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ENERGY NEWS
ENERGY REVIEW By Tsvetana Paraskova
Ukraine, the possibility of slowing economic growth, how sanctions would affect Russia’s oil production, the production decisions of the OPEC+ group after August, and the rate at which US oil and natural gas production rises. Refinery utilisation across the US is expected at or near the highest levels in the past five years. However, operable US refinery capacity has fallen by about 1 million bpd over the past two years, which means that US refinery output of products would not reach its highest level in the past five years in 2022. US natural gas production is expected to hit an all-time high in the coming months, exceeding 100 billion cubic feet per day (Bcfd) by the end of 2022, helping feed global demand as the world faces a severe supply shortage, a Rystad Energy analysis showed in July. Production growth from the major US gasproducing basins of the Haynesville and Appalachia, in addition to associated gas volumes from the Permian, will solidify the country’s position as the world’s largest gas producer, stretching its lead over Russia, and surpassing the official growth expectations of the EIA, Rystad Energy noted. “Already the top gas producer in the world, the US stands ready to boost output further to meet the global demand, but takeaway constraints are a serious risk. However, with new LNG capacity expected to be added after 2024, the US is set to grow its role in global gas markets for some time to come,” said Kristine Vassbotn, Rystad Energy senior analyst.
US LNG Exports To Rebound in 2023
While petrol prices in the United States fell in July from the record highs of June, the US oil and gas industry continued to call on the Biden Administration to stop its mixed messages to conventional energy producers and not frustrate the sector’s efforts to raise oil and gas production, which is badly needed not only in the United States but also in Europe in the aftermath of the Russian invasion of Ukraine.
www.ogv.energy I August 2022
Meanwhile, US benchmark natural gas prices have almost doubled in a year, due to the strong demand for US liquefied natural gas (LNG) in Europe, which scrambles with low Russian gas supply and with efforts to wean off Moscow’s energy influence.
Record US Oil & Gas Production Expected in 2023 The Energy Information Administration (EIA) continues to expect US crude oil production to reach a record annual high next year, rising by nearly 1 million barrels per day (bpd) from 2022 to 2023. In its July Short-Term Energy Outlook (STEO), the EIA sees US crude oil production averaging 11.9 million bpd in 2022 and 12.8 million bpd in 2023. If the forecast for next year materialises, it would set a record for most US crude oil production in a year. The current record is 12.3 million bpd, set in 2019. Still, the US administration warned that its forecasts are subject to heightened uncertainty due to Russia’s invasion of
US LNG exports averaged 11.2 billion cubic feet per day (Bcf/d) in the first half of 2022, but they would be lower in the second half because of the outage at the Freeport LNG export facility, which will not return to full operations before January 2023, the EIA said. This year’s LNG exports are set to average 10.9 Bcf/d, while exports are set to jump to an average of 12.7 Bcf/d in 2023. Europe has become the primary destination of US LNG exports, as the EU looks to fill gas storage sites ahead of the winter amid low Russian gas flows, trying to avoid a heating season of rationing of gas use for some industries and even households. Following the Russian invasion of Ukraine and the reduced Russian gas flows to Europe as of June, European countries are now importing more US LNG than the volume of pipeline imports from Russia, Fatih Birol, Executive Director of the International Energy Agency (IEA), said at the end of June. “Russia’s recent steep cuts in natural gas flows to the EU mean this is the 1st month in history in which the EU has imported more gas via LNG from the US than via pipeline from Russia,” Birol tweeted on 30 June. “The drop in Russian supply calls for efforts to reduce EU demand to prepare for a tough winter,” the head of the agency added.
