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Visualizing What’s Made From A Barrel Of Oil
Visualizing What’s Made From A Barrel Of Oil
From the gasoline in our cars to the plastic in countless everyday items, crude oil is an essential raw material that shows up everywhere in our lives.
With around 18 million barrels of crude oil consumed every day just in America, Visual Capitalist’s Niccolo Conte notes that this commodity powers transport, utilities, and is a vital ingredient in many of the things we use on a daily basis.
This graphic visualizes how much crude oil is refined into various finished products, using a barrel of oil to represent the proportional breakdown.
Barrel of Oil to Functional Fuel and More
Crude oil is primarily refined into various types of fuels to power transport and vital utilities. More than 85% of crude oil is refined into fuels like gasoline, diesel, and hydrocarbon gas liquids (HGLs) like propane and butane.
Along with being fuels for transportation, heating, and cooking, HGLs are used as feedstock for the production of chemicals, plastics, and synthetic rubber, and as additives for motor gasoline production.
Source: Canadian Association of Petroleum Producers
Crude oil not only powers our vehicles, but it also helps pave the roads we drive on. About 4% of refined crude oil becomes asphalt, which is used to make concrete and different kinds of sealing and insulation products.
Although transportation and utility fuels dominate a large proportion of refined products, essential everyday materials like wax and plastic are also dependent on crude oil. With about 10% of refined products used to make plastics, cosmetics, and textiles, a barrel of crude oil can produce a variety of unexpected everyday products.
Personal care products like cosmetics and shampoo are made using petroleum products, as are medical supplies like IV bags and pharmaceuticals. Modern life would look very different without crude oil.
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U.S. Gasoline Product Supplied Falls Off A Cliff
U.S. Gasoline Product Supplied Falls Off A Cliff
In just two short weeks, U.S. gasoline product supplied to the market fell 32%. The last time weekly gasoline supplies were at this level was more than 30 years ago. Unfortunately, the continued lockdown of a large part of the country will negatively impact the gasoline supply market for the next several months.
When the EIA, U.S. Energy Information Agency releases its weekly supply data over the next few weeks, I believe the motor gasoline supplied to the market will decline significantly. According to the EIA, finished motor gasoline product supplies fell to 6.6 million barrels per day (mbd) on March 27th versus 9.7 mbd reported on March 13th:
As we can see in the chart above, finished motor gasoline product supplies fell off a cliff during the week of March 27th. Typically, U.S. gasoline demand rises toward the end of March and early April. The average gasoline product supplied for the past three years during this week was 9.3 mbd.
Regardless, I wouldn’t be surprised to see U.S. gasoline product supplies to fall to 5 mbd or lower in the next 2-4 weeks. The BIG PROBLEM for the U.S. Refining Industry is that domestic demand for gasoline and jet fuel have fallen drastically while diesel consumption remains relatively strong. Why? The Trucking, Rail, and Shipping Industries that use diesel are still keeping quite busy.
So, over the next few months, gasoline and jet fuel inventories will continue to increase while diesel stocks are drawn down. This is due to the limited amount of diesel that can be refined from a barrel of oil. Here is a breakdown of the different petroleum products from a typical barrel of oil:
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Mexico and American Oil Companies Want a Crude Swap to Open Loophole in the Oil Export Ban
Mexico and American Oil Companies Want a Crude Swap to Open Loophole in the Oil Export Ban
As politicians from oil-producing states work to draw up bills to end the ban on oil exports, Mexican officials are “confident” that the country will soon be importing American crude through a backdoor loophole in the law.
Back in January, Mexico applied for a crude swap that, if approved, would allow the U.S. to export 100,000 barrels of oil per day to Mexico. This would be unrefined crude — refined products such as diesel and gasoline are not subject to the ban — likely from the Eagle Ford and Permian shale fields, where fracking has produced a glut of light, sweet crude in recent years.
Though the crude oil export ban has been in place for about four decades, it allows for certain exemptions to be permitted. Exports to Canada, for instance, are allowed, so long as the oil will be processed and consumed in Canada. And last year, Commerce Department officials in the Obama administration approved the export of condensate, an extremely light and gassy form of oil that can be minimally processed in the field without any trip to a refinery.
Condensates are already flowing heavily out of Texas shale regions, and since permission was granted last November, there’s been a rush of condensate exports to Mexico.
If the crude swap is approved, it’ll open up another loophole to the export ban for crude to flow through.
Very few exceptions have been made to the ban since it was implemented as a response to the Arab oil embargo in 1973.Exports are allowed to Canada “for consumption or use therein,” and very limited exports are allowed from Alaska.
Last September, Alaska shipped off its first crude export in over a decade.
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