Shale gas buried underground is estimated to increase recoverable gas in the world by 50%. Shale oil would allow oil reserves to expand by 10%. The US Energy Information Administration changed its estimates after a new study where it took into account twice as many oil and gas fields than in 2011.
Industrial metals prices trading on the London Metal Exchange were shaken this week by an unexpected slowdown in Chinese growth, followed by gloomy indicators in the United States, which cast doubt on global growth strength.
Without realizing it, U.S. drivers are competing for American-made gasoline with consumers in Latin America and Asia, where demand is rising. “Americans don’t think about their prices being impacted by a global market,” says Morse. “The American public just thinks about the rising price at the pump.”
For the first time since 1995, the U.S. will likely produce more oil than it imports. That’s great for the country’s trade balance, but the benefits of all that cheap domestic crude still haven’t shown up at the one place it matters most: the gas station.
Despite the rain from November to January, the American cultures should still undergo a major water deficit in 2013. The drought of 2012, the worst in the last fifty years, has resulted in the soil drying out which is difficult for the farmers to manage.
According to the Palmer Drought Index, 56% of the U.S. are still in drought at the end of February, mainly in the High Plains region. Kansas, the largest producer of wheat in the United States, but also Nebraska, Oklahoma and South Dakota are in extreme drought according to the latest report from the U.S. Drought Monitor.
Gasoline prices currently average nearly $4 per gallon nationwide. Rising U.S. crude production may seem like an attractive antidote, but it is proving ineffective on its own at a time when the world’s appetite for energy remains voracious and Middle East tension is a reminder that supplies could be disrupted.
U.S. crude production is expected to rise 12% this year and 8% in 2013, when it will hit the highest level since 1993, according to government figures. The price of West Texas crude, the U.S. benchmark, has fallen 7% this year, held down by rising supplies from new drilling methods.
Palm oil, the world’s most-used cooking oil, has slumped this year as demand slowed from importers including China and the European Union, and stockpiles surged because of a seasonal increase in production.
Futures in Malaysia, the global benchmark, may tumble to 2,600 ringgit ($852) a metric ton by December, according to the median estimate in a Bloomberg survey of 11 analysts and importers who attended an industry conference in Mumbai yesterday. That would extend this year’s loss to 18 percent, the biggest decline since 2008, after a 16 percent retreat last year to 3,175 ringgit.
Commodities like copper and crude oil are often seen as a barometer for industrial activity and, as such, the strength of the world economy. The steep price drops in both over the past few months, with oil down around 30% and copper off 15% since March, are sending a worrying signal about the depth of the global economic problems.
U.S. gasoline-futures prices have dropped 16 cents a gallon over the past eight trading days, as more U.S. crude becomes available for refining into gasoline and fears about a shortage of refining capacity fade.
Reformulated gasoline blendstock futures fell 2.8 cents Tuesday to settle at $3.1593 a gallon, and have repeatedly traded near seven-week lows in recent days. Many traders said futures prices may have hit their summer peak in late March, at near $3.42 a gallon, and see futures falling further in coming weeks, easing retail prices at the pump.
Palm oil production in Malaysia is set to slow in the first half of this year, says Dorab Mistry at Indian consumer products group Godrej International, who correctly forecast that palm oil prices would bottom last autumn.
Maybe even more importantly, he says, the current drought in South America will damage the harvest in soybean crops. These are also used in making cooking oils. If fewer soybeans are available, that will mean extra demand for palm oil to plug the gap.
Processing ethane into chemicals is 50% cheaper than using crude oil-derived naptha and its availability has made U.S. petrochemical companies the envy of overseas competitors. It also brings the prospect of lower prices for auto parts, Styrofoam and other products.
The U.S. shale-oil and natural-gas boom has cracked open another lucrative market—gas liquids used to make plastics.