U.S. oil production and prices increase, government allows exports

By Tyson Fisher, Land Line staff writer | Thursday, June 26, 2014

Despite losing one oil refinery, oil production is up by 101,000 barrels a day since last year, according to an Energy Information Administration report.

Keeping up with a trend, four refineries changed ownership in the past year. Producing more than 1.9 million barrels a day, Valero Energy Corp., keeps its number one spot as the largest U.S. refiner. Two new refineries are expected to start producing at the end of the year, one in North Dakota and the other in Texas.

In other oil news, the U.S. government has loosened a four-decade-long ban on exports of American crude oil. Two companies have been granted permission by the U.S. Department of Commerce to export a type of oil known as condensate. The condensate oil distillation process stops just before the point of refinement, technically no longer making it crude oil. Condensate oil can be used for gasoline, including diesel and jet fuel.

On the other side of the world, the anxiety of supply disruptions in Iraq is diminishing. Earlier this month, the militant organization ISIS raided Iraq’s largest refinery. Despite several media reports of an ISIS takeover, the Iraqi government stated that security forces are still in control of the refinery.

Because of the demand increase from allowing U.S. oil exports, domestic crude oil went up 47 cents to $106.50 a barrel on the New York Mercantile Exchange. The positive news overseas also led to a 46 cent decrease for Brent crude oil on the international market.

According to the EIA, diesel prices increased for the first time in two months earlier this week. As of June 23, the average price of a gallon of on-highway diesel was $3.919, a 3.7 cent increase from the previous week. Diesel prices went up in all ten regions in the nation.

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