EIA says U.S. gasoline prices may hit 14-year highs in second quarter 2022; U.S. fuel, petrochemical manufacturers clarify stand on Russian imports; U.S. chemical companies see rising demand with self-driving autos
EIA says U.S. gasoline prices may hit 14-year highs in second quarter 2022
U.S. regular gasoline retail prices may average $4.10 per gallon in the second quarter of 2022 and that would be the highest not-adjusted-for-inflation level since 2008, according to the Short-Term Energy Outlook released in March by the U.S. Energy Information Administration (EIA).
The “invasion of Ukraine by Russia and subsequent sanctions on Russia and other actions created significant market uncertainties about the potential for oil supply disruptions. These events are occurring against a backdrop of low oil inventories,” according to the EIA.
“Product prices have risen compared with year-ago levels because of rising crude oil prices and high refining margins,” the EIA added.
The second quarter of 2022 “would be the first time that gasoline prices (not adjusted for inflation) have reached at least $4/gal in any month since July 2008,” it said.
In the second half of 2022 average gasoline prices may drop to about $3.71 per gallon. However, actual prices could be significantly affected by the same factors that affect crude oil prices, it said.
U.S. crude oil production fell below 11.6 million barrels per day (b/d) in December. The EIA forecasts that production will rise to average 12 million b/d in 2022 and then to record-high production on an annual-average basis of 13 million b/d in 2023.
The previous annual-average record of U.S. crude production of 12.3 million b/d was set in 2019.
U.S. gasoline retail prices averaged $3.52 per gallon in February, up 20 cents per gallon from January and an increase from $1.02 per gallon from the same month a year earlier.
U.S. fuel, petrochemical manufacturers clarify stand on Russian imports
The Association of Fuel and Petrochemical Manufacturers said in March that it sent a letter to a group of U.S. House representatives after a request to clarify whether it supports sanctions suspending future crude oil purchases from Russia.
“AFPM fully supports the suspension of all future purchases of crude oil and petroleum products from Russia. To protect consumers, however, any import prohibition should exempt products currently in transit to the United States,” the AFPM said.
“This responds to your letter of March 2, 2022, inquiring about AFPM’s position on the import of Russian crude oil,” the association´s president, Chet Thompson, wrote in the letter, according to a statement.
There are 435 representatives and 100 senators in the U.S. Congress. The letter was addressed to six representatives.
“Your letter mischaracterizes AFPM’s February 25th blog. It was not a defense of the continued importation of Russian crude and petroleum products, nor did it stake out a policy position,” it added.
The AFPM said that general information related to Russian imports published in recent weeks “was written as a factual response to multiple inquiries from policymakers and the media about the extent to which Russian crude was used by U.S. refineries.”
Russian crude imports recently accounted for 3% of total U.S. crude imports, and about 1% of the refined crude oil, mostly in the West Coast, the AFPM said. The association also requested policies that favor domestic crude production.
U.S. chemical companies see rising demand with self-driving autos
The American Chemistry Council said on March 14 that the final rule on safety standards for automated vehicles by the U.S. Department of Transportation´s National Highway Traffic Safety Administration may result in welcomed increase in demand for many specialty chemicals.
“With NHTSA’s final rule ushering in autonomous vehicles, more components will rely on plastics for passenger safety, vehicle performance and comfort, such as cameras, sensors, radars, vehicle haptics, reconfigurable seating, and more,” according to the ACC.
“Plastics already are widely used in today’s vehicles, making them lighter weight, more fuel-efficient, and much safer by better absorbing impact during a crash,” it said.
Trends toward self-driving vehicles and EV may bring more demand for chemicals and plastics to reduce vehicle weight to compensate batteries, for added safety and for energy savings.
Trends for shared car riding may also bring more demand for specialized chemicals like anti-microbial materials or durable, lighter weight furniture and fixtures from materials that may also be recyclable.
Specialty chemicals can normally have a bigger profit margin compared with other petrochemical products like resin commodities.
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