The coming gasoline glut

[Bob Of Burleson]

Gas prices rising but glut coming

By Mark Thompson

LONDON (CNNMoney) — While violence in Iraq may squeeze drivers' wallets this summer, the U.S. is headed for a gas glut over the next few years as demand slows.

Despite rising slightly last year, U.S. gas demand will decline by about 1% a year for the rest of the decade, according to the International Energy Agency.

"Tightening fuel efficiency standards for automobiles, and changing consumer preferences look set to send U.S. gasoline demand back on the declining course on which it embarked in 2007," the Paris-based agency said in its latest forecast published Tuesday.

U.S. demand for gas alone accounts for about 10% of world oil consumption, and the decline will coincide with more ample supply, according to the IEA.

The U.S. energy boom is boosting output of oil that is rich in gasoline at a time when refineries are under pressure to produce more diesel and jet fuel amid an increase in industrial activity and air travel.

But the refineries still have to sell the gas produced from processing each barrel, and will be looking for markets to soak up that surplus.

The IEA estimates that North America could swing from being a small net importer of gas to exporting 1.3 million barrels per day in 2019.

Globally, the growth in world oil demand is expected to peak in 2015 and 2016, before slowing toward the end of the decade, IEA said.

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[planosteve]

This guy is basing his glut prediction on a report published last Nov. Does he realize that Iraq is probably going off line soon for the indefinite future. The US fracking fad is fading out. I'd say it's more likely we'll see $5.00 gas before long.

[Chlorine Tinsley]

This guy is basing his glut prediction on a report published last Nov. Does he realize that Iraq is probably going off line soon for the indefinite future. The US fracking fad is fading out. I'd say it's more likely we'll see $5.00 gas before long.

Exxon is betting otherwise:

"Exxon Mobil plans multibillion-dollar Baytown plant expansion-
a multibillion-dollar upgrade the company believes makes sense even if gas prices rise from lows that have driven a manufacturing surge.
Technological advances in recent years have helped producers unlock natural gas and oil from tight shale formations.
The expansion will increase the Baytown plant’s capacity to convert ethane, a natural gas liquid, into the chemical building block ethylene, and from that to produce the plastic polyethylene."

[glenn/dallas]

"Fracking fading out".... not what I read, whats your source please ?

[planosteve]

"Fracking fading out".... not what I read, whats your source please ?

They already announced they were wrong on California and it doesn't have 96% of the recoverable oil and gas that they thought. But, the economics of fracking is that it's too expensive. The wells play out quickly.

A lot of the Barnett shale is already played out.
HOUSTON — Shale drilling activity in North Texas has fallen to its lowest point in about a decade, according to state data.
The Texas Railroad Commission issued 827 drilling permits for the Barnett Shale region during the first 11 months of 2013, a steep decline from the 4,065 permits issued in all of 2008.
The regulatory agency hasn’t issued fewer than 1,000 permits for the Barnett Shale in a full year since 2003.
http://fuelfix.com/blog/2014/01/02/barn ... -a-decade/

[Bob Of Burleson]

North Dakota Pumps 1 Million Barrels of Oil a Day

By JOSH WOOD
Associated Press

North Dakota has joined the ranks of the few places in the world that produce more than a million barrels of oil per day, due in large part to the rich Bakken shale formation in the western part of the state.

The April figures released Tuesday by the state's Department of Mineral Resources showed the record tally. North Dakota had flirted with the million-barrel-per-day mark for months, but the harsh winter slowed the pace. In March, production had hit 977,000 barrels per day.

North Dakota's oil fields now represent more than 12 percent of all U.S. oil production, and more than 1 percent of global production — a situation unfathomable just a decade ago, when technology hadn't yet caught up to the challenge of extracting oil from the shale. Since then, the oil boom and the jobs it brings have transformed North Dakota, now home to the nation's fastest-growing cities and its lowest unemployment rate.

"Reaching the 1 million barrel a day mark is a tremendous and timely milestone for the petroleum industry and our state, but it is also a tremendous milestone for our nation," U.S. Sen. John Hoeven, a Republican, said in a statement, citing the need for the United States to build its domestic energy resources.

North Dakota joins Texas, Alaska, California and Louisiana as the only states ever to produce more than a million barrels per day. Of those, Texas is the only other state still producing above that level.

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