Oil, gas and resin markets "are not at a new normal," according to Ton Koenders, Europe sales director with M. Holland. A weak winter in Europe and North America allowed producers of those materials "to replenish supplies more than we thought they could," he added.
Producers "have tried to set the bottom of the oil price, but we don't see it leveling yet," Koenders said. "We could see future reductions."
Prices for both crude oil and natural gas have seen major reductions in the U.S. in the last year. West Texas Intermediate oil prices were near $121 per barrel in early June 2022 but were just under $68 in early trading June 1 for a decrease of 44 percent. U.S. natural gas prices were near $9.30 per million British thermal units in early June 2022 but closed at just under $2.30 on May 31 for a drop of 75 percent.
The use of fracking — hydraulic fracturing — to access natural gas has given the U.S. "significant growth" since the 2000s, according to Bency Thomas, strategic sourcing director with heating systems supplier Thermon Inc. in Houston.
"The industry has done very well and we're still rich with shale gas and oil," Thomas said. "The flexibility in the U.S. to turn [shale production] off and on is useful — we can do it as needed."
U.S. natural gas is cost-competitive with other feedstocks, Thomas said, and job creation "is an economic benefit of shale gas."
Canada also has increased its oil supplies through development of oil sands, primarily in Alberta, according to Chris Gick, industry dynamics manager with PE resin maker Nova Chemicals in Calgary. The country also is expanding an oil pipeline next year in a move that will allow more oil to be exported, he added.
And even as Canadian petrochemical plants are benefiting from crude oil and gas exploration, it's also doing work in renewable energy such as wind and solar.
Gick said that government incentives "make it easier for alternative energies to survive, but the market will ultimately be responsible." He cited the example of PE resins, where demand for recycled grades is growing even without regulations creating a market pull.
Reynolds pointed out that increased use of natural gas-based ethane as a feedstock instead of crude oil-based naphtha could affect polypropylene resin markets, since ethane creates less propylene feedstock than naphtha does.
He added that green hydrogen production is getting a lot of attention, especially in Europe, as a potential energy source for electric vehicles. The region currently doesn't have enough loading capacity for the growing EV market. Green hydrogen also could be boosted by environmental opposition to increased use of nuclear energy.
The U.S. has found an unlikely alternative energy hub in Texas, a state known for its oil and gas resources. Thomas pointed out that Texas is the largest user of alternative energy for power in the U.S.
He added that Texas uses both solar and wind resources, and that energy generated from those markets can easily be dropped into the state's electric grid.