Since replacing the British Navy as the guarantor of regional peace after World War Two, the United States has had a heavy presence in the Middle East. Now, as the U.S. comes closer to net oil exports, the country’s engagement with the Middle East, especially under President Trump, is diminishing. Even more than the Obama pivot to the East, the Trump Administration is moving the United States out of the region. That will implications for U.S. influence in the region, not to mention military conflict.
Weaker U.S. gasoline demand will limit additional ethanol blending in 2019 due to the slow penetration of higher ethanol blends. Meanwhile, expanded production capacity will keep U.S. domestic fundamentals bearish in 2019. Export markets are unlikely to provide much relief with protective trade policies limiting U.S. export opportunities in Asia. Strong hydrous ethanol demand in Brazil is the only bright spot.
Latin America’s non-OPEC crude and condensate production will rise by 260,000 b/d in 2019 as several new production units ramp up in Brazil, Argentina and Colombia grow slowly, and Mexico limits declines. Overall regional production will fall by 250,000 b/d, though, as Venezuela will decline by 500,000 b/d. These shifts in production will help the region’s crude quality grow lighter and sweeter.