10, 9 8, 7, 6, 5…., Oil & Gas Outlook 2014

Over the last year, oil prices have been volatile while natural gas prices have improved slightly.  Currently the bifurcation of oil prices to natural gas prices is less than last year but due more to oil dropping in price rather  than gas rising.  U.S. production of black oil is rising at a rapid rate.  Once again production is out stripping our ability to transport oil to the refiners.  With the lower prices our refiners have a major advantage over refiners overseas.  Our gasoline in storage is at or above the highs for this time of year.  They are exporting over 3,500,000 barrels of refined product per day overseas.  The vast majority of this is diesel.  Europe consumes a higher ratio of diesel than gasoline.  Even though the crack spread on gasoline has been reduced, the profit on diesel is much higher by exporting into Europe and South America.  Generally we are not allowed to export oil, but we can export refined product.  This is not bad in that the value added helps our economy and reduces our trade deficit.
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Breaking Ground: Is U.S. Really On Track To Become “Saudi America?”


“Saudi America.” Has a kind of nice ring to it, but is it really a possibility that the United States could produce enough oil to not only create its own energy independence but even outpace oil king Saudi Arabia?
 
It’s not as outlandish as it may sound. For starters, Texas now produces more oil than the U.S. imports from Saudi Arabia. Then there’s the recently doubled estimates of recoverable energy in North Dakota’s Bakken and Three Forks shale formations.  And, according to the International Energy Agency (IEA), the U.S. is on track to surpass all Saudi Arabia oil output by 2017.
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Breaking Ground: U.S. Boom’s Ripple Effects Could Challenge U.S. Energy Security


America’s unconventional oil and gas renaissance could have the United States on the fast track to energy security, but it’s also fueling a lot of activity across the globe as other nations seek to maintain, increase or create competitive advantage by developing their own unconventional resources.
 
Europe has some shale gas reserves that may help it level the playing field. There are certainly substantial benefits to be gained for Europe from successful development of its unconventional oil and gas resources. However, Europe is steps behind the U.S. in accessing those reserves and faces a tangle of differing national interests as well as the same environmental concerns oil and gas developers have contended with across the pond.
 
Poland, which is estimated to contain 29 percent of European shale gas reserves, is one European country wholeheartedly embracing unconventional hydraulic fracturing and horizontal drilling techniques. France, on the other hand, owns 28 percent of Europe’s shale gas reserves, but has placed a permanent ban on any extraction process that involves fracking. The rest of Europe, in the meantime, is taking a “wait and see” approach as governments observe and evaluate shale gas development activities in Poland as well as ongoing environmental studies in the U.S.
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Breaking Ground: Dangerous U.S. Export or Path to Prosperity?


As the United States stands on the brink of becoming an energy-independent nation, thanks to the vast shale gas and oil reserves now accessible through hydraulic fracturing, environmental groups warn other countries against succumbing to the lure of this “dangerous American export.”

Some countries, like France, have simply banned the practice, while others are eager to fully develop the potential of their reserves—a potential that only promises to grow as new discoveries and technologies increase the inventory of recoverable gas reserves.
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