The United States Energy Information Administration (EIA) plays a crucial role in delivering reports that pertain to the US energy sector and has recently stated that U.S. oil inventories have risen by 3.5 million barrels. The world has seen more reliance being placed on the renewable energy sector, leading to a stockpiling of inventory across the conventional energy sector. The United States still relies heavily on the traditional oil and gas sector, and thanks to the current administration’s efforts, that reliance on not going anywhere anytime soon.
The United States production numbers are in decline, leading to a stockpile of inventory
The United States is not known for its pragmatic approach to the energy sector. The current President, Donald Trump, signed several executive orders upon the start of his second term, which aimed to roll back the progress made in the renewable energy sector under the previous administration. While some have claimed this is merely political revenge, the impact on the United States’ energy sector has been profound.
According to new data from the U.S. Energy Information Administration, reported last week, US crude oil inventories increased by 3.5 million barrels during the week ending October 10, pointing to a troubling state of affairs in the United States energy production market.
This marks a slight decrease in crude oil inventories from the previous week, which saw 3.7 million barrels according to the EIA. According to government data, the increase brings commercial stockpiles to 423.8 million barrels, which is still significantly lower than the five-year average for this time of year.
Industry experts have noted the important role that crude oil plays in the global energy sector.
“About 75% of the price of gas is really dictated by crude oil. At the heart of the issue is increasing demand over a period of many years around the world. World crude oil consumption now is close to 90 million barrels a day. Most of the growth in demand is coming from China and the developing world.” – John S. Watson
American businessman and former CEO of Chevron
The United States production is declining, further increasing stockpiling issues
The EIA states that for middle distillates, inventories decreased by 4.5 million barrels. It noted that production decreased by 577,000 barrels daily to an average of 4.6 million barrels. Additionally, it noted that distillate inventories had increased 600,000 barrels in the week prior and are now 7% below the five-year average for this time of year.
The EIA reported that while crude oil inventories increased, inventories at the Cushing, Oklahoma, delivery hub fell by 703,000 barrels during the week. Europe has also faced some troubling times for the coal sector in recent months, as evidenced by the recent news that Europe’s coal power collapse is imminent.
Industry experts have urged the global community to reduce its reliance on crude oil, especially if the nations of the world are to meet their self-imposed decarbonization goals.
“Running out of energy in the long run is not the problem…. The bind comes during the next 10 years: getting over our dependence on crude oil.” – Geoloigist Kenneth S. Deffeyes
The current administration has given the oil and gas sectors in the United States a lifeline to continue dominating the sector
Once Donald Trump came into office for the second term, he lived up to his campaign promise of “drill, baby drill”. His administration has directed the federal government to roll back any regulatory barriers for the coal and gas sectors. While the rest of the world aims to accelerate the energy sector’s transition away from fossil fuels, the news that the EIA has reported an increase in US crude oil stocks undermines the global decarbonization efforts that have consumed the sector.
