Sunday, February 26, 2012

Infographic of the Day

Infographic of the day: The Impact of High Oil Prices on the US Economy

High gas prices are surging again in the US, putting pressure on our Congressmen and Secretary of State to calm fears of further increases in the summer when tough new International sanctions on Iran kick in. That happens on July 01, when the European Union will ban Iranian oil. The US also plans to put sanctions on those who purchase Iranian oil. To make up for the lost Iranian oil, Senator Chuck Schumer wrote a letter to Sec. of State Hillary Clinton, urging her to put pressure on Saudi Arabia to increase it's production. Gas prices are projected to exceed $4 a gallon over the summer peak driving season.
It has also been speculated that the Obama Administration might tap into the US strategic petroleum reserves to relieve prices. President Obama is facing pressure from members of his own party as well as members of his cabinet. In positive news, Obama stated at an appearance at the University of Miami that "we have to keep developing new sources of energy." According to Reuters:
President Barack Obama said on Thursday the federal government would fight high oil prices by easing bottlenecks and problems with permitting, but that the country would not be able to drill its way to lower oil prices. Obama said the government would look for ways to run vehicles on fuels beyond gasoline, such as advanced biofuels and natural gas. "
We can't just allow ourselves to be held hostage by the ups and downs of the world oil market." While the solution might not be 'drill baby drill,' US oil production is up this year and US imports of both crude and refined products have been falling since 2005. Another interesting tidbit: for the first time since 1949, the US is actually a net exporter of refined petroleum products: (US Energy Information Administration report)

Forecast total crude oil production increases by 240 thousand bbl/d in 2012 and by a further 90 thousand bbl/d in 2013. Continued increases in lower‐48 onshore crude oil production of 340 thousand bbl/d in 2012 and 110 thousand bbl/d in 2013 overshadow declines averaging about 20 thousand bbl/d in Alaskan output each year and a 90 thousand bbl/d decrease in 2012 GOM production (U.S. Crude Oil and Liquid Fuels Production Chart). The rise in production is driven by increased oil‐directed drilling activity, particularly in onshore shale formations. The number of onshore oil‐directed drilling rigs reported by Baker Hughes increased from 777 at the beginning of 2011 to 1,245 on February 3, 2012.
For the first time since 1949, the United States was a net exporter of refined petroleum products in 2011, with gross product exports averaging 420 thousand bbl/d more than gross product imports (product exports averaged almost 2.5 million barrels per day less than gross product imports in 2005). EIA expects that the United States will continue to be a net product exporter, with net product exports averaging 350 thousand bbl/d in 2012 and 320 thousand bbl/d in 2013.
The share of total U.S. consumption met by total liquid fuel net imports (including both crude oil and refined products), which has been falling since 2005, averaged 45 percent in 2011, down substantially from 49 percent in 2010. EIA expects that the total net import share of consumption will remain near 2011 levels in 2012 and 2013, as continued growth in domestic crude oil output exceeds the growth in liquid fuels consumption and total inventory levels stabilize.

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