Green People's Media on Thu, 20th Jun 2019 1:12 am 

    Oops, big parts of the Arctic region are also “scorching hot” these days.

    https://weather.com/science/environment/news/2019-06-14-permafrost-melting-sooner

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