OPIS Headlines

May 21, 2015
Petroleum Demand Inches Up in April: API

Total U.S. petroleum deliveries inched up 0.7% in April 2015 from April 2014 averaging 18.9 million b/d. Overall, April deliveries were the highest in April since 2010. Gasoline and distillate deliveries were less impressive than deliveries of jet fuel, residual fuel, and "other oils." Demand for jet fuel was very strong at 6.3% higher; residual fuel deliveries soared 9.4% albeit from depressed levels; and "other oils" gained 6.6%.

Gasoline demand actually declined in April by 0.4% to average just 8.9 million b/d while demand for distillate ended up a percentage point lower than prior year at 3.9 million b/d.

Much of the other data released by API confirms enduring trends indicative of the reshaped U.S. oil market.

At nearly 9.3 million b/d, U.S. crude production rose 8.6% from prior year to the third-highest crude production for any month dating back to April 1973. NGL output at 3.1 milllion b/d was the highest for any month on record.

Despite production being very high, API does note that the number of oil and gas rigs in the U.S. in April was 11.9% lower than the prior month and a whopping 46.8% below year-ago levels. Last month's count was the lowest count since August 2009 when oil prices were plunging.

Meanwhile, gasoline production set a new record for the month, rising 0.4% from the previous April to nearly 9.8 million b/d. Production of distillate fell 1.3% to just over 4.9 million b/d. Year-to-date production of both gasoline and distillate was also the highest ever.

Refinery utilization rates in April averaged over 90% for the first time this year, hitting 91.4%.

Also import levels for total petroleum products ended up being the second-lowest April level since 1996. Finished product imports fell 7.3% to 1.9 million barrels, the lowest level for the month since 1995.

Finally, exports of refined petroleum products climbed 14.8% to 4.6 million b/d, the highest for April ever.

Plans are underway for the 17th Annual OPIS National Supply Summit. Join us in Houston, October 21-23, 2015 at the JW Marriott Downtown – sign up now to take advantage of the $500 discount, the largest we’ll offer. This year’s Summit focuses on the reboot of the supply chain following the oil price collapse at the end of 2014 and where the market heads from here. Get exclusive supply and demand forecasts from top oil executives and analysts, plus ample networking opportunities with your industry colleagues. Visit www.opisnet.com/events/supply or call toll-free 888-301-2645 for more details and to register.

May 14, 2015
Delegation Visiting Mexico to Assess Potential for U.S. Ethanol Exports

As part of an ongoing trade promotion partnership between the U.S. Grains Council (USGC) and two ethanol trade groups, a delegation of U.S. interests is visiting Mexico this week to learn more about ethanol imports, OPIS has learned.

As Renewable Fuels Association (RFA) spokeswoman Dawn Moore told OPIS, representatives from USGC, RFA, Growth Energy and USDA "are meeting with producers, government regulators and buyers to get a better understanding of the Mexican market and discuss technical issues, market obstacles and policy challenges associated with ethanol imports," she said. "It is a market assessment mission designed to examine the possibilities of expanded ethanol exports from the U.S. to Mexico. The group is meeting with PEMEX, as well as a number of companies developing ethanol plants in Mexico including BIOMEX and SAGARPA. They are also meeting with SENER, the government regulator for fuels in Mexico, as well as Petrogas and ethanol-distributor Grupo Baltico," she added.

The trip, which began May 12, runs through May 16.

Similar trips have been held in the past year to China, Japan, South Korea, Peru and Panama.

Major changes are underway in Mexico’s energy markets -- you must be prepared to seize new opportunities as well as navigate challenges, both in Mexico and in the U.S. Attend the OPIS Mexico-U.S. Petroleum Summit, November 17-18, 2015 in Houston, TX and hear from industry experts as they break down what the shifting regulatory, pricing, supply and infrastructure landscape means for you. Visit www.opisnet.com/events/mexicosummit or call toll-free 888-301-2645 for more details and to register. Sign up early and save $200!

May 14, 2015
RFS Critics Want 'Significant Legislative Measures' to Fix RFS

In April, 37 senators wrote to EPA, urging the agency to issue a final 2014 Renewable Fuel Standard (RFS2) target "that reflect[s] Congress' intended goals" for the provision. On Wednesday, four groups that have been critical of the RFS wrote to some of those same 37 senators, urging the lawmakers to consider "significant legislative measures" to the overall provision that would address their concerns.

The groups -- ActionAid USA, Environmental Working Group, Clean Air Task Force and Oxfam America -- "are concerned that the RFS has thus far failed to deliver on its most basic goals, and in the process triggered consequences that have negatively impacted our environment, American consumers and people around the world," they wrote to Democratic Sens. Michael Bennett (Colo)., Maria Cantwell (Wash.), Martin Heinrich (N.M.), Mazie Hirono (Hawaii), Ed Markey (Mass.), Jeff Merkley (Ore.), Brian Schatz (Hawaii), Jeanne Shaheen (N.H.), Elizabeth Warren (Mass.), Sheldon Whitehouse (R.I.) and Ron Wyden (Ore.).

"To date, the RFS has primarily incentivized increased production of corn ethanol. In fact, corn ethanol accounted for 83% of the overall volume mandate finalized by EPA in 2013, the most recent year in which final renewable volume obligations were issued by EPA," the groups wrote. Additionally, "[c]orn ethanol has failed to reduce greenhouse gas emissions as once promised, and instead may actually be increasing GHG emissions as compared to gasoline," the groups continued. "A recent study found that from 2008-2012, 3.5 million acres of previously untouched grassland were plowed to plant corn and soy. ... This transformation has led to millions of tons of carbon emissions being released into the atmosphere, as much as 34 coal-fired power plants operating for one year," the groups noted.

"Meanwhile, one of the primary goals of the RFS -- spurring production of truly advanced biofuels derived from non-food crops such as cellulosic ethanol -- has significantly failed to meet goals that Congress set in 2007," the groups wrote, citing projections by the National Academy of Sciences and the Congressional Budget Office that cellulosic ethanol will fall drastically short of its RFS goal of 16 billion gal by 2022.

"With each passing month, we fall further from achieving the original goals of the RFS. When Congress crafted this policy, it was intended to benefit all Americans, but the RFS has instead resulted in delivery of benefits to a select few in the ethanol industry at the expense of everyone else. We know these unintended consequences must concern you, and we urge you to consider significant legislative measures to rectify them," the groups concluded.

The groups did not clarify what "significant legislative measures" would be, but RFS critics have pushed for both reform and repeal of the overall provision, including support for legislation that would remove the conventional biofuel portion (mostly comprised of corn-based ethanol).

In April, EPA announced that as part of a proposed consent decree worked out with petroleum trade groups, it agreed to propose the 2015 RFS targets by June 1 and finalize the 2014 and 2015 targets by Nov. 30.

While not part of the proposed agreement, EPA also said it would propose and finalize the RFS standards for 2016 on the same timeline (proposal by June 1, final by Nov. 30); propose and finalize the RFS biomass-based diesel volume requirement for 2017 on the same schedule; and re-propose volume requirements for 2014 that reflect the volumes of renewable fuel that were actually used in 2014.

In response to the letter, Growth Energy CEO Tom Buis noted that "[t]he RFS has been a resounding success, and a win-win for all Americans. ... The criticisms by such groups as the Environmental Working Group, Oxfam and ActionAid are not grounded in fact, but rather fiction to drive a narrative that advances special interests at the expense of a true American success story," he added.

This year’s 7th Annual OPIS RFS2, RINs & Biodiesel Forum dates and location have been finalized. Please visit www.opisnet.com/events/rfs2rins/ to register now and take advantage of the $300 discount – it’s the largest we’ll offer. You can also request agenda details be sent to you as soon as they become available. Make sure you join us in downtown Chicago October 15-16, 2015 so you can learn how to stay in compliance and avoid hefty fines!