This Week in Petroleum (EIA Update)

Chronological list of TWIP articles.

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

Crude oil inventories at the Cushing, Oklahoma storage hub reached a record 45.1 million barrels on May 11 (Figure 1), after rising 16.9 million barrels since January 13, a marked contrast to the relatively flat level of inventories over January through April in recent years. The increases have come ahead of the Seaway pipeline reversal, expected to commence this week, and are largely the result of growing U.S. inland production and increasing imports from Canada. However, with the imminent reversal, the inventory builds have not weighed disproportionately on West Texas Intermediate (WTI) crude oil prices, which have held up relatively well against global crudes such as Brent over the past few months. ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

As May began, the retail price of regular gasoline continued its recent decline from levels reached earlier this spring. As of May 7, prices averaged $3.79 per gallon, down 15 cents per gallon since April 2. If last week's crude oil price declines persist, the recent fall in gasoline prices could continue. However, while the forecast in the U.S. Energy Information Administration's (EIA) May 2012 Short-Term Energy Outlook (STEO) is showing lower crude oil and petroleum product prices this summer than were projected a month ago, it does not reflect a continuation of the sharp price drop seen last week. STEO's May forecast has both global demand and supply growth higher in 2012 than in the April projection, but with a bigger boost to projected supply. The revised market balance points to less price pressure than was seen a month ago. ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

On April 27, 2012, the Energy Information Administration (EIA) released the second in a series of reports required by the National Defense Authorization Act (NDAA) for Fiscal Year 2012. The report, The Availability and Price of Petroleum and Petroleum Products Produced in Countries Other Than Iran, is available on the EIA website at http://www.eia.gov/analysis/requests/ndaa/. ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

The national average retail price for regular gasoline has fallen for three consecutive weeks for the first time since December, reading $3.87 per gallon on April 23, seven cents per gallon lower than the 2012 peak of $3.94 per gallon on April 2. While global oil markets remain tight, some easing has occurred in recent weeks. Evidence of this easing can be seen in decreases in prompt prices for crude oil, reduced backwardation in the Brent futures curve, and accompanying builds in U.S. crude oil inventories, particularly in the important Gulf Coast (PADD 3) market. ...

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

The first quarter of 2012 saw a significant rise in global crude oil prices. After closing 2011 at $108 per barrel, Brent spot prices exceeded $125 per barrel by early March, before trading in a relatively narrow range for the remainder of that month. This price increase reflected changes in global oil supplies, as significant unplanned disruptions in production from countries that are not members of the Organization of the Petroleum Exporting Countries (OPEC) countered the recovery in Libyan production. Today's discussion explores these recent developments. . ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

The question frequently posed by the news media as we head into summer, the peak driving season, is whether or not retail consumers will be paying more than $4 per gallon for regular gasoline when they fill up their tanks. While the national average retail price for regular gasoline still hovers just under that mark at $3.94 per gallon on April 9, in many areas this question has already been answered. Consumers on the West Coast have been paying more than $4 per gallon, on average, since the end of February. Likewise, retail prices in the Chicago area have averaged more than $4 per gallon for the past month. But other areas have prices still below $4 per gallon, such as the Rocky Mountain region, where prices averaged $3.79 per gallon on April 9, as refiners supplying that area have access to discounted land-locked crude oil. ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

The U.S. Energy Information Administration's (EIA) recent report exploring the potential impacts of reductions in refinery activity in the Northeast on petroleum product markets in that region pointed out that, if Sunoco's Philadelphia refinery shuts down, waterborne movements from the Gulf Coast could be an important route for alternative supplies to help replace lost volumes in the short term, particularly for ultra-low sulfur diesel (ULSD). Because this route would involve vessel movements between U.S. ports, Jones Act vessels must be used. The Jones Act requires goods or passengers moved in U.S. coastal waters between U.S. ports to be carried on U.S. flagged ships that are constructed in the United States, and owned and crewed by U.S. citizens. ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

Last week's edition of This Week In Petroleum focused on domestic drivers of increased U.S. petroleum product exports, including weak U.S. demand and increased production due to higher refinery runs. To better understand international trade flows, factors affecting imports at the recipient's end of the trade must also be taken into account. This week, we look at U.S. product exports from the point of view of the single largest recipient of those exports, Mexico. ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.

The increase in U.S. petroleum product exports has garnered significant attention lately, as U.S. Energy Information Administration (EIA) data showed the United States was a net exporter of petroleum products (petroleum and other liquids, excluding crude oil) for the first time since at least 1949. The rise in U.S. product exports at a time of rising domestic product prices has led some to ask if higher gasoline exports might be causing higher gasoline prices. However, the available evidence does not support such a linkage. (The March 7 edition of This Week In Petroleum provides an analysis of key factors that EIA believes are driving gasoline prices.) ....

TWIP includes recent analysis of current petroleum issues as well as prices and volumes of major petroleum products.