-January 15,2023-
Ethanol follows corn and gas prices down
Ethanol, blended with your gasoline at 10%, has decreased 0.09 USD/GAL or 5.32% since the beginning of 2024, according to trading on a contract that tracks the benchmark market for this commodity. Historically, ethanol reached an all time high of $4.33 in June of 2006.Last summer, the renewable fuel reached the $2.50 level -now down about a dollar today . This time last year corn was trading at $6.80 a bushel today down to $4.46. That’s a drop of about 1/3.
Diesel price drops 30 cents
The the cost of diesel fuel in California is also down this new year to $5.15 a gallon says the federal EIA. That compares to $5.48 in early December – a decline of over 30 cents. California diesel hit a high of $6.89 the summer of 2022. Used to both ship goods and plow fields, the decline in the price of this fuel is considered key to fighting inflation.
Soybean crush expansion boosts renewable diesel supply
Robust US demand for renewable diesel is incentivizing soybean oil processors in the country to expand their operations with the addition of 12 new plants and five plant expansions by 2026, Several recent report say farmers have responded by planting more soybeans and soybean oil futures have fallen more than 40% from record highs in 2022.
Airlines enjoys cheaper jet fuel
Jet fuel to power your next flight is down from last fall say analyst Tom Kloza. Consider that “in the oil space, the greatest disinflation shows up in jet fuel prices.”
Location 1/10/2023 1/1/2024
NYHarbor $3.68/gal $2.63/gal
Gulf Coast $3.41/gal $2.57/gal
Los Angeles $3.19/gal $2.58/gal
GasBuddy expects lower gas prices in 2024
GasBuddy released its annual Fuel Price Outlook with some good news for drivers: expect lower gasoline and diesel prices in 2024. The outlook highlights key trends in gasoline and diesel prices, forecasting that, after two years of above average gas prices, 2024 will bring relief at the pump for consumers as several factors contribute to less of a pinch at the pump. GasBuddy expects the yearly national average will drop from $3.51 per gallon this year to $3.38 in 2024. But drivers in some West Coast cities could again briefly see prices above $6 per gallon in the peak summer period, although most major U.S. cities will see prices peak near $4 per gallon in 2024.
Who needs Middle East oil?
The U.S. has hit a record high in crude production estimated at 13.3 million barrels per day last week. The news was paralleled by record outputs in Brazil and Guyana.
In January 2021, the first year of the Biden administration, US daily pumping was around 11 mil barrels /day -now almost a 20% increase.
Western hemisphere oil production is increasing and replacing what had been Middle East oil imports of the past.
In 1979 the US was importing 6.4 mil barrels per day from OPEC countries. Today it’s just 1.1mil pd from OPEC coutures. Our largest import country is friendly neighbor Canada.
New South American players include the country of Guyana. Oil production in that country averaged around 389,000 barrels per day in 2023 That’s five times more than in 2020, according to figures from the International Energy Agency.
Brazil: Data from April 2023, showed Brazil pumped an average of 3.1 million barrels of oil per day – 5% greater year over year. Brazil has the potential to become the world’s largest oil producer, with production increasing to 3.4 million barrels as of January 1 2024. Brazil’s energy ministry expects the country will be pumping 5.4 million barrels daily by 2029.
Canada’s oil production is set to jump by about 10 percent over the next year and become one of the largest sources of increased supply around the world. The country produces about 4.8 million barrels per day of crude and that figure could climb by about 500,000 bpd to about 5.3 million bpd by the end of 2024, according to S&P Global Commodity Insights.
Mexico is one of the largest oil producers in the world at 1.6 million barrels produced daily in 2022 and the fourth largest in the Americas after the United States, Canada, and Brazil. In2023 they upped their daly production to 1.9 mil pd.
Don’t forget Venezuela. The US EIA estimates that Venezuela’s total oil output will increase to about 900,000 b/d by the end of 2024.