Click to enlarge:

>

Fascinating look at what might happen as North America becomes “the new Middle East” for energy production during the coming decade:

The above chart, from Citi via Bloomberg’s David Wilson, depicts the gap between U.S. exports and imports of oil products, as compiled monthly by DOE since 1973.

Here’s Bloomberg:

“Shipments of gasoline, diesel fuel and other products surpassed imports by an average of 439,000 barrels a day in 2011, according to the department. Last year was the first time since 1949 that the U.S. was a net exporter. Crude-oil output exceeded 2 billion barrels for the first time since 2003.

“The U.S. has become the fastest-growing oil and natural-gas producing area of the world,” Edward L. Morse, Citigroup’s New York-based head of global commodities research, and half a dozen colleagues wrote in the report. Greater output from Canada and a rebound in Mexico point to bigger increases in North American production “than all of OPEC can sustain.”

Citigroup’s U.S. equity analysts, in a separate report, named 63 energy producers, oilfield-service providers, pipeline owners, oil refiners and other companies poised to profit from the growth. They narrowed the list down to 10 top picks.”

Source:
‘New Middle East’ Seen Lifting U.S. Oil Stocks: Chart
David Wilson
Bloomberg March 22, 2012
http://www.bloomberg.com/news/2012-03-22/-new-middle-east-seen-lifting-u-s-oil-stocks-chart-of-the-day.html

Category: Economy, Energy, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

21 Responses to “Is the US the New Middle East?”

  1. SOP says:

    Anna, do you know the difference between oil production, and exports of finished product?

    Do you know the difference in joules, and infrastructure, between the oil and the gas markets?

    The distracted and energy-illiterate media is chasing its tail again – and Barry’s Blog is leading the tail-biters.

  2. machinehead says:

    Spot what’s wrong with this paragraph:

    Shipments of gasoline, diesel fuel and other products surpassed imports by an average of 439,000 barrels a day in 2011, according to the department. Last year was the first time since 1949 that the U.S. was a net exporter. Crude-oil output exceeded 2 billion barrels for the first time since 2003.

    Answer: “Crude oil” is not a product. Crude has nothing directly to do with the chart, which covers gasoline, diesel fuel, and other refined products such as heating oil and jet fuel.

    Bad editing, but it happens all too frequently at Bloomberg, where editors seem to take a perverse pleasure in shuffling reporters’ original narrative like a deck of cards put through a shredder.

    In particular, mixing in the non sequitur about crude oil could give the false impression that the U.S. has achieved energy independence — not at all the case.

  3. romtori says:

    The focus of the above chart is not some new dawn of US energy production, but the unparalleled (by US standards) demand destruction of petroleum products–ie gas as Americans still drive less now than at the peak in 2007.

  4. SANETT says:

    Nice news but let’s differentiate between Saudi oil, where they basically stick a garden hose in the sand, and >$100/bbl production costs (see latest Time). Quite nice from a certain perspective, essential needs met but waste reduced for those of us who read our credit card bills.

  5. CSF says:

    Let’s make this simple: we import slightly less than half (~9 million barrels) of the crude oil that we consume each day (~ 19 million barrels). We’re a long, long way from energy independence.

  6. crutcher says:

    BR, You conflated the United States with North America. Actually we Canadians do not appreciate Americans assuming that what we have is what you have. We have other customers, and we also have credible citizens who think we’d be better leaving it in the ground.

  7. Livermore Shimervore says:

    who said anything about energy independence? or better yet why is it even mentioned?

    If we increased domestic production it will simply go towards the world market where they are willing to pay the most for it. What group of investors or corporations is going to invest hundreds of billions (of your consumer dollars) to bring more oil to market and then decide, for no good reason, NOT to sell it to the highest offshore bidder? A bidder that is increasingly cash rich, has little if any debt and is trying to get ahead of shortages by paying up — as in well past the all time highs.

    advice: go long the OIH and get rid of that 20 mpg Range Rover.

  8. VennData says:

    How could this happen under Obama? The GOP Media Machine told me we couldn’t drill anywhere.

    There must be something wrong with these statistical lies, the GOP Media Machine is always right.

  9. willid3 says:

    not sure that we can say that many countries are debt free. you definitely can talk about any of the BRIC countries except maybe Russia (but then they do have oil and re an exporter).
    the vast majority of countries (public) and private debt has been going up and up. problem really is that incomes (almost every where) have been standing in place (at best) or going down

  10. Frilton Miedman says:

    VennData Says:
    April 2nd, 2012 at 2:04 pm
    “How could this happen under Obama? The GOP Media Machine told me we couldn’t drill anywhere.

    There must be something wrong with these statistical lies, the GOP Media Machine is always right.”

    Um…um…BIRTH CERTIFICATE!…er…eh..SOCIALIST!!……um…DEATH PANELS!!!

    Kidding aside, the relentless flow of sensationalist non-relevant diversions does seem to be slowing, must be the calm before the electoral storm.

    I’m bracing for the next FOX supermarket tabloid controversy “Obama plots with space aliens to overthrow Democracy!.

  11. Sechel says:

    B.R.
    Energy picture is changing drastically around the world. Israel is projected to be100% self sufficient and a net_export of natural gas after discovering some mamoth fields.
    Japan and Germany are getting out of Nuclear and will become more dependent than every on imports, which probably has ramifications for energy intensive industries.
    The U.S. has huge reserves of natural gas, and shale oil. Even more if you count the gulf and Canada.

    So we might see Japanese, China & Germany moving more of their operations to the United States when we are the end consumer.

  12. CSF says:

    Energy independence is a laudable goal (on a net basis, using market forces as much as possible) because of the consequences for the national current account, because of strategic vulnerabilities, and to avoid being beholden to certain regimes. Unfortunately, I think the U.S. will rely on oil – much of it imported from outside North America – for some time to come.

    My personal strategy? I’m long big oil and driving a diesel that gets 50 mpg…

  13. dougc says:

    Before we break out the champagne. let’s look at some facts.
    Refining is a low margin bisiness, buying oil at $3 a gal and selling gas at 3.50 is 17% but you must include transporting oil from the midle east and refined products back to the market of interest.
    Gasoline usage is declining is the US but we still import 9 MM BBLs a day this is a long way from energy independence.

  14. ilsm says:

    Interesting, the US has not opened a new refinery in nearly as long as nuclear plants. It used to be too little refining in the US. Maybe they include some capacity in Mexico/Canada/Caribbean?

    “Shipments of gasoline, diesel fuel and other products surpassed imports by an average of 439,000 barrels a day in 2011,

  15. contrarian23 says:

    World awash in oil.
    http://opinion.financialpost.com/2012/03/30/lawrence-solomon-a-world-awash-in-oil/

    The US may not achieve total energy independence in the near future or ever, but the volume of crude oil that it imports may drop dramatically.

    I don’t know if many people are keeping track of oil fundamentals, but it seems to me that we are on the cusp of a big production increase worldwide. After all, why is there such a big hubub about building new pipelines and even reversing the direction of existing pipelines ?

    And I don’t see the oil futures market taking ANY of this into account. I forecast a train wreck in the oil futures market in the near to middling future.

  16. godot10 says:

    That chart is a product of the EU war on refineries because of the reversal of the $BRENT/$WTI spread, and because of misguided EU environmental laws.

    European refineries are shutting down. That explains the chart.

  17. SOP says:

    Contrarian, post that article at theoildrum, in the Drumbeat section tomorrow and they might have the time and space to explain why you might want to avoid that source.

    Reading this thread… those interested in energy would benefit by reading the oil drum – all of the misunderstandings presented here on a regular basis have been dealt with ad nauseam @ that site.

    (note – I have no affiliation with theoildrum.com, I don’t even post there. )

  18. RC says:

    It is fascinating to see people fighting empirical data and proof so that they can continue believing in the “Oil is running out and America is always going to be dependent on the middle east for Oil” notion.

    No amount of data will convince them. One day the reality will dawn on them.
    This whole phenomenon of ridiculing or belittling US’s Oil and natural Gas potential is also a behavioral economics phenomenon.

  19. Joe Friday says:

    crutcher,

    You conflated the United States with North America. Actually we Canadians do not appreciate Americans assuming that what we have is what you have.

    Too late. Apparently you’ve already been assimilated. Resistance is futile.

    Rep. Paul Ryan during his appearance on ABC’s ‘This Week’:

    “Let’s open up the Keystone pipeline to bring Canadian oil into our country to dramatically reduce our dependency on foreign oil … And just by passing this legislation, you’ll improve the prices in the futures market, because you’ll see that all this new American-made energy is coming online.”

    (As Bugs would say, “WHAT A MAROON“.)

  20. Joe Friday says:

    ilsm,

    Interesting, the US has not opened a new refinery in nearly as long as nuclear plants.

    What’s “interesting” about it ?

    * In 2000, there were 350 gasoline refineries in this country, now there are less than 150 gasoline refineries. The oil companies have INTENTIONALLY closed down over 200 gasoline refineries.

    Just recently, it was announced that several more gasoline refineries would close on the East coast. Sunoco is expected to close the region’s largest refinery down in July, taking another 335,000 barrels per day in gasoline production capacity off the market.

    Why would new refineries be opened ?

    * In the Summer of 2000 (leading into the presidential election) gasoline prices spiked to previously unseen levels. A year-long investigation by the Federal Trade Commission concluded that the spike in gasoline prices was caused by refiners, who had intentionally removed gasoline inventories from the market to create a false shortage and drive up both prices and profits.

    But the Chimpy Bush FTC took the position that it was not illegal, because it didn’t find that refiners had colluded to fix gasoline prices, and therefore there was no enforcement issue.

    Isn’t “less government” just grand ?

  21. victor says:

    It boggles the mind that there is still confusion between crude oil and refined products’ just like in the mind of Fox’s Bill O’Reilly. Several serious bloggers here have already clarified that: we still import some half of our crude oil which we then refine into gasoline, diesel, jet fuel etc. Due to demand DECRESE here (mainly recession driven) and excess refining capacity, and demand INCRESE abroad (mainly Mexico and Brazil, mainly Diesel) we now have become net exporters of some 5% of these REFINED PRODUCTS while up until 2009 we were net IMPORTERS of some 10% of our total consumption of refined products along with up to 65% of the crude oil. Repeat: we have remained the #1 IMPORTER of crude oil in the world, almost equal to Saudi Arabia’s TOTAL crude production. I wont cite the numbers in barrels/day, those interested can look them up on several Gov. Agencies’ web sites.

    @VennData and Frilton Miedman: couldn’t resist to inject your usual low quality, irelevant , poisonous political sarcasm, right? What happened with “gobinment”? Crude production has increased under Obama ON PRIVATE LANDS and conversely it has decreased on federal lands/waters, look it up for yourselves. Drilling permits are DOWN under Obama, they were UP under Clinton and Bush (you see them coming to fruition now).

    @Joe Friday: Refineries are being closed down when they become uneconomical (because of market and regulatory conditions) and a buyer cannot be found; case in point is SUNOCO’s Phily refinery. No conspiracy, just like any other business….