US crude stockpiles gained 2.2 million barrels last week, versus analyst expectations for a 1.1-million-barrel drop, according to the Energy Information Administration. Gasoline supplies also rose by 800,000 barrels, and distillate stocks were down by 2.6 million barrels.
US crude exports climbed to a 25-year high of 2.33 million barrels per day last week, bringing the average for this month to 1.76 million barrels per day, according to the Energy Information Administration. Export volumes above 2 million barrels per day should become the new normal this summer as the widening price gap between West Texas Intermediate and Brent spurs demand for US oil.
Analysts expect North American explorers to report modest increases in oil and natural gas production in the first quarter of the year, with the exception of a handful of gas operators, including Gulfport Energy, which boosted gas production during the quarter by 35%. "We do not think companies will pivot to more aggressive programs at this time as E&Ps could be hit by the potential risk of incremental service cost inflation if oil prices hold these levels," said The Williams Capital Group analyst Gabriele Sorbara.
The recent decline in the price of Midland, Texas, crude to three-year lows is expected to give a financial boost to small, independent US refiners such as Delek US Holdings and HollyFrontier, whose facilities are equipped to process light, sweet crude from West Texas. "To have your major feedstock be in such abundant supply is unequivocally a positive for US refining," said Tudor, Pickering, Holt & Co. analyst Matthew Blair.
The Trump administration's tax overhaul may force pipeline companies such as Williams Cos. and Enbridge to refund as much as $18.5 billion of the money they charged to drillers, utilities and United Airlines before the new tax rules took effect. The Federal Energy Regulatory Commission will only issue a decision on potential refunds and timing after reviewing comments from the industry.
The public is invited to attend a series of meetings hosted by the Nuclear Regulatory Commission to discuss the proposed interim storage site for used nuclear fuel in southern New Mexico. The public can comment on the plan through the end of May.
FirstEnergy Nuclear Operating officially notified the Nuclear Regulatory Commission that it will retire three nuclear power plants, citing "severe economic challenges" as a reason for the closures. Shutdown activities will begin at Davis-Besse nuclear power plant in Ohio by May 31, 2020, Perry nuclear plant in Ohio by May 31, 2021, and Beaver Valley nuclear plant in Pennsylvania by Oct. 31, 2021.
The South Carolina House of Representatives is debating a bill that would eliminate the fees on ratepayers for SCANA's halted V.C. Summer nuclear power plant expansion. Dominion Energy said it probably won't follow through on buying SCANA if the bill passes.
Westinghouse and its partners have begun loading fuel into a reactor at the Sanmen nuclear power plant in China. The reactor, the first AP1000 design to get as far as fuel loading, will undergo testing before it starts commercial operations.
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