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U.S. Chemical Production Flat in April; Up 4.4% Over One Year Ago

According to the American Chemistry Council (ACC), the U.S. Chemical Production Regional Index (U.S. CPRI) was flat in April, as measured on a three-month moving average (3MMA). This followed an upwardly revised flat growth rate in March and a 0.2% gain in February. Also measured on a 3MMA basis, chemical production by segment was mixed.

Compared to April 2014, total chemical production in all regions was ahead by 4.4% on a year-over-year basis, a slowing comparison. Chemical production remained ahead of year ago levels in all regions.

Oil & Gas Spending Nearly Quadrupled in Last Decade

“More rigs and wells translate into billions in investment and equipment. IHS Energy estimates that U.S. and Canadian energy companies increased their investment in production from $98 billion in 2005 to $363 billion last year,” The Associated Press is reporting.

“The United States is now the world's largest combined producer of oil and natural gas. Last year, it produced an average of 8.7 million barrels of oil a day, up from 5 million in 2008. Natural gas output soared from 57.7 billion cubic feet a day to 74.7 billion, according to government data. Oil production accounts for nearly 2% of the economy, up from less than 1% in 2000.” 

Pipeline in CA Oil Spill Not Equipped with Automatic Shut-Off Valves

The Plains All American Pipeline that has spilled thousands of gallons of oil onto the California coast “was the only pipe of its kind in the county not required to have an automatic shut-off valve because of a court fight nearly three decades ago,” The Associated Press reports.

“The original owner of the pipeline skirted the Santa Barbara County requirement by successfully arguing in court in the late 1980s that it should be subject to federal oversight because the pipeline is part of an interstate network.”

Automatic shut-off valves are not required by federal government regulations.

Why Oil M&A Activity Should Increase in 2016

“The Permian basin in West Texas and southeastern New Mexico is a hot area for M&A interest, while consolidation is expected in the Eagle Ford shale in South Texas, as producers try to drive efficiencies and lower costs,” according to Stephen Trauber, vice chairman and global head of energy at Citigroup, at the Mergermarket conference in Houston on Tuesday.

“Oil’s rebound from a six-year low in March has faltered near $60/bbl amid speculation that rising prices will encourage production in U.S. shale formations. OPEC, led by Saudi Arabia, has increased output, exacerbating the oversupply,” Bloomberg reports.

New U.S. LNG Plants Changing the Global Market

"When the first tanker carrying LNG from shale fields leaves the Sabine Pass terminal in Louisiana in December, it will turn consumers into traders with more bargaining power. That will transform a market dominated by long-term contracts into one where spot trading gains prominence, similar to crude oil,” Anna Shiryaevskaya and Isis Almeida from Bloomberg are reporting.

“Since the first LNG cargo went to the U.K. from Algeria under a long-term contract in 1964, buyers opted for guaranteed supply, because the fuel was scarce. That’s changing, because gas from the Eagle Ford and other plays will transform the U.S. into the third-biggest exporter by 2020. Spot trading will probably account for almost half of transactions by then, from 29% last year, and LNG is poised to overtake iron ore as the most valuable commodity after oil.”

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Valve Magazine Digital Edition

15 SPR CVRInside the Spring 2015 issue…

• Heavy Oil
• 3D Printing Gains Momentum
• Restoring Power After Sandy
• What is a Surplus Valve?