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Issue Contents


Volume 13, Issue 5
Published: September 13, 2017
Turbulent times

How sanctions on Venezuelan crude, Mexico’s energy liberalisation and President Trump’s ‘America first’ energy stance are having an effect on trade flows across the US. By Nnamdi Anyadike.

The US physical oil market over the last few months has been at its most volatile for some time. Prices, which had remained stubbornly low since the start of the year, began to show some signs of recovery on the back of oil supply tightness at the refineries.
Since mid-year, US refiners have been processing at record rates, buoyed by stable demand from US motorists but also higher demand for petrol and diesel from Latin America. This demand has risen in response to a shortage of product supply from local refineries that have been dogged by numerous technical problems.
All of this has coincided with a slowdown in oil exports from the Middle East Gulf that has reduced inventories at the US refineries. In mid-August, data from the API showed that crude oil reserves in the US fell by 9.2 million barrels in a single week – the seventh weekly decline in a row. This was more than double the projected drop anticipated by
the Energy Information Administration (EIA) in its official weekly report, which also showed the largest weekly decline in US crude supplies since September of last year.
A number of factors are all playing their part in the ongoing turbulent mix that is the current North American oil market. These include: Mexico’s energy liberalisation; President Trump’s ‘America first’ energy stance; potential sanctions on sales of US light crude to Venezuela’s state owned PdVSA oil company – and on imports of Venezuelan heavy crude into the US; possible effects of a North Atlantic Free Trade Agreement (NAFTA) on the US energy sector; and OPEC cuts.
Also looming on the horizon and less than three years away are the International Maritime Organization (IMO) regulations. Its low sulphur fuel oil requirement that is set to come into effect in January 2020, could yet impact massively on the US refining sector.

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Investing in a flourishing market
As the chemical industry experiences a resurgence in the US, Stolthaven Houston is positioning itself to meet growing demand for infrastructure The shale oil revolution has led to a revival in the US chemical sector as significant investments are made in production capacity, generating more demand for more supply chain infrastructure...
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Fulfilling Houston's storage potential
Following the completion of 7.5 million barrels of underground cavern storage capacity, Fairway Energy is focusing on creating an extensive distribution network to support Houston’s thriving crude oil market Fairway Energy’s underground cavern storage is addressing a need in Houston for a more efficient crude oil marketas production continues to drive demand for logistics infrastructure...
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The storage and transport games
A lack of refining capacity in Mexico means that oil product imports will continue to increase, and infrastructure investments are now being made to capitalise on these market dynamics The storage and transport games started long ago, back in 2013, when several investors saw the potential demand for refined imported products from Tuxpan Veracruz...
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The rupture ripple effect
Analysing the impact of crude pipeline outages on the supply chain The network of crude pipelines in North America serves as the circulatory system for the oil supply chain...
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From demand pull to supply push
Altered supply chain dynamics, which has seen the US move from peak oil to a supply glut, have created attractive conditions for storage operators The resurgence in US crude production over the past several years has generated a myriad of market and structuralchanges, including upending world trade flows while pressing and holding refined fuel prices at low levels that has incentivised demand...
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Turbulent times
How sanctions on Venezuelan crude, Mexico’s energy liberalisation and President Trump’s ‘America first’ energy stance are having an effect on trade flows across the US...
To read this article in full, subscribe now >