demand created confusion for oil traders last week. In summary:
- Petroleum exports set a record
- Refinery runs were back to normal
- Crude oil production had a big increase and
- Oil inventories increased nationwide but declined at Cushing as did gasoline and distillate inventories
an incentive for U.S. traders to export domestic oil to higher-priced markets a phenomenon believed to be related to the hurricane.
Even though total U.S. crude stockpiles rose by 856000 barrels halting four weeks of declines according to EIA oil supplies at the key Cushing Oklahoma pipeline hub decreased for the first time since August.
Gasoline supplies fell by 5.47 million barrels and distillate supplies dropped by 5.25 million barrels.
Oil output from U.S. wells jumped 13 percent last week to 9.51 million barrels per day (bpd) the biggest leap since September 2012.
Another factor concerning worldwide crude oil supplies involves news that crude oil from Venezuela has been contaminated with high levels of water salt or minerals. Many purchasers of oil produced in Venezuela have complained about the quality and Phillips 66 has cancelled at least eight cargoes in the first half of 2017.
Venezuela has struggled to pay its debts and is having trouble acquiring the necessary chemicals to cleanup its oil exports. Venezuelas national oil company PDVSA has had to shutdown operations or cut back on production. PDVSA is the primary revenue source for Venezuela which indicates further financial and political trouble as it tries to meet it debt requirement that come due soon.
The U.S. also initiated sanctions a few months ago restricting new financial arrangements with U.S. oil companies and financial institutions ability to restructure Venezuelan debt.
For much of this year weekly U.S. imports of Venezuelan oil bounced around between 600000 bpd and 800000 bpd sometimes going even higher. But trading volumes began to plummet about a month ago. For the week ending Oct. 13 U.S. purchases of Venezuelan oil dropped to just 255000 bpd the lowest weekly total in EIA data stretching back to 2010.
Its a troubling situation for an oil company already suffering from a steep drop in output.
DOE EPA Take On Energy Environment Issues
The U.S. Department of Energy (DOE) and the Environmental Protection Agency (EPA) recently introduced two significant policy changes regarding energy following the release of studies that methane and carbon dioxide emissions continue to decline.
Energy Information Administration (EIA) said on Oct. 12 energy-related carbon dioxide (CO2) emissions fell in both 2015 and 2017 and they are expected to fall again in 2017 based on forecasts in EIAs Short-Term Energy Outlook."
EPA announced on Oct. 6 declines in methane emissions during the past five years.
Apparently the release of this data was coincidental to Energy Secretary Rick Perrys proposal to the Federal Energy Regulatory Commission (FERC) to implement a new market pricing policy allowing certain coal and nuclear plants to gain a competitive advantage on wholesale electric rates. Perry said this proposal would make the electric grid more reliable because coal and nuclear can stockpile fuel sources on site.
Other energy sources that provide power to utilities for electricity generation such as natural gas wind and solar objected to Perry pushing the adoption of such a rule that would give some energy sources a competitive advantage dictated by the federal government. Opponents also pointed out that even though the FERC is a part of DOE it has separate commissioners who are appointed by the President and act independently of the Energy Secretary.
Two of the three current FERC commissioners questioned Perrys proposal and one Commissioner Rob Powelson said that FERC will not destroy the marketplace."
While Perry was trying to smooth the troubled waters EPA Administrator Scott Pruitt (right) on Oct. 10 signed a document beginning the process to change the regulations to the Clean Air Act implemented 
by the Obama Administration which are called the Clean Power Plan.
The proposed changes will be published in the Federal Register with a 60-day comment period.
The Obama administration pushed the bounds of their authority so far with the CPP that the Supreme Court issued a historic stay of the rule preventing its devastating effects to be imposed on the American people while the rule is being challenged in court" said Pruitt.
We are committed to righting the wrongs of the Obama administration by cleaning the regulatory slate. Any replacement rule will be done carefully properly and with humility by listening to all those affected by the rule.
EPA will respect the limits of statutory authority. The CPP ignored states concerns and eroded longstanding and important partnerships that are a necessary part of achieving positive environmental outcomes. We can now assess whether further regulatory action is warranted; and if so what is the most appropriate path forward consistent with the Clean Air Act and principles of cooperative federalism" Pruitt said.
The regulation adopted by Obamas EPA required each state to develop plans to reduce emissions from electric utilities. The rule has been on hold since February 2016 when the Supreme Court put an unprecedented halt on it while litigation brought by Republican states and industry groups proceeded.
Alex Mills is President of the Texas Alliance of Energy Producers. The opinions expressed are solely those of the author. The Texas Alliance of Energy Producers is an oil & gas trade association that represents some 3000 members. It has offices in Austin Houston Fort Worth & Wichita Falls.
