Tuesday, February 25, 2014

The key energy commodity price trends of U.S. in 2013

the key energy commodity price trends 2013


During 2013, the prices of various energy commodities increased from 2012 levels or were down modestly as prices of nonenergy commodities generally fell significantly. Average prices for natural gas, western coal, electricity, and WTI crude were all higher in 2013 than in 2012, while the price of North Sea Brent crude oil, various petroleum products, and eastern coal all dropped.

This article provides an overview of a series of related articles. To ensure comparability among commodities, the prices shown here reflect near-month contracts of futures prices. Most other articles in this series focused on spot market trends. Some key findings from these articles include:

Crude oil and petroleum products

Brent crude oil averaged $109 per barrel in 2013, declining for the first time in four years, but marking the third year in a row that the global oil benchmark averaged more than $100 per barrel. Brent prices came under downward pressure as rising U.S. light sweet crude oil production reduced the need for U.S. imports, thereby increasing supplies of Brent-quality crude oil available to the global market.
West Texas Intermediate (WTI) crude oil averaged $98 per barrel in 2013, up 4% from the 2012 and the highest annual average price since 2008. New pipeline and railroad infrastructure alleviated transportation constraints that had put downward pressure on WTI prices.
The national weekly average pump prices for gasoline and diesel fuel during 2013 averaged $3.50 per gallon (down 11 cents from 2012) and $3.92 per gallon (down 5 cents), respectively. For the third year in a row the average price in 2013 for gasoline and diesel failed to drop below $3 per gallon during any week.
The record for the highest gasoline price in EIA's weekly survey in 2013 was not a West Coast city, which is usually the case. Chicago's peak EIA survey price of $4.36 per gallon on June 10 exceeded Los Angeles, where prices reached $4.34 per gallon on February 25.

Average Annual spot prices for Brent and WTI oil

Rising crude oil production in the United States contributed to relatively stable global crude oil prices in 2013, at around the same annual average levels of the previous two years. West Texas Intermediate (WTI) spot prices averaged $98 per barrel (bbl) in 2013, up 4% from 2012 and the highest annual average since 2008. New pipeline and railroad infrastructure alleviated transportation constraints that had put downward pressure on WTI prices. The North Sea Brent spot price averaged $109/bbl, down 3% from 2012. Brent prices came under downward pressure as rising U.S. light sweet crude oil production reduced the need for U.S. imports, thereby increasing supplies of Brent-quality crude oil available to the global market.


wti price 5 year average vs 2013
brent  price 5 year average vs 2013



U.S. highlights

  • Domestic crude oil production increased 1.0 million bbl/d—rising more than the combined increases in the rest of the world—to reach its highest level in 24 years. This increase marked the largest observed annual increase in U.S. history.
  • Production exceeded imports during several weeks for the first time in nearly two decades.
  • Transportation infrastructure improvements enabled crude oil from Cushing, Oklahoma, and the Bakken, Permian, and Eagle Ford tight oil formations, to better reach refineries, reducing the need for foreign crude oil.

Global highlights
  • China accounted for almost one-third of growth in global demand and surpassed the United States to become the world's largest importer of crude oil.
  • EIA estimates that global unplanned supply disruptions averaged 2.6 million bbl/d in 2013, 0.7 million bbl/d higher than the previous year. OPEC (Organization of the Petroleum Exporting Countries) producers had the largest volume outages at 1.8 million bbl/d.
  • Despite significant production disruptions, international crude oil prices were relatively stable last year because higher U.S. production and seasonally elevated Saudi Arabian production (Saudi Arabia maintained peak summer production levels into the fall) offset outages elsewhere.
  • Total liquid fuels production from members of OPEC fell by 0.9 million bbl/d in 2013. Non-OPEC liquid fuels production, concentrated in the United States, grew by more than 1.4 million bbl/d in 2013, more than offsetting the decline in OPEC production.
Total liquid fuel supply capacity growth 2013


Natural Gas

Average wholesale (spot) prices for natural gas increased significantly throughout the United States in 2013 compared to 2012. The average price for natural gas at Henry Hub, the key benchmark location for pricing in the United States, rose 35% to $3.73 per million British thermal units (MMBtu) in 2013.
Spot prices rose at the beginning of 2013 and exceeded $4.00/MMBtu in March, a level not reached since September 2011.
Spot prices decreased beginning in May, and by August had declined to a monthly average of $3.40/MMBtu, before rising back above $4.00/MMBtu by year's end.

Spot natural gas prices US map december 31 2013


Electricity

Wholesale, on-peak electricity prices across the nation were up from 2012 to 2013, driven largely by increases in spot natural gas prices. The Pacific Northwest and New England had the highest percentage increases in power prices, based on regional supply and demand issues in those markets.
The spring of 2013 was drier than the previous two springs in the Pacific Northwest, which kept wholesale power prices in the region from dropping to levels seen in 2012.
In New England, cold weather taxed the already strained natural gas pipeline infrastructure, leading to day-ahead power prices in excess of $200 per megawatt hour in January and February 2013. Cold weather in late November and early December led to a second spike in both the natural gas and power markets in New England.


Wholesale electricity price map of US


Coal
Central Appalachian coal prices trended downwards, Northern Appalachian and Powder River Basin coal prices trended upwards, and Illinois Basin and Rocky Mountain coal prices remained largely unchanged.
Coal exports in the first nine months of 2013 declined by nearly 8 million tons compared to the same period in 2012, following a few years of growth. A weak European economy, slower demand growth in Asia, increased output from other coal-exporting countries, and lower international coal prices all contributed to the decrease in U.S. coal exports.


US weekly spot steam coal prices by basin


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