We are going to take a little trip back in time today due to some information just now being released.
Let’s get out of our comfort zone and talk about the US Economy for a moment. Now that we have some data, the United States GDP annual growth rate has been confirmed at 2.9%. With that being said, the momentum of that growth slowed at the end of 2018, and has yet to pick up again due to the polar vortex, a general downward trend in consumer sentiment and other factors. As far as labor is concerned, the unemployment rate fell to 3.8% compared to 4.0% previously. Inflation is ever present, however didn’t hit as hard this last year. In January, total yearly inflation sat at 1.6% y-o-y showing a clear downward trend over the last few months. (compared to 2.2% y-o-y in November)
At the end of 2018 United States crude oil output averaged 11.85mb/d, 1.80 mb/d increase y-o-y. Texas production in December rose by 35 tb/d m-o-m to average 4.88 mb/d with the majority of that coming from the Permian Basin. While New Mexico only averaged 0.82 mb/d, they had the highest y-o-y growth rate from a percentage standpoint, Nearly 46%. North Dakota rose 18 tb/d m-o-m and averaged 1.37 mb/d, with the majority coming from the Bakken shale play.
The Gulf Coast (PADD 3) produced more than 64% of the united states crude oil production, with Texas accounting for 40% of total us crude oil output alone. The Permian Basin accounted for almost 59% of the US crude oil growth in 2018.
Globally speaking, the heavy hitters for growth in 2018 were (in no particular order) Canada, US, Russia, Kazakhstan, and Qatar with Mexico, Norway and Vietnam showing the biggest declines in growth.
Now back to our regularly scheduled programming.
Some new data suggests that the 2019 Global oil output has increased to 1.50 mb/d y-o-y, while Global oil supply has lowered by 0.16 mb/d to an average of 99.15 mb/d in February compared to January. This reduction in supply (gasoline is the main culprit) has led to some bullish sentiment in the market. BRENT crude is a point of attraction for many investors who appear to be strengthening their bullish positions. Whether or not this is a short or long-term strategy is yet to be known for certain, but we can say that the rising price of oil is currently being supported by the expectations of a shrinking global supply in the coming months.
Further support could extend from the global rise in demand, speculated to rise 1.24 mb/d, leading us to an average global oil demand of 99.96 mb/d.
As of March 28th 2019, the current price of BRENT crude is $68.00, and WTI crude is hovering under $60 at $59.51. Ultimately only time will tell where we end up at the end of 2019, but all things considered so far so good!
Stay tuned for our April update!
With YOUR help again we hope to donate $1,000 (If not more 😃 ) this month to an organization called Elijah Rising.
Based in Houston, Elijah Rising aims to end to bring an end to human trafficking through raising awareness, prayer, intervention, and restoration. They not only reach out and provide resources to victims of trafficking, but also help to provide housing, care, and counseling for survivors. In 2017, it was reported that in Texas alone, there were over 300,000 victims of human trafficking, with Houston being one of the most active areas. We ask you to challenge us once again as we donate to this more than deserving cause.
Last month, Texas Flange asked you to challenge us by giving you the reigns and letting you decide how much we would donate to St. Jude’s Children’s Research Hospital. At the end of the week we donated $507 via Comments counted over Facebook, Linkedin, and Instagram.
PLEASE READ BELOW!!! WE DON’T WANT TO MISS ANY OF YOUR COMMENTS!!
The rules this month are as follows:
-we will add up and every comment between $1 and $5
-for every “like” this post receives we will add $1
-every time this post is shared we will add $2
- PLEASE ASK YOUR FOLLOWERS TO COMMENT ON THE ORIGINAL POST. DEPENDING ON YOUR FACEBOOK PRIVACY SETTINGS, WE MAY NOT BE ABLE TO SEE YOUR POST AND WOULD MISS ANY COMMENTS/LIKES/SHARES THERE.
-April 22nd through April 26th 2019. We will comment on Friday to end the donation period and begin tallying the results!
Remember, we aren’t asking for your money, just asking you to call the shots on how much of ours we donate! Together we can help an amazing organization!
Elijah Rising Donation Results:
Everyone knows at least one person who has had medical difficulties in their life. Here at Texas Flange we've decided to pay it forward and help in a way that hits close to home for us. However, we need YOUR help to do so! No, no, not your money... All we ask is that you comment any number between $1 and $10 and then like/share our social post! Easy enough!
Tuesday April 2nd we will add all the comments up from our social media platforms and donate that amount to St. Jude Children's Research Hospital. No catch, no strings attached, only giving back!
We will Update this blog once the Donation period has ended with all the totals and a picture of our donation!
Grand total: $507
Several governing specifications exist for a wide variety of industrial steel flanges, and each have their own suitability for our customers’ applications. Here at Texas Flange, our most popular product lines include ASME/ANSI flanges, API flanges, AWWA flanges, and DIN flanges. Lets dive a bit deeper below.
ANSI/ASME flanges – B16.5 and B16.47
The current ANSI/ASME flange specifications of B16.5 and B16.47 trace their roots to the old B16.1 specification from decades past, which consisted primarily of cast iron. This specification in turn was developed from the original AESC/ASA committee B16 in the 1920s. These modern specifications are the result of countless hours of engineering and design to form a standard which could be utilized worldwide. Our most commonly requested flange specification, ANSI/ASME flanges continue to be the most widely used type of steel flange across various industries. The pressure vessel and fabrication sectors use these in abundance in their pressurized applications to retain and transport air, water, and a variety of other chemicals. Often found in refineries, ANSI/ASME flanges are a critical component in their infrastructure, and are primarily used to connect piping, valves, and other fittings which compose the bulk of a piping assembly. The 150# class of steel flanges is the most popular for low pressure and vacuum applications, as the design has proven to be effective in applications which require an occasional fluctuation in the temperature and pressure of the environment.
API flanges – 6B and 6BX
A standard developed for the American Petroleum Institute, the API 6A specification shares many characteristics with ANSI/ASME flanges. They are dimensionally similar, however their minimal design requirements for operating pressure begin in the 2000# class, which is derived from the ASME/ANSI 600# class. Certain jobs require the use of pressure classes as high as the 6BX 25000#, though this is much less common than the typical 6B range of 5000# and below. All API flanges require ring type joint facings with the proper gaskets for optimal integrity of their application. This higher-pressure base requirement is due to their overwhelmingly popular use in petrochemical / oilfield applications of a volatile nature. Upstream assemblies with API flanges consist of wellheads, drilling equipment, and much more. The downstream sectors of refinery and processing also require these flanges for the development of crude oil into products for the everyday consumer.
AWWA flanges – C207
A specification designed for generally lower pressure applications (300 psi or less), American Water Works Association flanges are the exact opposite of the API flanges and can be found in a variety of assemblies in which temperature is ambient and media is not corrosive. In most cases, this is simply for the transportation of well water and waste water. AWWA C207 steel flanges are usually of a mild carbon steel or stainless variant and are most often either of the ring slip on or blind disc style. Due to their intended design, they do not have ring joint or raised faces, and are typically sealed with rubber gaskets. Due to their cost and weight compared to other flange types, they are also becoming more popular with project work for structural steel types which require mating or filling a gap between existing flanges.
Across the pond, you will find the Deutsches Institute fur Normung (DIN) flange specification, consisting of a variety of European styles which have been unified into one code for the purpose of commonality. Although much less common than ANSI/ASME steel flanges in the United States, many of our international customers request flanges to these specifications for a variety of applications such as imported steel vessels, cargo ships, and other infrastructure which may consist of metric pipes/valves and European designed equipment. The subset flanges under the DIN standard consist of the same style of flanges in the United States, including the most commonly used slip on flanges, weld neck, flanges, and blind flanges. Adapter flanges can be custom made to end user requirements for the mating of American flanges to international ones, however we find it is a much more common and easy solution to provide DIN flanges to mate to existing equipment.
In January we talked about the record high United States oil production reached in 2018, with some speculation on oil production moving into 2020. Now with the first two months on 2019 almost under our belt, it is looking like the U.S. oil production shows little to no signs of slowing down and may have been underestimated…
Based on 11 months of data from 2018 we are seeing an overall increase in oil demand, 0.56 mb/d year over year. Even though the demand for jet kerosene and jet fuel dropped last year, the slack was picked up by an increase in demand from the petrochemical and industrial sectors driving into a net positive U.S. demand for the year. 2019 is expected to still show growth, however, it is expected to be less than the previous few years.
We saw January’s predictions for the U.S. at 12.1 mb/d by the end of 2019 and 12.9 mb/d by 2020, while the February predictions have already been increased to 12.4 mb/d and 13.2 mb/d respectively. This ultimately will bring great economic gains to the plays/basins situated around the U.S. as well as to the other industries supporting their growth, such as valve / flange manufacturers, new opportunities for pipe fitters to fuse a Weld neck flange and a pipe, or to the local stores who welcome the increased customer traffic and revenues. However, with such rapid industrial growth strain has been put on the local infrastructure and governing officials as they try to catch up.
Possible reasons for the underestimation of oil production in the U.S. may be due to the lowering cost of technology paired with greater operational efficiency than expected, but with such a complex beast it is hard to pinpoint any one explanation. With so many changes so quickly in the industry, it can be hard to accurately predict U.S. oil growth, but the EIA has consistently been updating forecast models and KPI’s (Key Performance Indicators) to close the gap between what is predicted and reality.
As new data presents itself, be on the lookout for a potential up/downticks in U.S. production/demand but currently, it looks like we are in a positive trajectory and will keep ramping up production for the foreseeable future. Globally speaking, this could have a long-term negative effect on the price per barrel. OPEC and Russia are working together to stabilize supply/demand by reducing production for the first 6 months of 2019 by approximately 1.2 mb/d collectively. This action has helped stabilize the price per barrel for now, but if the United States fills the vacuum left over and/or destabilizes the supply and demand of the industry we could be in for a rude awakening.
Check out our March Update!
In this day and age, we use metals in nearly every aspect of our lives, and it is hard to imagine a time without their impact on our society. We use them for anything from industrial piping and flanges, general manufacturing, electrical components, all the way down to our use of sodium in our food. (YES, SODIUM Chloride = Salt, contains a soft, silvery White metal called Sodium.) It can be an odd feeling when you realize metals have impregnated themselves in almost every part of our lives.
So where did all these different metals come from? What are they ultimately made from? Simply put, all elements (Not just metals) came from the complex processes that make up the life cycle of a star, and ultimately, they are nothing but a conglomerate of general atomic materials: Electrons, Neutrons and Protons. Elements are distinguishable by the number of protons they contain, While the number of electrons and neutrons can vary for samples of the same element. For example, Iron or FE (used in the creation of carbon steel or stainless steel for pipe Flanges) is the 4th most common element on the Earth and regardless of the number of electrons or neutrons it will always have 26 protons. As far as where they came from?
Billions of years ago when the Universe was in its infancy, the first clouds of helium and hydrogen atoms Condensed until their own gravity proved too much causing them to implode, forming the first stars. During the birth and life of all stars, they reach temperatures hot enough to break down atoms into their base atomic materials and fuse them into different atoms that are heavier and larger. Starting with Hydrogen we go to Helium, then Lithium, then Carbon and so on... As stars reach the end of their life they catastrophically explode, leading to a supernova, spewing the heavier elements that have been formed into the universe.
In Earth's case, when our sun was in the process of forming, most of the hydrogen and helium went into our sun’s creation while the rest of the dust and gaseous material formed a spinning molten mass around the new star. Eventually the mass cooled and coagulated into the planets and other features of our solar system, including all the metals we process and use on this planet!
With this new Perspective it is hard not to be amazed by even the simplest things in our World. Everything from Industrial Flanges to the Salt we put in our food, to even our own bodies are made from the Stars and are truly unique.
"The nitrogen in our DNA, the calcium in our teeth, the iron in our blood, the carbon in our apple pies were made in the interiors of collapsing stars. We are made of starstuff."
― Carl Sagan, Cosmos