Wed. Oct 5th, 2022

Monthly Newsletter

July 30, 2021

Prof. ST Hsieh

Director, US-China Energy Industry Forum

626-376-7460

[email protected]

Introduction: This monthly newsletter is intended to be a monthly update on US-China interactions on energy and environment industry sectors. We believe that accurate, quantitative, updated data is key for decision making. Please note that data is from open sources and comments are personal opinion.

Overview:

Energy security is a national security issue, but it is also a geopolitical issue. Balance of supply and demand dominates the price and vice versa. Currently, the global demand side is clouded by the threat of COVID-19 virus and its variants. Many nations, including USA, must quickly reverse previous relaxation of pandemic control in July. It is going to negatively impact on the global recovery. Thus, global energy demand will be weak until COVID-19 pandemic is under control.

On the supply side, we notice the following issues:

  1. OPEC+ has reached the consensus of relaxing oil production quota, in July.
  2. The JCOPA negotiation with Iran is intensifying, once it is resolved, Iran will be able to export crude oil immediately. The reason is that Iran has been store crude on super tankers and they will be ready to go anytime.
  3. US is pulling out of Iraq at the end of 2021, if Iraq destabilized then its oil production could be severely reduced. Iraq has already asked Exxon-Mobile to leave.
  4. US shale oil-gas industry is slowly recovering, in general terms US shale oil industry can break even when WTI price is above US$65/bbl. When US Shale oil-gas roars back, we can expect the global oil and gas price stabilizing.
  5. US natural gas, including Coal Bed Methane and Shale gas, may dominate the global LNG market.
  6. In July, it was reported that China released three million tons of crude oil from her strategic petroleum reserve (SPR) as a tool to cool down the crude oil price. India could follow!

Background: The U.S. Energy Information Administration (EIA) is a principal agency of the U.S. Federal Statistical System responsible for collecting, analyzing, and disseminating energy information to promote sound policymaking, efficient markets, and public understanding of energy and its interaction with the economy and the environment. EIA programs cover data on coalpetroleumnatural gaselectricrenewable and nuclear energy. EIA is part of the U.S. Department of Energy.

The Department of Energy Organization Act of 1977 established EIA as the primary federal government authority on energy statistics and analysis, building upon systems and organizations first established in 1974 following the oil market disruption of 1973 due to the Arab oil embargo.

EIA conducts a comprehensive data collection program that covers the full spectrum of energy sources, end uses, and energy flows; generates short- and long-term domestic and international energy projections; and performs informative energy analyses.

EIA disseminates its data products, analyses, reports, and services to customers and stakeholders primarily through its website and the customer contact center.

Located in Washington, D.C., EIA has about 325 federal employees and a budget of $126.8 million in fiscal year 2021. Most importantly, by law, EIA’s products are prepared independently of policy considerations. EIA neither formulates nor advocates any policy conclusions. The Department of Energy Organization Act allows EIA’s processes and products to be independent from review by Executive Branch officials; specifically, Section 205(d) says:

“The Administrator shall not be required to obtain the approval of any other officer or employee of the Department in connection with the collection or analysis of any information; nor shall the Administrator be required, prior to publication, to obtain the approval of any other officer or employee of the United States with respect to the substance of any statistical or forecasting technical reports which he has prepared in accordance with law.

Some data with historical figures

  1. Petroleum
  1. 1. Weekly Petroleum Status Report (Data for Weekended: July 23, 2021)

Summary of Weekly Petroleum Data for the week ending July 23, 2021 U.S. crude oil refinery inputs averaged 15.9 million barrels per day during the week ending July 23, 2021 which was 132,000 barrels per day less than the previous week’s average. Refineries operated at 91.1% of their operable capacity last week. Gasoline production increased last week, averaging 9.8 million barrels per day. Distillate fuel production decreased last week, averaging 4.7 million barrels per day. U.S. crude oil imports averaged 6.5 million barrels per day last week (See STH Notes,) decreased by 0.6 million barrels per day from the previous week. Over the past four weeks, crude oil imports averaged about 6.4 million barrels per day, 6.9% more than the same four-week period last year. Total motor gasoline imports (including both finished gasoline and gasoline blending components) last week averaged 909,000 barrels per day, and distillate fuel imports averaged 188,000 barrels per day. U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.1 million barrels from the previous week. At 435.6 million barrels, U.S. crude oil inventories are about 7% below the five year average for this time of year. Total motor gasoline inventories decreased by 2.3 million barrels last week and are about 0% below the five year average for this time of year. Finished gasoline and blending components inventories both decreased last week. Distillate fuel inventories decreased by 3.1 million barrels last week and are about 7% below the five year average for this time of year. Propane/propylene inventories increased by 1.9 million barrels last week and are about 14% below the five year average for this time of year. Total commercial petroleum inventories decreased by 6.5 million barrels last week. Total products supplied over the last four-week period averaged 20.6 million barrels a day, up by 12.6% from the same period last year. Over the past four weeks, motor gasoline product supplied averaged 9.5 million barrels a day, up by 9.1% from the same period last year. Distillate fuel product supplied averaged 3.8 million barrels a day over the past four weeks, up by 12.6% from the same period last year. Jet fuel product supplied was up 39.4% compared with the same fourweek period last year

The West Texas Intermediate crude oil price was $72.24 per barrel on July 23, 2021, $0.48 above last week’s price and $31.01 more than a year ago. The spot price for conventional gasoline in the New York Harbor was $2.292 per gallon, $0.049 more than last week’s price and $1.047 above a year ago. The spot price for ultra-low sulfur diesel fuel in the New York Harbor was $2.133 per gallon, $0.031 above last week’s price and $0.871 over a year ago. The national average retail regular gasoline price was $3.136 per gallon on July 26, 2021, $0.017 per gallon less than last week’s price but $0.961 over a year ago. The national average retail diesel fuel price was $3.342 per gallon, $0.002 below last week’s price but $0.915 over a year ago.

STH Notes: Even though the US is now a net energy exporter nation, imported heavy crudes are essential for mixing with local produced light crudes for efficient refinery operations.

  1. 2. Weekly Imports and Exports (Thousand Barrels Per Day)
Download Series History
Definitions, Sources & Notes
 Show Data By:
Data Series or Area
06/18/2106/25/2107/02/2107/09/2107/16/2107/23/21View
History
Imports       
Total9,7948,7608,5268,6589,6889,2591991-2021
Crude Oil6,9436,4065,8756,2217,0976,5071990-2021
Commercial6,9436,4065,8756,2217,0976,5071982-2021
Imports by SPR0000001982-2021
Imports into SPR by Others0000002010-2021
Total Products2,8522,3532,6522,4372,5912,7521990-2021
Total Motor Gasoline8407901,0161,0441,3749091982-2021
2 Finished Motor Gasoline731581792076972081994-2021
Reformulated0000001993-2021
Blended with Fuel Ethanol0000002004-2021
Other0000002004-2021
Conventional731581792076972081994-2021
Blended with Fuel Ethanol0000002004-2021
Ed55 and Lower0000002010-2021
Greater than Ed550000002010-2021
Other Conventional731581792076972082004-2021
Motor Gasoline Blending Components7676318378376777011985-2021
RBOB2542713692232722682010-2021
RBOB with Ether      2004-2010
RBOB with Alcohol      2004-2010
CBOB20701041666552004-2021
GTAB24997175117109332004-2021
All Other2441931894812303452004-2021
Fuel Ethanol20230015362010-2021
Kerosene-Type Jet Fuel2811081361171292791982-2021
Distillate Fuel Oil27624513177871881982-2021
15 ppm Sulfur and Under2762458677871882004-2021
> 15 ppm to 500 ppm Sulfur0000001993-2021
> 500 ppm to 2000 ppm Sulfur00450002004-2021
> 2000 ppm Sulfur0000002004-2021
Residual Fuel Oil2351251131021181761982-2021
Propane/Propylene77103708196882004-2021
Other Oils1,1249611,1861,0167711,0762010-2021
Kerosene00000202010-2021
NGPLs/LRGs (Excluding Propane/Propylene)3834403738312010-2021
Exports       
Total Crude Oil and Products9,1338,7117,8289,6207,9858,1441991-2021
Crude Oil3,6513,7172,6284,0252,4632,4891991-2021
Products5,4824,9945,2005,5955,5225,6551991-2021
Finished Motor Gasoline8954468487478667182010-2021
Kerosene-Type Jet Fuel140556113788612010-2021
Distillate Fuel Oil1,1901,2281,0271,3161,2571,0122010-2021
Residual Fuel Oil155155131205851392010-2021
Propane/Propylene1,1821,2131,1391,0711,1861,5312010-2021
Other Oils1,9201,8971,9942,1192,0402,1942010-2021
Net Imports       
Total66149698-9621,7031,1151991-2021
Crude Oil3,2922,6893,2472,1964,6344,0182001-2021
Products-2,630-2,641-2,548-3,158-2,931-2,9032001-2021
– = No Data Reported; — = Not Applicable; NA = Not Available; W = Withheld to avoid disclosure of individual company data.
Notes: RBOB with Ether and RBOB with Alcohol are discontinued as of the week ending June 4, 2010 reporting period. Due to independent rounding, individual product detail may not add to total. See Definitions, Sources, and Notes link above for more information on this table.
Release Date: 7/28/2021
  1. 3. Spot Prices (Crude Oil in US Dollars per Barrel, products per Gallon)
Download Series History
Definitions, Sources & Notes
Product by Area 07/19/2107/20/2107/21/2107/22/2107/23/2107/26/21View
History
Crude Oil       
WTI – Cushing, Oklahoma66.4567.3270.2672.1572.2472.151986-2021
Brent – Europe69.3370.0372.5474.2574.8674.791987-2021
Conventional Gasoline       
New York Harbor, Regular2.1122.1392.2152.2642.2922.3191986-2021
U.S. Gulf Coast, Regular2.0552.0692.1452.1972.2102.2371986-2021
RBOB Regular Gasoline       
Los Angeles2.1922.2242.3052.3642.4122.4392003-2021
No. 2 Heating Oil       
New York Harbor1.8101.8391.9061.9491.9551.9781986-2021
Ultra-Low-Sulfur No. 2 Diesel Fuel       
New York Harbor1.9842.0152.0842.1272.1332.1562006-2021
U.S. Gulf Coast1.9321.9562.0292.0722.0792.1022006-2021
Los Angeles1.9972.0262.1212.1592.1702.1931996-2021
Kerosene-Type Jet Fuel       
U.S. Gulf Coast1.7471.8461.8391.8861.8901.9131990-2021
Propane       
Mont Belvieu, Texas1.0481.0381.0651.0851.0881.0901992-2021
– = No Data Reported; — = Not Applicable; NA = Not Available; W = Withheld to avoid disclosure of individual company data.
Notes: Weekly, monthly, and annual prices are calculated by EIA from daily data by taking an unweighted average of the daily closing spot prices for a given product over the specified time period. See Definitions, Sources, and Notes link above for more information on this table.
Release Date: 7/28/2021
  1. 4. Exports by Destination
Download Series History
Definitions, Sources & Notes
 Show Data By:
Destination or Product
Dec-20Jan-21Feb-21Mar-21Apr-21May-21View
History
Total All Countries3,3713,1652,7032,6853,2832,7361920-2021
Argentina 0    2016-2021
Australia 4827  242018-2021
Bahama Islands      2016-2020
Belarus      2020-2020
Belgium  26 17 2019-2021
Brazil2880106 146142015-2021
British Indian Ocean Territory      2017-2017
Bulgaria      2019-2019
Cameroon      2004-2004
Canada3843632973373542721993-2021
Chile24442723 502018-2021
China7193902693392023501996-2021
Colombia18182021 352016-2021
Costa Rica      2011-2011
Croatia      2018-2020
Curacao      2016-2018
Denmark2323  6642017-2021
Dominican Republic1616351633162016-2021
Finland24     2020-2020
France71711049248502005-2021
Georgia, Republic of      2017-2017
Germany69488149851072004-2021
Gibraltar      2017-2020
Greece      2016-2020
Guatemala      2016-2016
Hong Kong      1996-2017
India5604634633443703612015-2021
Indonesia  22   2019-2021
Ireland393922 22222018-2021
Israel      2016-2020
Italy1209480741381442014-2021
Jamaica      2019-2019
Japan33 25 43 1996-2021
Korea, South2603192473983482391993-2021
Liberia      2016-2016
Lithuania48    242019-2021
Malaysia      2017-2020
Malta      2020-2020
Marshall Islands      2016-2020
Martinique     182021-2021
Mexico      1996-2019
Netherlands2601374621934252452004-2021
Netherlands/Antilles      2004-2004
New Zealand      2020-2020
Nicaragua121212  92016-2021
Nigeria      2016-2016
Norway244626 23772017-2021
Panama4345    2016-2021
Peru2313 4613132016-2021
Philippines      2019-2019
Poland     232017-2021
Portugal2524 23  2018-2021
Puerto Rico      1993-1996
Russia      2004-2004
St. Lucia      2020-2020
Singapore 97130662171052014-2021
South Africa     262016-2021
Spain2396264675232014-2021
Sweden4623 24  2018-2021
Switzerland 23 2125242014-2021
Taiwan47192253052112081996-2021
Thailand101128  85 2016-2021
Togo      2017-2017
Trinidad and Tobago      2017-2017
Turkey      2017-2017
Ukraine      2020-2020
United Arab Emirates25     2017-2020
United Kingdom2842241001972902322016-2021
Uruguay      2018-2020
Venezuela      1998-1998
Vietnam22 18   1996-2021
Virgin Islands (U.S.) 89517147231993-2021
– = No Data Reported; — = Not Applicable; NA = Not Available; W = Withheld to avoid disclosure of individual company data.
Notes: On December 18, 2015, the U.S. enacted legislation authorizing the export of U.S. crude oil without a license. Exports to embargoed or sanctioned countries continue to require authorization. Prior to December 2015, crude oil exports were restricted to: (1) crude oil derived from fields under the State waters of Cook Inlet of Alaska; (2) Alaskan North Slope crude oil; (3) certain domestically produced crude oil destined for Canada; (4) shipments to U.S. territories; and (5) California crude oil to Pacific Rim countries. Totals may not equal sum of components due to independent rounding. See Definitions, Sources, and Notes link above for more information on this table.
Release Date: 7/30/2021

ST Notes:  The data shows that US crude exports to China during the past half year experienced a large (almost 50%) reduction after President Biden took over from President Trump. The decrease could also be attributed to elevated crude oil price and slow global recovery from the COVID-19 pandemic. So there are plenty room for US-China crude oil trade to expand.

  1. Natural Gas

STH Note: The spike of natural gas price on February 16 and 17, 2021 was due to the severe winter weather hitting Texas caused the collapsing of its energy supply network

  1. 1. U.S. natural gas supply Week: (7/22/21 – 7/28/21)
this weeklast weeklast year
Marketed production104.5105.0101.2
Dry production92.692.989.6
Net Canada imports5.65.04.1
LNG pipeline deliveries0.10.10.2
Total supply98.398.093.9
Average daily values (billion cubic feet)
Source: Chart by the U.S. Energy Information Administration (EIA), based on data from IHS Markit
Note: This table reflects any data revisions that may have occurred since the previous week’s posting. Liquefied natural gas (LNG) pipeline deliveries represent natural gas sendout from LNG import terminals.

U.S. LNG exports decrease week over week. Nineteen LNG vessels (seven from Sabine Pass, four from Corpus Christi, three each from Cameron and Freeport, and two from Cove Point) with a combined LNG-carrying capacity of 70 Bcf departed the United States between July 22 and July 28, 2021, according to shipping data provided by Bloomberg Finance, L.P.

  1. 2. U.S. Natural Gas Exports and Re-Exports by Country (Volumes in Million Cubic Feet, Prices in US Dollars per Thousand Cubic Feet)
Download Series History
Definitions, Sources & Notes
Type – Area Dec-20Jan-21Feb-21Mar-21Apr-21May-21View
History
Export Volumes       
Total553,176563,483423,972595,375560,890574,5011973-2021
Pipeline248,884258,287215,579274,352254,072259,5791997-2021
Canada84,30784,92778,19891,30174,56770,5611973-2021
Mexico164,577173,360137,381183,051179,505189,0181973-2021
LNG304,263305,196208,394321,023306,818314,9221997-2021
Exports304,263305,196208,394321,023306,818314,9222014-2021
By Vessel304,209305,113208,331321,004306,755314,8552013-2021
Argentina0002,2384,48516,2262015-2021
Bahamas3628293946452017-2021
Bangladesh03,14803,56610,2196,9482019-2021
Barbados2517191430192015-2021
Belgium0003,48402,1002018-2021
Brazil29,92721,13213,11821,97711,61519,7262015-2021
Chile9,7939,7846,52421,32010,29317,5982015-2021
China45,52538,9403,41528,47646,83737,7312011-2021
Colombia000089202017-2021
Croatia3,275007,3673,6663,3642020-2021
Dominican Republic5,0006,8955,6895,5772,9055,2832016-2021
Egypt0000002016-2021
France3,7523,58714,85133,67836,12011,9262018-2021
Greece3,38260006,80506,7962018-2021
Haiti171211103122018-2021
India10,24120,36713,77617,38113,75228,2592015-2021
Israel0002,8263,22502017-2021
Italy00010,7396,8962,9232016-2021
Jamaica2,3743,7082,3652,4582,3702,9252018-2021
Japan54,00464,33118,27127,67328,75625,0581973-2021
Jordan0000002016-2021
Kuwait0003,8213,70502016-2021
Lithuania6,29106,8513,2283,0783,0492017-2021
Malaysia      2019-2019
Malta00002,92802016-2021
Mexico0013,3540002016-2021
Netherlands3,3162,94922,77724,20417,06026,6112016-2021
Pakistan03,68203,4213,32302016-2021
Panama27151603,27902,3412017-2021
Poland7,03307,0993,5077,3823,5812016-2021
Portugal3,71103,36007,35810,7652015-2021
Russia0000002007-2021
Singapore03,68803,3037,2973,0892018-2021
South Korea39,61755,93618,09432,20321,68346,0332016-2021
Spain13,5837,3773,73313,90022,9745,2342016-2021
Taiwan12,47010,319013,4506,59410,1572015-2021
Thailand00007,3883,4532016-2021
Turkey20,18826,65920,6523,61903,0172016-2021
United Arab Emirates0000002015-2021
United Kingdom30,37821,43634,34317,44013,87710,5862017-2021
By Truck5383631963662013-2021
Canada800015182007-2021
Mexico4683631948481997-2021
Re-Exports0000002013-2021
Argentina0000002016-2021
Brazil0000002010-2021
Chile      2011-2016
China0000002011-2021
Egypt0000002015-2021
India0000002010-2021
Japan0000002010-2021
Mexico0000002012-2021
Portugal      2012-2016
South Korea0000002009-2021
Spain0000002010-2021
Turkey0000002015-2021
United Kingdom0000002010-2021
CNG29000002011-2021
Canada29000002011-2021
Export Prices       
Average4.844.6212.684.714.474.911989-2021
Pipeline2.852.8918.642.912.723.021997-2021
Canada2.802.994.032.862.582.841989-2021
Mexico2.872.8426.962.932.783.091989-2021
LNG6.486.086.526.255.926.461997-2021
Exports6.486.086.526.255.926.462014-2021
By Vessel6.486.086.516.255.926.462013-2021
Argentina6.556.256.112015-2021
Bahamas10.3910.3910.3910.3910.3910.392017-2021
Bangladesh2.956.075.567.012019-2021
Barbados10.3910.3910.3910.3910.3910.392015-2021
Belgium4.657.352018-2021
Brazil6.597.357.516.535.816.082015-2021
Chile5.995.916.976.155.956.552015-2021
China6.336.094.466.395.766.432011-2021
Colombia6.252017-2021
Croatia6.756.586.256.672020-2021
Dominican Republic6.326.238.996.145.906.592016-2021
Egypt2016-2021
France7.126.096.726.755.766.952018-2021
Greece6.085.565.336.112018-2021
Haiti10.3910.3910.3910.3910.3910.392018-2021
India6.336.106.626.075.486.362015-2021
Israel6.465.112017-2021
Italy6.656.886.112016-2021
Jamaica6.276.096.436.556.226.632018-2021
Japan6.786.206.607.016.066.941973-2021
Jordan2016-2021
Kuwait6.645.752016-2021
Lithuania6.286.147.086.166.612017-2021
Malaysia      2019-2019
Malta6.222016-2021
Mexico5.682015-2021
Netherlands8.375.575.875.816.186.302016-2021
Pakistan4.548.426.002016-2021
Panama6.086.096.077.352017-2021
Poland7.256.956.556.156.612016-2021
Portugal7.125.375.964.702015-2021
Russia2007-2021
Singapore6.114.374.776.672018-2021
South Korea6.206.016.645.486.216.812016-2021
Spain6.946.316.485.956.346.772015-2021
Taiwan6.195.175.595.426.652015-2021
Thailand4.086.662016-2021
Turkey6.226.137.006.596.422016-2021
United Arab Emirates2015-2021
United Kingdom6.235.746.166.476.915.782017-2021
By Truck8.679.169.5210.3911.5310.712013-2021
Canada9.9911.1411.342007-2021
Mexico8.459.169.5210.3911.6610.471992-2021
Re-Exports2013-2021
Argentina2015-2021
Brazil2010-2021
Chile      2011-2016
China2011-2021
Egypt2015-2021
India2010-2021
Japan2010-2021
Mexico2012-2021
Portugal      2012-2016
South Korea2009-2021
Spain2010-2021
Turkey2015-2021
United Kingdom2010-2021
CNG3.812011-2021
Canada3.812011-2021
– = No Data Reported; — = Not Applicable; NA = Not Available; W = Withheld to avoid disclosure of individual company data.
Notes: The price of LNG exports to Japan is the “landed” price, defined as received at the terminal in Japan. CNG = Compressed Natural Gas: Natural gas compressed to a pressure at or above 200-248 bar (i.e., 2900-3600 pounds per square inch) and stored in high-pressure containers. LNG re-exports are shipments of LNG to foreign countries that were previously imported, offloaded. See Definitions, Sources, and Notes link above for more information on this table.
Release Date: 7/30/2021

STH Notes:

  1. From the US data, it seems that the US-China LNG trade has been steady for the past half year, as of May 2021 (last data available) China Imported 37,731 Million Cubic Feet over the US total of 314,992 Million Cubic Feet or almost 12%. China’ import is only next to South Korea which is at about 15%. Overall, Asia is the major destination of US LNG at 37.7%.
  2. China’s import price at US$6.43 per Thousand Cubic Feet which is rather fair as Japan must pay US$ 6.94 and South Korea must pay US$6.91 respectively.
  3. Further, the US data shows that there is no Re-Exports anywhere in the world. It seems that LNG spot market is not well developed.

Conclusions: More LNG activities are expected.

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Email: [email protected]

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